Former Willmar Attorney Sentenced to 18 Months in Prison for Bankruptcy Fraud
ST. PAUL, Minn.– A former attorney from Willmar has been sentenced to 18 months in prison, followed by one-year of supervised release and required to pay a $20,000 fine for fraudulent concealment of bankruptcy assets, announced United States Attorney Andrew M. Luger.
According to court documents, on November 3, 2015, Gregory Ronald Anderson, 63, a former attorney, prepared and filed a voluntary bankruptcy petition on behalf of his client, James Alan Rothers. Upon the filing of the petition, Anderson knew that Rothers’ assets, wherever located, became property of a “bankruptcy estate” to be used to pay Rothers’ creditors. Anderson also filed a set of Rothers’ bankruptcy schedules in which Rothers was required to disclose, under penalty of perjury, the full extent and value of all Rothers’ assets as of November 3, 2015. As Rothers’ bankruptcy attorney, Anderson had to certify that the petition filed with the bankruptcy court was true and accurate.
Prior to the bankruptcy filing, Anderson created fake liabilities to create the appearance that Rothers was insolvent when, in fact, Rothers could easily have paid all his creditors. Specifically, Anderson arranged to have a fictitious lawsuit filed against Rothers, and then instructed Rothers to default in that lawsuit. This created a judgment of approximately $608,000 against Rothers to further the appearance that he was insolvent. Anderson also created documents that made it appear that an Iowa company had loaned $240,000 to Rothers and that Rothers had to repay this loan. This loan was fabricated and created to bolster the appearance of Rothers’ insolvency.
Nevertheless, when Anderson filed Rothers’ bankruptcy petition on November 3, 2015, he certified that he had no knowledge that the information in Rothers’ schedules was incorrect. But, despite this certification, Anderson knew about the above-outlined efforts to make Rothers appear insolvent. Anderson also knew that Rothers had purposefully failed to disclose on his bankruptcy schedules $100,000 in gold coins, $686,000 on deposit in bank accounts for two companies, and $455,484 in uncashed checks. In fact, Anderson helped Rothers open one of the concealed bank accounts and received portions of his legal fees from the other.
Anderson was sentenced on December 7, 2022, in U.S. District Court by Judge Eric C. Tostrud. On August 8, 2022, Anderson pleaded guilty to one count of fraudulent concealment of bankruptcy asset. Anderson’s plea agreement also required his voluntary disbarment from the practice of law.
On November 7, 2019, James Alan Rothers pleaded guilty to one count of fraudulent concealment of bankruptcy assets in U.S. District Court before Judge Susan Richard Nelson. Rothers will be sentenced at 10:30 a.m. on December 13, 2022.
This case was the result of an investigation conducted by the FBI.
Assistant U.S. Attorney Jordan L. Sing and former Assistant U.S. Attorney David J. MacLaughlin prosecuted the case.