The bankruptcy system is often used as a tool by individuals engaged in a variety of real estate scams. For the perpetrators, the automatic stay becomes an integral part of their schemes. By filing serial bankruptcy cases, the perpetrators can stop the foreclosure actions and continue to control the properties. For the individuals recruited to purchase the properties, they will eventually need to file chapter 7 cases to discharge the mortgage deficiencies incurred as a result of the foreclosures. Victims of these types of schemes include lenders, the federal government and, in some instances, the debtor. John Dupuy (HUD, Office of the Inspector General) and Peter Ainsworth (Chief, U.S. Trustee Program’s Criminal Enforcement Unit) will discuss several of these schemes including equity skimming, property flipping, and fractional interest schemes and how they utilize the bankruptcy system on April 17 at the Commercial Fraud Task Force meeting during the Annual Spring Meeting in Washington, D.C.
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Mr. Chairman and Members of the Subcommittee:

I appreciate the opportunity to appear before you once again on behalf of the Department of Justice to discuss the important work of the United States Trustee Program, outline for you some of our accomplishments over the last year, and walk you through the President's FY 2005 budget request for the Program.
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