Steve McVay Guilty of Hiding Assets in Bankruptcy Fraud

Steve McVay, 68, of Morgan Hill, California, admitted to a federal court that he hid assets during a 2010 bankruptcy proceeding, pulling the wool over creditors, the court, and federal watchdogs. McVay pleaded guilty yesterday to one count of concealing assets in a bankruptcy proceeding, a crime that could land him five years behind bars.

The plea, accepted by U.S. District Judge Lucy H. Koh in San Jose, stems from McVay’s February 9, 2010, bankruptcy filing in the Northern District of California. At the time, he claimed approximately $1.5 million in debts. But under oath, he submitted documents riddled with lies—knowing full well they were false and designed to shield his money from scrutiny.

As detailed in the plea agreement, McVay opened a bank account in his wife’s name without her knowledge or consent. He used the account to receive and move funds under his sole control—all while omitting it from his bankruptcy disclosures. That wasn’t the only hidden account. McVay admitted to concealing multiple additional bank accounts he was legally required to report.

The fraud didn’t fly under the radar forever. On April 28, 2016, a federal grand jury indicted McVay on two counts of concealing assets and one count of false testimony in bankruptcy proceedings, violations of 18 U.S.C. § 152(1) and § 152(2). He’s now pleading guilty to one count of concealment; the other charges may be dropped as part of the plea deal.

McVay now faces up to five years in prison and a $250,000 fine—or double the financial loss tied to the scheme. The court may also impose supervised release and restitution. Sentencing is scheduled for May 17, 2017. Any final judgment will weigh the U.S. Sentencing Guidelines and federal law under 18 U.S.C. § 3553.

The case was prosecuted by Assistant U.S. Attorney Timothy J. Lucey, with assistance from Laurie Worthen. The FBI led the investigation, peeling back layers of deception that spanned years. U.S. Attorney Brian J. Stretch and FBI Special Agent in Charge John F. Bennett confirmed the guilty plea, underscoring federal resolve to crack down on financial fraud that undermines the justice system.