FEDERAL WAY FRAUDSTER SENTENCED TO MORE THAN 5 YEARS IN PRISON FOR BANKRUPTCY FRAUD, MAIL FRAUD AND USING FALSE DOCUMENTS
DONALD ENGEL, 51, of Federal Way, Washington was sentenced today to 63 months in prison and three years of supervised release in connection with a number of fraudulent schemes designed to steal more than $900,000 from Washington State Employment Security, Washington State Department of Labor and Industries, the Social Security Administration, and creditors in a bankruptcy filing. U.S. District Court Judge James L. Robart also ordered ENGEL to pay $621,085 in restitution.
ENGEL pleaded guilty in September 2004, admitting that he and James T. Baird conspired to commit bankruptcy fraud. The two were prison inmates at Airway Heights Correctional Facility near Spokane in 1998. The two men filed a number of false documents claiming that ENGEL had loaned Baird money in the early 1990's in exchange for interest in properties Baird owned in Whatcom County. The properties were the sole assets in Baird's bankruptcy filing. The intent was to deprive legitimate bankruptcy creditors of some $650,000 in proceeds from the sale of the properties.
ENGEL'S mail fraud scheme began in March of 1995 and continued through 2003.
ENGEL created fictitious employers by submitting paperwork to the Washington State Department of Licensing. Then ENGEL submitted fraudulent Employer Quarterly Tax and Wage Reports to Employment Security. ENGEL used the fictitious employment to then qualify for Unemployment Insurance Benefits. He also applied for Labor and Industry Industrial Insurance Benefits claiming an "on-the-job injury" while employed by one of the fictitious companies. In one of the filings ENGEL claimed temporary emergency unemployment due to the 9/11 terrorist attacks and the war in Iraq. ENGEL fraudulently obtained payments of more than $228,000 through this scheme.
Finally, ENGEL admits he used fraudulent documents to apply for Social Security Disability benefits. In 1996 ENGEL falsely claimed his work history qualified him for disability benefits. In fact for two of the years he claimed to have worked, he was actually incarcerated. ENGEL submitted fraudulent W-2 forms so that he could increase the amount of the disability payments. ENGEL obtained more than $100,000 through this scheme.
The case was investigated by the Federal Bureau of Investigation (FBI), the Department of Labor Office of Inspector General and the Social Security Administration Office of Inspector General. The case was prosecuted by Assistant United States Attorney Donald M. Currie.
For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney's Office, Western District of Washington at (206) 553-4110.