Bankruptcy Fraud Results in Federal Prison
|Dec. 17, 2013|
HOUSTON – Darren David Chaker, 41, of Beverly Hills, Calif., and Las Vegas, Nev., has been ordered to federal prison following his conviction of bankruptcy fraud, announced United States Attorney Kenneth Magidson. Chaker was found guilty April 4, 2013, following a five-day bench trial before U.S. District Judge Nancy Atlas.
Today, Judge Atlas sentenced Chaker to a term of 15 months in prison to be immediately followed by a three-year-term of supervised release. He was further ordered to pay a $2000 fine. As part of the sentencing, Judge Atlas included special conditions that he not stalk or harass anyone and obtain mental health counseling and anger management. In handing down the sentence, Judge Atlas noted that the bankruptcy system depends on the reliability of those who petition for bankruptcy relief and added that the case involved a defendant who could not tell the truth to the court. She rejected Chaker’s request for a sentence of probation, calling this a significant crime and finding that a sentence of custody is critical.
The evidence at trial showed that Chaker filed bankruptcy under Chapter 13, in which a debtor is required to propose a plan of reorganization to pay the debtor’s creditors over time. The debtor is required to pay at least as much as the creditors would receive if the debtor’s assets were liquidated on the date of the filing of the bankruptcy petition. The process is designed to achieve an orderly transfer of a debtor’s assets to creditors from available assets truthfully and accurately disclosed and to provide a “fresh start” to honest debtors by allowing them to obtain a discharge or release of debt incurred prior to filing bankruptcy.
According to the evidence, Chaker filed for bankruptcy under Chapter 13 on March 6, 2007. Specifically, on or about March 26, 2007, during a bankruptcy hearing before the Honorable Jeffrey Bohm, while under oath, Chaker falsely and fraudulently represented to the court that the property was never leased out prior to January 2007, when he had in fact previously contracted with a realtor who secured at least two rental contracts with Chaker personally. Chaker failed to disclose income and the existence of past and present residential leases of a residential property facing foreclosure in Houston to his creditor, Saxon Mortgage in the hearing and to the court.
In order for the bankruptcy system to work for all parties, it is imperative for the debtor to be truthful and forthright in all aspects of the bankruptcy process. The bankruptcy system is based on an honor system - the debtor agrees to provide all of the necessary information requested by the trustee and to assist the trustee in collecting all assets of debtors and comply with the court’s orders to obtain the relief desired under the chapter the case was filed.
Chaker will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
This case was investigated by the FBI with assistance from the United States Trustee’s Office and is being prosecuted by Assistant United States Attorneys Carolyn Ferko and Sharad Khandelwal.