Miss. man pleads not guilty in bankruptcy fraud
JACKSON, Miss. (AP) — A Jackson man pleaded not guilty Tuesday to federal charges that he defrauded his bankrupt business of more than $9 million.
Federal prosecutors said that after William “Butch” Dickson company, Community Home Financial Services, filed for Chapter 11 bankruptcy protection, the 57-year-old wired nearly $9.1 million from company accounts to a bank in Panama. Prosecutors say he also sent mortgage checks the company had collected to Central America.
Court papers say the bankruptcy trustee in charge of protecting funds for the company’s creditors demanded Dickson return the money but he didn’t comply.
A federal magistrate in Miami ordered Dickson held without bond after he was expelled from Panama on March 12 and returned to the United States. A hearing was set Thursday for Dickson to challenge his detention.
Assistant U.S. Attorney Carlos Tanner told U.S. Magistrate Judge Keith Ball Tuesday that prosecutors believe Dickson is flight risk if released from the Madison County jail, where he’s being held. Joe Holloman, one of Dickson’s lawyers, said after the hearing that he would present evidence Thursday showing why Dickson is not a flight risk.
The indictment charges Dickson with six counts of bankruptcy fraud, six counts of bank fraud and five counts of wire fraud. If convicted, he could face decades in prison and millions of dollars in fines. Prosecutors also want him to forfeit the money in question.
Community Home was in the business of collecting mortgage payments on several thousand accounts. The company filed for Chapter 11 protection in 2012, claiming nearly $45 million in assets and $30 million in liabilities. Dickson was left in charge of the company and its bank accounts, but wasn’t supposed to make certain kinds of transfers without permission, as is typical in a Chapter 11 proceeding.
But court papers say that starting in November, Dickson began sending money out of the country, himself traveling to Costa Rica in January. Prosecutors also allege that the company began directing customers to send loan payments to a Las Vegas address, where they were boxed up and sent to Costa Rica. After the bankruptcy trustee discovered the Las Vegas address, prosecutors say the company directed payments to a Miami address.