Score:   1
Docket Number:   ND-IL  1:19-cr-00565
Case Name:   USA v. Filer et al
  Press Releases:


MADISON, WIS. — Chicago attorney Edward Lee Filer, consultant Robert Joseph Gereg and business owner Paul Michael Kelly have been indicted on wire and bankruptcy fraud charges alleging that they created a sham secured creditor with a senior lien on all of the assets of Kelly’s Chicago company, Barsanti Woodwork Corporation, for the purpose of fraudulently shielding the assets from legitimate creditors.

According to the 10 count indictment, Filer, 54, and Kelly, 49, both of Clarendon Hills, Illinois, and Gereg, 71, of Osprey, Florida, created sham limited liability companies and engaged in fraudulent agreements, assignments, transfers, transactions and state and bankruptcy court actions designed to make it appear that the fraudulent transactions involving Barsanti Woodwork’s assets were non-collusive and arms-length, in order to deceive and falsely represent to Barsanti Woodwork’s creditors and later to a bankruptcy trustee that Barsanti Woodwork’s assets had been taken by a secured creditor and that collection activities by legitimate creditors against Barsanti Woodwork would be futile.

Filer, then a partner in a Chicago law firm referred to in the indictment as Law Firm A, is alleged to have caused the fraudulent agreements, assignments, transfers, transactions and state and bankruptcy court actions necessary to accomplish the scheme.

The indictment further alleges that the defendants created BWC Capital to serve as a sham secured creditor of Barsanti Woodwork and falsely represented BWC Capital to be Gereg’s company, when, in reality, Gereg’s role was to conceal Kelly’s control of BWC Capital, as Filer had caused Gereg to secretly assign his interest in BWC Capital to a trust controlled by Kelly.  The defendants then caused BWC Capital to use Barsanti Woodwork’s funds to purchase Barsanti Woodwork’s secured debt from a Bank at a discount and caused that Bank to assign its lien on Barsanti Woodwork’s assets to BWC Capital, giving Kelly control through Gereg of the senior lien on all of Barsanti Woodwork’s assets.



The defendants then allegedly began the process of fraudulently transferring Barsanti Woodwork’s assets to BWC Capital through a state court action using fraudulent back-dated confessions of judgment clauses and Gereg’s false affidavit which inflated the amount Barsanti Woodwork purportedly owed to BWC Capital.  It is specifically alleged that Filer caused the confessions of judgment clauses to be back-dated in order conceal that they lacked consideration and to expedite the transfer of Barsanti Woodwork’s assets in anticipation of bankruptcy. 

The indictment further alleges that the defendants created Barsanti Millwork as a sham entity under whose name Barsanti Woodwork continued to operate at the same location, and falsely represented Barsanti Millwork to be Gereg’s company, when, in reality, Gereg’s role was to conceal Kelly’s control of Barsanti Millwork, as Filer had also caused Gereg to secretly assign his interest in Barsanti Millwork to a trust controlled by Kelly.

According to the indictment, the defendants then put Barsanti Woodwork into a bankruptcy in which defendants attempted to conceal the fraudulent transfer of Barsanti Woodwork’s assets, including the use of Barsanti Woodwork’s funds to purchase the bank debt for the benefit of BWC Capital, and made and caused false representations to be made, including that BWC Capital was a creditor with a claim against Barsanti Woodwork. Filer is then alleged to have concealed records from creditors and the bankruptcy trustee. Finally, both Filer and Gereg are alleged to have testified falsely under oath.

The indictment was returned Thursday.  It charges Filer with two counts of wire fraud and eight counts of bankruptcy fraud; Gereg with two counts of wire fraud and seven counts of bankruptcy fraud; and Kelly with two counts of wire fraud and three counts of bankruptcy fraud.  Arraignment in federal court in Chicago has not yet been scheduled.

The law firm of Freeborn & Peters has authorized the disclosure that it is the law firm referred to in the indictment as Law Firm A.  According to Scott C. Blader, United States Attorney for the Western District of Wisconsin, “Freeborn & Peters’ extensive cooperation with this investigation was exemplary and essential to successfully investigating this sophisticated offense.” 

“The American public needs to be aware that any fraud or falsehood in connection with bankruptcy seriously undermines the integrity of the system,” said Craig Goldberg, Inspector in Charge of the Chicago Division of the United States Postal Inspection Service. “The U.S. Postal Inspection Service investigates crimes when the mail is used to commit a crime or in furtherance of a crime. The individuals charged in this case allegedly utilized the U.S. Mail as part of their scheme to shield assets from legitimate creditors.”

The indictment was announced by U.S. Attorney Blader, whose office is overseeing the matter; Inspector in Charge Goldberg of the U.S. Postal Inspection Service in Chicago; Irene Lindow, Special Agent-in-Charge of the Chicago Regional Office of the United States Department of Labor, Office of Inspector General; Tara Sullivan, Acting Special Agent-in-Charge  of the Chicago Field Office of the Internal Revenue Service, Criminal Investigation; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI. The government is represented by Assistant U.S. Attorney Brian P. Netols and Special Assistant U.S. Attorney Jeffrey S. Snell.

