“Bankruptcy court corruption is not just a matter of bankruptcy trustees in collusion with corrupt bankruptcy judges.” — AG John Ashcroft

By Sydney Sullivan

gavel moneyEvery day I hear more stories about alleged corruption in the courts, not only when it comes to foreclosures, but also bankruptcy – especially when families are trying to protect their homes. It is more than obvious that the system is flawed.

Judges are not necessarily adept, specifically educated or predisposed to this new form of securitization…these quasi-securities called NTMs (nontraditional mortgages). Nor are they willing to risk their investment portfolios and mutual funds to protect the average citizens in America.

justice for saleAdd the “rat pack” mentality to the judicial mix and you have a recipe for judicial corruption that apparently abounds across the United States from Maine to Hawaii. Watch any of the BBC law-related programs and the same theme applies abroad. We are unfortunately in an era that smacks of ignored improprieties and a judicial trail sprayed with unnecessary human misery and degradation.

A year ago this story was posted on Daily Kos by laserhaas for Citizens Against Tryanny Cronyism & Corruption. It is ringing even louder today because no one is reining in the corruption. If suspected corruption gets reported (and believe me when I tell you there is a conspiracy level of corruption that appears to exist), little is done to correct the injustice and the judicial “rat pack” become vindictive and malevolent.

The longer the rat pack “clicks” remain in tact the more likely the corruption increases and expands its web. Money is usually at the root of the corruption – whether it is a financial investment portfolio or the poorly written federal laws that pay a bankruptcy trustee and his attorneys first from the proceeds of the estate (an automatic incentive to pillage and fee crank) before any other debts or creditors.

To Hague Global Forum on Corruption AG Aschroft on Corrupt Federal Judges’ Collusion w US Trustee’s

AshcroftWe all know that there are bad faith judges, police and prosecutors who are willfully blind to the bad faith acts of their friends, relatives and campaign donating hordes. Unless someone is watching, the Chief of Police is unlikely to arrest the drunk driving judge.

The question is, how far does cronyism and corruption bad faith acts travel up our system of justice bad faith ladders? According to then Attorney General (pic right by Cage Skidmore Wikipedia) of the United States, John Ashcroft. He penned that corruption goes all the way to the top where he wrote this to the Hague Global Forum on Corruption;

“Bankruptcy court corruption is not just a matter of bankruptcy trustees in collusion with corrupt bankruptcy judges. The corruption is supported, and justice hindered by high ranking officials in the United States Trustee Program –“. emphasis added

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Defending Organized Crime

You cannot tackle tyranny, cronyism and corruption in our legal systems, without incurring the wrath of nearly every lawyer on the block. They will argue that a judge said this, or a court said that or the police did not arrest anyone; thus no crimes could have occured – Correct?

If some attorney robs a bank, right in front of the restaurant where the Chief of Police is eating with the head prosecutor and the Chief Justice – and they say – it was just a “conflict of interest” issue. That their lawyer friend who practiced before them for a decade just became a disgruntled person denied his rights to possess his “due process” portion of the American Dream.

????????Crony (good ole boyLogic arguments that robbery is not “really” a crime.

After all, the wayward attorney is really a good guy. His cousin runs the local newspaper that backed the Chief of Police’s campaigns and both the wayward attorney and the Chief of Police helped get the Judge appointed who just so happens to be the great uncle twice removed of the prosecutor. Plus, the wayward attorney wants to give half to Citizens United Super Pacs; he’s “their” type of player. Thus, who cares what he “misappropriated” in his single aberrant act of waywardness. No one really cares – Right?

Unless you are the victim who lost your life savings

         Thus, if you are important enough, wealthy enough or powerful enough,

Banks & MERS lie under oath and forge paperwork(s) in court

band of liars and thievesWe have banks and MERS lying under oath tens of thousands of times, on millions and billions of dollars of homes with a multi level scheme that can still cause the collapse of our entire American economy – if not handled correctly.

