Sycamore Attorney Indicted on Bankruptcy Fraud Charges
ROCKFORD — A Sycamore attorney was indicted today by a federal grand jury on charges of bankruptcy fraud.
KEVIN O. JOHNSON, also known as “K.O. Johnson,” 50, of Sycamore, was charged with four counts of bankruptcy fraud and four counts of making a false oath in a bankruptcy case under penalty of perjury, fraudulently concealing or withholding information in the books or records of the financial affairs of the debtor, and concealing assets.
As alleged in the indictment, Johnson, a Sycamore attorney whose practice included bankruptcy law, filed a Chapter 7 Bankruptcy Petition on Dec. 31, 2011. The indictment alleges that Johnson fraudulently concealed property from the bankruptcy trustee, creditors, and the United States Trustee, including complete information about $1,790,000 of account receivables owed to Johnson by his present and former clients. The indictment charges that Johnson failed to comply with a court order requiring Johnson to turn over all proceeds from the collection of the account receivables. Johnson is further charged with having directed clients not to send any payments to the Bankruptcy Trustee and asking clients to sign misleading documents about the nature of payments they made, despite Johnson knowing that all future account receivable payments were required to be made to the Trustee.
The indictment also alleges that Johnson made false statements concerning his security interests and liens on the $1,790,000 of account receivables, removed invoices and fee agreements from client files, and obstructed the Bankruptcy Trustee by omitting a bank account Johnson used to deposit a check received in payment of an account receivable owed to Johnson at the time he filed for bankruptcy.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
Each charge in this case carries a maximum penalty of up to five years in prison, and a fine of up to $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greater. The Court may also impose a sentence of probation of one to five years, and a term of supervised release of up to three years. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The government is represented by Assistant U.S. Attorney Michael D. Love.