Confidence Crime

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Series </B></U></A></div> <div> Widespread Corruption In The Federal Bankruptcy Courts </div> <div> <A HREF="polaroid.htm" TARGET="_top" TITLE="Polaroid"><U><B><IMG BORDER="0" SRC="Symb075c00b700dc99000000.png" HEIGHT="15" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">What Happened to Polaroid?</B></U></A><B> </B><FONT SIZE="2" COLOR="#000000" FACE="Times New Roman" >(Massachusetts)</FONT></div> <bR> <div> <A HREF="stealingland.htm" TARGET="_top" TITLE="Stealing NonDebtor Owned Property"><U><B><IMG BORDER="0" SRC="Wing0a7300a700dc99000000.png" HEIGHT="15" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">Stealing Non-Debtor Owned Property</B></U></A><B> </B><FONT SIZE="2" COLOR="#000000" FACE="Times New Roman" >(Illinois)</FONT></div> <div> <A HREF="unlawful.htm" TARGET="_top" TITLE="Unlawful Request"><U><B><IMG BORDER="0" SRC="Symb075c00b700dc99000000.png" HEIGHT="15" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">Unlawful Request</B></U></A><B> </B><FONT SIZE="2" COLOR="#000000" FACE="Times New Roman" >(Illinois)</FONT></div> <bR> </td> <td valign="top" height=390 BGCOLOR="#FFFFFF" TEXT="#080000"> <div> <I><B><U>Confidence Crime </U></B></I><I><B> - Part 1</B></I></div> <div>   <B>Bankruptcy Case Number 01-70672</B></div> <div> <B>Adversary Case Number 01-07102</B></div> <bR> <div> <B>Li</B><A HREF="#update___final_report" TITLE="Confidence Crime "><U><B>nk to Final Report</B></U></A></div> <bR> <bR> <div> <B>"Every time I offer to meet the demands of the Trustee, the demands go up in price.  </B><B><U>What started as a $2,800.00 request is now $11,200.</U></B><B>"</B></div> <div> <I>(Debtor's statement recorded in case document. )</I></div> <bR> <div> In confidence crimes, for extended periods of time, the victims, unaware of the scheme, attempt to get the perpetrators to do what they promised, and/or what they were paid to do.  This case provides evidence that the victim made an honest, sincere attempt to put an end to the confusion in his case.  The debtor sought justice, but ended up in a quagmire of deals, bartering, and confusion.  </div> <bR> <div> The following case provides documented evidence of the intentional misleading of victims.  What the attorneys and trustees do behind the scene is not presented to the Court to decide if it is lawful, and/or ethical, or not.  When cases are manipulated as evidenced by the following, it provides the trustees with more time and expenses to pad their bill.  Essentially, the benefit in conspiring cases is a financial benefit to the Chapter 7 trustee to perpetrate embezzlement under color of official right.  </div> <bR> <div> After reading the details we have gathered from case documents, ask yourself, if you were the debtor, what would you do?  If you complained, who would you complain to?  We will address this again at the end of this report.</div> <bR> <div> We are referencing documents filed in the case, and providing quotes from those documents.  They are public records.  If anyone wants to verify the information, contact the U.S. Bankruptcy Court in Rockford, IL for instructions on how to obtain case files.  (815-987-4485, Courtroom Deputy; 815-987-4350, Clerk).  Cases documents can also be obtained from the Court's Web site by establishing an account.  (ilnb.uscourts.gov)  </div> <bR> <div> Because the debtor in this case has no clue that he was chosen as a <I>mark,</I> he wrote the Court and the U.S. Trustee for the District, explaining his case, <B>AND ENCLOSED</B> correspondence from his attorney and the Chapter 7 trustee.  The correspondence, along with his attestation of conversations, threads together the evidence that Wells of Justice has heard from other victims of conspiratorial behavior between some attorneys, the Chapter 7 trustees, and the Judge.    </div> <bR> <div> The Chapter 7 trustee in this case is James Stevens.  The debtor reveals that Stephen Balsley, who is also a Chapter 7 trustee and partner in the same law firm with James Stevens, appeared in Court one day on James Stevens' behalf.  During a conversation taking place outside of the courtroom, Stephen Balsley informed the debtor that Steve Brody, (the attorney for the debtor), and bankruptcy trustee James Stevens, "<I>butt heads</I>."   This is a method used to mislead the <I>marked</I> victim.  It redirects him so he will not suspect collusion among the supposedly feuding parties. </div> <bR> <div> In innocence, the debtor advises the court that his attorney and James Stevens are "<I>butting heads</I>," because another Chapter 7 trustee, who is a partner in the same law with James Stevens, said so.  Logically, therefore, the problems in his case must come from the personality conflicts between his attorney and the trustee.  The debtor has confidence that what his attorney has done, advised, and stated to him, and what comes from the mouth of the trustee's partner who is also a Chapter 7 trustee, is the truth.  </div> <bR> <div> This psychological game of divulging that attorneys and trustees "<I>butt heads</I>," conveys to the debtor/victim that attorneys have no convincing knowledge or power to present law or arguments on their clients' behalf.  Subtlety, the debtor/victim is being told that the bankruptcy trustee can and does use the color of authority in his position to fight personal conflicts.  The debtor/victim has already gotten a taste of how he is denied justice, because his attorney and the bankruptcy trustee, "<I>butt heads</I>."  </div> <bR> <div> Bankruptcy trustees present themselves as representatives of the United States government.  (The truth is that they are private parties paid from filing fees and on commission and not on the government's payroll.)  The attorney represents someone who is not able to pay their debts.  Who is the most credible? Once these ideas are placed into the non suspecting victim's mind, they become traumatized with the idea that the bankruptcy trustee can do whatever he wants, lawful or unlawful, and there is no power on earth who can and will stop him.  </div> <bR> <div> Judge Manuel Barbosa does not offer a mediator.  He does not question.  