Kanawha County Man Sentenced for Withholding Information in Bankruptcy Case

CHARLESTON, W.Va. – James Eugene Wells, 73, of Marmet, was sentenced today to one year of federal probation for withholding records relating to the property or financial affairs of a debtor in bankruptcy from an officer of the court or a United States Trustee entitled to its possession.

According to court documents and statements made in court, in October 2022, a Charleston business solely owned by Wells’ wife filed for Chapter 11 bankruptcy. Wells helped with the business’ day-to-day management, including by overseeing many of its financial affairs, but was never an employee of the business or a registered owner or manager. As part of his guilty plea, Wells admitted that he applied for and obtained five loans in the business’ name from February 2023 through February 2024, knowing that the business had filed for bankruptcy protection. Wells further admitted that he did not disclose the existence of the loans to the United States Trustee, who oversees the administration of bankruptcy cases in the Southern District of West Virginia.

On January 31, 2024, the U.S. Bankruptcy Court held a hearing on the U.S. Trustee’s motion to dismiss the business’ bankruptcy case. That day, the bankruptcy lawyer for the business informed the U.S. Trustee of the existence of one of the four loans that Wells had obtained by that time in the business’ name. When the bankruptcy court confronted Wells about the loan, Wells lied under oath about the circumstances surrounding its origins. As part of his guilty plea, Wells admitted that he did not disclose the existence of the other three active loans while the bankruptcy judge questioned him under oath. Wells further admitted that the fifth loan, obtained on February 8, 2024, was not approved by the bankruptcy court or disclosed to the U.S. Trustee. On February 21, 2024, the bankruptcy court dismissed the business’ bankruptcy case.

A total of $68,000 was obtained in proceeds from the five loans and used for the business’ operations or to pay down debt. The lender charged the business $9,750 in fees. Wells’ agreement with the lender gave the lender priority status over other creditors, including by granting the undisclosed lender direct access to the business’ bank account. This arrangement allowed the lender to withdraw funds directly from the business’ account without court oversight.

Acting United States Attorney Lisa G. Johnston made the announcement and commended the investigative work of the Federal Bureau of Investigation (FBI). The United States Trustee’s Charleston field office, which serves West Virginia, made the criminal referral of this case to the U.S. Attorney’s Office. The United States Trustee Program is a component of the Department of Justice whose mission is to promote the integrity and efficiency of the bankruptcy system for the benefit of all stakeholders — debtors, creditors and the public.

United States District Judge Joseph R. Goodwin imposed the sentence. Assistant United States Attorney Jonathan T. Storage prosecuted the case.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:25-cr-7.

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