Missouri Woman Pleads Guilty To Bankruptcy Fraud
March 25, 2014
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that Marlene Stephens (61, Kansas City, MO) pleaded guilty to one count of bankruptcy fraud. She faces a maximum penalty of 5 years in federal prison. As part of her plea agreement, Stephens has agreed to pay restitution in the amount of $175,000.48 to various credit card companies. Her sentencing hearing is scheduled for June 18, 2014.
According to court documents, Stephens filed a petition for bankruptcy on October 10, 2008. In that petition, she sought the discharge of more than $500,000 in personal credit card debt. Included in the personal credit card debt was $191,342.51 that Stephens transferred to her sister via credit card convenience checks, in January and February 2008. The investigation revealed that Stephens wrote the convenience checks to her sister, who put the money into a Washington Mutual checking account. At the time Stephens filed the bankruptcy petition, this account had a balance of $175,000.48. Stephens’ bankruptcy, which included the credit card debt, was discharged in February 2009.
A month before Stephens filed her bankruptcy petition, her sister transferred the money from a Washington Mutual account to a Wachovia Bank account. An investigation determined that Stephens concealed the existence of the Wachovia Bank account from the bankruptcy trustee when she filed for bankruptcy in October 2008. The Internal Revenue Service (IRS) was able to trace the funds in the Wachovia Bank account back to Stephens, after the bankruptcy was discharged.
This case was investigated by Internal Revenue Service-Criminal Investigation, with assistance from the United States Trustees Office. It was prosecuted by Assistant United States Attorney Shawn P. Napier.