by Frank Donze, The Times-Picayune
Monday August 31, 2009, 10:45 PM
Faced with a recent federal court ruling that he can be held liable to forfeit nearly $500,000 in bribe money, convicted former U.S. Rep. William Jefferson and his wife, Andrea, have filed for Chapter 7 bankruptcy protection.
Jefferson, who was found guilty of 11 of 16 counts of corruption last month in a Virginia courtroom, filed paperwork on behalf of himself and his wife last week in U.S. Bankruptcy Court stating that the couple have debt of between $1 million and $10 million.
Under Chapter 7 bankruptcy, all of a debtor's assets are sold to pay creditors in a formula approved by the court. However, some property can be exempt.
The court filings also show that the couple have between $1 million and $10 million in assets, but the forms are no more specific than that, making it hard to tell how far in debt the Jeffersons are. An attached list of 20 creditors includes parties ranging from his lead defense lawyer, Robert Trout, to the Jeffersons' mortgage holders, their credit-card companies, their cable-television network and their car-loan providers.
On the forms, the Jeffersons indicated their debts are mostly "consumer" in nature, meaning they were incurred "for a personal, family or household purpose." The couple also estimated that after any exempt property is excluded, "there will be no funds available for distribution to unsecured debtors."
Unsecured debt is debt that is not backed by collateral, such as property or another asset.
The filing does not indicate what property the Jeffersons might seek to exempt from liquidation, though debtors typically look to shield their residences from creditors.
Creditors list
Among the creditors listed in the Jeffersons' filing are Liberty Bank and Trust, Dryades Savings Bank of New Orleans, the Trout Cacheris law firm of Washington, D.C., American Express, Citi Cards, Audi Financial Services of Baltimore and Nissan Motor Acceptance Corp. of Dallas, Comcast of Philadelphia and the Congressional Federal Credit Union.
The bankruptcy papers were filed Aug. 24 by the Jeffersons' daughter, lawyer and former state legislator Jalila Jefferson-Bullock.
Jefferson-Bullock could not be reached for comment to discuss the filing.
While those who file for Chapter 7 may seek to exempt certain assets from liquidation, the law adds that if a debtor is "found to have committed certain kids of improper conduct" spelled out in the bankruptcy code, the court may deny such a request.
Some assets are exempt if they are considered necessary to support the filer and any dependents, but state and federal laws vary widely. In general, a percentage of home equity and disability benefits are exempt, and Chapter 7 filers are allowed to keep any money or property they obtain after filing.
The court can authorize a trustee to take possession of and sell any property that is not exempt and use the proceeds to pay creditors.
The ex-congressman, who lost a bid for a 10th term in December, faces up to 20 years in prison after his conviction for soliciting bribes, money laundering, depriving citizens of his honest service as a member of Congress and turning his congressional office into a racketeering enterprise. His sentencing is set for Oct. 30.
Forfeiture hearing
He faces a forfeiture hearing because a federal jury found that he and his family received more than $470,000 and more than 30 million shares of stock as a result of criminal activities.
The jury also found that ANJ Group, a front company set up for the benefit of Andrea Jefferson's and the couple's five daughters, could be required to surrender millions of shares of stock in a Kentucky technology company and a Nigerian telecommunications venture that are now presumably worthless.
The jury's Aug. 6 forfeiture verdict established which of Jefferson's assets amount to ill-gotten gains, and set an upper limit on how much the government may require him to forfeit. Exactly how much Jefferson will have to pay, and how he'll have to pay it, were left to the judge, T.S. Ellis III, who could make a determination any time up to and including at Jefferson's sentencing.
After Jefferson's indictment in June 2007, Ellis froze funds deposited in accounts controlled by ANJ, as well as a savings account for the then-congressman and proceeds due Jefferson from the sale of his partnership with his former law firm, Jefferson, Bryan, Jupiter, Lewis & Blanson.
More money problems
The former congressman's brother, political operative Mose Jefferson, who was convicted two weeks ago of bribery, has a similar raft of financial troubles that have been aired in federal court filings.
Mose Jefferson claimed in a financial statement that he owes friends and family more than $270,000 in loans. In the runup to the trial, he complained in filings that the federal government's efforts to tie up his property and bank accounts left him unable to pay lawyers. Mose Jefferson, along with his sister, 4th District Betty Jefferson, still faces a racketeering case accusing them of stealing from government-financed nonprofits.
In addition to the loans, Mose Jefferson has more than $150,000 in other debts, according to a financial statement.
While Mose Jefferson still owns two apartment buildings -- which prosecutors have indicated they hope to seize if he is convicted in the nonprofit case -- the rental income each month is less than his expenses, the financial statement asserts.
The debts led a magistrate judge this summer to convert his bond to a personal surety guaranteed by relatives. Mose Jefferson remains free on that bond pending his December sentencing in the bribery case.
Meanwhile, Jefferson and prosecutors are arguing about whether he can get back part of a $263,000 bank account seized by the government last year. Jefferson has agreed to forfeit $100,000, but his attorney argues in court filings he should receive the rest of the money back.
The assistant U.S. attorneys who handled the case, however, say the money should be held to go toward what prosecutors termed an inevitable fine ordered by the court.
. . . . . . .
Staff writer Laura Maggi contributed to this report.