We have looked at Adversary cases filed in the Eastern Division of Illinois and found where mediators are used when the debtor(s) do not have an attorney.  In the Western District, according to the best of our knowledge based on research of case documents and interviews with debtors, they didn't know anything about, and were never offered a mediator.</div> <bR> <div> Looking at the case and what has resulted, Judge Manuel Barbosa ignored the debtor's pleading.  To the best of our knowledge, the U.S. Trustee for the District has never responded in writing to any debtor's complaint or concern about the behavior of Chapter 7 trustees.   Martha L. Davis, while Acting Director of the Executive Office for United States Trustees in Washington, D.C. believes that:</div> <div> "<I>Trustees may have to spend significant time pursuing debtors that do not comply with the bankruptcy laws and court orders, which increases the trustees' fees.</I>"</div> <bR> <div> How about increasing fees because the trustee manipulates cases under the auspice of "<I>butting heads</I>" with the attorney for the debtor?  In this case, we will see that it is not the debtor who is not complying with bankruptcy laws.  There are no court orders entered in the case that require any action on his part.  This case provides evidence that the generic justification of blaming debtors for their own victimization because they are <I>uncooperative</I> is not based on facts.  </div> <bR> <div> In bankruptcy case number 01-70672, the debtor's pleading is Entry No. 8 on the docket sheet.  The first thing Wells of Justice noticed is that although the pleading addresses issues brought about because of the adversary case, the clerk did not enter or reference it on the docket sheet for the adversary proceeding.  If you look at the docket sheet for the adversary case only, (No. 01-07102), you will not find the debtor's detailed pleading concerning issues brought about by the trustee's Adversary Complaint.  Neither is the subsequent Motion to Compromise, generated from the Adversary Complaint, entered on the docket sheet for the adversary proceeding.  It appears that the debtors' complaint and the compromise motion are entered only on the docket sheet for the bankruptcy case in an effort to hide these issues and evidence from anyone who will look at the adversary case only. </div> <bR> <div> The letter from the debtor's attorney, dated June 19, 2001, is page 39 of the debtor's detailed pleading.  It states in part:</div> <div> "<I>A discharge order has been entered in your bankruptcy case.  You should have received a copy of the discharge order.  Nevertheless, I enclose a copy of that order for your records.  In most cases, this means that you are no longer liable for any of the obligations included in your bankruptcy filing unless you have received a notice of an adversary claim or objection filed against you</I>."</div> <bR> <div> The debtor had not received any adversary claim or objection against his bankruptcy filing.  He includes a calendar of events and conversations in his pleading.  On page 3, he states that after receiving the above referenced letter, he had a telephone discussion with a person in his attorney's office who informed him,</div> <div> …"<I>that my filing was completely closed, done and over with</I>."</div> <bR> <div> By the letter from his attorney, and subsequent telephone conversation with his attorney's office that his case was closed, he went on with his life.  </div> <bR> <div> The debtor listed a boat on his Schedules, which the trustee did not ask to have turned over.  After being informed his case had closed, the debtor sold the boat for $1,600.  The debtor also listed a 1971 automobile on his Schedules, which the trustee did not ask to have turned over.  He sold that for $1,000.  </div> <bR> <div> In other cases, there is evidence that at some Section 341 Meetings, the bankruptcy trustee says something to the effect that they "<I>might be taking interest</I>" in property or anticipated money.  However, they allow months, and sometimes a year or more <B><U>after</U></B> the discharge of debts before they begin making demands.  Couples separate.  People move.  Divorce, illness, births, deaths.  If debtors could see into the future, they would have seen that filing for bankruptcy in the Northern District of Illinois, Western Division, was something they should avoid.  Without knowing what the future holds, without hearing from the bankruptcy trustee, and with their attorney advising them that their case is closed, they initiate the <I><B>fresh start</B></I> that Chapter 7 is suppose to provide.</div> <bR> <div> It was not until October 2001 that the debtor discovered that  his case was not closed.   That's because on September 28, 2001, trustee, James Stevens, filed an Adversary complaint to revoke the debtor's discharge of debts.   In his complaint, the trustee alleges that the debtors were due a tax refund for $2,800.  The wording of the trustee's complaint is an example of how the trustees direct guilt and acts of being uncooperative to the debtors.  In his complaint, bankruptcy trustee James Steven's states:</div> <div> "<I>Debtors indicated in their bankruptcy petition and schedules that they were entitled to a Two Thousand, Eight Hundred Dollar ($2,800.00) tax refund for tax year 2000.  A copy of the Debtors' Petition and schedules is attached hereto and incorporated herein as "Exhibit A</I>."</div> <bR> <div> Let's remember that the debtors did not keep this information secretive or hidden.  Bankruptcy trustee, James Stevens acknowledges their truthfulness by providing documents filed in their case where they have included this information.  <B>HOWEVER</B>, James Stevens' next statement is deceptive.  It is also a fraudulent charge against the debtors.  In Item number 6 of his Adversary Complaint, he states:</div> <div> "<I>Upon learning of the anticipated tax refund, Plaintiff, pursuant to 11 U.S.C. 542, demanded in writing the turnover of the tax refund upon Debtors' receipt of the same.  Copies of the written demands are attached hereto and incorporated herein as "Exhibit B</I>."</div> <bR> <div> After acknowledging that the debtors disclosed the information on their schedules, the trustee seeks to cloak that truth by stating,  "<I>upon learning</I>," as though the debtors' petition and schedules did not disclose the information.  