News and Press Releases


WEDNESDAY - February 15, 2012


NEW BERN - United States Attorney Thomas G. Walker announced that in federal court yesterday GARY KEVIN COATS, pled guilty before United States Magistrate Judge David W. Daniel to bankruptcy fraud, in violation of Title 18, United States Code, Section 157(3).

According to the Criminal Information filed on December 20, 2011, COATS filed a voluntary petition for a Chapter 7 bankruptcy on February 10, 2009. A Chapter 7 Trustee was appointed and COATS, then a licensed realtor and operator of Featured Properties, LLC, was notified by an Order and Notice to Debtor that all property belonged to the Chapter 7 estate. This property included a Raleigh condominium to which COATS had declared he intended to surrender. In March, 2009, COATS was contacted by a realtor who represented clients wishing to purchase the condo. In April, 2009, COATS, using the buyers’ assumed name and forged signatures and initials, submitted an offer to the Trustee to purchase the condo. Over the next couple of weeks, COATS, using the assumed name, through emails, encouraged the Trustee to take the buyers’ offer. In May, 2009, the Trustee filed a motion to approve the private sale with the United States Bankruptcy Court. Unbeknownst to the Trustee, the buyers’ realtor and COATS had negotiated a side agreement that the buyers would pay additional funds to COATS outside of closing that would not go to the Trustee. On June 5, 2009, the Trustee contacted the closing attorney and learned of the side agreement. On June 10, 2009, COATS, posing as an attorney, emailed the realtor regarding a cease and desist letter sent to COATS under his assumed name concerning the side agreement. Later that month, the attorney whose name had been used by COATS, contacted the Trustee notifying the Trustee that he did not email the realtor nor did he know COATS.

COATS will be sentenced in 90 days.Investigation of this case was conducted by the Federal Bureau of Investigation. Assistant United States Attorney S. Katherine Burnette is prosecuting the case.

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