Evansville Woman Sentenced in Federal Court for Bankruptcy and Wire Fraud Scheme
Wife filed forged documents in Bankruptcy Court and stole from husband’s retirement account
Evansville – United States Attorney Josh Minkler announced today the sentencing of an Evansville woman for her role in an elaborate bankruptcy fraud scheme in which she stole thousands of dollars from her husband’s retirement account. Patricia Bippus-Allen, 58, was sentenced to 60 months (five years) imprisonment by U.S. District Judge Richard L. Young after pleading guilty to conspiracy to commit bankruptcy fraud, subornation of perjury, wire fraud, and aggravated identity theft.
“Using the bankruptcy system and government resources to further one’s own selfish and fraudulent scheme will not be tolerated,” said Minkler. “If you intentionally waste the government’s limited judicial resources, you can expect to spend time in federal prison.”
In September 2010, Bippus-Allen filed a joint Chapter 13 bankruptcy petition in both her and her husband’s name in the United States Bankruptcy Court for the Southern District of Indiana. This was done without her husband’s consent, knowledge or authorization. During the course of the bankruptcy proceedings, Bippus-Allen created several documents bearing the forged signature of her husband of over 25 years.
Bippus-Allen also provided her bankruptcy attorney with a letter from a doctor stating her husband was under his care and would be hospitalized for at least 30 days during which he could not see visitors or take phone calls. The doctor who purportedly signed the letter stated it was a forgery and that he had never provided services for her husband.
In March 2011, Bippus-Allen attended a meeting of creditors which her husband was required to attend as well. David Bippus, her brother, attended the meeting with Bippus-Allen and posed as Bippus-Allen’s husband. Bippus-Allen and David Bippus both stated under oath that he was the husband and that all schedules and documents filed in the bankruptcy proceedings were true and correct.
Based on the representations made by Bippus-Allen and David Bippus, a bankruptcy plan was confirmed requiring monthly payments to Bippus-Allen’s for 60 months. Pursuant to this plan, approximately $74,000 was deducted from the direct deposit paychecks of Bippus-Allen’s husband without his consent or knowledge.
Bippus-Allen was convicted of wire fraud stemming from her transferring money from her husband’s 401(k) account into her own personal bank accounts without his consent, knowledge, or authorization. Bippus-Allen made multiple calls to the 401(k) service center purporting to be her husband while also faxing supporting documentation to the service center for a 401(k) hardship withdrawal. In sum, Bippus-Allen made multiple unauthorized withdrawals from her husband’s 401(k) account for a total of over $24,000. Bippus-Allen also took out over $16,000 in loans on her husband’s 401(k) account without his consent, knowledge, or authorization.
This investigation was conducted by the Federal Bureau of Investigation with assistance from the Southern District of Indiana Bankruptcy Fraud Working Group, which includes the U.S. Trustee Program.
“For honest individuals who find themselves overwhelmed by debt, filing for bankruptcy can be a lifesaver. But then there are others who try to get out of paying their debts and line their pockets through illegal actions,” said W. Jay Abbott, Special Agent in Charge of the FBI’s Indianapolis Division. “The FBI takes our responsibility to pursue those who commit bankruptcy fraud and corrupt the process through deceit very seriously.”
“Criminal bankruptcy fraud threatens the integrity of the bankruptcy system, as well as public confidence in that system,” stated Nancy J. Gargula, U.S. Trustee for Indiana, Central Illinois and Southern Illinois (Region 10). “I am grateful to U.S. Attorney Minkler and our law enforcement partners for their strong commitment to combating bankruptcy related crimes, as demonstrated by today’s sentencing.”
The U.S. Trustee Program is the component of the U.S. Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. Region 10 is headquartered in Indianapolis, with additional offices in South Bend, Ind., and Peoria, Ill.
According to Assistant United States Attorneys Kyle M. Sawa and Todd Shellenbarger, who prosecuted this case for the government, Bippus-Allen must pay $112,354 in restitution and serve three years of supervised release following her sentence. Her co-defendant brother, David Bippus, was sentenced in May 2017 to two years of probation and $10,000 in restitution for conspiracy to commit bankruptcy fraud and making false statements in bankruptcy court.