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Surprise: Sometimes lying will get you in trouble.

By Sam Calvert, Attorney At Law |

Blog by Sam Calvert, Attorney at Law

I recently saw a news report about a man in Pennsylvania who got caught in some serious lies in his bankruptcy.

Scott H. Korn was sued in the Court of Common Pleas in Philadelphia, along with a number of other entities. He lost, and in April 2014 a judgment for about $2,400,000 was entered against him. The bankruptcy case is 14-1313, the criminal case is 19-CR-248, and I believe the state court case is 091202418.

According to the criminal indictment:

On or about April 12,2014, defendant SCOTT H. KORN purchased a 2009 BMW X3 for approximately $26,085. On or about April 14,2014, defendant SCOTT H. KORN purchased a 2014 Porsche 911 for approximately $118,176. On or about April 15,2014, defendant SCOTT H. KORN purchased a 2014 Porsche Cayman for approximately $68,267. Defendant SCOTT H. KORN charged all three cars to his American Express Centurion Card.

( I don't know about you, but I don't know if American Express card would let me charge $212,000 worth of cars in one week!)

Mr. Korn then filed Chapter 11 bankruptcy (a reorganization) on April 21, 2014.

He "forgot" to list the BMW and the two Porsches in his bankruptcy paperwork. He "forgot" to list a lot of other stuff, too, including $214,000 of cash, a 21 foot ski boat, $30,000 of tax refunds, etc.

He was asked at his trustee meeting if he owned any vehicles (other than a $4,000 Harley and a leased Honda) and he flatly denied owning other vehicles.

I don't know who "turned him in", but someone did or somehow the justice system found out about it. A grand jury issued an indictment dated April 19, 2019; and the case wound its way through the system for a while, and in August 2019 there was a plea hearing. Mr. Korn pled guilty to two counts, involving hiding the BMW and the two Porsches and making false oaths in his bankruptcy papers.

He has now been sentenced to a year in jail, three years of supervised release, a $50,000 fine, and some other conditions.

In the meanwhile, American Express sued him in his bankruptcy, and he wound up agreeing that he would not get a discharge of his debts.

It is probably true that some people lie in their bankruptcy paperwork. (For that matter, it is probably true that some people lie in reporting political contributions, and how many fish they caught last week, and lots of other things). But this case shows that if you get caught lying in bankruptcy or hiding assets that there may be some serious repercussions. Mr. Korn got his bills back, even though he filed bankruptcy, and he gets to spend time in prison, and he gets to spend three years on supervised release, and he gets to pay a $50,000 fine.

There is a saying: "Bulls make money, bears make money, pigs get slaughtered".

Don't be a pig!!

As always, if you have questions about bankruptcy, feel free to contact me.