In Bankruptcy Crime, Bankruptcy Information

Photo by Helen Richardson/The Denver Post

A Boulder, Colorado, spinal surgeon reportedly reached a plea deal with federal prosecutors after she was charge with bankruptcy fraud. Cathleen Van Buskirk was indicted last December and charged with bankruptcy fraud, concealment of assets, money laundering and fraudulent transfer of assets. According to the indictment (which is merely a claim, not proof), Dr. Van Buskirk failed to report $46,000 in cash or deposits,200 U.S. silver dollars, foreign currency, gold coins and one diamond ring in her 2014 bankruptcy filing. She was also alleged to have transferred around $170,000 to several companies that prosecutors said she controlled even though they were registered to her sister or an employee. The indictment said Van Buskirk fabricated invoices from those companies to hide her true relationship to them.

It doesn’t take a genius to figure out what happened. Dr. Van Buskirk got into money problems. Most likely, if the picture in this article from Boulder’s Daily Camera is any indication, her lavish lifestyle exceeded her substantial earnings. Being forced into bankruptcy, she decided she needed to salvage something from the grasp of the trustee, so she became what she thought was creative in ways to hide part of her assets. Alas, it didn’t work as she had planned. The trustee found out about the hidden assets, referred her case to federal prosecutors, as the trustee is obligated to do when he suspects bankruptcy fraud, and the FBI, who is pretty good at digging into things, found a lot more than a few silver dollar coins.

Bankruptcy is intended for honest debtors. The law makes a contract between the debtor and her creditors: You, debtor, disclose everything you own and turn over everything that isn’t exempt to the trustee. In return, you get out of paying your debts. When you tell the truth and do that, the system works just fine. When you don’t — well, you might end up looking at 20 years in a federal prison.

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