When did he learn about the anticipated tax refund?  On April 5, 2001 at the Section 341 Meeting of Creditors.  It was James Stevens'  responsibility to cover the debtors' petition and schedules at that meeting, and advise them of the property and money the debtors would need to turn-over as <B>LISTED</B> and <B>REVEALED</B> on those required papers.  Did James Stevens "<I>learn</I>" of the tax refund <B><U>AFTER</U></B> the Section 341 Meeting so he would need to write letters demanding the tax refund?  No.  In fact, the letters that he included as exhibits were written to <B>THE DEBTORS' ATTORNEY</B>, and not the debtors.  James Stevens would mislead the Court and all others not taking time to examine his documents, to believe that he made direct demand upon the debtors.</div> <bR> <div> In the case reported under "<FONT SIZE="3" COLOR="#0000CC" FACE="Bookman Old Style" ><I><B>Abuse of Authority</B></I></FONT> ", case number 99-50046, the trustee, Thomas Lester, waited over two years before complaining that he demanded the debtor to turn over a tax refund.  He states in his Motion, </div> <div> "<I>On June 10, 1999, the Trustee again wrote a letter to the Debtor requiring turnover of the $2000.00 tax refund and the Debtor failed to contact the Trustee and/or turnover the money.</I>"</div> <bR> <div> As in this case, while alleging they contacted the debtor, the evidence attached as exhibits to the trustees' Motions are letters written to the <B><U>ATTORNEYS</U></B> -- not the debtors.  As the debtor attests in this case, Wells of Justice has heard from others --- their attorneys did not forward them a copy of the letter or relay the contents thereof in any manner.  In the Miller case, number 99-50046, we have reason to believe that those letters did not exist prior to the preparing of the Motion of December 2001.  It is not ethical, neither expeditious to the bankruptcy estate, for a bankruptcy trustee to wait two years before bringing up a matter in Court, <B>IF</B> he knew about it two years previously, as bankruptcy trustee Thomas Lester claims.  </div> <bR> <div> The Exhibits filed with the trustee's Adversary Complaint include his letter dated May 9, 2001 to the debtors' attorney, where trustee James Stevens states:</div> <div> "<I>Your clients have fourteen (14) days to turn over the tax refund or I am filing the Complaint for Turnover and I am objecting to their discharge</I>."  </div> <bR> <div> There are two things we want to point out about this statement.  </div> <div> 1.  The letter is dated May 9, 2001.  It is a 14 day demand.  If this letter is true, and was sent according to its date, why then, did the bankruptcy trustee wait until September 28, 2001 to file his complaint for turnover?</div> <bR> <div> 2.  Federal bankruptcy rule under Section 727 of the bankruptcy code, sets a limitation on when an objection to discharge can be filed. We understand it is within 90 days from the date the case was filed.  The debtors filed their petition on February 28, 2001.  If bankruptcy trustee, James Stevens' letter is true as dated, and his intentions were in good faith based on the duties of his job as a trustee, he should have filed a Motion to extend time to object to the discharge  -- but he did not.</div> <bR> <div> Wells of Justice also noticed that the date of filing on the cover sheet on this case is incorrect.  We don't know how the clerk could possibly make such a mistake since the docket sheet clearly shows that the debtors filed their voluntary petition under Chapter 7 on February 28, 2001, and it was entered on the docket sheet on March 1, 2001.   The trustee's complaint also states that the debtors filed their petition on February 28, 2001.  <B>However</B>, the cover sheet for the case has the date of filing as September 13, 2001!</div> <bR> <div> We wonder what is planned for the future where federal records have already been altered to suggest that the debtors filed 7 months later than they did?</div> <bR> <div> We have reason to believe that Steven Brody, (attorney for the debtors), intentionally withheld information from his clients, so he could manipulate the case whereby the debtors would need to retain him, resulting in more legal fees on his behalf.  Why?  Because the debtor, in his unsuspecting innocence to resolve the problems in his case, encloses a letter from Steven Brody, dated October 27, 2001,where the attorney states:</div> <div> "<I>I again remind you that I do not represent you in the adversary proceeding that is currently pending.  I will not file any documents as required by the summons unless specifically retained to do so.  You may contact me to discuss such services if you desire.</I>"</div> <bR> <div> The attorney does not take responsibility and accountability for his own actions in not responding to the bankruptcy trustee's correspondence, neither contacting his clients to relay the content of those letters.  He seeks to be retained by his clients to resolve the problem that stems from his own actions or lack thereof.</div> <bR> <div> One can allege that this is just bad practice on the attorney's part and there is nothing unlawful about it.   If trustee James Stevens' letters are true as dated, and the attorney for the debtors did not contact them about the demand for the income tax refund, it's not bad practice --- it's case manipulation.  If James Stevens' letters are true as dated, and the attorney for the debtors wrote them <B>AFTER</B> they received their discharge of debts advising them:</div> <div> <I>"In most cases, this means that you are no longer liable for any of the obligations included in your bankruptcy filing unless you have received a notice of an adversary claim or objection filed against you</I>."</div> <div> It's not bad practice --- it's deception.</div> <bR> <div> Based on the outcome of these cases, and the trauma victims suffer, it is reasonable to conclude that cases, such as this one, are manipulated by the attorneys and trustees for their own personal, financial gain.  Under color of official right, this takes place unhindered, and highly difficult to report.  