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View Diary: Hostess CEO Received 300% Raise Before Bankruptcy (86 comments)

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  •  It's a felony to plan a bankruptcy to cover up (5+ / 0-)

    fraud, and it's a felony to convey assets with the intent to defraud creditors.

    Filing false bankruptcy court documents is perjury at a minimum.

    Bankruptcy fraud is a federal crime in the United States.

    The bankruptcy court is supposed to rule on these matters. There is a U.S. Trustee from the DOJ who is also supposed to get involved
    http://www.justice.gov/...

    But in the case I cited above (Syntax-Brillian Corporation) the Trustee did nothing. It wasn't until later that individual investors uncovered the Chinese reverse merger scam/fraud that the SEC got involved and charged some of the perpetrators. The shady law firm that arranged the bankruptcy agreed to pay back millions in fees to the creditors trust (a slap on the wrist for them, really, since the bankruptcy filing was covering up actual fraud)

    This case may be different but the vulture investors and their henchmen are well versed in all the loopholes. They know how to get meat off the carcass, let's say.

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