In 1996, an Oversight Hearing on the United States Trustee Program was heard by the Judiciary Committee of the United States House of Representatives that reported "widely reported stories of cronyism, bankruptcy rings, and other scandals that tainted the entire system. "

Bankruptcy clubs/rings, can be best described as organized crime, consisting of extortion, racketeering, and embezzlement, through the United States Bankruptcy courts. When this allegation was made in the Circuit Court in Winnebago County, Pecatonica, Illinois attorney Janet Fuenty opposed it by inferring the person impugned the entire Winnebago County Bar. Please note the difference ... the allegation was made toward the bankruptcy court. Attorney Fuenty applied it to the entire Winnebago County Bar.

A group of attorneys who are appointed trustees in bankruptcy court, came up with a plan on how to embezzle and extort money by setting up people who are already in financial trouble. To do this, they need cooperation and information from attorneys filing bankruptcy cases and those representing parties in the bankruptcy courts. Based on reports from reliable sources who are attorneys, the racketeering operation forbids them from challenging Chapter 7 trustees. More than a few attorneys that refuse to collude in schemes of extortion have found themselves subject to bankruptcy judges that make them return fees, and enjoin them from practicing bankruptcy. Some have found their license to practice law is suspended for several years.

When you're involved in corruption with bankruptcy trustees, judges, and U.S. Attorneys, they can use all of the avenues and resources of the United States Government to bring harmful retribution upon you.

In November 2000, I called the U.S. Attorney's office in Chicago, Illinois to inquire on one case where the person had contacted their office. Their only recommendation to that person was to obtain private legal counsel. I spoke to a paralegal in Scott Lasser's office, making it clear that I would not speak of the evidence of embezzlement and extortion to anyone in authority in Rockford. There is a reason for this. In Rockford, power and authority is in the hands of a few. Natives of Rockford, and those residing there for years, have allegiance to each other. Everyone who is someone knows everyone else who is someone. Talking to anyone about the criminal acts of another could be talking to their cousin, in-law, step-child, or the person who got their spouse a job.

A few minutes after talking to the para-legal, I received a telephone call from Randall Samborn of U.S. Attorney Scott Lasser's office. He introduced himself by name, but not by title. He asked that I send him whatever evidence I had ferreted out. I never did. I am glad I did not. I was informed later that Randall Samborn was Scott Lasser's public relations spokesperson. He's the one that talks to the press. Why would a public relations spokesperson want evidence, and what would he do with it? (Please note, Randall is now a left-over from Lasser's days, and still serves in the same position for U.S. Attorney Patrick Fitzgerald.)

Less than half an hour after that telephone call, I received a telephone call from Keith Syfert, Assistant U.S. Attorney in Rockford. I'm not sure if the paralegal, or Randall Samborn called him with my telephone number. Whoever it was, they could only have had one of two reasons for dishonoring my request. One -- they wanted to intimidate me into silence. If the top dog in authority has my name and telephone number, then it scares me into silence. Two -- the Chicago office sought to obstruct justice by warning the Rockford office that people know about the financial confidence crimes committed by the bankruptcy trustees, Judge, and those attorneys colluding with them in the Northern District of Illinois.

Keith Syfert's conversation was meant as a warning that if anyone is guilty of bankruptcy fraud, he would be the one prosecuting them. Of course, his reference was to victims of Judge Manuel Barbosa's Court, and not toward Chapter 7 bankruptcy trustees. It was a way of saying if people that are fraudulently charged complain, that he would make sure they are prosecuted. Keith's words were not to give anyone trust or comfort in his position and fiduciary responsibility. His purpose was to intimidate and cleverly threaten.

Assistant U.S. Attorney Keith Syfert was concerned with who else I had spoken with, what media or publication I work for, who else works with me, and who are my sources and informers. I had said nothing about having sources and informers. His question tipped me off that he had received the news that the "bankruptcy club" was no longer a secret.

