Rancho Santa Fe Couple Sentenced to Prison for Roles in Concealing $1.5 Million in Bankruptcy Assets, Evading $6 Million in Taxes and Committing Bank Fraud
Assistant U. S. Attorneys Michael J. Heyman and Joseph J.M. Orabona
NEWS RELEASE SUMMARY – April 6, 2018
SAN DIEGO – On April 5, 2018, J. Douglass Jennings, a disbarred California attorney, was sentenced to 34 months in federal prison for committing bankruptcy fraud (concealment of assets) and for tax evasion. His wife Peggy Jennings was sentenced to four months in federal custody for committing bank fraud.
Mr. Jennings once touted in a commercial that he managed “one of the nation’s leading estate and tax planning law firms.” He appeared on talk-shows and authored two books, including what he claimed in court filings was “highly regarded and one of the best and most complete estate planning treatises to date.” Mr. Jennings also practiced what he described in an advertisement as a “faith-based” approach to financial planning, with some referring to him as “Uncle Doug.”
In January 2010, Mr. and Mrs. Jennings filed a voluntary bankruptcy petition in the United States Bankruptcy Court for the Southern District of California, In re J. Douglass Jennings, Jr. and Peggy L. Jennings, Case No. 11-04720. On September 11, 2017, Mr. Jennings pleaded guilty to devising a scheme to defraud his unsecured creditors by concealing numerous assets and income during the bankruptcy. Those assets and income, valued at nearly $1.5 million, included:
- A stock interest in a real-estate venture valued at approximately $1 million;
- A 53.2 foot luxury yacht known as the “Sea Eagle” valued at approximately $150,000;
- Antique silver items valued at approximately $165,139; and
- $138,694 in salary payments and other benefits in violation of a Bankruptcy Court order.
Mr. Jennings also pleaded guilty to evasion of tax payments in the amount of $5,927,093.00.
At the sentencing hearing, the Honorable Gonzalo Curiel quoted one of the victims of the fraud who described Mr. Jennings as having “manufactured a diabolical morass of massive complexity around his bankruptcy.” Judge Curiel further described Mr. Jennings’ conduct as “callous, uncaring, and deceitful.” Mr. Jennings was sentenced to 34 months in custody for this conduct and his lack of remorse. The sentence was also imposed to deter Mr. Jennings from committing fraudulent conduct in the future since he was already “planning his comeback and planning his resurrection.” The judgment additionally included an order to pay restitution to victims in the amount of $1,453,833.00 and restitution to the IRS in the amount of $5,927,093.00.
Peggy Jennings was sentenced to bank fraud in the related action, United States v. Peggy L. Jennings, Case No. 17CR2306-GPC. Mrs. Jennings had forged her mother’s signature on loan documents, fraudulently transferred funds into her mother’s bank accounts to make it appear that her mother had substantial income, submitted false documents to the bank, and intended to cause the bank losses exceeding more than $226,000. Mrs. Jennings was sentenced to 4 months in custody and ordered to pay a $50,000 fine and $145,481.71 in restitution.
“The bankruptcy system is designed to provide honest debtors a fresh start,” said United States Attorney Adam L. Braverman. “Manipulation of that system through fraudulent acts can cause significant harm and suffering to innocent victims, and will be vigorously pursued.”
“Mr. Jennings’ abuse of his position and manipulation of the system for his own personal gain will not be tolerated,” said IRS-CI Special Agent in Charge R. Damon Rowe. “This case is an example of fraud and deceit at the highest level. Jennings utilized his reputation and experience to lure victims and perpetrate his scheme. Investigating these types of cases and ensuring those responsible are brought to justice continue to be a top priority for the IRS- Criminal Investigation Division.”
“This sentencing reinforces the FBI’s commitment to restoring the public’s faith in the bankruptcy system through the unwinding of this intricate web of deception, bringing this husband and wife team to justice,” said FBI Special Agent in Charge John A. Brown. “Through our partnerships with the Internal Revenue Service and other government institutions, the FBI will continue to pursue and prosecute criminals who defraud American citizens and the U.S. Government.”
“I am grateful to U.S. Attorney Braverman and our law enforcement partners for their strong commitment to combating fraud and abuse in bankruptcy cases, as evidenced by these successful criminal prosecutions,” stated Tiffany L. Carroll, Acting U.S. Trustee for the Southern District of California, Hawaii, Guam, and the Northern Mariana Islands (Region 15). The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. Region 15 is headquartered in San Diego with offices in Honolulu and Guam.
DEFENDANT Case Number 17CR2722-GPC
J. Douglas Jennings, Jr. Age: 73 Rancho Santa Fe, CA
SUMMARY OF CHARGES FOR J. DOUGLASS JENNINGS:
Bankruptcy Fraud – Title 18, U.S.C., Section 152(1)
Evasion of Tax Payment – Title, 26 U.S.C., Section 7201
DEFENDANT Case Number 17CR2306-GPC
Peggy L. Jennings Age: 72 Rancho Santa Fe, CA
SUMMARY OF CHARGES FOR PEGGY L. JENNINGS:
Bank Fraud – Title 18, U.S.C., Section 1344
Federal Bureau of Investigation
Internal Revenue Service