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Kurt F. Johnson, Bogus Bankruptcy Petitions, Illinois 2018
A federal inmate has been found guilty of filing fictitious involuntary bankruptcy petitions against federal prison officials in a bizarre scheme to extort money from his victims.
Kurt F. Johnson, 55, was convicted by a jury after a three-day trial in Benton, Illinois, for filing false involuntary bankruptcy petitions against the warden and an officer at the U.S. Penitentiary in Marion, Illinois.
The evidence at trial established that Johnson, who is serving out the last decade of a 300-month sentence for an unrelated fraud conviction in the Northern District of California, used the assistance of persons outside the prison to file the false petitions on January 8, 2018.
The petitions alleged that each victim was indebted to Johnson in the amount of $20 billion, owing to a judgment Johnson claimed to have obtained from the International Court of Justice (also known as the World Court). As part of the scheme, Johnson purportedly canceled $1 billion of the supposed debt and then filed forms with the Internal Revenue Service showing the canceled debt as unreported income for his victims.
The mere filing of the fictitious claims resulted in both victims receiving solicitation letters from credit counseling services and loan companies based upon their supposed bankruptcy. Once the fraud was discovered, the United States quickly moved to seal the proceedings to prevent further damage to the victims’ reputations.
Johnson represented himself at the trial and testified in his own defense that he genuinely believed the World Court had awarded him a default judgment for $20 billion on account of his placement in the CMU. The jury deliberated for approximately 40 minutes before returning guilty verdicts on all four counts.
The case was investigated by the Federal Bureau of Investigation, with substantial assistance from the Federal Bureau of Prisons. Assistant United States Attorney Michael J. Quinley is prosecuting the case.
Sentencing is set for January 3, 2019, at 10:00 a.m. at the federal courthouse in Benton. By statute, Johnson could receive as much as 20 additional years in prison, which may be imposed to run consecutively to the time he is already serving.
Nancy J. Gargula, U.S. Trustee for Southern and Central Illinois and Indiana (Region 10), praised the efforts of U.S. Attorney Weinhoeft and law enforcement partners who serve on the Southern District of Illinois Bankruptcy Fraud Working Group.
Key Facts
- State: Illinois
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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