U.S. ATTORNEY’S OFFICE COLLECTS OVER $1.4 MILLION IN LONG-FOUGHT COLLECTIONS ACTION
U.S. Attorney Wendy J. Olson announced today that her office’s Financial Litigation Unit has collected over $1.4 million from the WBW, LLC bankruptcy estate. The assets collected satisfy a 2002 judgment and tax liens against Idahoans Virgil and Phyllis Jahnke, as well as debts of WBW LLC, and its sole owner Melvin Heide.
According to an adversary action filed by the United States in the bankruptcy, the Jahnkes, along with Melvin Heide of Renton, Washington, sought to avoid tax liens, court judgments, and other obligations. They used Heide’s business – WBW – in various complex financial arrangements culminating with a 2003 bankruptcy petition in their efforts to hinder collection. A settlement was reached after years of litigation. In December 2006, the bankruptcy trustee auctioned WBW properties in Eastern Idaho for $3,896,869. More litigation ensued as to how to distribute the proceeds. The United States has received over $1.4 million since WBW filed its bankruptcy petition. Of that sum, over $300,000 will go to victims of fraud for which Heide was convicted in 1992. The balance of the bankruptcy estate will repay other creditors, mortgages, and administrative expenses. A final order of distribution was issued by the court on February 2, 2011.
The Financial Litigation Unit of the United States Attorney’s Office collects civil debts and penalties. It pursues individuals who have fraudulently obtained money or benefits from the government. Finally, it collects fines, assessments, and restitution from criminal defendants. The Asset Forfeiture Unit seizes assets that are the fruit of criminal activity.
Victims of crime receive funds collected in criminal restitution cases. Other criminal collections go into the Crime Victims Fund. That fund provides monies to programs such as the Idaho Crime Victims Compensation Program and the Idaho Council on Domestic Violence and Victim Assistance. Asset forfeitures are distributed to local, state, and federal law enforcement agencies to help fight crime. Other recoveries go back to agency creditors.
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