As can be expected, someone from within the club would leak that information, and Keith Syfert, evidently, wanted to know the name of the member or members that dare talk about it. Since I made no mention of the "bankruptcy club," I wasn't about to entertain his questions and demands pertaining to sources and informers. Let him continue to guess if there is one, two, three of more members of the club talking to journalists and others about the club's operation and purpose.

Attorney Syfert retired several years later, but not before he informed several bankruptcy trustees about me. Since 2001, I have been blacklisted, not able to retain employment more than 3 months at any given company in Illinois.

The testimony of a club member is not needed to believe if it exists or not. On this site, there are cases presented that evidence organized patterns used to extort money and property from people under color of official right of the United States Bankruptcy Court. Victims, researchers, advocates, attorneys, and others contribute information to this site that is backed by court documents, correspondence, and other documented evidence. Most have lived the experience.

As I began presenting patterns of evidence to Keith Syfert, his conversation was like a doctor who wants the patient to make a diagnosis without revealing the symptoms. Just imagine a conversation such as this:

What does this tell us? That Keith Syfert, the now retired Assistant U.S. Attorney in Rockford, knows the organized extortion ring of bankruptcy trustees, judge and attorneys, and protects them. I received evidence of this a week later.

Giving him the benefit of the doubt during our telephone conversation, I gave Keith Syfert several case numbers and asked if he would check into them. About a week later, the attorney in one case warned his client not to talk to any reporters. He had a semblance of my name. The only way he could have obtained the information was from Keith Syfert. This demonstrates that instead of Assistant U.S. Attorney Keith Syfert checking into the case to detect wrongdoing on the part of the trustee and attorney, he called them instead to obstruct justice. The attorney for the debtor issued a warning directly to the debtor, and indirectly to me by saying, "We know who she is."

The victim in this case asked his attorney about the "bankruptcy club". He asked straight out if it was true. His attorney admitted that he was "blackmailing" his client because the trustees would blackmail him if he didn't. I am totally convinced that the only reason Keith Syfert phoned me was to find out how much I knew about the "club", and who leaked the information. Keith Syfert did state that any evidence we have of the crimes committed by Chapter 7 trustess was "irrelevant" if he could not have names of "informers and sources."

I have the testimony of a trustee -- face-to-face --that he knows people are being "blackmailed" by the bankruptcy trustees. They use that term because in some cases the people are intentionally setup so it appears they are committing bankruptcy fraud. If they give the trustee money, the charges alleged against them are dropped. If they resist, the trustees allege more charges.

For example, the trustees have demonstrated that when debtors resist extortion schemes, bankruptcy judges order them evicted from their homes --- before they are sold. If there is an offer to buy their house --- they are ordered to vacate before the closing of the sale. When this happens, the people don't have their homestead exemption so they can afford another place to live.

In one case the trustee got bankruptcy Judge Barbosa to order the debtor and his family evicted from their home in February 2001. The trustee withheld the debtor's statutory homestead exemption until January 23, 2002. Bankruptcy trustee Thomas Lester of Hinshaw & Culbertson waited eight (8) months after the closing of the sale of the debtor's home to ask Judge Barbosa to divert portions of the homestead exemption to the trustee's compensation. In spite of federal law providing homestead exemption to the debtor, Judge Barbosa complied with the trustee's request and on January 16, 2002, diverted a portion of the debtor's lawful homestead exemption to the trustee's compensation. (See Abuse of Authority on this site for more details and case number)

Other forms of harmful retribution used against debtors is to divide and conquer. They will use brother against brother, spouse against spouse, sister against sister, mother and father against child. Such deception is carried forth subtly by leading one person to believe that the other is accusing them of being uncooperative, or guilty of the alleged fraud.

The average person knows little to nothing about bankruptcy law. That is why they hire legal counsel. To paraphrase something stated by an attorney, "bankruptcy attorneys assist the ignorant to unknowingly commit bankruptcy fraud."