The public is reminded that an indictment is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  Each wire fraud count is punishable by a maximum sentence of 20 years in prison, while each count of bankruptcy fraud carries a maximum sentence of five years.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

Indictment.pdf

Docket (0 Docs):   https://docs.google.com/spreadsheets/d/1y6i8n53L78N4CA_9ylKYXhdZcKaOitdwKT3eBv_UYKM/edit#gid=0
  Last Updated: 2021-05-05 16:07:30 UTC
Description: The fiscal year of the data file obtained from the AOUSC
Format: YYYY

Description: The code of the federal judicial circuit where the case was located
Format: A2

Description: The code of the federal judicial district where the case was located
Format: A2

Description: The code of the district office where the case was located
Format: A2

Description: Docket number assigned by the district to the case
Format: A7

Description: A unique number assigned to each defendant in a case which cannot be modified by the court
Format: A3

Description: A unique number assigned to each defendant in a case which can be modified by the court
Format: A3

Description: A sequential number indicating whether a case is an original proceeding or a reopen
Format: N5

Description: Case type associated with the current defendant record
Format: A2

Description: A concatenation of district, office, docket number, case type, defendant number, and reopen sequence number
Format: A18

Description: A concatenation of district, office, docket number, case type, and reopen sequence number
Format: A15

Description: The status of the defendant as assigned by the AOUSC
Format: A2

Description: A code indicating the fugitive status of a defendant
Format: A1

Description: The date upon which a defendant became a fugitive
Format: YYYYMMDD

Description: The date upon which a fugitive defendant was taken into custody
Format: YYYYMMDD

Description: The date when a case was first docketed in the district court
Format: YYYYMMDD

Description: The date upon which proceedings in a case commenced on charges pending in the district court where the defendant appeared, or the date of the defendant’s felony-waiver of indictment
Format: YYYYMMDD

Description: A code used to identify the nature of the proceeding
Format: N2

Description: The date when a defendant first appeared before a judicial officer in the district court where a charge was pending
Format: YYYYMMDD

Description: A code indicating the event by which a defendant appeared before a judicial officer in the district court where a charge was pending
Format: A2

Description: A code indicating the type of legal counsel assigned to a defendant
Format: N2

Description: The title and section of the U.S. Code applicable to the offense committed which carried the highest severity
Format: A20

Description: A code indicating the level of offense associated with FTITLE1
Format: N2

Description: The four digit AO offense code associated with FTITLE1
Format: A4

Description: The four digit D2 offense code associated with FTITLE1
Format: A4

Description: A code indicating the severity associated with FTITLE1
Format: A3

Description: The title and section of the U.S. Code applicable to the offense committed which carried the second highest severity
Format: A20

Description: A code indicating the level of offense associated with FTITLE2
Format: N2

Description: The four digit AO offense code associated with FTITLE2
Format: A4

Description: The four digit D2 offense code associated with FTITLE2
Format: A4

Description: A code indicating the severity associated with FTITLE2
Format: A3

Description: The title and section of the U.S. Code applicable to the offense committed which carried the third highest severity
Format: A20

Description: A code indicating the level of offense associated with FTITLE3
Format: N2

Description: The four digit AO offense code associated with FTITLE3
Format: A4

Description: The four digit D2 offense code associated with FTITLE3
Format: A4

Description: A code indicating the severity associated with FTITLE3
Format: A3

Description: The title and section of the U.S. Code applicable to the offense committed which carried the fourth highest severity
Format: A20

Description: A code indicating the level of offense associated with FTITLE4
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Description: The four digit AO offense code associated with FTITLE4
Format: A4

Description: The four digit D2 offense code associated with FTITLE4
Format: A4

Description: A code indicating the severity associated with FTITLE4
Format: A3

Description: The title and section of the U.S. Code applicable to the offense committed which carried the fifth highest severity
Format: A20

Description: A code indicating the level of offense associated with FTITLE5
Format: N2

Description: The four digit AO offense code associated with FTITLE5
Format: A4

Description: The four digit D2 offense code associated with FTITLE5
Format: A4

Description: A code indicating the severity associated with FTITLE5
Format: A3

Description: The FIPS code used to indicate the county or parish where an offense was committed
Format: A5

Description: The date of the last action taken on the record
Format: YYYYMMDD

Description: The date upon which judicial proceedings before the court concluded
Format: YYYYMMDD

Description: The date upon which the final sentence is recorded on the docket
Format: YYYYMMDD

Description: The date upon which the case was closed
Format: YYYYMMDD

Description: The total fine imposed at sentencing for all offenses of which the defendant was convicted and a fine was imposed
Format: N8

Description: A count of defendants filed including inter-district transfers
Format: N1

Description: A count of defendants filed excluding inter-district transfers
Format: N1

Description: A count of original proceedings commenced
Format: N1

Description: A count of defendants filed whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1

Description: A count of defendants terminated including interdistrict transfers
Format: N1

Description: A count of defendants terminated excluding interdistrict transfers
Format: N1

Description: A count of original proceedings terminated
Format: N1

Description: A count of defendants terminated whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1

Description: A count of defendants pending as of the last day of the period including long term fugitives
Format: N1

Description: A count of defendants pending as of the last day of the period excluding long term fugitives
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Description: The source from which the data were loaded into the AOUSC’s NewSTATS database
Format: A10

Description: A sequential number indicating the iteration of the defendant record
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Description: The date the record was loaded into the AOUSC’s NewSTATS database
Format: YYYYMMDD

Description: Statistical year ID label on data file obtained from the AOUSC which represents termination year
Format: YYYY

Data imported from FJC Integrated Database
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