Federal Grand Jury Indicts Dallas Man for Making False Statements and Providing False Testimony Under Oath in his Bankruptcy Case
DALLAS — A federal grand jury in Dallas returned a seven-count indictment yesterday charging Gary Michael Beach of Dallas with various offenses stemming from his filing a petition for voluntary bankruptcy in early December 2011, announced U.S. Attorney John Parker of the Northern District of Texas.
Specifically, the indictment charges Beach, 65, with five counts of making false statements under penalty of perjury and two counts of providing false testimony under oath. If convicted, each count charged in the indictment carries a maximum statutory penalty of five years in federal prison and a $250,000 fine.
Beach is scheduled to make his initial appearance in federal court Friday afternoon, before U.S. Magistrate Judge Irma C. Ramirez, at 1:00 p.m.
According to the indictment, Beach filed a petition for voluntary bankruptcy in the Northern District of Texas on December 2, 2011.
On approximately September 13, 2010, Beach, Beach’s father, and Beach’s son formed the Beach 2010 Trust. From approximately December 2009 through July 2011, Beach received approximately $177,500 from the Beach 2010 Trust and two other family trusts. On August 29, 2011, a final civil judgment in Harris County, Texas, was entered against Beach personally that required him to pay an award of $812,000 plus post-judgment interest.
On November 29, 2011, Beach and his co-trustee son caused the Beach 2010 Trust to spend $857,500 of Beach 2010 Trust funds to purchase property (Beach’s personal residence) on Beverly Drive in Dallas. Then, from December 13, 2011, through April 30, 2012, Beach and his son caused the Beach 2010 Trust to spend an additional $35,901 for renovation work on the residence, bringing the total spent on the residence to approximately $893,401.
In late October 2009, Black Horse Resources, LLC was formed; it was owned/managed by Beach’s brother-in-law. On April 1, 2011, Black Horse entered into a partnership agreement with the Beach 2010 Trust, and on June 29, 2011, Beach caused the Beach 2010 Trust to assign its interest in the partnership agreement to the newly-formed Beach Petroleum, LLC. Beach caused the “Articles of Organization” for Beach Petroleum to be filed with the Nevada Secretary of State’s office.
From approximately April 2011 through at least May 23, 2012, Beach fraudulently concealed from the bankruptcy court, the United States Trustee, and creditors his connection to Beach Petroleum and his receipt of Black Horse consulting fees through Beach Petroleum. From April 2011 through May 3, 2012, Beach received a total of approximately $210,000 from Black Horse – all paid directly to Beach or indirectly to Beach through Beach Petroleum.
The five false statement counts charged relate to documents Beach submitted in his bankruptcy case in which he fraudulently concealed material information concerning income received that he knew he was legally obligated to disclose. The two false testimony under oath counts allege that Beach falsely testified under oath when he continued to conceal these consulting fees at his creditors’ hearing in January 2012, and again at his bankruptcy deposition in April 2012.
An indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty.
This case is one of several felony prosecutions of bankruptcy-related crimes generated by the Bankruptcy Fraud Initiative in the Northern District of Texas. Beach is the 21st defendant to have been charged as part of that initiative; 16 have been convicted, one resulted in a mistrial, and four are pending trial.
The U.S. Postal Inspection Service is investigating the case. Assistant U.S. Attorney David Jarvis is in charge of the prosecution.
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