A Federal Jury In Houston, Texas Has Convicted A Former Houston Law Office Manager Bankruptcy Fraud Scheme

A federal jury in Houston, Texas has convicted a former Houston law office manager on 12 counts of a 13-count indictment charging him with schemes to fraudulently obtain money from people who were seeking assistance from the law office, the Justice Department announced today. Richard Dragon, former office manager at Bobby Stokes and Associates, was convicted on Jan. 29 on eight counts of bankruptcy fraud and four counts of mail fraud, following an eight-day jury trial.

Dragon was charged in a 13-count indictment in December 2001. Evidence at trial showed that Dragon conducted a bankruptcy fraud scheme from on or around September 1994 through May 1998, in which he instructed four individuals who sought assistance on their delinquent mortgage payments to stop making payments to their mortgage companies and, instead, make cash payments to himself and others at the law firm. Three of the victims, who eventually lost their houses, paid Dragon amounts ranging from $560 to $1,500 per month for as long as several years. Dragon falsely represented that he would negotiate with the mortgage companies to prevent foreclosures. Instead, he kept the mortgage

which temporarily resulted in automatic stays of pending foreclosures.

Sentencing is scheduled for May 5, 2003. Dragon faces a maximum penalty of 60 years in prison, payment of restitution, and a fine of up to $250,000 per count.

The case was prosecuted by Senior Trial Attorney William Stapleton and Trial Attorney Michael Dumont of the Fraud Section, Criminal Division, U.S. Department of Justice. The case was referred to the Fraud Section by the Office of the U.S. Trustee in Houston. The investigation was conducted by the FBI.

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