Bankruptcy Fraud: Staying Out Of Trouble

Recently, I wrote here about the story of Jennifer McKinney (the mommy blogger known as MckMama) and her alleged fraud on the United States Bankruptcy Court in the District of Minnesota. In short, Jennifer and Israel McKinney filed bankruptcy, claiming nearly $750,000 in debts, while failing to disclose the extent of their assets and income.

The bankruptcy trustee has asked the court for a denial of discharge of the McKinneys’ debts, based on false disclosures, lack of disclosure, manipulation of income, and destruction of records. In particular, Jennifer McKinney is accused of falsely claiming her blogging income is $1,500 per month, while she was depositing at least $7,000 to $10,000 per month to her bank account. She reported to the bankruptcy court that her income for 2011 was $55,000, while the records for that year show more than $148,000 of income. In addition, certain assets including cash, accounts receivable, personal property, and (very valuable) domain names and websites were not disclosed in the bankruptcy filing.

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Jennifer McKinney MckMama Bankruptcy: Fraud Alleged by Trustee

MckMama BankruptcyWhat is fraud? A false representation of a matter of fact—whether by words or by conduct, by false or misleading allegations, or by concealment of what should have been disclosed—that deceives and is intended to deceive another so that the individual will act upon it to her or his legal injury.

Yesterday in the United States Bankruptcy Court, District of Minnesota, the trustee in the bankruptcy of Israel McKinney and Jennifer Sauls McKinney (known as mommy blogger MckMama, blogging at mycharmingkids.net) filed Case 12-06024, objecting to the discharge of the bankruptcy. Last month I published a lengthy article about the MckMama bankruptcy fraud, and today we’re going to compare what I showed you and what trustee Gene Doeling (my new hero!!!) has alleged.

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MckMama Bankruptcy Update: Trustee Files Motion Objecting to Exempt Property

Whether or not you are a reader of MckMama (or mommy blogs in general), this post has good information on bankruptcy fraud.  Last week we looked at the bankruptcy filing of Jennifer Howe Sauls McKinney and Israel McKinney, and discussed the many red flags of fraud that have been detected. Jennifer / MckMama has made a very public spectacle of her life, her finances, and her many money-making scams on her blog My Charming Kids, and things may finally be catching up to her.

Today the bankruptcy trustee filed a motion objecting to exempt property, essentially asking the judge to order that certain assets are NOT exempt from the bankruptcy. What does this mean?

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