Joel R. Glucksman
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201-896-7095 jglucksman@sh-law.comFirm Insights
Gold River businessman gets 17 years for bankruptcy fraud
Author: Joel R. Glucksman
Date: March 11, 2014
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Gold River businessman Steven Zinnel and his wife were divorced in 1999, and as proceedings dragged on, things got ugly. According to the Sacramento Bee, Zinnel told his wife in an angry email in 2001 that he intended to file for bankruptcy, and that she and the ex-couple’s two teenage children would get nothing. The problem is that Zinnel was a successful investor in electrical infrastructure and real estate, and in actuality, held millions of dollars in assets.
Zinnel filed for protection under Chapter 7 of the bankruptcy law in 2005, according to court documents. At the time, he and his attorney, who will also be sentenced, had hidden his assets by putting them in other people’s names, according to the Sacramento Bee, a practice that is highly illegal. In order to disguise his continued income, Zinnel and his attorney funneled money through shell companies so that he would not have to pay child support, which is calculated based on a formula in California, rather than being set by the courts.
Despite having apparently gotten away with the scheme “scot-free,” Zinnel called the FBI and requested an investigation of his ex-wife for allegedly trying to illegally access his private health insurance information, according to Time Magazine. Upon hearing his ex-wife’s side of the story, however, the FBI became much more interested in Zinnel’s bankruptcy filing, quickly unraveling the plot. As Judge Gregory Hollows put it, “having roused the beast, like the professor in Frankenstein, [Zinnel] was soon fighting off his own creation.”
In July 2013, Zinnel was convicted of 15 counts of bankruptcy fraud and money laundering, according to the news source. On March 5, he was ordered to forfeit $2.8 million in assets, pay $500,000 in fines and serve 17 years in prison. “You don’t lie before a court of law,” said Judge Troy Nunley of the U.S. Bankruptcy court in handing down the sentence. “You don’t continue to lie, which is what you did.”
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