Harrisburg Woman Pleads Guilty to Bankruptcy Fraud

Rietta M. Miller, 51, of Harrisburg, Illinois, has pleaded guilty to federal bankruptcy fraud after attempting to hide a $47,736.12 worker’s compensation settlement from the U.S. Bankruptcy Court in Benton. The plea, entered today, marks a hard-fought win for federal prosecutors cracking down on individuals who abuse the bankruptcy system for personal gain.

Charges were filed January 30, 2017, after investigators uncovered that Miller received the worker’s comp payout just one month before filing for Chapter 7 bankruptcy. Instead of disclosing the funds, she shuffled the money through multiple bank accounts in a clear effort to conceal it. The move violated federal law requiring full asset disclosure so creditors receive fair restitution before debts are discharged.

Miller admitted in court that she knowingly lied on her bankruptcy petition and supporting schedules. She repeated those falsehoods under oath during a Meeting of Creditors, a critical proceeding where debtors are held accountable for their financial disclosures. Her actions constitute a direct assault on the integrity of the bankruptcy process, prosecutors say.

“Federal bankruptcy laws enable debtors to gain a fresh start in life through a discharge of their debts,” said U.S. Attorney Donald S. Boyce for the Southern District of Illinois. “Individuals who hide their assets during bankruptcy cases are defrauding their creditors. Our office will continue to prosecute those who engage in this type of conduct.”

Nancy J. Gargula, U.S. Trustee for Region 10, which includes Southern Illinois, praised the collaborative takedown. “This case is an example of the collaborative efforts of the Bankruptcy Fraud Working Group and other law enforcement partners to combat fraud and abuse in our nation’s bankruptcy system,” Gargula stated. The probe was led by FBI agents out of the Springfield Division, Fairview Heights Resident Agency, working with the U.S. Trustee’s task force.

Miller faces up to 5 years in federal prison, a $250,000 fine, three years of supervised release, and full restitution. Sentencing is set for May 18, 2017, at 10:30 a.m. in the federal courthouse in Benton, Illinois. The case was prosecuted by Assistant U.S. Attorney Scott A. Verseman, following a referral from the U.S. Trustee’s office.