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JUDGE SENTENCES SPOUSE FOR FALSE BANKRUPTCY REPORTS

This blog has been following the case of the now-estranged husband and wife team of daycare providers who apparently hid income after filing a Chapter 7 bankruptcy in Milwaukee. In April, the husband was sentenced to six months in prison for filing false reports. Yesterday, the second shoe dropped, when a federal judge sentenced the wife, who had earlier pleaded guilty, to one year behind bars. Both spouses will also have to pay restitution and go on probation after they are released.

The Milwaukee couple originally went Chapter 13 in November 2001. Their case was converted to Chapter 7 in 2004. Separately and together, the couple received thousands of dollars from the state of Wisconsin’s taxpayer-subsidized childcare program during this time that apparently was not disclosed in the bankruptcy paperwork. According to the Milwaukee Journal Sentinel, from 2003 to 2008, the husband received about $725,000 from the state-sponsored program and the wife received about $540,000 just in 2008 alone. The Sentinel notes that “Federal, state and local authorities are investigating dozens of child care providers for possible fraud.” The couple is not charged in this investigation.

Under the bankruptcy laws in Wisconsin, a debtor must reveal all income, property, and liabilities. Concealing any financial information is against the law, and in some cases can result in the debtor wind up being locked up. So it’s a very bad idea to try to engage in any form of creative bookkeeping. If you are considering an individual bankruptcy in Wisconsin, make absolutely sure that you have compiled a complete set of accurate financial records. You must provide your Wisconsin bankruptcy lawyer with all the documents relating to your personal and business debts so that he or she can address your financial needs in full compliance with the law.