USTP Press Release
For Immediate Release
February 18, 2000
L.A. LANDLORD CONVICTED ON
THREE COUNTS OF BANKRUPTCY FRAUD
LOS ANGELES--Bernard Gross
of Los Angeles was convicted February 16, after a two-week
jury trial, on three counts of bankruptcy fraud for making
false statements in his bankruptcy papers, United States Trustee
Maureen Tighe announced today.
"Gross' false statements prevented
the Bankruptcy Court from learning about other potentially
related bankruptcy cases, and about properties and businesses
that may have been connected with other bankruptcy filings,"
Tighe explained. "Failure to disclose information serves to
conceal abuse of the bankruptcy system and prevents creditors
from protecting their legitimate claims."
Gross filed for bankruptcy
in August 1996 in Santa Ana, Calif. In papers submitted in
connection with that case, Gross made false statements concerning
the number of times he had previously filed for bankruptcy,
the number of properties he owned, and the number of businesses
he controlled. For example, Gross stated that he had filed
for bankruptcy only once before, when he had actually filed
seven prior cases between January 1991 and August 1996.
Since at least 1989 Gross
had filed multiple bankruptcies, in his own name and in the
names of others, to protect as many as 800 rental properties
from foreclosure. On Jan. 14, 1997, the Bankruptcy Court for
the Central District of California enjoined Gross from filing
further bankruptcy cases. On Feb. 4, 1997, the Bankruptcy
Court fined Gross $85,000 on the basis of evidence, provided
by the United States Trustee, that Gross had filed his bankruptcy
petition in bad faith and for an improper purpose.
In December 1997, Gross was
indicted on 17 counts, primarily involving bank fraud. The
criminal case ultimately went to trial on the bankruptcy fraud
counts pertaining to the Santa Ana bankruptcy filing. Financial
analyst Marilyn Sorensen and Attorney Advisor Michael Hauser
of the United States Trustee Program's Santa Ana office had
engaged in an extensive investigation and had determined that
Gross failed to list the prior bankruptcies filed, real property
owned, and businesses controlled by him. Sorensen testified
at the criminal trial, and an audiotape of her prior examination
of Gross was played for the jury. The case was prosecuted
by Assistant United States Attorney
Kendra McNally
.
Meanwhile, in October 1998,
the United States Trustee filed an application for an order
to show cause why Gross should not be held in civil contempt
of court for violation of the 1997 Bankruptcy Court injunction
and failure to pay the $85,000 sanction. On Dec. 7, 1999,
the Bankruptcy Court found Gross in contempt and referred
the matter to the District Court for appropriate punishment.
The District Court has not yet heard this matter.
The United States Trustee
Program is a component of the Justice Department that monitors
the administration of bankruptcy cases nationwide. Tighe serves
as United States Trustee for Region 16, the Central District
of California.
Contact: Maureen Tighe, United
States Trustee, Region 16
(602)
640-2100
Jane Limprecht, Public Information Officer
Executive Office for United States Trustees
(202) 305-7411
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