Does Crime Pay?
MayorBob.
Posted to Legal on Mon Sep 22, 2008 at 08:59:02 PM EST (promoted by DEMachina). RSS.
How would you feel if you were victimized by someone and then told you had to pay your victimizer? Outraged, perplexed, and confused - all of these things describe Mark Poveromo. The Connecticut pet store owner was cheated by an unscrupulous contractor and used the courts to prosecute the crook and make things right for himself. However, because the contractor filed for bankruptcy, Poveromo now finds himself behind the eight ball. Poveromo must pay back the contractor what he recovered and he must also pay the contractor's legal fees.
Poveromo's troubles began in 2006 when he hired Mark Koch of Illinois to do $80,000 worth of work on his store. Koch never did any work, even though he had been given $39,500 up front. Poveromo eventually had to file a complaint with police against Koch, which resulted in Koch being convicted. Koch was ordered to repay Poveromo and he began by giving him $25,000 back and began making monthly payments to Poveromo. Unbeknownst to Poveromo, or so he claims, Koch applied for bankruptcy protection two months before his conviction.
The federal judge in Missouri, where Koch filed for bankruptcy, ruled that Poveromo had "interfered with (Koch's) attempt to file for bankruptcy" and ordered the $25,000 be given back to Koch. Oh, and he also ordered that Poveromo compensate Koch for whatever costs he put up trying to defend himself against the criminal charges. Poveromo is perplexed, "I cannot understand how he can justify letting this man rob me and forcing me to pay him back through bankruptcy protection money that was stolen from me." He says if he didn't comply with the judge's order, he would have had a lien slapped on his business.
Judge Charles Rendlen, the federal bankruptcy judge, said Poveromo's complaint to the police was "highly suspect." According to Rendlen, "allowing a creditor to use the threat of incarceration on charges related to a prepetition debt undermines the most fundamental premise of bankruptcy law: the guarantee of equal treatment among creditors pursuant to the bankruptcy code." He was also unconvinced about Poveromo's excuse (he didn't receive notices of the filing) for not showing up in court in St. Louis to contest the matter. Rendlen also didn't want to hear about Poveromo's request to testify by phone against Koch: "Inconvenience experienced by the defendant's parents does not outweigh the need of the court to observe the defendant in person as he gives his testimony, to allow the court to best weigh his credibility."
Jeff Weisman, Poveromo's lawyer, called the ruling "an injustice." Jack Williams, a bankruptcy expert, said the problem lay in bankruptcy law which will give debts owed priority over criminal convictions and suggested Congress could easily fix this if it wanted to. Stuart Hirshfield, another bankruptcy expert, says the law is fair and clear and bankruptcy judges have the power to issue a stay of claims, even in light of criminal convictions against the debtor. Public opinion in Connecticut is solidly behind Poveromo with him offering some additional insight into his case.
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