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Press Release

U.S. Trustee Program Obtains Sanctions Against Consumer Bankruptcy Attorneys Involved in Real Estate Schemes

For Immediate Release
Office of Public Affairs

The Justice Department’s U.S. Trustee Program (USTP) recently brought enforcement actions against two consumer bankruptcy attorneys who hid their involvement in schemes to acquire their clients’ homes.

On Feb. 20, the Bankruptcy Court for the Southern District of California entered a stipulated judgment permanently barring attorney David Speckman from representing clients in bankruptcy cases in the district. Speckman also agreed to pay a fine of $3,500 in the stipulated judgment, which resolved an adversary complaint by the U.S. Trustee’s San Diego office.

And the Bankruptcy Court for the Northern District of Georgia entered an order on April 5 prohibiting Stanley Kakol and his law firm from filing any new bankruptcy cases in the district for one year. The court’s order, which granted a motion for sanctions by the U.S. Trustee’s Atlanta office, also permanently barred Kakol from filing any bankruptcy case where he would be paid by a party other than the debtor.

“Consumers who have fallen on hard times rely on their attorneys to help navigate the way to a fresh start,” said Director Tara Twomey of the Executive Office for U.S. Trustees. “Attorneys who abuse this trust for their own gain have no place in bankruptcy court.”

In the California case, Speckman failed to disclose property transfers and other transactions involving his clients and Prado Investments LLC, a company owned by Speckman’s wife. Among other things, Speckman drafted agreements for two debtor clients to sell their homes to Prado during their chapter 13 bankruptcies without seeking court authorization and filed several false and misleading documents with the court that failed to disclose the transfers. In another chapter 13 case, Speckman failed to list his client’s debt to Prado and failed to identify Prado as the junior lienholder on the debtor’s home. In the stipulation, Speckman agreed that his conduct violated the Bankruptcy Code, federal and local rules of bankruptcy procedure and California attorney ethical rules.  

Kakol, the attorney in Georgia, filed two skeletal chapter 13 petitions for an 80-year-old widower at the behest of CMNC Homes LLC, which paid Kakol’s fees. The petitions were intended to delay a foreclosure on the debtor’s home and allow CMNC to complete a purchase of the home for well below market value. The property went into foreclosure after the debtor’s wife died, triggering a default on a reverse mortgage on which the wife was the sole borrower. After the second bankruptcy case was dismissed, the debtor’s family contacted a legal aid attorney who helped the debtor remain in the home through a federal program for non-borrowing spouses of deceased borrowers. In its order imposing filing restrictions, the bankruptcy court noted Kakol’s history of disciplinary action for similar misconduct in other cases including failure to properly disclose his compensation, failure to verify debtors’ signatures on bankruptcy paperwork and inadequate representation. The bankruptcy court has opened a separate proceeding to address at least 17 similar cases in which Kakol took payment from CMNC.

The USTP’s mission is to promote the integrity and efficiency of the bankruptcy system for the benefit of all stakeholders – debtors, creditors and the public. The USTP consists of 21 regions with 89 field offices nationwide and an Executive Office in Washington, D.C. Learn more about the USTP at

Updated April 30, 2024

Press Release Number: 24-531