ANATOMY OF A BANKRUPTCY FRAUD

A Case Study And Expose'
Federal Racketeering and International Money Laundering Wrapped In A "Faith Based" Fraud

"Not For Profit" Religious Groups Hijack Bankruptcy Courts..."For Profit!"

 This case epitomizes the scandalous abuse of our bankruptcy courts where the unscrupulous, and the extremely wealthy have hijacked a system that was intended to provide a "fresh start" for those who are deserving of a second chance.  Bankruptcy fraud is especially repugnant when perpetrated by "faith based" organizations, charged with exemplifying the moral and ethical fiber of the community. Instead, they have found sanctuary and a bully pulpit in our federal courts. Cloaked in the garments of the righteous, they use their superior organizational wealth, predatory stealth, and non-profit status to vanquish their victims, senior citizens, and those who would stand between them and their insatiable greed.

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK
One Bowling Green, 7th FL, New York, NY 10004
Chief Judge Stuart M. Bernstein
"This case doesn't pass the smell test"
  • Case No. 04-16410 Filed October 4, 2004; Ch 7
  • Case No. 04-04545 Filed November 15, 2004; AP
  •  Case No. 04-17525 Filed November 24, 2004; Ch 11
  • Case No. 07-01937 Filed July 16, 2007; AP
  • Case No. 07-02052 Filed September 25, 2007; AP
  • Case No. 08-01265 Filed June 16, 2008, AP
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"A Rebuttable Presumption Of Authority"
1) While one side is present and fully represented in court, and the other side is not? There is a bias! 2) When one side is vested with actual authority while the other side is presumed to have apparent authority? There is a bias! 3) Under such circumstances, when a hearing is not scheduled for settlement and yet one is suddenly confirmed? There is a bias! Such were the circumstances in Federal Bankruptcy Court on July 20th, 2005. However, there was still a fourth, and most compelling bias in the court that day. 4) The attorney entering into the binding settlement on behalf of the creditor, specifically did not have the authority to do so.  5) That attorney did advise his client that a scheduled hearing had been adjourned when in fact it had not been adjourned. Upon information and belief, there was a conspiracy to deny the creditor their day in court.

The creditor's absence from the procedings created an overwhelming bias that was at the very least disturbing. The debtor was fully represented, in person and by counsel, while the creditor was not. The debtor concurrently instructed his counsel, and otherwise actively participated in the procedings, and thereby had an immediate impact on the outcome, while the creditor was denied their civil rights. In a 2004 deposition held on Jan 30, 2008, the debtor freely admits to having personally met with the creditors' attorney outside of the court room. HMH believes that "influence" was brought to bear on their attorney which resulted in this unauthorized settlement. The scales of justice were heavily tipped in the debtor's favor.

In the absence of full and equal representation in the court, a binding settlement should neither have been contemplated nor confirmed. For the courts to uphold that attorneys are vested with an apparent authority is to conclude that their clients relinquish their rights when they retain counsel. Clients hire attorneys to represent them, not to hold dominion over them. A client's basic right to affirm or decline a binding settlement is inviolate and must not be usurped. In the absence of a client's physical presence in a court of law, or the client's signed affidavit ceding, or yielding actual authority to an attorney, the court cannot presume that the authority exists. It certainly did not in this case! Justice is a sacred covenant that demands truth; nothing contrived, nothing less. Federal Rules of Evidence!

Facing overwhelming evidence that the creditor's attorney was not authorized to enter into a settlement, the debtor nevertheless mounted a vigorous, eighteen month defense in an effort to cram down the settlement. It is obvious that this was a settlement much to the debtor's liking and ran counter to the interests of the creditor.
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Justice is a concept involving the fair, moral, and impartial treatment of all people, especially in law. It is often seen as the continued effort to do what is "right." Justice is completely contingent upon the equal application of logical and "correct thinking" and it is simply inconsistent with bias.