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March 07, 2012

Hopkins County Man Sentenced for Bankruptcy Fraud

         TYLER, Texas – A 50-year-old Sulphur Springs, Texas man has been sentenced for federal violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Dennis Canada pleaded guilty on Sep. 2, 2011, to bankruptcy fraud and was sentenced to 24 months in federal prison today by U.S. District Judge Leonard E. Davis.  Canada was also ordered to pay restitution in the amount of $286,191.45.

                According to information presented in court, a civil lawsuit was filed on June 23, 2006, alleging that Canada engaged in negligent and fraudulent conduct related to the construction and sale of a home.  At the same time, Canada was a party to another lawsuit in which another couple claimed Canada engaged in negligent and fraudulent conduct related to the construction of their home as well.  Both cases were set for trial on June 23, 2008 and Canada filed for bankruptcy five days prior, on June 18, 2008. 

Canada admitted that from Jan. 18, 2008 to Oct. 7, 2008, he devised a scheme to defraud his creditors by concealing his true financial condition in order to avoid paying their claims against him.  Canada also admitted that during this same time, he transferred and withdrew funds from bank accounts under his control in an effort to conceal the funds from his creditors.  Canada admitted that he failed to disclose income, transfers of funds, financial accounts, cash on hand, and payments to creditors when he filed for bankruptcy on June 18, 2008.  Canada was indicted by a federal grand jury on Mar. 2, 2011. 
This case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Jim Noble.


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