Personal Injury Settlement Goes to Trustee in Bankruptcy
October 8, 2010
First, I am amazed to see the Federal Bureau of Investigation a/k/a/ FBI get involved in what seems to be a $12,000 fraud by a local man concealing his settlement from his bankruptcy trustee.
Second, I get this question often as to who will be in charge if a plaintiff in a personal injury case files for bankruptcy. Generally, when a Plaintiff files for bankruptcy during his lawsuit, the Trustee steps into the shoes of the Plaintiff and takes over the lawsuit by becoming the one who will make all the decisions. The Trustee will decide whether or not to settle it, or to proceed to litigation. The Trustee is also the one who gets the proceeds from the result of the case either via settlement or a judgment. There usually is an exemption of certain amount of money which will go to the Plaintiff but the rest if the Trustee to distribute amongst all creditors.
As the news article below shows, being truthful to one’s Trustee is important.
A Moline man has been indicted by a federal grand jury on charges that he concealed a lawsuit settlement during bankruptcy proceedings.Jacob Herold Jr., 50, is charged in U.S. District Court, Rock Island, with two counts of concealing assets-false oath and concealing assets-claims bribery.According to the U.S. Attorney’s office, Herold concealed a $12,000 settlement he received in a lawsuit against a motel from a bankruptcy trustee in July 2007. In October 2008, he falsely testified in U.S. Bankruptcy Court that he had not received the settlement and that the suit was still pending, prosecutors claim.The case was investigated by the Federal Bureau of Investigation in coordination with the Central Illinois Bankruptcy Fraud Working Group.Herold will be issued a summons to appear in federal court for arraignment, according to a news release from the U.S. Attorney’s office. If convicted, each of the two counts he faces could carry up to five years in prison and a fine of up to $250,000.
If you or a loved one has been a victim of personal injury in Chicago or the surrounding area, contact or call us at 312-252-5252 for a free no obligation consultation to discuss your legal options.