Instead of investigating for financial confidence crimes, law enforcement advises victims to hire attorneys.  The U.S. Department of Justice advises victims to seek the appellate procedure.   Even in this case, the debtor reveals that Tyler Moore, on behalf of trustee James Stevens, advised the debtor to sue Steve Brody for legal malpractice.  At the same time, Mr. Moore raised the stakes from $2,800 to over $11,000 if the debtor did not want his discharge revoked. </div> <bR> <div> Making an accomplice the "<I>bad guy</I>" is a method employed by those perpetrating financial confidence crimes.  For example, in a case involving a home improvement company, the person who arranges the advance payment avoids being suspected as taking the money in bad faith.  It is always his partner, or supplier, who is delaying the work.  The same is true in this case.  First, from the mouth of Stephen Balsley  who is also a partner with James Stevens, the trustee in this case, he tells the debtor that there is a personal dispute -- "<I>butt heads</I>" as reason why the debtor is denied justice.  Then, the debtor hears from an employee representing the bankruptcy trustee that he should sue his attorney --- it's not the trustee's fault for increasing the dollar amount it will take to keep his discharge of debts.  </div> <bR> <div> In this case, which mirrors many other cases, the attorney for the debtors misled them to believe their discharge is the same as closing their case.  We have heard from debtors that their attorneys told them that their case would not be closed until pending monies from tax refunds, lawsuits, personal loans, etc. were received.  They have also attested to receiving the discharge of debts, and contacting their attorneys who have outright stated, or otherwise lead them to believe, that the discharge is the same as closing a case. </div> <bR> <div> One debtor reported asking her attorney if the discharge is the same as closing the case.  It was after she was charged with bankruptcy fraud that she remembered her attorney not directly answering the question.  His words in reply were, "<I>You do not need to pay any of the debts.  The federal government has  written them off</I>."  In her understanding, it meant that the back wages she was due would not be appropriated by herself, neither the bankruptcy trustee,  to pay the debts she declared  on her bankruptcy petition.  Logically, if the federal government has "<I>written them off</I>," then the bankruptcy trustee could not require her back wages to pay them.</div> <bR> <div> These betrayals of trust have been repeated too often for it to be a coincidence.  Either these attorneys practicing bankruptcy law do not know the law, or it is intentional use of deception.  </div> <bR> <div> Victims have also attested to not hearing from the bankruptcy trustee by telephone, correspondence, or any other way of communication --- until they are charged with fraud, or threatened with revoke of discharge.  They have no idea they have been accused of committing any wrong.  They are summoned to appear in court and made to look like criminals who intentionally and willfully ignored the trustees' supposed demands for turnover of money and/or property.</div> <bR> <div> In this case, since the trustee and their attorney failed to communicate  <B>WITH THE DEBTORS</B> asking them for the tax refund, <B><U>AND</U></B> allowed their debts to be discharged, the debtors thought they could spend the tax refund.  Often, the circumstances that create the need to file for bankruptcy do not end with the discharge of debts.  If people file for bankruptcy due to loss of employment or illness that disables them for a period of time or permanently, they are still incurring bills such as utilities, telephone and medical.  These bills continue while the debtors remain in the condition of lost or reduced income.  Therefore, with the attorney stating their case is closed, the people use tax refunds to pay ongoing living expenses.    </div> <bR> <div> These cases appear to be arranged as to allow enough time for the money to be exhausted before the trustee files a complaint.  The person does not have money remaining to pay additional attorney fees.  What Wells of Justice has reported is that often, attorneys for debtors advise them that legal representation will cost more than the money the trustee wants.  That is proven in this case.  In the letter from Steve Brody, dated October 27, 2001, and filed as page 55 of case document entry 8, he wrote:</div> <div> "I <I>suggest that the amounts sought by the trustee are relatively small considering the costs of litigation and exposure to revocation of discharge.  I urge you take steps to resolve this quickly thereby limiting your costs and exposure.</I>"</div> <bR> <div> The debtors' attorney has just conveyed the message to them that it will cost them more than $2,800 to reply to the trustee's Adversary Complaint.  Coincidence?  Because we have reason to believe that monthly dues to the "<I>bankruptcy club</I>" are $3,000, it is not by coincidence that the attorney says $2,800 is "<I>relatively small considering the costs of litigation</I>" …  <FONT SIZE="3" COLOR="#0000CC" FACE="Bookman Old Style" >(You will find the report titled, "The Bankruptcy Club" under the Information Menu)</FONT></div> <bR> <div> Steve Brody did write James Stevens, reminding him that the debtors exempted a portion of their income tax refund, and that the bankruptcy estate was only entitled to collect $1,100.  That opened a complex issue for the debtors.  James Stevens wrote Steve Brody a reply whereby he covers his embarrassment for demanding more than he was lawfully due, and perpetrates harmful retribution upon the debtors.  His letter, page 52 of document entry 8, states in part:</div> <div> "<I>However, upon reviewing the Bankruptcy Petition and schedules looking for your exemption, I noticed that your clients also claimed assets in the form of jewelry worth $2,250.00 and guns worth $1,500.00 (see attached copy of Schedule B).  As you know, those assets are also property of the estate; and as such, I am requesting turnover of that property as well."