Monday August 31, 2009, 10:45 PM
Faced with a recent federal court ruling that he can be held liable to forfeit nearly $500,000 in bribe money, convicted former U.S. Rep. William Jefferson and his wife, Andrea, have filed for Chapter 7 bankruptcy protection.
Jefferson, who was found guilty of 11 of 16 counts of corruption last month in a Virginia courtroom, filed paperwork on behalf of himself and his wife last week in U.S. Bankruptcy Court stating that the couple have debt of between $1 million and $10 million.
Under Chapter 7 bankruptcy, all of a debtor's assets are sold to pay creditors in a formula approved by the court. However, some property can be exempt.
The court filings also show that the couple have between $1 million and $10 million in assets, but the forms are no more specific than that, making it hard to tell how far in debt the Jeffersons are. An attached list of 20 creditors includes parties ranging from his lead defense lawyer, Robert Trout, to the Jeffersons' mortgage holders, their credit-card companies, their cable-television network and their car-loan providers.
On the forms, the Jeffersons indicated their debts are mostly "consumer" in nature, meaning they were incurred "for a personal, family or household purpose." The couple also estimated that after any exempt property is excluded, "there will be no funds available for distribution to unsecured debtors."
Unsecured debt is debt that is not backed by collateral, such as property or another asset.
The filing does not indicate what property the Jeffersons might seek to exempt from liquidation, though debtors typically look to shield their residences from creditors.
Creditors list
Among the creditors listed in the Jeffersons' filing are Liberty Bank and Trust, Dryades Savings Bank of New Orleans, the Trout Cacheris law firm of Washington, D.C., American Express, Citi Cards, Audi Financial Services of Baltimore and Nissan Motor Acceptance Corp. of Dallas, Comcast of Philadelphia and the Congressional Federal Credit Union.
The bankruptcy papers were filed Aug. 24 by the Jeffersons' daughter, lawyer and former state legislator Jalila Jefferson-Bullock.
Jefferson-Bullock could not be reached for comment to discuss the filing.
While those who file for Chapter 7 may seek to exempt certain assets from liquidation, the law adds that if a debtor is "found to have committed certain kids of improper conduct" spelled out in the bankruptcy code, the court may deny such a request.
Some assets are exempt if they are considered necessary to support the filer and any dependents, but state and federal laws vary widely. In general, a percentage of home equity and disability benefits are exempt, and Chapter 7 filers are allowed to keep any money or property they obtain after filing.
The court can authorize a trustee to take possession of and sell any property that is not exempt and use the proceeds to pay creditors.
The ex-congressman, who lost a bid for a 10th term in December, faces up to 20 years in prison after his conviction for soliciting bribes, money laundering, depriving citizens of his honest service as a member of Congress and turning his congressional office into a racketeering enterprise. His sentencing is set for Oct. 30.
Forfeiture hearing
He faces a forfeiture hearing because a federal jury found that he and his family received more than $470,000 and more than 30 million shares of stock as a result of criminal activities.
The jury also found that ANJ Group, a front company set up for the benefit of Andrea Jefferson's and the couple's five daughters, could be required to surrender millions of shares of stock in a Kentucky technology company and a Nigerian telecommunications venture that are now presumably worthless.
The jury's Aug. 6 forfeiture verdict established which of Jefferson's assets amount to ill-gotten gains, and set an upper limit on how much the government may require him to forfeit. Exactly how much Jefferson will have to pay, and how he'll have to pay it, were left to the judge, T.S. Ellis III, who could make a determination any time up to and including at Jefferson's sentencing.
After Jefferson's indictment in June 2007, Ellis froze funds deposited in accounts controlled by ANJ, as well as a savings account for the then-congressman and proceeds due Jefferson from the sale of his partnership with his former law firm, Jefferson, Bryan, Jupiter, Lewis & Blanson.
More money problems
The former congressman's brother, political operative Mose Jefferson, who was convicted two weeks ago of bribery, has a similar raft of financial troubles that have been aired in federal court filings.
Mose Jefferson claimed in a financial statement that he owes friends and family more than $270,000 in loans. In the runup to the trial, he complained in filings that the federal government's efforts to tie up his property and bank accounts left him unable to pay lawyers. Mose Jefferson, along with his sister, 4th District Betty Jefferson, still faces a racketeering case accusing them of stealing from government-financed nonprofits.
In addition to the loans, Mose Jefferson has more than $150,000 in other debts, according to a financial statement.
While Mose Jefferson still owns two apartment buildings -- which prosecutors have indicated they hope to seize if he is convicted in the nonprofit case -- the rental income each month is less than his expenses, the financial statement asserts.
The debts led a magistrate judge this summer to convert his bond to a personal surety guaranteed by relatives. Mose Jefferson remains free on that bond pending his December sentencing in the bribery case.
Meanwhile, Jefferson and prosecutors are arguing about whether he can get back part of a $263,000 bank account seized by the government last year. Jefferson has agreed to forfeit $100,000, but his attorney argues in court filings he should receive the rest of the money back.
The assistant U.S. attorneys who handled the case, however, say the money should be held to go toward what prosecutors termed an inevitable fine ordered by the court.
. . . . . . .
Staff writer Laura Maggi contributed to this report.
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Here's a PDF of Jefferson's petition for bankruptcy.