Bankruptcy Leads to Fraud Charges

An Encino man was arrested on suspicion of fraud Wednesday for allegedly hiding hundreds of thousands of dollars worth of assets when he declared bankruptcy, according to the U.S. attorney’s office.

Larry Lee Reed, 66, faces eight counts of bankruptcy fraud, Assistant U.S. Atty. Angela J. Davis said.

According to Davis, Reed filed for Chapter 7 bankruptcy in 1997, claiming $11,000 in assets and more than $70,000 in credit card debt.

But FBI agents alleged that Reed bought a house in Missouri and on a homeowner’s insurance application he filled out shortly after he filed for bankruptcy, he claimed assets such as jewelry valued at $69,000, a gun collection worth $75,000 and paintings and sculptures valued at $190,000, officials said.

Reed’s lawyer was not available for comment.

If convicted of all counts, he faces up to 40 years in prison and $2 million in fines. Reed was charged as part of an initiative targeting bankruptcy fraud.