Palm Beach County Couple Sentenced To Prison For Bankruptcy Fraud

Last week, a South Florida couple was sentenced to one year and one day in federal prison for hiding assets and lying to bankruptcy officials during their Chapter 7 bankruptcy filing. Dr. Richard S. Krugman and his wife, Tamara B. Giordano, formerly Boca Raton residents, sought bankruptcy protection in 2008 after their successful anesthesiology practice fell on hard times. That was just the beginning of their troubles.

What started as a normal bankruptcy proceeding turned suspicious quickly. After receiving a tip, bankruptcy officials paid a surprise visit to the couple’s Boca Raton home and noticed that a pricey-looking watch suddenly vanished from the wife’s wrist. The pair eventually came clean about hiding a substantial amount of artwork and jewelry.

The actions taken by the two during the bankruptcy proceedings became so questionable that U.S. Bankruptcy Judge Erik Kimbal ruled the husband and wife were not trustworthy and made a rare decision to deny their request to discharge their debts of an estimated $2.9 million. He then referred the case for prosecution.

Seven years after their unsuccessful bankruptcy filing, Krugman and Giordano pleaded guilty to one count of bankruptcy fraud for concealing assets.

To show remorse and save face, Krugman and Giordano wrote letters to U.S. District Court Judge Kenneth Ryskamp acknowledging their misconduct and admitted to behaving arrogantly and showing no respect for the bankruptcy court and trustee.
Because of their lies and concealment, the couple still owes all the original debts they tried to discharge. The money made from auctioning off their personal belongings at rock-bottom prices all went to pay the bankruptcy trustee and her assistant.
Although Krugman reported he made $400,000 since 2010 and family members shelled out $10,000 a month to help them, Prosecutor Carolyn Bell said the duo made no effort to repay their debts.

Bell urged the judge to impose prison time, stating there had to be criminal ramifications for lying in bankruptcy proceedings and concealing assets. She went on to say incarceration would also deter other people who might consider doing the same thing. The judge agreed. The couple must report to prison in 45 days and, with time off for good behavior, will likely serve a little more than 10 months.

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