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Kristina Roberts US Trustee Deny Discharge
Kristina Roberts US Trustee Deny Discharge
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In re:
KRISTINA L. ROBERTS,
Debtor.
JUDY A. ROBBINS,
UNITED STATES TRUSTEE,
Plaintiff,
Adv. Proceeding No.:__________
v.
KRISTINA L. ROBERTS,
Defendant.
This Court has jurisdiction over this Complaint pursuant to 28 U.S.C. 1334 and
11 U.S.C. 727.
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2.
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7012-1, the United States Trustee consents to the entry of a final order or judgment by the
Bankruptcy court in this matter.
3.
4.
The U.S. Trustee has standing to file this Complaint under 11 U.S.C. 307 and
7.
8.
After the Defendant filed for relief under Chapter 7, Roger Schlossberg was
On June 11, 2014, the Defendant filed a voluntary petition (Doc. 1) for relief
under Chapter 7 of the Bankruptcy Code in the United States Bankruptcy Court for the District
of Maryland, Greenbelt Division.
10.
On June 11, 2014, the Defendant also filed schedules, statements, and related
On Schedule A (Doc. 1), the Defendant listed real property located at 2500 Old
Largo Rd, Upper Marlboro, MD (primary residence) valued at $950,000 and at 14209 Dunwood
Valley Drive, Bowie, MD (investment property) valued at $530,000.
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Capital One Checking account, a $51 Capital One Savings account, and an $8 Capital Money
Market account.
13.
$3,500.
14.
all personal property of the debtor of whatever kind, the Defendant checked None for all of
the other 31 questions on Schedule B, including: question 5 (books), question 13 (interests in
businesses), question 14 (partnerships or joint ventures), question 22 (copyrights), and question
35 (other personal property of any kind).
17.
property
18.
On Schedule G, the Defendant checked the box indicating that the debtor has no
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On Schedule H, the Defendant checked the box indicating that the debtor has no
co-debtors.
22.
On Schedule I, the Defendant listed Author as her occupation and Simon &
Schuster, Inc. as her employer for 9 years with monthly gross income of $4,729, and $3,159
monthly income after $1,570 payroll deductions for taxes and retirement.
23.
On Schedule J, question 2, the Defendant listed two dependents: a son age 19 and
$5,155, including a $3,365 mortgage payment, and calculated a monthly net income (question
23c) of negative $1,996.
27.
two years preceding bankruptcy), the Defendant listed income from Simon and Schuster, Inc:
$28,374 for 2014 year to date; $91,000 for 2013; and $362,000 for 2012.
28.
On the SOFA, question 2 (other income for two years preceding bankruptcy), the
On SOFA, question 4 (suits within one year preceding bankruptcy), the Defendant
listed three Prince Georges County Circuit Court proceedings: a $1,575,234.60 Direct Lending
Group debt collection judgment; a WBGLMC foreclosure; and a State of Maryland Tax Lien
judgment.
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30.
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On the SOFA, question 7 (gifts within one year preceding bankruptcy), the
On the SOFA, question 8 (losses within one year preceding bankruptcy), the
On the SOFA, question 11 (all financial accounts in debtors name or for the
debtors benefit which were closed, sold or other transferred within one year preceding
bankruptcy), the Defendant checked the box None.
34.
On the SOFA, question 14 (all property owned by another person that the debtor
On the SOFA, question 18 (all businesses within six years preceding the
bankruptcy), the Defendant listed Strebor Books International, LLC, 2500 Old Largo Road,
Upper Marlboro, MD 20772, book sales beginning June 1999 and ending June 2013.
36.
On the SOFA, question 19 (firms or individuals with debtors books, records, and
financial statements within six years preceding the bankruptcy), the Defendant checked None.
37.
Test Calculation - Form B22A (Doc. 5), filed on June 11, 2014, signed under penalty of perjury,
the Defendant checked the box indicating that the presumption does not arise and listed her
annualized current monthly income (question 13) as $56,400 ($31,524 below the median income
of $87,924 for a family of 3 in Maryland).
