BOISE -- Federal prosecutors say a Meridian man has pleaded guilty to one count of bankruptcy fraud.
Reed J. Bowen, Jr., 50, admitted that in 2004, he committed a scheme to defraud his creditors and the bankruptcy trustee. Bowen disclosed in bankruptcy that he had only a lease on his Meridian home and fraudulently failed to disclose a real estate agreement and contract for deed that granted him an exclusive right to purchase the home for a fixed price.
Bowen purchased the home shortly after bankruptcy and immediately obtained substantial equity in the home.
His bankruptcy disclosures also included an interest in a McCall cabin, however, Bowen fraudulently inflated the mortgages against that cabin and thus under-represented his equity in it. He sold the cabin while in bankruptcy and netted substantial equity from the sale. In the bankruptcy proceedings Bowen discharged over $3 million in unsecured debt so he could finalize the purchase of his Meridian home. Additional charges against Bowen arising out of his bankruptcy were dismissed in exchange for his guilty plea.
“Fraudulent conduct in bankruptcy results in serious consequences which undermine public confidence in the system, and taint the reputation of honest citizens seeking protection under the bankruptcy statutes,” said Thomas E. Moss, United States Attorney.
Sentencing is set for Jan. 19, 2010, before U.S. District Judge Edward J. Lodge in Boise.
The federal charge carries a maximum penalty of five years in prison and a $250,000 fine.
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