Tamaroa Man Sentenced for Bankruptcy Fraud
David E. Woodside, 37, of Tamaroa, Illinois, was sentenced Friday, April 12, 2013, in United States District Court in Benton to a term of 3 years’ probation for fraudulently concealing assets from the United States Trustee and the chapter 7 trustee during the pendency of his 2009 bankruptcy case in the United States Bankruptcy Court, announced Stephen R. Wigginton, United States Attorney for the Southern District of Illinois. Woodside waived indictment by a Grand Jury and pled guilty to an information charging him with that offense on December 7, 2012.
“This is another example of how I will not tolerate fraud and cheating in our court processes.” said United States Attorney Wigginton. “My goal is to keep our processes fair for all Southern Illinoisans.”
“Abuse of the bankruptcy system by concealing assets for personal gain threatens the integrity of the bankruptcy system,” stated Nancy J. Gargula, United States Trustee for Southern Illinois, Central Illinois, and Indiana (Region 10). “I am gratified by the actions taken by United States Attorney Wigginton and our law enforcement partners to prosecute those who engage in fraudulent conduct.”
Evidence introduced in support of the guilty plea and sentence showed that in 2009 Woodside filed a bankruptcy petition in which he sought to discharge $49,446.00 in debts he owed to various creditors. Under bankruptcy law, Woodside was required to list all of his assets, including any interest he might have in any lawsuit from which he might receive a settlement or award of damages. Woodside repeatedly failed to disclose on his petition or to the Chapter 7 Trustee that he expected to receive a settlement of $10,667.18 from a class action lawsuit related to a 2003 train derailment near his residence in Tamaroa. The Chapter 7 Trustee, however, independently discovered the existence of the settlement and was able to seize the funds and distribute them to Woodside’s creditors.
In addition to the 3 year term of probation, Woodside was ordered to pay to the United States fines and special assessments totaling $600 and to perform 30 hours of community service.
The case was investigated by the Federal Bureau of Investigation with the assistance of the United States Trustee for Region 10 and the Peoria Office of the United States Trustee. Region 10 of the U.S. Trustee Program is headquartered in Indianapolis, Indiana, with additional offices in Peoria, IL and South Bend, IN. The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws.
The case was prosecuted by Assistant United States Attorney James M. Cutchin.