Osakwe Ismael Osagbue, Bankruptcy Court Embezzlement, MD 2025

SAN JUAN, Puerto Rico – Osakwe Ismael Osagbue, a man from Maryland, will spend the next seven and a half years in federal prison after being sentenced to 90 months for a brazen scheme to steal over $1.8 million from federal bankruptcy courts across the nation. The sentencing, handed down on July 14, 2025, follows a guilty plea entered by Osagbue on February 19, 2025, after his indictment on April 3, 2024. He was convicted of mail and wire fraud, falsification of bankruptcy records, and aggravated identity theft.

The scheme, meticulously detailed in court documents, involved exploiting the Public Access to Court Electronic Records (PACER) system to identify bankruptcy cases with unclaimed funds. Osagbue didn’t bother with subtlety. He crafted fraudulent applications for payment, brazenly using the names, social security numbers, and even signatures of unsuspecting individuals. These applications, addressed to 28 separate bankruptcy courts, directed payments into bank accounts Osagbue controlled – accounts opened under the stolen identities of his victims.

The audacity of the operation is staggering. Osagbue didn’t just submit the paperwork; he followed up with fraudulent emails impersonating the victims, communicating with court personnel to push the fraudulent claims through. When the money hit the accounts, he’d withdraw it via ATM and deposit it into his own, personal accounts. The total amount of fraudulent claims submitted exceeded $1.8 million, a testament to the scope of his criminal ambition. The courts targeted spanned the country, including the District of Puerto Rico, Northern District of Alabama, Arizona, Colorado, Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Montana, Nevada, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, Utah, Washington, Washington D.C., and Wisconsin.

The fraud was ultimately uncovered by the United States Bankruptcy Court for the District of Puerto Rico, who flagged the suspicious activity and immediately reported it to federal authorities. The case was then taken up by the United States Secret Service, who investigated and built the case against Osagbue. Their work highlights the critical role these agencies play in protecting the financial integrity of the nation.

“This sentencing reflects the US Attorney’s Office ongoing commitment to prosecuting sophisticated fraudsters who abuse the system,” stated W. Stephen Muldrow, United States Attorney for the District of Puerto Rico. “Thanks to the relentless efforts of our multiagency partners, we will continue to aggressively pursue accountability for perpetrators whose actions impact the integrity of the United States courts and the integrity of the United States bankruptcy system.” Monsita Lecaroz-Arribas, Assistant U.S. Trustee added, “Filing fraudulent unclaimed funds requests strike at the integrity of the bankruptcy system. This sentence will go a long way in protecting it.”

The 90-month sentence sends a clear message: exploiting the bankruptcy system for personal gain will not be tolerated. While Osagbue may have believed he could slip through the cracks of a complex legal system, the combined efforts of the US Attorney’s Office, the Secret Service, and the Bankruptcy Court ensured he faced justice. This case serves as a stark reminder that even the most sophisticated financial crimes will be pursued, and perpetrators will be held accountable.

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