Yesterday, a local Sacramento man received a 17 year sentence for committing Bankruptcy Fraud after filing for Chapter 7. Steven Zinnel was convicted last July of hiding assets during his bankruptcy in an effort to avoid paying his wife significant support during their divorce.
Zinnell and his wife terminated their relationship in 1999 and engaged in a bitter divorce. Mr. Zinnell later filed his bankruptcy petition on July 20, 2005. He hid the assets by placing them in other individual’s names. Evidently, Mr. Zinnel concealed assets and income in order to avoid having to pay his wife spousal and child support. As the divorce intensified between the parties, Zinnel asked FBI to investigate his wife. Upon conducting their investigation, FBI agents uncovered multiple bankruptcy crimes committed by Zinnel and his attorney, Derian Edison. FBI agents uncovered an elaborate money laundering scheme whereby ZInnel funneled concealed assets back to his name by using his attorney’s trust account after receiving the bankruptcy discharge.
Upon his conviction, The Federal Court imposed a $500,000 fine on Zinnel and sentenced him to almost 18 years in federal prison. He was also ordered to hand over almost $3 Million in corporate assets to the US government.