Villanova Businessman Sentenced to a Year and a Day in Prison for False Statements, Concealment of Assets in Bankruptcy Filings
PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Scott Korn, 57, of Villanova, Pennsylvania, was sentenced to one year and one day in prison, three years of supervised release and a $50,000 fine by United States District Judge Eduardo C. Robreno for false statements and financial fraud.
In August 2019, Korn pleaded guilty to an Indictment charging him with concealment of assets in a bankruptcy proceeding, and swearing a false oath or account. Those charges arose from the following set of facts. In 2009, a lawsuit was filed against the defendant and several of his companies for breach of contract among other issues. In April 2014, the case proceeded to trial in the Philadelphia Court of Common Pleas and the jury returned a verdict against Korn and his companies in the amount of approximately $2.4 million.
Over the course of the next few days following the verdict, Korn purchased a BMW X3, a Porsche 911, a Porsche Cayman, charging all three luxury vehicles to his American Express credit card. Additionally, Korn purchased a cashier’s check for almost $200,000, payable to himself, drawn on his personal bank account. The defendant cashed this check the following day at a check casher, receiving approximately $196,000 in cash and paying a check cashing fee of about $4,000. He then filed for Chapter 11 bankruptcy.
Under the bankruptcy code, debtors must complete financial Schedules, including a schedule listing all of their personal property (assets) , and a Statement of Financial Affairs which discloses all financial data. Debtors must also file a Declaration, under penalty of perjury, that they have read the schedules and summary they are submitting and that all are true and correct to the best of their knowledge. In Korn’s filings, he did not list the recently purchased luxury vehicles among his assets or in his schedule of personal property, but he did include American Express in his schedule of creditors, along with the total debt that he owed American Express – an amount that included the purchase price of the cars – without revealing what was purchased on this credit card. The defendant also did not disclose the recent liquidation of nearly $200,000 in cash from his bank account, instead listing that bank account with an approximate balance of only $9,300. Korn also omitted other assets from his bankruptcy statements including a 21-foot ski boat and two wave runners. At a later proceeding in the bankruptcy, Korn swore an oath under penalty of perjury and testified that he did not own any carsand only had an old motorcycle and a leased Honda.
“Mr. Korn abused the bankruptcy court system in an effort to enrich himself while cheating his creditors,” said First Assistant U.S. Attorney Williams. “He tried to play games to avoid fulfilling his fiduciary obligations, but the dedicated investigators on this case uncovered his lies. Today’s sentence provides justice to those Mr. Korn attempted to swindle.”
“Perjury and concealment of assets in a bankruptcy case are serious crimes,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “Scott Korn sought to use the federal courts to defraud his creditors and today’s sentence holds him accountable. It should also serve as a warning to anyone else looking to game the system. Expect to be caught and prosecuted.”
The case was investigated by Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Karen Grigsby.