</I></div> <bR> <div> It is not our desire to get into a legal argument of if the jewelry and guns had or could have exemptions applied against them.  However, it is reasonable to ask what the trustee was doing at the Section 341 meeting where he did not see and advise the debtors at that time what they needed to turnover <B>BEFORE</B> they <B><U>COULD</U></B> receive their discharge of debts?  It is reasonable to conclude that the trustee intentionally neglected his responsibility at the Section 341 meeting in <B>bad faith</B>.</div> <bR> <div> Where do the debtors stand?  It's been almost a year since they filed bankruptcy; approximately 9 months since their Section 341 Meeting; 7 months since they received their discharge of debts.  The jewelry has sentimental value to the debtor.  Originally, the trustee asked for $2,800.  The debtor counters his offer with $4,000 so he can retain the guns and jewelry.  From his pleading, it appears as though the debtor was instructed to turn over the jewelry and guns so they could be appraised before the bankruptcy trustee would accept his offer.  </div> <bR> <div> However, the debtor reports that on November 1, 2001, Mr. Tyler Moore, representing trustee James Stevens in the negotiations in his case, stated to him that he needed to come up with $7,600 to "<I>make all this go away</I>."  The debtor asked how $2,800 became $7,600?  According to the debtor, based on his pleading filed in the public case record, Mr. Moore stated to him that if the matter had been resolved in April 2001, it wouldn't be "<I>an issue now</I>."  Mr. Moore's answer, whether he realizes it or not, places direct responsibility upon James Stevens, as trustee of the bankruptcy estate, who could and should have avoided the issues occurring by doing his job back in April 2001.  </div> <bR> <div> We refer back to James Stevens' letter, dated October 19, 2001, page 52 of the debtor's pleading, where he discovers assets of the bankruptcy estate; namely, two guns worth $1,500 and jewelry worth $2,250.  Bankruptcy trustee James Stevens wrote:</div> <div> "<I>Upon receipt of the aforementioned items, namely the $1,100.00 of nonexempt tax refund, the $2,250.00 worth of jewelry, and the $1,500.00 worth of guns from your clients, we can resolve the Complaint to Revoke the Discharge which I have previously filed.</I>"</div> <bR> <div> The debtor reports that he brought the guns and diamond earring to the court on November 5, 2001.   Stephen Balsley, representing bankruptcy trustee James Stevens, instructed the debtor to deliver the property to his office.  The debtor did so, and received a receipt for the property.  The items were to be appraised.  According to the debtor's pleading, Tyler Moore, representing trustee James Stevens, did not have the items appraised.  Without an appraisal, Tyler Moore, representing trustee James Stevens on the negotiation for a settlement, rejected the offer for $4,000.  Based on the debtor's report, Tyler Moore stated that the debtor would need to come up with $6,400 cash, and agree to make 24 monthly payments of $200.  That totals $11,200.</div> <bR> <div> It appears by the debtors testimony that each time he attempted to resolve the matter, the amount to "<I>settle</I>" increased.  In addition, the trustee now has property in his possession that he will begin to use as hostage to coerce the debtor into paying him ransom to buy it back for more than it is worth.</div> <bR> <div> Based on James Stevens' documented letter stating that the turn over of the jewelry, guns, and $1,100 would resolve the matter, James Stevens, as a member of the panel of Chapter 7 bankruptcy trustees,  has not kept his word.  </div> <bR> <div> On January 14, 2002, trustee James Stevens filed a Motion to Compromise.  The debtor's pleading reveals that they have a car which his wife uses to go to work 40 miles from home.  According to the debtors' schedules, it is a 1996 Pontiac Bonneville with 80,000 miles.  Keep in mind that this case was filed in February 2001.  It will soon be a year since these schedules were filed out and filed.  The value of vehicles used to travel 80 miles round trip on the average 5 day work week decreases in a year.  On their schedules, their attorney entered its value as $7,150, with an exemption of $1,200.  In the trustee's Motion to Compromise, he is taking the diamond earring, the two guns, $1,100 <B><U>AND</U></B> the 1996 Pontiac.  The trustee adds that the debtors will receive their exemption from the sale of the vehicle.  </div> <bR> <div> Please note that trustee James Stevens threatened to revoke the discharge of the debtors on the basis that they had not turned over a $2,800 tax refund.  He said nothing about additional property <B>UNTIL</B> the debtors' attorney corrected him on the exemption on the tax refund.  In retaliation for being told he could only lawfully recover $1,100, James Stevens <I>discovered</I> assets that he had not demanded previously.  Bankruptcy trustee James Stevens did not amend his Adversary Complaint to <B>INCLUDE</B> additional property for turnover.   In his Motion to Compromise, he contradicts his demands in his letter of October 19, 2001.  James Stevens, as a bankruptcy trustee, representing the United States Government, has betrayed citizens of the United States who sought federal law to help them.  James Stevens, as a bankruptcy trustee, representing the United States Government, has deceived citizens of the United States by agreeing to take 3 assets, and upon receiving total cooperation for the turnover of the property, coerced the debtors into agreeing to give him more.</div> <bR> <div> We are now watching this case for what trustee James Stevens means by stating:</div> <div> "<I>NOW, WHEREFORE, the Trustee prays the Court enter an Order authorizing the compromise requested herein in full and complete satisfaction of the Bankruptcy Estate's claim against the property in question</I>." </div> <bR> <div> He does not say anything about closing his adversary complaint upon satisfaction of the compromise.  Since he stated "<I>property in question</I>," we are wondering if this is going to be another case kept open for years until the debtors pay down their mortgage, so the trustee can threaten to sell their home as "<I>property in question</I>" on the threat of revoking their discharge of debts.  