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Maryland Woman Sentenced to Jail for Bankruptcy Fraud

On Behalf of | Jun 27, 2013 | Blog |

A Maryland woman, Diana J. Stout. was sentenced to 27 months in jail followed by three years supervised release for making false statements and concealing assets in her Chapter 7 bankruptcy case. She was also ordered to pay restitution in the amount of $155,747.

Ms. Stout filed bankruptcy in April 2010 to stop a civil action against her by her former boyfriend for misappropriating more than $1 million of his assets for her own use or the use of her children. In 2008 her boyfriend loaned her money to purchase property in North Carolina. She purchased the property and had title to the property placed in her and her daughter’s name. In 2009 she transferred title from herself and her daughter to just her daughter for the sum of $1. Ms. Stout failed to disclose this transfer on her bankruptcy forms.

She also failed to disclose a diamond bracelet with 75 individually set diamonds, her stock interests in Eagle Bancorp, a 1993 Toyota Supra, and a 2005 Chevrolet Avalanche SUV. After filing bankruptcy, she sold the Supra for $14,000, the stock for $10,125 and the diamond bracelet for $85,000.

In addition to these improper transfers and omissions, in November 2010 she forged contractors names on payments that she got from her insurance company for water damage to her home in Hagerstown, Maryland. She never had the work done to repair the house and the trustee had to pay for the repairs. In addition, after the trustee sued her daughter to reverse the transfer of the house in NC to their joint names, Ms. Stout created a new deed which falsely stated that her daughter had paid her $75,000 for the transfer.