10 Indicted in U.S. Fight Against Bankruptcy Fraud

Federal authorities have obtained indictments of 10 people in a crackdown on wide-ranging types of bankruptcy fraud, the U.S. attorney’s office disclosed Thursday.

Officials said those indicted include people who had their debts erased by hiding assets from the court, a former lawyer who gave clients fake court documents to make them think he had erased their debts, and two debtors who used other people’s Social Security numbers.

Among the suspects are a Newport Beach couple who successfully erased $220,000 in credit card debt and legal judgments in a 1999 bankruptcy by concealing that they owned three rental properties on the Balboa Peninsula, said Assistant U.S. Atty. Robert J. Keenan.

Mark and Leslee Manderson were indicted on charges of conspiracy, concealment and making false statements in a bankruptcy. After a bankruptcy court official discovered the rental properties -- worth about $1.5 million -- the Mandersons then made false statements about the equity they held in the properties, Keenan said.

Keenan said the indictments, issued Wednesday, come as the federal government pays increasing attention to abuses of the bankruptcy court system.

“Bankruptcy filings are on the rise to record levels,” he said. “When people who file for bankruptcy are not truthful, they basically use the federal court as a tool to defraud creditors.... Credit card companies have to charge higher interest rates.”

Also indicted were:

* Michael and Martha Gordon of Irvine, charged with concealing stocks and other financial interests, held in the name of their business, from the bankruptcy court.

* Steven Dayton of Long Beach, a former attorney charged with creating false bankruptcy court documents to make clients believe he had discharged their debts.

* Frank R. Martinez of Irvine, charged with filing false bankruptcy documents to help clients avoid foreclosure.

* John C. Reynolds of Fontana, charged with using another person’s Social Security number in bankruptcy proceedings.

* Sharon Egan of Tustin, charged with running up $500,000 in credit card debt to buy Rolex watches and bulk cigarettes, which she arranged to sell after erasing her debt.

* Rafael Berrios of Huntington Beach, charged with concealing a past bankruptcy and using another person’s Social Security number in bankruptcy proceedings.

* Thomas R. Reyes of Santa Ana, charged with creating a false document in an effort to prevent garnishment of wages.