Bankruptcy is certainly complicated; it is a mixture of both Federal and state statutes, local laws and rules and exemptions. But as complicated and confusing as bankruptcy is and can be, it is not brain surgery. But for one person, bankruptcy proved to be not only more complicated than brain surgery, but also far costlier.
The Neurosurgeon’s Bankruptcy
A former Montana and Wyoming neurosurgeon has been sentenced to two years in federal prison for trying to hide assets when he filed for bankruptcy after being sued for malpractice. According to a report in the Billings Gazette, John Schneider was sentenced to federal prison after pleading guilty to concealing a bank account containing nearly $310,000.”
“Schneider filed for bankruptcy in December 2014 while facing $12 million in claims from former business partners and for malpractice. He settled the claims for $2.3 million but was allowed to keep a $2 million residence in California.”
“Bankruptcy Trustee Joe Womack, a Billings attorney, said in court records that Dr. John Henry Schneider was a successful neurosurgeon who claimed to have a personal net worth of $17 million as recently as 2011”, according to the Gazette.
Joe Womack had accused Schneider of carrying out an elaborate asset disappearing act through a complex scheme, including using companies, trusts and transfers to “divest himself of technical ownership of virtually all assets and claims, leaving virtually nothing to satisfy his creditors.” These charges were later dismissed by the bankruptcy court.
U.S. District Judge Susan Watters ordered Schneider to pay nearly $309,000 in restitution. He offered an initial payment of $35,000 on August 15, 2018.
Always Tell the Truth
While bankruptcy certainly can be complicated, a seasoned, experienced bankruptcy attorney can help guide you through this confusing process. However, lying to the bankruptcy court, concealing assets and committing bankruptcy fraud can make a simply bankruptcy too difficult for even a brain surgeon!