Baltimore, MD – Diana J. Stout, a 56-year-old resident of Bethesda, Maryland, has been sentenced to 27 months in prison, followed by three years of supervised release, for making a false statement in bankruptcy and concealing assets in her Chapter 7 Bankruptcy case.
U.S. District Judge J. Frederick Motz handed down the sentence, which also includes an order for Stout to pay restitution of $155,747.83. The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein, along with Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation and the Greenbelt Office of the United States Trustee Program.
According to Stout’s plea agreement, from April 2010 through June 2011, Stout engaged in a scheme to defraud creditors in her Chapter 7 bankruptcy case, the trustee, and the bankruptcy court. Stout filed a Chapter 7 bankruptcy petition on April 20, 2010, but failed to disclose her ownership of a diamond bracelet with 75 individually set diamonds in 18kt white gold, 797 shares of common stock in Eagle Bancorp Inc., a 1993 Toyota Supra, and a 2005 Chevrolet Avalanche SUV, in addition to the two vehicles listed.
In order to conceal her assets, Stout sold the Toyota Supra for $14,000, the stock for a total of $10,125.91, and the diamond bracelet for $85,000, none of which she reported to the bankruptcy trustee. She also forged the signatures of contractors and converted insurance proceeds to her own use, totaling $155,747.83.
Stout’s bankruptcy estate included a home in Hagerstown, Maryland, and she had previously purchased a property in South Carolina with her former boyfriend, who claimed that Stout had misappropriated over $1 million of his assets for her own use or the use of her children. Stout transferred her interest in the property to her daughter for $1.
The bankruptcy trustee initiated proceedings to recover Stout’s interest in the South Carolina property, alleging that the transfer was intended to defraud Stout’s creditors. Stout signed and had a revised deed filed, falsely stating that the property had been transferred to her daughter in exchange for $75,000 paid to Stout.
With this conviction, the courts have sent a clear message that bankruptcy fraud will not be tolerated. The sentence reflects the severity of Stout’s actions and the harm caused to her creditors and the bankruptcy system.
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Key Facts
- State: Maryland
- Category: Fraud & Financial Crimes|White Collar Crime
- Source: DOJ Press Release ↗
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