So what if the debtor quit claimed their house 10 months before filing bankruptcy? Maybe they quit claimed the property in order for someone else to pay the mortgage because they could no longer do so. At least they will still have a roof over their head while seeking employment, or recovering from an illness. Let's face it -- not many people, including parents or other relatives, would loan people mortgage payments for extended periods of time without having ownership of the property.

Ten months later, the person quit claiming their deed finds that their financial situation has not improved. They consider their only option is to file for bankruptcy. The lawyer filing the bankruptcy says that it is okay. As long as the property was not transfered to defraud your creditors, you haven't broken the law. Federal bankruptcy law says that you cannot transfer property within 12 months of filing for bankruptcy. There are some State laws that increase that to 4 years, (such as California and Illinois.)

Of course, the trustee will challenge your motive. He will say you quit claimed the property, not so that the mortgage could be paid by another as you attempted to get back on your feet, but rather, to avoid paying your debts.

One thing for sure -- the attorney had a motive for NOT advising you properly. He will say you are guilty for your actions, while never defending your motive. He will also, no doubt, withdraw from your case upon the trustee filing the complaint. You can declare all you want that you told your attorney everything, including the reason why you transferred the property. You can proclaim in the courtroom that your attorney stated you committed no wrong. It won't make an ounce of difference.

It should be noted that the bankruptcy trustees ALWAYS add a motive in their charges. For example, they will not say that a debtor did not list property on the Schedules because a Court of Law decreed that property to another. They will say the debtor "concealed property of the bankruptcy estate" to "avoid paying creditors."

In the US Bankruptcy Court, Northern Division, Western District, there are six Chapter 7 trustees and one judge. The sixth trustee does not have an office located in Rockford. The Chapter 7 bankruptcy trustees, and their year of appointment to the position, are:

Thomas Lester - Exact year unknown, but some time in or after 1987. (As of May 1, 2007, the list of panel trustees provided by the U.S. Trustee Program does not include Thomas Lester.)

The current judge, Manuel Barbosa, was appointed to the bench in March 1998 after working for the Illinois Department of Human Rights for 18 years as a Commissioner. A law degree is not a qualification to serve as a Commissioner with the Department of Human Rights. Commissioners are not hired, in the common use of the word. They are appointed -- political, patronage positions.

This is DECEPTIVE! Manuel Barbosa was one of thirteen Commissioners. The top position of the Illinois Human Rights Commission is titled Executive Director. That position is followed by a General Counsel. That position is followed by an Assistant General Counsel. The Commission also has a Chief Administrative Law Judge and hearing and motions judges. Barbosa held none of these positions. Chairman of the Commissioners can be likened as being the host of a conference.

The Martindale-Hubble edition for 1997 does not have a rating for Manuel Barbosa. The web site for the library of NIU reports that Manuel Barbosa was with the law firm of Barbosa and Gil located in Elgin, Illinois. Obviously, Manuel Barbosa was able to supplement his income as an attorney with his income as a Commissioner with the Illinois Human Rights Commission. As a Commissioner with the Illinois Human Rights Commission, his annual salary was in the range of $31,616. As Chairman, his salary was approximately $35,129. As a federal U.S. Bankruptcy Judge, his salary is approximately $120,000.

What qualifies Manuel Barbosa to be a judge? Good question. Observed in court, most of his decisions are based on his opinion of the character of the debtors and not on the law or the evidence.

He approved the compensation of a trustee who billed for four (4) months, during which time, Judge Barbosa had discharged him from the case. What reason did Judge Barbosa give to pay the trustee for four (4) months after he ordered him discharged? Because he felt the debtors had been "evasive."

He has entertained motions asking him to void orders entered by the state court. To act as an appellant court in one case, Judge Barbosa barred the non-debtor property owner from filing documents without his pre-approval, denied her approval, then entered a default order that effectively overruled a state court's order.

When debtors present statute that corrects Judge Barbosa, he handles it by banning them from filing documents in their case. In at least one case, the clerks in the bankruptcy court refused to docket the debtor's objection to Judge Barbosa's "ban" order within the 10 days provided by Federal Rule to object to bankruptcy court orders.