Based on the results from other cases presented on this web site, we have reason to suspect the trustee is not entering this compromise in good faith.  This is the same trustee, who in case number 99-50938, adversary numbers 00-07116 and 00-07048, took possession of jewelry in or about October 2000, and <FONT SIZE="3" COLOR="#FF0000" FACE="Bookman Old Style" ><B>STILL HAS NOT REPORTED IF IT WAS SOLD OR NOT</B></FONT>.  <FONT SIZE="3" COLOR="#BF0000" FACE="Bookman Old Style" ><I><B>(UPDATE) Since our report on this case, James Stevens has entered a Motion to abandon the jewelry in case number 99-50938. ) </B></I></FONT></div> <bR> <div> Case law has established that irrevocable harm cannot be placed upon debtors.  Taking away the wife's transportation to and from work, when she is the only employed person in the household, and after almost a year since filing for bankruptcy, is cause for irrevocable harm.  James Stevens, bankruptcy trustee, caused undue delay in demanding <B>THOSE</B> assets of the bankruptcy estate.  James Stevens, bankruptcy trustee, <B>DID NOT RECOGNIZE LISTED</B> assets of the bankruptcy estate <B>UNTIL</B> he was corrected about the amount of tax refund he could lawfully receive.  </div> <bR> <div> Of course, the debtors do not have an attorney to argue this in Court.  By James Stevens' association with Stephen Balsley, and Stephen Balsley's association with Winnebago Legal Services, and friendship with a board member of Prairie State Legal Services, they deny debtors legal assistance as a conflict of interest.  </div> <bR> <div> Even if the debtors could afford legal counsel to present the argument of undue delay and irrevocable harm, Judge Manuel Barbosa has demonstrated he will not uphold the law and that he approves of causing irrevocable harm to debtors.  For example, in case number 98-53581, Judge Manuel Barbosa placed an injunction on money upon the bankruptcy trustee's, (Stephen Balsley), Motion that the debtors financial condition would cause them to spend the money.  Judge Barbosa heard and saw evidence that the debtor had a stroke two days after his discharge of debts.  Two days before the discharge of debts, Judge Manuel Barbosa gave the debtor's mortgage company the right to foreclose.  With the potential of the debtor being homeless, suddenly disabled and unable to work, and needing medication to sustain his life due to involuntary illness, Judge Manuel Barbosa placed an injunction on the money anyway <B>AND</B> ordered the money the stroke victim had remaining to be turned over to Stephen Balsley. <I>   (Hospital Admission Record included as Exhibit on Objection For Compensation, Docket Sheet entry number 30, page 17 under case number 98-53581.)</I></div> <bR> <div> The debtors in the case in this report were bound by bankruptcy law to turn over assets.  The bankruptcy trustee has the right to demand assets of the bankruptcy estate.  Our effort in presenting this report is to provide evidence that the methods used by the bankruptcy trustee to obtain said assets are unethical, in bad faith, and with criminal intent to extort.</div> <div> <IMG BORDER="0" SRC="Symb075c00b700f000000000.png" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">What would be the bankruptcy trustee's motive for not knowing about<B> LISTED</B> assets until he was corrected about the exemption on the income tax refund?  </div> <bR> <div> <IMG BORDER="0" SRC="Symb075c00b700f000000000.png" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">When the debtor turned over the property the trustee requested, why did the trustee barter for increasing financial amounts, rather than appraise the property?  </div> <bR> <div> <IMG BORDER="0" SRC="Symb075c00b700f000000000.png" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">What would be the bankruptcy trustee's motive for documenting that he would accept three items and $1,100, and then change his demands three months later? </div> <bR> <div> <IMG BORDER="0" SRC="Symb075c00b700f000000000.png" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">Was bankruptcy trustee, James Stevens, sincerely seeking property to appraise and/or liquidate, or was it solely cold, green cash he was looking for?  </div> <bR> <div> The only motive we can determine for undue delay in demanding assets, is because the trustees do not want property.  They want cash.  As evidenced in this case, trustee James Stevens only saw the tax refund, (cash) as an asset.  When he realized he was not going to receive $2,800 because of the exemption, he used the demand for additional property to spur the debtors on to offer him more money in order to retain said property.  $4,000 was not enough.  $6,000 was not enough.  Through his representative, Tyler Moore, trustee James Stevens wanted $11,000 -- cash.</div> <bR> <div> The trustees demonstrate varying patterns of activity in how they administer cases.  There does not seem to be any standard for keeping bankruptcy rules and honoring bankruptcy law in all cases.  For example:</div> <bR> <div> 1.   <U>Case number 00-72924, James Stevens trustee.</U>  The debtors listed a 1997 Dodge Caravan as an asset with the value of $15,000.  James Stevens does not liquidate it.  Unlike the debtors in the case reported in here who live in McHenry County, the debtor who got to retain his 1997 Dodge Caravan is a resident of Rockford.</div> <bR> <div> 2.   <U>Case number 00-73504, James Stevens, trustee.</U>  The debtors' assets include a tax refund of $3,830, firearms valued at $1,500 and 2 snowmobiles with a combined value of $4,600.  James Stevens only required the $3,830 tax refund.  Unlike the debtors represented by Steven Brody, who is in Crystal Lake, IL, the attorney in this case is in Rockford.</div> <bR> <div> 3.   <U>Case number 99-53689, James Stevens, trustee.</U>  The debtor's assets include a 1994 Chevrolet valued at $10,000.  The trustee did not liquidate it.  It is rather doubtful that in1999, the debtors had a significant debt remaining on a 1994 vehicle.</div> <bR> <div> 4.   <U>Case number 00-73388, Gregory Schott, trustee</U>.   The debtors' assets include a 1996 Astro Van valued at $7,500 and a 1992 Jeep Wrangler valued at $6,000.  