U.S. Charges Man With Massive Fraud Scheme

A federal grand jury has charged a Los Angeles man with engineering a massive fraud scheme in which he allegedly obtained money and property by filing more than 200 bogus bankruptcy petitions, federal prosecutors announced Thursday.

Gilfert W. Jackson, 52, was charged with 15 counts of bankruptcy fraud and making false statements in bankruptcy filings to cheat lenders and procure rent-free homes for friends, relatives, employees and himself.

The case is “definitely one of the largest� bankruptcy fraud prosecutions in the central district of California, said Maureen Tighe, deputy chief of the major fraud section of the U.S. attorney’s office in Los Angeles. She said the number of involuntary bankruptcy filings in the case “is just off the charts.�

Jackson faces a maximum term of 75 years in prison if convicted on all charges. Jackson, who is currently serving a two-year sentence for grand theft in a state prison in Kern County, is expected to be arraigned on the charges in December in federal court in Los Angeles. He could not be reached for comment.

“On a large scale, the Bankruptcy Court was defrauded, lenders were defrauded and individuals were defrauded,� said David Marcus, an assistant U.S. attorney who is prosecuting the case. According to the indictment, the fraudulent filings were made between May 1992 and last April.

The case was investigated by the FBI and U.S. Postal Inspection Service.

The indictment supersedes a more limited set of charges filed in May against Jackson and his secretary, Etta Barr. She has pleaded guilty to two of the three counts in that indictment and is awaiting sentencing.

Jackson alone is named in the 15 new counts, each of which corresponds to a specific property or resident who allegedly became the subject of fraudulent bankruptcy proceedings.

According to the indictment, Jackson used phony petitions for two distinct purposes:

* To collect fees from homeowners or renters by using bankruptcy filings to delay foreclosure and eviction.

* To take control of vacant, foreclosed properties by moving in and filing fraudulent bankruptcies to hold lenders at bay.

According to the indictment, Jackson would approach homeowners facing foreclosure and solicit a fee for using his “expert services in avoiding foreclosure.�

Thus retained, he would file involuntary bankruptcies against the homeowners, sometimes using false Social Security numbers and forged signatures and frequently listing phony debts to fictional businesses as the reason for the bankruptcy petition. But according to the charges, the real reason was to gain the stay of foreclosure proceedings that automatically occurs when a bankruptcy petition is filed.

The homeowners ultimately got evicted, usually after a few months, when lender attorneys got court orders lifting the automatic stay. When the homeowners called Jackson to say they were being evicted, he would either not return their calls or say he could do nothing for them, prosecutors said.

The indictment does not say how many homeowners knew that Jackson’s “expert services� involved bankruptcy abuse, but it does cite examples of petitions filed without residents’ knowledge or against their will.

It cited the case of Joseph Amaya, a Downey resident Jackson offered to help when he fell behind in his rent payments in March 1995. According to the indictment, Amaya told Jackson he did not want to file for bankruptcy.

Nonetheless, in April 1995, Jackson filed an involuntary bankruptcy petition against a J. Richard Amaya that listed several aliases, a false Social Security number, and a “finder’s fee� debt to Jackson of more than $11,000.

Three months later, Jackson allegedly filed another petition in the name of Joseph V. Amaya, falsely stating that Amaya owed a non-existent business a $13,350 “partnership contribution,� the indictment says.

Jackson allegedly filed three phony bankruptcies against Janice Cole after she fell behind in her mortgage payments and moved out of her house on Don Carlos Avenue in Los Angeles in March 1995.

According to the indictment, Cole discovered the following month that Jackson and his family had moved into the vacant house. To hold off the lender, Jackson allegedly filed an involuntary petition against Cole in January 1996, falsely claiming that she owed a debt of $17,500 to the 4272 Don Carlos Partnership.

In July 1996, he filed a second involuntary bankruptcy petition against Janice E.K. Cole, and last January filed a third one against her.

According to the indictment, “each of these bankruptcies delayed the sale of the Don Carlos property and enabled . . . Jackson and his family to continue living there rent-free until March 1997.