Judge Manuel Barbosa's disrespect for Pro Se parties is obvious. No matter how much law they document or quote, Judge Barbosa states his personal, negative opinion of their character to deny their motions and advises them to obtain legal counsel.

Someone knew about the corruption in bankruptcy court, because when Judge Barbosa was appointed, the main boast was, "We went all the way to Elgin, Illinois for a judge." Such boast was to gain the trust and confidence of citizens. They are not to anticipate being victims and victimized by this judge as with the previous, late, Judge DeGunther. However, the trustees did not change, and whomever serves as judge in that court is subject to being victimized by the trustees if they do not go along with the scheme of the "bankruptcy club."

Another very important thing to understand and keep in mind is that Winnebago County Legal Services will not take a bankruptcy case challenging a bankruptcy trustee. Chapter 7 bankruptcy trustee, Stephen G. Balsley, is on their board. Call the Winnebago County Legal Services on a bankruptcy matter challenging a trustee, and they will tell you it is a conflict of interest.

Prairie State Legal Services had an attorney on their board named Wade Morris. Wade Morris stated in a telephone conversation that he cannot take a bankruptcy case challenging bankruptcy trustee Stephen Balsley. Conflict of interest. Wade Morris says he does work for Stephen Balsley. Prairie State Legal Services offers "limited" representation in the area of bankruptcy. Understand that to mean their attorneys will file bankruptcy for clients, but not represent them if trustees should be adverse to any issue in the case.

Chapter 7 bankruptcy trustees who commit extortion and embezzlement under the color of official right, and serve on boards of income-based legal services, guarantee themselves and their friends protection. Their association denies citizens their right for fair, affordable and impartial legal counsel.

After filing an answer to the trustee's alleged charges, the attorney representing the defendant in the Adversary case will inform their client that to continue challenging the trustee will result in more time requiring more legal fees. They recommend that their client give the trustee a pre-determined amount of money to "settle" or "compromise," although all evidence and case law is in favor of the Defendant. If their client should question or insist on the attorney presenting the law, the attorney takes at least one, if not all of the following actions:

2. On the basis that the client has not paid additional legal fees for lack of being provided an itemized bill, the attorney withdraws, alleging that the client has not paid legal fees and/or is not cooperating.

The Northern District of Illinois, Western Division, covers approximately 10 counties. Attorneys practicing law in other counties need the cooperation of the bankruptcy trustees. If they do not agree with their schemes of extortion, fraud and embezzlement, they might very well find their cases dismissed upon motions of trustees.

Members of the "club" are obligated, by club rules, to inform the trustees of any client they have who is not familiar with the law. For example, the case of quit claiming a property deed 10 months before filing bankruptcy. In some cases, the attorneys ill advise their clients, then inform the trustees where they can find money, deeds, or property that the attorney told his/her client they can retain or did not need to list in their bankruptcy schedules.

At least one attorney reported to me that he was threatened by a trustee that he would never practice law again unless he went along with their extortion scheme. Another attorney reported to me that he was threatened with sanctions, and would be slandered by the trustee and judge, unless he withdrew from cases. Not immediately withdrawing, this particular attorney was victim of a suspious automobile accident, and was subsequently criticized in case documents filed by the trustee and judges inferring that he is incompetent.

Upon last report, dues to belong to the bankruptcy club are $3,000 per month. This amount buys referrals and offers security that the attorney will not be given a hard time by the bankruptcy trustees. Most attorneys taking an Adversary case will charge $3,000 as a retainer. This money goes to the club.

Chapter 7 trustees are required to deposit portions of their commissions in an off-shore bank account. Upon last report, it was with a bank in South America. That money is earmarked, its main purpose being to pay politicians to bring nominations of cooperative U.S. Trustees and U.S. Attorneys for the federal bench before the U.S. President. Once nominated, money is then paid to certain politicians to make sure that those nominations are appointed.