The trustee did not liquidate them.  </div> <bR> <div> 5.   <U>Case number 01-71484, Joseph Olsen, trustee.</U>  The debtors had a tax refund of $1,700 which the trustee did not, apparently, consider as property of the bankruptcy estate.  Without controversy, he allowed the debtors to retain it.  That might be because the trustee's Final Report reveals that the debtors are clients of Barrick, Switzer, Long, Balsley & Van Evera, in which Stephen Balsley and James Stevens are partners.</div> <bR> <div> 6.  <U>Case number 00-74000, Stephen Balsley, trustee.</U>  The debtors received $4,000 in tax refunds.  They did not exempt any portion of it.  The trustee did not, apparently, consider the tax refund as property of the bankruptcy estate.  The attorney for the debtors was Feld & Korrub, who have a questionable relationship with Stephen Balsley.</div> <div>  </div> <div> <I>(Source:  Final Reports as documented and filed in the case numbers referenced)</I></div> <bR> <div> By taking a closer look at cases, one sees the indecisiveness, appearance of retaliation, and prejudicial behavior perpetrated by bankruptcy trustees who present themselves as officers of the United States bankruptcy courts.  We do not believe that a bankruptcy trustee did not know of <B>LISTED</B> assets on the debtors' schedules, until approximately six months after their discharge of debts. </div> <bR> <div>  This case could have taken interesting turns.  What if the debtors gave him $2,800 without question?  Would the trustee had <I>discovered</I> additional assets then … another 6 months afterwards … a year afterwards … or longer?  This trustee has demonstrated in another case that he waits a year and six months after the discharge of debts to unlawfully use the threat of revocation of discharge to demand property.   (See <FONT SIZE="3" COLOR="#0000CC" FACE="Bookman Old Style" ><A HREF="unlawful.htm" TARGET="_top" TITLE="Unlawful Request"><U><I><B>Unlawful Request</B></I></U></A></FONT>)   Does this mean that bankruptcy trustees can also go through schedules of other cases after discharge, because they did not perform their fiduciary responsibility when they should have?</div> <bR> <div> How many <FONT SIZE="3" COLOR="#FF6633" FACE="Bookman Old Style" ><I><B>oops</B></I></FONT> does it take before a bankruptcy trustee is recognized as being incapable of performing the duties of their position in an expeditious, ethical manner?  Or, is not performing the duties of their position in an expeditious, ethical manner intentional to result in more personal, financial rewards later?</div> <bR> <div> At the beginning of this report, we asked that after reading the details we have gathered from case documents, for you to ask yourself, if you were the debtor, what would you do?  If you complained, who would you complain to?  Would you consider that you have been done an injustice?  If so, what?  Consider the following, which we have based on responses from various law enforcement agencies ... </div> <bR> <div> <IMG BORDER="0" SRC="Symb075c002a00f000000000.png" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">If you had other case history showing that the same bankruptcy trustee in your case treated liken assets differently in other cases, you might present that as a basis in your complaint.  However, most debtors do not research bankruptcy cases to have knowledge and evidence of prejudicial behavior in case administration.  Even with verifiable, documented proof, the most likely answer you will receive is that the trustee has not committed any crime, and complaints concerning his prejudicial behavior should be directed to the U.S. Trustee.  </div> <bR> <div> Martha L. Davis, while Acting Director for the Executive Office for United States Trustees, in reply to unethical behavior of Chapter 7 bankruptcy trustees, limits her review of cases to, "<I>administered appropriately and consistent with the requirements of the Bankruptcy Code</I>." </div> <div>  Understand "<I>consistent with the requirements of the Bankruptcy Code</I>," to mean that Ms. Davis overlooks deception, undue delay, conflict of interest, perjury, extortion, embezzlement, and all other unethical and/or criminal conduct perpetrated by Chapter 7 bankruptcy trustees.</div> <bR> <div> <IMG BORDER="0" SRC="Symb075c002a00f000000000.png" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">If you complain that you were mislead by your attorney, and all problems in your case came from such misleading, you will be advised by law enforcement to complain to the Attorney's Registration and Disciplinary Commission.  They will not investigate it as organized financial confidence crime.  </div> <bR> <div> <IMG BORDER="0" SRC="Symb075c002a00f000000000.png" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">If you complain to the FBI or U.S. Department of Justice that the bankruptcy trustee demanded more than he was lawfully entitled to, and perpetrated harmful retribution upon you after being corrected, they will judge it as a bankruptcy trustee doing his job to recover property of the bankruptcy estate -- that he did nothing unlawful.  They will recommend that you obtain private legal counsel.</div> <bR> <div> <IMG BORDER="0" SRC="Symb075c002a00f000000000.png" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">If you have knowledge that the same bankruptcy trustee has demonstrated taking possession of property, and <B>holding it for over a year without reporting liquidation</B>, giving you reason to believe he will not liquidate your property to close your case, the U.S. Dept. of Justice is most likely to advise you to hire an attorney to make the trustee perform his duties.</div> <bR> <div> <IMG BORDER="0" SRC="Symb075c002a00f000000000.png" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">If you appeal the compromise on the basis that taking possession of the vehicle nine months after your discharge of debts, which is used to travel to work, was undue delay on behalf of the trustee, and causes irrevocable harm, the appeal will be dismissed because you voluntarily agreed to the compromise, and did not object to it.  How could you enter an objection when the bankruptcy trustee did not go before the Court to demand anything other than $2,800?  </div> <bR> <div> It takes the total picture in order for others to see that such a case requires investigation into the motives that bring about the actions of the trustees.  Motives of bad faith, unethical, and seditious, should not be allowed for personnel of the United States Trustee Program, including those they appoint to the panel of trustees. </div> <bR> <div> <B><U>A Developing Pattern</U></B></div> <div> After watching Chapter 7 bankruptcy cases for years, some of us can predict the motives behind developing patterns.  We now see a new pattern developing where the trustees incorporate letters written to attorneys for debtors in with their complaints.  Since the Northern District of Illinois, Western Division, only has 7, Chapter 7 bankruptcy trustees, all it takes is for 2 of them to commit the same or similar act, around the same period of time, for a pattern to be noticed.  By knowing the history of the cases, it doesn't take long to put two-and-two together. </div> <bR> <div> We previously mentioned that in the Miller case, in December 2001, trustee Thomas Lester alleges that in 1999, he demanded a tax refund from the debtor.  The letters he included as his exhibits are letters he wrote to the debtor's attorney.  This is to infer upon the debtor that the lost of his home was really his attorney's fault.  The Miller case is the one where he documented that his attorney stated to him that he (the debtor) was being "<I>blackmailed</I>" by the trustee.  It is our speculation that trustee Thomas Lester's reason for producing supposed two-year-old letters, on a matter that had not been presented in the case for the same length of time, was in retaliation for the attorney spilling the beans. </div> <bR> <div> And here, we have a case where the supposed evidence that the trustee made demands for money of the bankruptcy estate upon the debtor, was actually by way of correspondence addressed to the debtors' attorney.  An employee representing the trustee suggests to the debtor that he should sue his attorney for misrepresentation.  It is reasonable to presume that this also, is done out of retaliation. </div> <bR> <div> Wells of Justice knows that there is not one attorney in the Northern District of Illinois, Western Division, who will file legal malpractice suits against attorneys in that same area.  We know, because we have called every attorney referred to us by every County Bar Association in that area.  "<I>Conflict of interest</I>" is their reason, because they know the attorneys involved.   It is, therefore, reasonable to presume that the trustees have a member of "the club" who they are moving into place to file legal malpractice suits.  <B>And</B>, by incorporating correspondence supposedly sent to attorneys representing debtors in their complaints, they are creating the need for such an attorney.  If this is more than mere speculation, we need to ask how much that attorney will charge for consultation, advise people they have a case, and then lose the case whereby their client has to pay attorney fees not obtained by winning the suit?</div> <bR> <div> When Wells of Justice gets a hunch, we follow-up on it.  We looked for other cases where Steven J. Brody represents debtors.  The first case we discovered was one where Steve Brody withdrew.  It is case number 01-73463, filed August 30, 2001.  Stephen Balsley is the trustee.  The Section 341 Meeting was held on October 4, 2001.  Two weeks later, Steve Brody filed his Motion to withdraw.  This took place about the same time that the case focused on in this report began going through hoops and tunnels.  </div> <bR> <div> <FONT SIZE="3" COLOR="#000000" FACE="Bookman Old Style" >For a case comparison with another case involving Steven J. Brody and James Stevens, see Part 2, </FONT><A HREF="confidence2.htm" TARGET="_top" TITLE="Confidence"><U>Coincidence</U></A><A HREF="confidence2.htm" TARGET="_top" TITLE="Confidence"><U>?</U></A><FONT SIZE="3" COLOR="#000000" FACE="Bookman Old Style" >     </FONT></div> <bR> <div> <B><U> <A NAME="update___final_report"><IMG BORDER="0" SRC="1x1.gif" HEIGHT="1" ALIGN="bottom" WIDTH="1" HSPACE="0" VSPACE="0" ></A></U></B><B><U>Update - Final Report</U></B></div> <div> On Sept. 25, 2002, trustee James Stevens filed a Final Report in this case.   He reports $5,109.94 in receipts -- $1,100 in cash from the debtors, and $4,000 from the sale of the only vehicle they had to get the wife to a job 40 miles from where they live.  Chase 8 Auto Sales was paid $500 for selling that car, AFTER the trustee spent time and money advertising the car in the local paper.  The trustee also paid a parking ticket that was given after he took possession of the vehicle. The trustee paid the debtors $500 for their exemption, leaving $4,109.94 available.</div> <bR> <div> The trustee's compensation and expenses as trustee and attorney for himself, totaled $1,865.88, however, he voluntarily reduced it to $1,152.49.  Legal fees for Stephen Balsley, Tyler Moore, and James Stevens as trustee, totaled $901.51, for a total of $2,054 in administrative costs. That is approximately 50 percent of the assets. </div> <bR> <div> The debtors paid Steve Brody $1,200 to prepare and file their bankruptcy.  (There may have been additional fees associated with the case after the bankruptcy was filed, which are not reported on the Final Report.)</div> <bR> <div> This case had one claim that the trustee paid the creditor the balance, or $2,055.94.  </div> <bR> <div> Overall, the debtors paid out $1,800, and lost $4,000 in property, for a total of $5,800 so that their one creditor could be paid $2,055.94. </div> <bR> <div> <FONT SIZE="3" COLOR="#000099" FACE="Arial" ><A HREF="http://www.wellsofjustice.com/zimmerman.pdf" TARGET="_blank" TITLE="http://www.wellsofjustice.com/zimmerman."><U>Click here to see copy of the Final Report</U></A></FONT><A HREF="http://www.wellsofjustice.com/zimmerman.pdf" TARGET="_blank" TITLE="http://www.wellsofjustice.com/zimmerman."><U> </U></A>filed by bankruptcy trustee James Stevens</div> <bR> <div> <A HREF="confidence_m.htm" TITLE="Confidence Crime "><U><B><U>Back to Top</U></B></U></A></div> <bR> <bR> </td> </tr></table></body>