38.
On July 15, 2014, the Chapter 7 Trustee held the Defendants first meeting of
creditors. The Chapter 7 Trustee, the United States Trustee, and a representative of the $1.6
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million judgment creditor Direct Lending Group questioned the Defendant under oath
concerning her bankruptcy documents filed under penalty of perjury listing over $3.6 million in
liabilities with monthly income of only $3,159 after payroll deductions.
39.
The parties were particularly concerned when the Defendant testified that she had
written and published numerous books under the pen name Zane and was employed by Simon
and Schuster, Inc., but had minimal assets and income.
40.
The Chapter 7 Trustee continued the meeting of creditors to October 16, 2014,
and the Defendant appeared but did not produce the information requested. On December 3,
2014, the Chapter 7 Trustee filed a motion to compel (Doc. 25) the Defendant to attend a
meeting of creditors on December 12, 2014.
41.
On December 8, 2014, an Order (Doc. 30) was entered compelling the Debtor to
During the December 12, 2014 meeting of creditors, the Defendant testified
On December 22, 2014, the Chapter 7 Trustee filed an emergency motion for a
Rule 2004 examination (Doc. 33) of Enrizon Worldwide, Inc. and the Defendants son, Andre
Roberts.
44.
Finally, on January 13, 2015, the Defendant filed Amended Schedules (Doc. 36),
an Amended Statement of Financial Affairs (Doc. 37), and an Amended Chapter 7 Statement of
Current Monthly Income and Means-Test Calculation B22A (Doc. 38) in her chapter 7 case
disclosing income and assets, including Enrizon Worldwide, Inc., that she failed to disclose
during the previous seven (7) months that her case was pending.
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45.
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intangibles), the Defendant added Debtors interest in Zane name, value Unknown.
47.
On Amended Schedule B (Doc. 36, page 3), the Defendant increased the total
On Amended Schedule I (Doc. 36, page 5), question 8h (other monthly income),
On Amended Schedule I (Doc. 36, page 5), question 12, the Defendant increased
On Amended Schedule J (Doc. 36, page 7), question 23c, the Defendant increased
On the Amended SOFA (Doc. 37, page 1), question 1 - Income, the Defendant
increased the 2014 year to date Simon & Schuster income from $28,374 to $100,968.
52.
On the Amended SOFA (Doc. 37, page 4), question 10 Transfers, the Defendant
added a transfer that began on May 7, 2013 to Enrizon Worldwide, Inc. of Wage earnings and
sales earnings from Debtors pen name Zane, approximate value of $500,000. Upon
information and belief, Enrizon Worldwide, Inc. continues to receive the Defendants earnings.
53.
Test Calculation B22A (Doc. 38, page 1), the Defendant changed the Statement from the
presumption of abuse does not arise to The presumption arises.
54.
On the Amended B22A (Doc. 38, page 3), question 12, the Defendant increased
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On the Amended B22A (Doc. 38, page 3), question 13, the Defendant increased
annualized current monthly income from $56,400 to $201,936. Thus increasing the Defendants
income from $31,524 below the $87,924 median income for a family of 3 in Maryland to
$114,012 above it.
56.
On the Amended B22A (Doc. 38, page 6), question 50, the Defendant increased
On the Amended B22A (Doc. 38, page 6) question 51, the Defendant increased
Therefore, on January 21, 2015, the Chapter 7 Trustee filed a Chapter 11 petition
for Enrizon Worldwide, Inc. (Case No. 15-10863-PM) on behalf of the Defendants Chapter 7
bankruptcy estate as president, sole director and owner of 100% of the common stock of Enrizon
Worldwide, Inc.
COUNT I
Objection to Discharge 11 U.S.C. 727(a)(2)(A)
(Transferred or concealed property of the debtor with intent to hinder, delay or
defraud a creditor, within one year Before the date of filing the petition)
59.
reference.