It is rumored that a portion of the club's dues pay for Manuel Barbosa's seat. I wrote U.S. Senator of Illinois, Richard Durbin (D) asking what his involvement was in the nomination of Manuel Barbosa. Twice, Senator Durbin ignored my question. The third time, after I stated that it is rumored Judge Barbosa's seat is bought, Senator Durbin replied, "President Bush has not nominated Judge Manuel Barbosa for a position in the federal judiciary."

Again, I wrote asking who nominated Manuel Barbosa for a seat as bankruptcy judge. Senator Durbin's reply addressed how bankruptcy judges are appointed. In case you didn't notice, Senator Durbin did not answer my question.

The attorneys counsel clients on bankruptcy, asking questions pertaining to purchases, business transactions and real estate transactions for the past twelve months. It becomes the attorney's committed duty to the bankruptcy club to assure the client that they will not lose property or businesses or business income. The attorney then files the bankruptcy petition.

When the Section 341 Meeting is scheduled is important. The trustee sitting that day becomes a main player in the plan of extortion. With a friendly demeanor, he goes over the Schedules in the case, types the case as "asset" or "no asset," and approves the bankruptcy petition. Therefore, the debtor is led to believe that if they have committed any wrong, the trustee would tell them so. "What? It's illegal for me to quit claim property 10 months ago? My attorney did not tell me. I want to withdraw my bankruptcy petition and look at other ways for debt relief. "

It doesn't work that way with the club. Everything goes smoothly. Two to three months later, the debtor receives a discharge of debts. In a no asset case, this should pretty much end it all. However, when it comes to the bankruptcy club, this is just the beginning. The very information given to the attorney who says he does not have to include it on Schedules, ends up as knowledge the trustee "discovered."

!!! NEW DEVELOPMENT!!! Discharge of debts are no longer automatic in all of the trustees' preplanned cases. The trustees once used the threat of the revoke of the discharge as their aceinthehole. Now it seems, as evidenced in several cases, they object to the discharge while working on a bribe behind the scenes. In order for the debtor to be officially discharged of debts, they must pay the trustee upfront, and in full.

A very revealing form of evidence that the trustees and attorneys work together to extort money and/or property in a no asset case, is that they do not close it. The average individual believes that discharge of debts is the same as closing their case. Several people have testified to contacting their attorney when receiving the discharge, and being told that their case was closed. (See Confidence Crime In Progress on this site.) In one particular case, the man paid his mortgage for a full year from the time of his discharge, only to have the trustee Motion the court to sell his house after a year. (As reported in Abuse of Authority" on this site.)

Update! Since reporting on how some Chapter 7 trustees keep no-asset cases open, we have discovered that they are now closing them, only to reopen them later on the allegation that the case was closed in error. (The report, "Confidence Crime in Progress , Part 2, Coincidence? provides one example.)

In general, the pattern shows that attorneys refer their falsely charged clients to an attorney who is also a trustee in bankruptcy court. The selling point is to encourage the client that being a trustee makes the attorney more knowledgeable of bankruptcy law than they are.

At least one trustee is known for representing a debtor pro bono -- without charge. It wasn't because he felt any compassion for the debtor. The attorney/trustee colluded with the bankruptcy trustee to take the money the debtor gave to him as a bribe so he would not be subjected to fraudulent charges. The trustee, Stephen G. Balsley, never reported the money he received. His replacement in the case as trustee, Daniel Donahue, filed a no-asset report. The debtor's attorney filed an objection, with a copy of the cancelled check included as an exhibit. However, the debtor's attorney did not appear at the hearing, and the bankruptcy judge dismissed the objection on the basis of want of prosecution.

Unlike other organized crime in America, organized crime in the U.S. Trustee Program uses private parties, bankruptcy trustees, to engage harmful retribution against innocent people who are not parties to the organization. To guarantee that they will not be blackmailed, bankruptcy judges are obligated to rubber-stamp whatever the trustees want. To further protect perpetrators and hinder justice, those politicians who take bribes to nominate the chosen to the bankruptcy bench, and to appoint the chosen to federal benches, allege that separation of powers prevent them from investigating.