According to information released by the United States Attorneys Office on May 5, 2011, Kenneth G. Reidenback was charged by superseding indictment with bankruptcy fraud. The bankruptcy attorney is accused of concealing assets during a bankruptcy proceeding and embezzling from a bankruptcy estate. Filing for bankruptcy is a legal proceeding designed to protect both creditor and debtor and to allow the honest person or business to work their way out of a bad financial situation, or in some cases, to completely start fresh. The key word here is “honest.” Bankruptcy attorneys are considered an extension of the debtor when he or she represents a client, and therefore, they come under the same auspices of the law. The United States Bankruptcy Courts frown upon fraud, no matter from who it comes.

According to the superseding indictment, Reidenbach, a 61 year old Lancaster, Pennsylvania attorney, represented an individual in a bankruptcy proceeding. The indictment says he counseled his client to place nearly $40,000 in real estate proceeds into a law firm account controlled by himself and then concealed those proceeds from the bankruptcy court. The indictment also alleges that Reidenbach falsely represented he had agreed to receive only $1,500 for representing the client in the bankruptcy proceeding. The original indictment, filed December 9, 2010, charged Reidenbach and co-defendant Herbert P. Henderson, another attorney in Lancaster, with conspiracy to commit bankruptcy fraud and concealing assets in bankruptcy by concealing more than $51,000 of clients’ real estate sales proceeds from the bankruptcy court.

If convicted of the charges in the superseding indictment, Reidenbach faces a maximum possible sentence of 40 years in prison and a fine of $2,000,000. The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney David J. Ignall. An indictment or information is an accusation. A defendant is presumed innocent unless and until proven guilty.(This press release was taken from the FBI website in Philadelphia: )

The seriousness of fraud is sometimes overlooked when it comes to the ones we elect as our advocates. The point of this article is to show that bankruptcy lawyers are human beings too. They can and should be held to the letter of the law. After all, that is what they do to make their living, and their living affects all of us who trust and employ them. I am relatively sure Mr. Reidenbach is not the first of last lawyer to be accused of fraud, but I would guess the statistical numbers on such occurrences are very low.

Regardless, fraud is fraud no matter who commits it. If we are to expect to keep a level playing field for all who participate in bankruptcy proceedings, we should expect the law to apply to all who participate in those proceedings. Along with debtors and creditors, the laws should apply to lawyers, judges, and trustees as well. I cant but wonder how many trustees or judges illegally overlook certain aspects of the law in administering their brand of justice.

So, as a layman who is seeking help on filing for bankruptcy protection, what should I learn from all of this? Learn to challenge authority no matter from where it originates. Be up front and honest in your dealings and expect and demand the same from everyone, regardless of their position. You deserve a fair bankruptcy proceeding in order to allow the system to work like it was designed. Know your contract with your advocate and demand professionalism in its deliverance. Ask how he or she deals in regards to trustees, creditors, or judges irregularities in the process. In other words, will your advocate challenge authority, as well, to protect your interests?

Basically, the system works, but it is run by human beings who make mistakes. Bankruptcy laws can be complicated, and common sense indicates you most likely will need a bankruptcy lawyer in order to help you understand how these complex laws may apply in your particular situation. If you determine you are in need of relief from the stress associated with debt and you live in or around the metropolitan areas of Wilmington or Newark, Delaware and Maryland, contact us here today at . We will help you find a bankruptcy attorney in your area that will help you with any questions you may have on bankruptcy law.

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