60.
Section 727(a)(2)(A) provides that the Court shall grant the Debtor a discharge
unless the Debtor, with the intent to hinder, delay, or defraud a creditor or an officer of the
estate, has permitted to be transferred or transferred, removed, destroyed, mutilated, or concealed
property within one year before the date of the filing of the petition.
61.
the estate, has transferred or concealed property within one year before the date of the filing of
the petition.
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62.
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The Defendant has transferred or concealed personal property that she owned
within one year of the date of filing the petition, which she did not disclose on her original
bankruptcy documents filed under penalty of perjury on June 11, 2014, and not amended until
January 13, 2015.
63.
and sales earnings from the Defendants pen name Zane to Enrizon Worldwide, Inc., as indicated
in the Defendants Amended Schedules (Doc. 36), Amended Statement of Financial Affairs
(Doc. 37), and Amended Chapter 7 Statement of Current Monthly Income and Means-Test
Calculation B22A (Doc. 38).
64.
delay, or defraud creditors and the estate within one year before the date of the filing of the
petition.
65.
727(a)(2)(A).
COUNT II
Objection to Discharge 11 U.S.C. 727(a)(2)(B)
(Transferred or concealed property of the debtor with intent to hinder,
delay or defraud a creditor, After the date of filing the petition)
66.
reference.
67.
Section 727(a)(2)(B) provides that the Court shall grant the Debtor a discharge
unless the Debtor, with the intent to hinder, delay, or defraud a creditor or an officer of the
estate, has permitted to be transferred or transferred, removed, destroyed, mutilated, or concealed
property after the date of the filing of the petition.
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defraud a creditor or an officer of the estate, has transferred or concealed property after the date
of the filing of the petition.
69.
In the original petition and schedules filed in her Chapter 7 case, the Defendant
The Defendant did not file amendments disclosing over $1 million of additional
income, assets, and property until her case had been pending for seven (7) months, after several
meetings of creditors, a motion and Court order compelling the Debtors attendance, and only
after the Court entered an Order granting an emergency motion for a Rule 2004 examination
concerning the unscheduled corporation Enrizon Worldwide, Inc. and the Defendants son,
Andre Roberts.
71.
72.
valued at $105,000.
73.
The Defendant continued to conceal post-petition that her monthly net income
in wages and sales earnings from the Defendants pen name Zane to Enrizon Worldwide, Inc.
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arises in this case. Several months after the deadline for filing a Motion to Dismiss for Abuse,
the Defendant increased her annualized income on Form B 22A (Doc 38) from $56,400 to
$201,936; increased her 60-month disposable income from $0 to $768,840; and checked the box
on Form B22A indicating that the presumption [of abuse] arises.
78.
wilfully with the intent to deceive and to conceal these assets and financial accounts from parties
in interest, the Chapter 7 Trustee, and from the United States Trustee.
79.
727(a)(2)(B).
COUNT III
Objection to Discharge 11 U.S.C. 727(a)(4)(A)
(False Oaths)
80.
81.
Section 727(a)(4)(A) provides that the Court shall grant the debtor a discharge
above.
unless the debtor knowingly and fraudulently, in or in connection with the case, made a false
oath or account.
82.
The Defendant made numerous false oaths and omissions on her original
Schedules (Doc. 1)
83.
The Defendant made numerous false oaths and omissions on her original SOFA
(Doc 1).
84.
The Defendant made numerous false oaths and omissions on her original B22A
(Doc 5).
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85.
86.
87.
88.
The Defendant committed a false oath by not listing her 401k CBS, Inc. valued
The Defendant committed a false oath by not listing her valuable interests in her
The Defendant committed a false oath by not listing $13,669 monthly income on
The Defendant committed a false oath on her original SOFA question 1 by listing
her 2014 year to date Simon & Schuster, Inc. income as $28,374 when it was actually $100,969.
