A California man who abused the bankruptcy process to delay a series of foreclosures is now facing 10 months in federal prison.
The Special Inspector General for the Troubled Asset Relief Program (SIGTARP) announced that sentence for 72-year old Walter Bruce Harrell.
A grand jury initially indicted Harrell on eight counts of bankruptcy fraud and two counts of making false statements in a bankruptcy proceeding.
Harrell, who is from Montara, Calif., used the U.S. bankruptcy code as part of an elaborate foreclosure-rescue scheme.
Authorities say he promised distressed borrowers relief from foreclosure for a fee. Once receiving a payment, Harrell had the homeowners deed fractional interests in their properties to other individuals, who then filed for bankruptcy in the U.S. Bankruptcy Court. Once Harrell notified creditors of the bankruptcy, they were forced to automatically stay any type of foreclosure proceeding.
SIGTARP got involved with some of the impacted banks receiving TARP money. The creditors filed claims saying Harrell’s actions caused foreclosure delays, resulting in numerous fees and expenses for the banks.