FOR IMMEDIATE RELEASE:
TUESDAY - February 2, 2010
LOG CABIN HOME SELLER PLEADS GUILTY TO BANKRUPTCY FRAUD
WILMINGTON - The United States Attorney’s Office for the Eastern District of North Carolina announced that in federal court yesterday JOHN M. BARTH, JR., of Whitakers, North Carolina, pled guilty before Senior United States District Judge James C. Fox to bankruptcy fraud.
According to the Criminal Information that was filed on January 8, 2010, BARTH, a principal of Amerlink, LTD, a business that sold log cabin homes in North Carolina and other states, and through Amerlink, filed Chapter 11 bankruptcy proceedings in February 2009. To keep Chapter 11 proceedings going, it is necessary to show that the debtor has sufficient capital to meet its operating needs. BARTH falsely led the bankruptcy court to believe that a $200,000 balance would be maintained in the debtor-in-possession bank account, when in fact no such balance existed.
The Information further alleges that BARTH fabricated bank statements showing a deposit of $120,000 in order to support monthly operating reports for the debtor-in-possession account.
During the course of the bankruptcy proceedings, Amerlink creditor, National Consumer Cooperative Bank (NBC), began taking steps to foreclose upon $8.2 million in loans secured by certain critical operating assets and real estate owned by Amerlink. To delay foreclosure, BARTH fabricated an email, from his father, who had the financial means to assume the $8.2 million in NCB loans.
BARTH then sent the fabricated email to NCB, who relied upon it by agreeing to delay the foreclosure on Amerlink’s operating assets. The fabricated guarantee of the $8.2 million in loans was further discussed in open court in the presence of BARTH. Ultimately, the Bankruptcy Court entered an order delaying NCB’s right to foreclose in reliance on the false $82 million guarantee.
This case is being handled by the Office’s Economic Crimes Section, with Assistant United States Attorney William Gilmore assigned as prosecutor.
News releases are available on the U. S. Attorney’s web page at www.usdoj.gov/usao/nce within 48 hours of release.