Sacramento Woman Sentenced for Bankruptcy Fraud Scheme

United States Attorney McGregor W. Scott announced that Martha Kathleen Montoya, 48, of Sacramento, was sentenced today by United States District Judge Morrison C. England, Jr., to one year in prison. The defendant pleaded guilty to bankruptcy fraud and making a false statement in a bankruptcy case on October 10, 2006.

This case is the product of an extensive investigation by the Federal Bureau of Investigation, with the assistance of the Office of the United States Trustee.

The sentence of 12 months recognized the defendant's repeated victimization of her landlords. Judge England expressed his concern with the defendant's repetitive use of the federal bankruptcy court against the state court unlawful detainer system, and her use of both courts against her landlords.

Montoya filed 13 bankruptcies in Sacramento between July 1999 and January 2006, each for the purpose of delaying the collection of past due rents and her family's eviction from rental homes. As part of the scheme, Montoya sought the protection of the automatic stay provisions of the Bankruptcy Code after her landlords obtained judgments against her for unpaid rents and won the right to evict her family. During the pendency of each bankruptcy case, Montoyalived in the homes rent-free while the owners of the residences were prevented from collecting past due rents, executing the judgments, or evicting Montoyafrom the property. The bankruptcy cases were dismissed after Montoyafailed to pay filing fees and/or failed to pursue the cases. In December 2002 the Bankruptcy Court ordered Montoyanot to file another bankruptcy case for two years (or five years if all accumulated past filing fees were not paid), but Montoyacontinued to file petitions from 2003 through 2005 using false Social Security numbers and variations of her true name.

As part of her sentence, Judge England ordered Montoya to make restitution to victimized landlords in the amount of $42,721. Upon her release from prison, Montoya will serve a three-year term of supervised release.

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