Man Sentenced for Hiding Assets in Bankruptcy Case

A former attorney was sentenced to 30 months in federal prison for concealing an airplane and other assets after filing for bankruptcy, authorities said Wednesday.

Michael D. Freeman--who from 1975 until 1995 operated Michael D. Freeman & Associates in Encino--was sentenced by U.S. District Judge Kim McLane Wardlaw, said Angela J. Davis, the assistant U.S. attorney who prosecuted the case.

She said Freeman, 59, was also ordered to pay $66,000 in restitution to Peter Andersen, the bankruptcy trustee.

“Justice was done,” Davis said.

The attorney who represented Freeman during the criminal case could not be reached for comment.

Wednesday’s sentencing followed Freeman’s conviction in December by a federal jury that found him guilty of seven counts of bankruptcy fraud. The charges stemmed from a personal bankruptcy case he filed in 1994 in which he sought to have $400,000 of debt discharged, Davis said. His creditors ranged from credit card companies to the IRS.

The FBI began an investigation of Freeman after some creditors became suspicious, Freeman said.

Federal prosecutors claimed during the criminal trial that Freeman had falsely stated under oath that his Cessna airplane was encumbered by a $95,000 lien, preventing the plane from being sold to repay his creditors, Davis said.

Davis said Freeman also concealed the existence of Auto Rental Management Systems, a Cayman Islands corporation he owned.

Freeman also concealed a $3,500 sculpture, the prosecution claimed.

Davis said Freeman is expected to turn himself in to the United States marshal on April 18 or report directly to prison.