Yet, they are not investigated or arrested. Instead they are “Bailed Out”. As Matt Taibbi states in his very apropos article that is nicely & aptly titled “Bank of America: Too Crooked to Fail” – where Taibbi states;

“At least Bank of America got its name right. The ultimate Too Big to Fail bank really is America, a hypergluttonous ward of the state whose limitless fraud and criminal conspiracies we’ll all be paying for until the end of time.”

Here’s one issue that even Matt Taibbi has not written about – Yet. It seems that judges have a serious “conflict of interest” issue when it comes to Banks and the Securitization of mortgages. Their retirements depend on making sure the banks do not lose monies. http://livinglies.wordpress.com/…

Prosecutions of Martha Stewart, Barry Bonds & Roger Clemens

Now lawyers can lie under oath, Notaries can forged notary papers so that they can drive a BMW or Mercedes, but if you are John/ Jane Doe or even an individual like Martha Stewart, Barry Bonds or Roger Clemens, don’t you dare lie verbally to a federal agent or Washington panel – that is PERJURY – and you WILL be prosecuted to the fullest extent of the Nationally publicized LAW.

        Martha Stewart lied to federal investigators about making money on inside information for saving her investment, when she learned it might go wrong. The real crime is the guy who told her. How would anyone react? You would pull back your investment. She had bad legal advice and she have Never said a word, much less lied.

       Barry Bonds was convicted for lying too. Actually, it was not even lying that he was convicted for. They wanted to thump him so bad, they convicted him of an “evasive” answer to federal authorities. Meanwhile Roger Clemens 2nd trial continues. His 2011 trial was halted and a mistrial declared, due to prosecutorial misconduct. They can get more than 1 chance, even when they do wrong. But Bonds & Clemens must pay the piper on cases that were obviously only brought forward because of how important they were.

perjuryTrustee argues that false statements are Not Lies under oath

Bad faith is bad faith, crimes are crimes and lying under oath is – – ? As a Trustee in the federal case of Walker v Walden argued, that her false testimony is not “necessarily” a lie. Good ole boys (and girls) are not suppose to prosecute each other for Perjury (lying under oath).

         In this case (In re: James Walker, 515 F.3d 1204 (11th Cir. 2008)) – it was noted by the 11th Circuit, that Fraud on the Court had transpired by the Creditor’s Trustee testifying falsely. But there is a reason that was not reported by the main stream press. This particular Trustee was NOT an attorney at Law – therefore she was fair game. The 11th Circuit stated the obvious (as noted at Fraud on the Court Blogspot) that;

“Lying under oath is lying under oath.”

Of course lying under oath is Lying Under Oath. But, when you are an attorney at Law, they circle the wagons to protect one of their own – as protecting the whole profession against any and ALL assaults by those who are not attorneys at law. You and I, or Stewart, Bonds, Clemens, will go to jail for it. But, if you are Bank of America, Goldman Sachs, Bain or their attorneys – then it gets cloudy. Lying is not necessarily a really bad thing and stealing from your client to help your other secret clients – Well – that’s just a “conflict of interest”. It is really No big deal –

            Unless you are the victim of conflict of interest robbery

AG Ashcroft denotes that US Trustee’s and Judges PUNISH victims

justice4The entire crux of this Diary is the fact that there ARE corrupt judges and corrupt Department of Justice officials (United States Trustee’s in particular) – who engage in bad faith acts for the sake of Organized Crime. When Laser Haas says such, it is really of little consequence. When AG Ashcroft says the same thing – vindication does not get any better.

          Here is the exact quote from the Testimony of Francis C. P. Knize as denoted to the public comments on the RULES GOVERNING JUDICIAL CONDUCT. Where it quotes the Attorney General John Ashcroft’s remarks to the Hague Global Forum on Corruption verbatim;

Bankruptcy court corruption is not just a matter of bankruptcy trustees in collusion with corrupt bankruptcy judges. The corruption is supported, and justice hindered by high ranking officials in the United States Trustee Program. The corruption has advanced to punishing any and all who mention the criminal acts of trustees and organized crime operating through the United States Bankruptcy Courts. As though greed is not enough, the trustees, in collusion with others, intentionally go forth to destroy lives. Exemptions provided by law are denied debtors. Cases are intentionally, and unreasonably kept open for years. Parties in cases are sanctioned to discourage them from pursuing justice. Contempt of court powers are misused to coerce litigants into agreeing with extortion demands. This does not ensure integrity and restore public confidence.