92.
The Defendant committed a false oath on her original SOFA question 10 by not
listing the $500,000 transfer to Enrizon Worldwide, Inc. that began on May 7, 2013.
93.
The Defendant committed a false oath on her original B22A by indicating that the
presumption of abuse did not arise, and then admitting several months after the motion to
dismiss deadline that the presumption arises.
94.
The Defendant committed a false oath on her original B22A by indicating that her
The Defendant committed a false oath on her original B22A by indicating that her
The Defendant committed a false oath on her original B22A by indicating that her
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The Defendant committed a false oath on her original B22A by indicating that her
The Defendant committed knowing and fraudulent false oaths and accounts when
she failed to list at least $1 million in financial interests in her Schedules, SOFA, and B22A.
99.
727(a)(4)(A).
COUNT IV
Objection to Discharge 11 U.S.C. 727(a)(4)(D)
(Withholding Recorded Information from Officer of Estate)
100.
101.
Section 727(a)(4)(D) provides that the Court shall grant the debtor a discharge
above.
unless the debtor knowingly and fraudulently, in or in connection with the case, withheld from
an officer of the estate entitled to possession under the Bankruptcy Code, any recorded
information.
102.
The Chapter 7 Trustee serves as officer of the bankruptcy estate while the
The Chapter 7 Trustee has standing to request production and is entitled to obtain
possession of any recorded information, including books, documents, records, and papers,
relating to the Defendants property or financial affairs.
104.
As indicated in more detail in the facts above, because of the Defendants lack of
cooperation the Chapter 7 Trustee obtained an Order (Doc. 30) compelling the Defendants
attendance at a continued meeting of creditors on December 12, 2014.
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During the December 12, 2014 meeting of creditors the Defendant finally
disclosed her creation and transfer of assets to Enrizon Worldwide, Inc. However, the Defendant
failed to produce accounting or recorded information related to the company, so the Chapter 7
Trustee resorted to the extraordinary measure of obtaining an Order (Doc. 34) on December 22,
2014 for an Emergency Rule 2004 Examination of Enrizon Worldwide, Inc. and the Defendants
son, Andre Roberts.
106.
The Defendant knowingly and fraudulently in and in connection with the case,
withheld recorded information from the Chapter 7 Trustee, an officer of the estate entitled to
possession under the Bankruptcy Code.
107.
727(a)(4)(D).
COUNT V
Objection to Discharge 11 U.S.C. 727(a)(5)
(Failure to Explain Loss/Deficiency of Assets)
108.
1 - 107 above.
109.
Section 727(a)(5) provides that the Court shall grant the debtor a discharge
unless the debtor knowingly and fraudulently, in or in connection with the case, failed to explain
satisfactorily any loss of assets or deficiency of assets to meet the debtors liabilities.
110.
In the original petition, schedules, and SOFA, which the Defendant filed in her
case on June 11, 2014, under penalty of perjury, the Defendant did not list all of her businesses
or all of her income or all of her personal property, and the Defendant failed to satisfactorily
explain the loss or deficiency of her assets.
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As indicated in detail in the facts above, the Defendant listed $3.6 million in
liabilities in her Schedules with monthly income of only $3,159 after payroll deductions, and the
Defendant failed to satisfactorily explain the loss or deficiency of her assets.
112.
Attendance, and an Order for an Emergency 2004 Examination, has a partial explanation been
provided by the Defendant, but it remains unsatisfactory.
113.
727(a)(5) because the Defendant failed to satisfactorily explain the loss or deficiency of assets.
WHEREFORE, based on the foregoing, the United States Trustee respectfully prays that
the Court:
a. Deny the Defendants bankruptcy discharge pursuant to Counts I, II, III, IV or
V; and
b. Grant such further relief as the circumstances may require.
Dated: February 11, 2015
JUDY A. ROBBINS
United States Trustee for Region 4
By Counsel:
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