Former Toddville Resident Sentenced to Prison for Bankruptcy Fraud

A former Iowa resident, who made a series of fraudulent omissions in his Chapter 7 bankruptcy case, was sentenced last week to one year in federal prison.

Branden Patten, 40, of Colorado Springs, CO, formerly of Toddville, Iowa, received the prison term after a September 23, 2015, guilty plea to one count of making a false declaration in a bankruptcy proceeding.

In a plea agreement, Patten admitted that, in 2012, he was the owner and sole stockholder of a number of local companies, including National Glass, BLP (doing business as Apple Creek Carpet Care), and Patten Property Management.  On August 15, 2012, after Patten and his companies experienced financial difficulties, a lender cut off his line of credit.  Patten then filed a voluntary Chapter 7 bankruptcy petition in the United States Bankruptcy Court for the Northern District of Iowa.

In Patten’s bankruptcy filings, which were made under penalty of perjury, he knowingly failed to disclose that, in the two weeks preceding his bankruptcy filing, he had signatory authority over three bank accounts that were opened for his son’s newly formed corporations.  Patten also failed to disclose he had transferred two vans equipped with carpet cleaning equipment to his son.  Finally, Patten failed to disclose a new corporation he had formed in June 2012 called “Mission Slimpossible, LLC”, a boat lift he had purchased, a $1,000 deposit to a Canadian resort, and a lease interest in a BMW.

As a part of his plea agreement, Patten admitted in 2009 he had drawn down $50,000 on his line of credit and purchased a 26-foot boat and trailer that was titled in his own name.  In his bankruptcy petition, which was later denied, Patten unsuccessfully tried to claim the boat as his exempt homestead in an attempt to shield the boat from his creditors.