The American public, victimized and held hostage by bankruptcy court corruption, have no where to turn.” [emphasis added]

Now, can this really be emphasized enough? The Attorney General of the United States of America, has gone on the public record as stating that there are:

  • corrupt bankruptcy judges
  • bankruptcy trustees in collusion with corrupt bankruptcy judges
  • justice hindered by high ranking officials in the United States Trustee Program
  • The corruption has advanced to punishing any and all who mention the criminal acts
  • organized crime operating through the United States Bankruptcy Courts
  • [U.S.] trustees, in collusion with others, intentionally go forth to destroy lives.
  • Cases are intentionally, and unreasonably kept open for years.
  • Parties in cases are sanctioned to discourage them from pursuing justice.
  • Contempt of court powers are misused to coerce litigants
  • [Corrupt’s] coerce litigants into agreeing with extortion demands
  • American public, victimized and held hostage by bankruptcy court corruption,
  • held hostage by bankruptcy court corruption, have no where to turn

Organized Crimes within our federal systems of justice

 corrupt judgesIt is undeniable that bad faith acts can transpire. We are not saying the systems are corrupt. We are pointing out that PEOPLE are corrupt within the system. Thus there  exists irrefutable evidences that there are rogue elements operating within our federal systems of justice.

We must purge ourselves of this assault upon the Constitution of the United States by the very people We, U.S. “pays” with tax payer dollars, to defend us from enemies foreign and DOMESTIC.

A 5th Circuit United States Court of Appeals Justice [Honorable Edith Jones] – who spoke at a Harvard Law School seminar advisary said;

Having lost sight of the moral and religious foundations of the rule of law, we are vulnerable to the destruction of our freedom, our equality before the law and our self-respect.

Read more HERE.

moneyAt the root of corruption stems the “money” issue and as trustees and their hired guns (attorneys) get paid first, the incentive to fee crank is automatically built in.

Let’s take an average Chapter 7 asset bankruptcy where the debtor has turned over assets worth $150,000. The trustee hires an outside attorney firm (at special inflated rates) who ends up billing $115,000 for less than 2 months work in total and the trustee get a piece of the assets’ value for management fees, another $25,000 – leaving little to nothing for the creditors.

In some cases all the money can be eaten up by the trustee’s attorney who is over billing or over litigating issues that could have easily be settled in a conference call; and, the judge signing off on the motions to pay the exorbitant fees. God forbid the debtor challenge the fees or a bad collection deal – that just opens up the direct line to retaliation …and there is no where to complain or be protected. There is no whistle-blower safe harbor in the bankruptcy arena.

While this may not sound like a lot of money – think about it on a grander scale where there are 1500 – 3000 bankruptcies under the trustee’s belt and some of them are multi-million dollar estates. And of course, there are the bigger corporate bankruptcies where billing and fee cranking are easily hidden. Trustees and their attorneys have been known to fee crank for 2-4 times the amount of the estate and then generously tell the judge that they’ll be willing to take 50 cents on the dollar (which just so happens to be all that was collected in the estate).

rat_pack_backgroundThe corruption rat packs are usually small in number and powerful. Bankruptcy judges are not Article III and they do not have life tenure on the bench. After 14 years, these magistrates are looking for a new home to hang their shingle. Some judges end up with the attorney firms the trustee has hired, as does the trustee in many cases. It wouldn’t be surprising to find a pot of money squirreled away from these fee cranked cases used as a signing bonus for the judge who adds a bit of prestige to the firm.

