Robert Negrelli, 65, admitted to making false statements during his bankruptcy case filed with the U.S. Bankruptcy Court for the Northern District of Georgia.
Sentencing is scheduled for Nov. 16, and Negrelli faces as long as five years in prison and a fine of as much as $250,000.
"Bankruptcy is intended to provide relief to individuals who are overcome by their personal debts. For the process to work, those filing for bankruptcy protection must be completely honest about their finances," U.S. Attorney Sally Quillian Yates said. "Mr. Negrelli's false statements undermined the integrity of the bankruptcy proceedings and, if successful, would have cheated his creditors out of the money that he owed."
Negrelli filed a bankruptcy petition in the U.S. Bankruptcy Court for the Northern District of Georgia on March 23, 2005. At the time, he was a licensed real estate broker and owed Negrelli Realty, a real estate company in Alpharetta that specialized in the sale of high-end homes and horse farms in the area.
During his bankruptcy, Negrelli made a number of materially false statements that related to the merits of his bankruptcy case, according to the case. He falsely stated that his income from employment or operation of his business was only $81,000 in the two-year period prior to filing bankruptcy, when he knew this was false. When confronted, he admitted he made significantly more income through the operation of Negrelli Realty.
Negrelli also falsely represented in the course of the bankruptcy case that he had listed all potential creditors in bankruptcy when he knew there were creditors with unsecured nonpriority claims that he failed to disclose. During the course of the case, he approached one creditor and asked the creditor not assert a claim. He promised he would pay the creditor whatever he owed after the resolution of the bankruptcy case. He threatened that, if the creditor filed a claim in bankruptcy and testified against him, he would not pay him in the end.
This case was investigated by the Internal Revenue Service and prosecuted by Assistant U.S. Attorney Kurt R. Erskine is prosecuting the case.
"Bankruptcy is for individuals and businesses who have legitimate claims of insolvency and need relief to get back on the right track," IRS Criminal Investigation Special Agent in Charge Reginael D. McDaniel said. "Honest, law abiding citizens are fed up with those who abuse this process by using deceit and fraud to evade their tax obligations."
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