Xyngular: Starve, Binge, Purge, Repeat!

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direct-selling-pyramid-schemeMulti-level marketing companies are getting lots of attention lately thanks to the Bill Ackman smackdown of Herbalife in December. MLMs offering “nutrition products” are of special interest to consumers, and with good reason. Companies like Isagenix, MonaVie , Usana, Mannatech, and Shaklee all offer magic potions that claim to help you lose weight, absorb more vitamins and minerals, and cure all diseases.

Of course, many of these health claims are strictly prohibited. Nutrition MLMs generally have disclaimers stating that their health claims have not been evaluated by the Food and Drug Administration, and that the products are not intended to diagnose, treat, cure or prevent any disease. But that doesn’t stop the distributors for making such claims, and the company management turns a blind eye to it. Continue reading

Getting Away With Bankruptcy Fraud?

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Dumb and Dumber

Bankruptcy Fraudsters Jennifer McKinney and Israel McKinney

For the last several months, we have been following the story of Jennifer “MckMama” McKinney and her bankruptcy filing from nearly a year ago. By spring, trustee Gene Doeling had her number, and was preparing to file a motion objecting to the bankruptcy. In not so many words, Mr. Doeling alleged fraud against Jennifer and Israel McKinney, saying things such as manipulated, destroyed, concealed, falsified, false, and intentionally.

In my first story on the MckMama bankruptcy, I detailed the lies and deception of Jennifer Howe Sauls McKinney, both to her blog readers and to the bankruptcy court. Why such a public discussion of this case? There are two reasons. First, bankruptcy itself is a public process. The documents are readily available on Pacer, the federal government’s online warehouse of court documents. Continue reading

On Buying a House During Bankruptcy

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The new MckMama McKinney house

Recently, watchers of the MckMama train wreck were treated to the news that blogger Jennifer McKinney has bought a home. This lovely home in West Salem, Wisconsin, was most recently on the market at $289,900.

Jennifer “MckMama” McKinney bought the home under a contract for deed arrangement, also called a land contract. She paid $282,500 with $20,000 up front and the balance to be paid monthly with annual interest at 6.95%. The contract matures on April 15, 2013, which means she must pay in full at that time or lose her downpayment and lose the house. Continue reading

MckMama Bankruptcy Case Update

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There is little news to report in the bankruptcy case of Jennifer Sauls McKinney and Israel McKinney. In May, bankruptcy trustee Gene Doeling filed Case 12-06024, objecting to the discharge of the McKinney’s bankruptcy and alleging that the McKinneys made false and misleading disclosures in their bankruptcy filing.

The summons in the case gave the McKinneys 30 days to file an answer. According to Pacer, the site on which documents in federal cases are made available to the public, no response has been filed. Why not? It’s hard to say, but the logical conclusion might be that MckMama and MckDaddy have no real defenses to the allegations made by Mr. Doeling. Continue reading

Bankruptcy Fraud: Getting Out of Trouble

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Got fraud? If you find yourself being accused of a fraud on the bankruptcy court like Jennifer MckMama McKinney (i.e. falsified, misleading, destroying, manipulating, etc.), what can you do? If you could turn back the hands of time, I would tell you to be honest and fully disclose everything in your bankruptcy filing.

But once the wheels of fraud are in motion, it’s awfully hard to stop them.

One of the techniques used by debtors trying to save their skin after red flags of fraud have been uncovered by the bankruptcy trustee is an attempt to dismiss the bankruptcy case. This move makes little difference in a case of suspected fraud. The bankruptcy is likely going to be denied anyway, so asking to have the bankruptcy dismissed does not get the debtor ahead. And a debtor can’t just automatically get a bankruptcy dismissed. The judge decides whether the bankruptcy can be dismissed. Continue reading