While Congress has written some powerful statutes and rules like 18 USC § 15718 USC § 1001 and Bankruptcy Rule 9011 – these are rarely held against the rat packs even when they are asserted with clear and convincing evidence. The judges have more than a modicum of discretion to decide to ignore the facts and free the legal corruptors. Besides, if the court were to sanction the corruptor – that might mean less money for the poker game or signing bonus.

the_corruptor_ii_by_iborart-d6aeh2uJudges know it is costly to appeal and those folks in bankruptcy have very little money or the debtor wouldn’t be there in the first place. This rat pack mentality is not interested in justice or protecting and giving the debtor a fresh start. It’s all about the money and that means the wild cards are always in play.

Follow the rule of law – appearance of impropriety – aw phooey! It went out the window a long time ago. “You lie and I’ll swear to it” has replaced integrity.

Can it be fixed? Of course it can. Every federal Congressional legislator might want to consider the following:

1.     Start with a study in every bankruptcy district calculating the trustees’ and their attorneys’ annual collection of fees granted by the court(s) from the debtors’ estates. I promise it will create a shit-storm of controversy.

At that point, calculate the cost of hiring young lawyers as the trustee’s assistants and law students as paralegals, ON A SALARY rather than a percentage, and divide those $50k – $85k salaries into the fees the corruptors have collected.

class1For example, one average case recently had the trustee’s corruptor (attorney firm) bill over $1 million in fees and the case is not over yet. There could have been 10-20 lawyers hired for an entire year on that one case’s fees alone! And those 10-20 lawyers and paralegals would likely be working on several cases throughout the year. It just doesn’t make sense to continue to allow the known fee cranking and percentage basis – especially in this economy and to the detriment of the debtor, the creditors and the estate.

I’d be willing to bet that if the figures were compiled there’d be enough money to put law students through college and agree to return to work for the district for a minimum of 5 years on a workforce for education program, plus pay their salaries and get more honorable work accomplished.

2.     Move bankruptcy judges around or shorten their terms to 4 years. They become too friendly with local counsels and have trouble remaining impartial when they remain in one spot.  Bankruptcy judges should have the option of moving or applying to another district after four years. I’d rather see bankruptcy judges paid more so they’d be inspired to move and hopefully maintain integrity.

3.     Listen to the US Trustees, DOJ and FBI when they tell you they suspect there are problems in a district and/or they have gotten complaints. Allow them to investigate when allegations can be supported by evidence. This may be the only way to weed out the bad apples and clean up the bench.

integrity defDon’t get me wrong – there are good guys (and gals) out there on the bench. But by not making judges and trustees toe the line or hold them accountable for wrong doings, it not only burdens the appellate procedure, it wreaks havoc with society in general.

10 thoughts on ““Bankruptcy court corruption is not just a matter of bankruptcy trustees in collusion with corrupt bankruptcy judges.” — AG John Ashcroft

    • we are in chapter 13 and we should be paid out 6 months before our 60 month plan is over but this judge in south bend in she is making us continue to pay for the full 60 months then a aditional 6 months after the 60 months because our house was in the bankruptcy but we were not ever late or behind on our house i would like to know who and how to make her accountable for her actions

  1. I’m currently going thru a situation where the trustee and his lawyers are cranking up fees and even tho I don’t hold equitable title to our home, they are doing everything in their power to get fees. We even showed proof that there is a trust in which my father is equitable owner, the judge still did not allow my transfer to chapter 13. He denied it. I’m in shock and I would like to know what else I can do to take this further and get help on a higher level? Any suggestions?

  2. Detroit bankruptcy court is horrid. Lin and company fake it all, exceed the statutory time periods, rack up fees that exceeded my total debt.
    Another government sham.

  3. I do need some help I lost a case I never should have . If you can help me I need some . 910-528-1195 . Karen semprevivo

    • Karen , where do you stay at? And you lost a case, how? I know of a great bankruptcy specialist that is helping me with my case. I’m in Los Angeles

  4. I had a lot of equity in my home which sold in January 2016. Only one debtor which has been paid. There’s over $100,000 left after paying that. Now trustee won’t release my money and I believe my attorney is in on it. I consulted with another attorney about the collusion between the trustee and my attorney only for her to call and repeat everything I told her. Yes I had a retainer with her. I don’t know what to do now. Do I have a case? This happened in Atlanta.

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