June 22, 2024
Former Law Firm Partner Arrested For Bankruptcy Fraud
Former Law Firm Partner Arrested For Bankruptcy FraudDamian Williams, the United States Attorney for the Southern District of New York, and Michael...

Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of an Indictment charging JOHN ROESSER, a former attorney, with abusing the bankruptcy system by making false statements under penalty of perjury and submitting falsified records.  By February 2022, after years as a partner at major law firms, ROESSER owed the Internal Revenue Service (“IRS”) millions of dollars in income taxes and filed for Chapter 11 bankruptcy.  Through multiple false statements, ROESSER lied to the Bankruptcy Court and the IRS about his purported receipt of millions of dollars in order to receive the protections of bankruptcy and keep his assets – including a multi-million-dollar residence and an Aston Martin sports car – while not paying his bills.  ROESSER was arrested this morning in Bronxville, New York, and will be presented today in Manhattan federal court.

U.S. Attorney Damian Williams said: “Bankruptcy is a lifeline for many people who need its protections to keep their lives together.  The defendant allegedly corrupted and degraded a system that helps so many.  As alleged, he manipulated the bankruptcy system by lying and falsifying bank records so that he could use its protections to keep his assets and to avoid paying his bills.  And he should have known better — he used to be a lawyer.  This Office will always bring to justice those who use their status to abuse the public’s trust and to try to put themselves above the law.”

FBI Assistant Director Michael J. Driscoll said: “As alleged, Roesser committed bankruptcy fraud when he lied to both the Bankruptcy Court and the IRS about his receipt of millions of dollars so he could retain his assets – which included a multi-million-dollar residence and a luxury sports car – while avoiding paying his bills.  The FBI will continue to investigate and bring to justice those who attempt to fraudulently exploit our nation’s legitimate financial protections to satisfy their own selfish desires.”

As alleged in the Indictment:[1]

From in or about March 2013 through in or about January 2018, ROESSER was a partner at three multinational law firms.  During his time as a partner at these law firms, ROESSER earned substantial income — and incurred substantial income tax liability.  ROESSER resigned from the New York bar in or about June 2020 after admitting to misappropriating client funds.

By 2022, ROESSER owed the IRS, and others, over three million dollars.  He also owned a house that he estimated was worth millions of dollars and an Aston Martin Rapide, a luxury sports car.  Instead of paying his debts, in February 2022, ROESSER filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Southern District of New York.  See In re John Roesser, No. 22 Bk. 22049 (Bankr. S.D.N.Y.) (the “Bankruptcy”).  In a Chapter 11 bankruptcy, a debtor may remain “in possession,” meaning that the debtor keeps possession and control of his assets during the bankruptcy.  But a debtor-in-possession must propose a viable plan of reorganization, which creditors then vote on.  If a debtor fails to comply with the requirements of Chapter 11, a Chapter 11 bankruptcy can be converted to a Chapter 7 bankruptcy or dismissed.  In a Chapter 7 bankruptcy, an appointed trustee usually converts a debtor’s assets into cash for distribution among creditors.  If a bankruptcy is dismissed, the debtor loses the protections of bankruptcy; for example, creditors can take steps to seize a debtor’s assets.

ROESSER told the Bankruptcy Court and the IRS that he would soon receive millions of dollars and be able to pay his debts while keeping his house.  Then, ROESSER filed a false declaration and submitted falsified records in the Bankruptcy indicating that he had received millions of dollars.  This was false.  ROESSER was concealing that he had not received millions of dollars after all, in a fraudulent effort to retain control of his assets while avoiding payment of his debts.

On or about March 3, 2023, after some of the above false statements were withdrawn by ROESSER’s attorney in the Bankruptcy, ROESSER’s Chapter 11 bankruptcy was dismissed.  Without the protections of bankruptcy, creditors can now take steps to seize ROESSER’s assets to pay his debts.

*                *                *

ROESSER, 52, of Bronxville, New York, is charged with one count of falsification of records in bankruptcy, which carries a maximum sentence of 20 years in prison, and one count of false oaths and claims in bankruptcy, which carries a maximum sentence of five years in prison.

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Williams praised the outstanding investigative work of the FBI.

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorney Steven J. Kochevar is in charge of the prosecution.

The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described therein should be treated as an allegation.

Originally published at https://www.fbi.gov/contact-us/field-offices/newyork/news/former-law-firm-partner-arrested-for-bankruptcy-fraud

originally published at HUMAN RIGHTS - USA DAILY NEWS 24