Missouri couple charged with bankruptcy fraud and evading bank reporting requirements | USAO-SDIL

Couple in Camden County, Missouri face bankruptcy fraud and structuring charges stemming from
a scheme to defraud the Federal Bankruptcy Court for the Southern District of Illinois. Kevin and
Catharine Kahrig are named in a four count indictment which accuses the pair of
fraud and bankruptcy structuring. The indictment also accuses Kevin Kahrig, 47, of having made a
long list of false statements and omissions in bankruptcy court.
According to the indictment, from 2016 to 2018, the Kahrig launched a ploy to cover up the
assets of his creditors and fraudulently transfer at least $ 550,000 in assets to his wife,
Catharine, 34 years old. Kevin and Catharine have reportedly deposited over $ 160,000 in cash and checks
owned by Kevin in Catharine’s bank account. Catharine allegedly used the mixed funds in
his account to buy a property and selectively pay Kevin’s expenses, while Kevin emptied and
closed his own bank accounts, cashing over $ 200,000 in checks rather than depositing them with the
Bank. The Kahrigs also allegedly structured over $ 100,000 in deposits in an attempt to escape the bank.
reporting requirements.

The indictment further alleges that Kevin asked his business customers to make payments to
Catherine and other family members rather than himself or his business. The couple is also
accused of selling Kevin’s boat and using check for $ 395,000 to pay Catharine’s price
mortgage rather than paying Kevin’s debts.

Kevin Kahrig filed for bankruptcy in May 2018. The indictment accuses him of having made numerous
false statements and omissions in its declarations of bankruptcy and subsequent declarations under
oath to cover up the fraud scheme.

“Abuse of the bankruptcy system by concealing assets for personal gain threatens the
integrity of the bankruptcy system, ”said Nancy J. Gargula, United States Trustee for Southern
Illinois, central Illinois and Indiana (region 10). “I am satisfied with the actions taken by United
State Prosecutor Wei hoeft and our law enforcement partners to prosecute those who engage in
fraudulent conduct.

Each count carries a maximum penalty of five years imprisonment and a fine of up to
$ 250,000. The initial appearances and indictments of the Kahrig took place earlier today, and both
the defendants pleaded not guilty. The trial is scheduled for May 19, 2021, before the United States
District Judge Stephen P. McGlynn.

An indictment is only a formal accusation against an accused. By law, the
defendants are presumed innocent of the charges until proven guilty beyond a reasonable doubt
to the satisfaction of a jury.

The investigation was conducted by the FBI in conjunction with the Southern District of Illinois.
Bankruptcy Fraud Task Force coordinated by US Trustee for Region 10, after referral by the
American trustee. The US Trustee Program is the component of the Department of Justice that protects
integrity of the bankruptcy system by overseeing case administration and advocating for compliance with
bankruptcy laws. Region 10 is headquartered in Indianapolis, with additional offices in Peoria,
Illinois and South Bend, Indiana. The case is being continued by assistant United
State Attorney Peter T. Reed.

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