Missouri Couple Charged With Bankruptcy Fraud and Evading Bank Reporting Requirements
A Camden County, Missouri couple are facing bankruptcy fraud and structuring charges arising out of a scheme to defraud the federal bankruptcy court for the Southern District of Illinois. Kevin and Catharine Kahrig are named in a four-count indictment that accuses the pair of bankruptcy fraud and structuring. The indictment also charges Kevin Kahrig, age 47, with making a long list of false statements and omissions to the bankruptcy court. According to the indictment, from 2016-2018, the Kahrigs launched a scheme to conceal Kevin’s assets from his creditors and fraudulently transfer at least $550,000 in assets to his wife, Catharine, age 34. Kevin and Catharine allegedly deposited over $160,000 in cash and checks belonging to Kevin into Catharine’s bank account. Catharine allegedly used the commingled funds in her account to purchase property and selectively pay Kevin’s expenses, while Kevin emptied and closed his own bank accounts, cashing over $200,000 in checks rather than depositing them with the bank. The Kahrigs also allegedly structured over $100,000 in deposits in an attempt to evade bank reporting requirements.
The indictment further alleges that Kevin instructed his business customers to make out payments to Catharine and other family members rather than to himself or his business. The couple is also accused of selling Kevin’s boat and using the $395,000 check to pay off Catharine’s mortgage rather than pay Kevin’s debts.
Kevin Kahrig filed for bankruptcy in May 2018. The indictment charges him with making numerous false statements and omissions in his bankruptcy filings and subsequent statements under oath to conceal the scheme to defraud.
“Abuse of the bankruptcy system by concealing assets for personal gain threatens the integrity of the bankruptcy system,” stated Nancy J. Gargula, United States Trustee for Southern Illinois, Central Illinois, and Indiana (Region 10). “I am gratified by the actions taken by United States Attorney Wei hoeft and our law enforcement partners to prosecute those who engage in fraudulent conduct.”
Each charge carries a maximum sentence of five years imprisonment and a fine of up to $250,000. The Kahrigs’ initial appearances and arraignments were held earlier today, and both defendants entered a plea of not guilty. Trial is set for May 19, 2021, before United States District Judge Stephen P. McGlynn.
An indictment is merely a formal charge against a defendant. Under the law, the defendants are presumed to be innocent of the charges until proven guilty beyond a reasonable doubt to the satisfaction of a jury.
The investigation was conducted by the FBI, in collaboration with the Southern District of Illinois Bankruptcy Fraud Working Group coordinated by the U.S. Trustee for Region 10, after referral by the U.S. Trustee. The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. Region 10 is headquartered in Indianapolis, with additional offices in Peoria, Illinois, and South Bend, Indiana. The case is being prosecuted by Assistant United States Attorney Peter T. Reed.