This is why they make involuntary Bankruptcy. I haven't read through this whole thread but it sure seems like someone should liquidate what's there and pay out buyers as unsecured creditors (probably pennies on the dollar).

Wow, I just stumbled into this. I'm a lawyer and while I don't exclusively practice Bankruptcy law I've practiced in Bankruptcy Court enough to know my way around a little. The thread is way too long to sort through but it looks like Kuleks stole a bunch of money with their Predator scam and tried to discharge the resulting debt in a Chapter 7, but creditors filed an AP, called them on their shit and now their spot is getting blown up?

Anybody know if the U.S. Trustee has taken any interest yet? They'll criminally prosecute in some cases.

In my neck of the woods the Chapter 7 trustee would be all over this and the U.S. Trustee would probably be objecting to discharge. People think they can just file a Ch 7 and thumb their nose at creditors but don't understand that it's not that simple. Whyisnow is right about the timing though. I've had a case where crimes were committed during a Chapter 11 case and it was years later that the U.S. Attorney's office finally indicted and prosecuted.

No, they have to work through the Bankruptcy system too. It's all about transparency. The IRS does have lots of preferential advantages but they can't side-step the system.

Yes there's some posibility of the feds getting involved, but there is also a matter of prosecutorial discretion, jurisdictional concerns etc. The bottom line is that there are a lot of factors that play into how cases are criminally investigated and prosecuted and they are often beyond the control the victims. What the victims CAN influence is the civil portion of the case and it's great to see that the victims here have not just walked away. I've seen quite a few scams over the years but I think this is the only one where I've seen victims say "enough" and do something about it themselves. Cheers to all of you Plaintiffs out there!

You may be right that he's giving the debtors every possible benefit of process so that any ruling he makes is more likely to be upheld by the District Court if there is a review. He appears to be granting the Trustee's motions though and it's not like he can circumvent an Adversary Proceeding and just jump to the end. There's a time and a place for him to rule on the case. I'm not 100% up to speed on the case but it appears to me that Keith is doing a good job either (a) getting the documents he needs (b) pinning down that they don't exist (which helps his case) and (c) illustrating that the debtors are being evasive (which helps his case). Bankruptcy judges aren't doing a whole lot of "hammering" in their everyday duties so it's not exactly an easy ask for Keith at the end of the day. Hopefully the slow build will work to his advantage when it comes time to dispose of the case.

Under the Federal Rules of Evidence "Hearsay" is a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.

The tax returns consist of statements made by the declarant, and therefore aren't hearsay. To the extent the tax returns contain statements by non-parties (hearsay within hearsay) you could potentially have a problem but it's highly unlikely this type of thing would rear its head in a case like this. In my experience, nobody objects to the entry of their own tax returns because it severely undercuts their credibility.

Also, there's always the catchall rule as well which judges can use to admit otherwise inadmissible evidence because the statement has "equivalent circumstantial guarantees of trustworthiness." Tax Returns would be a prime example

I don't practice criminal law but my thinking is that it comes in because the statements are all party admissions, and therefore not hearsay. Isn't this why parties in civil cases often plead the "fiznif"?

My thinking in cases like this is that the real "punishment" is the process. The amount of pressure put on people under these circumstances, even in a civil case, is crushing. Uncertainty of the result will put people under extreme amounts of stress. Admittedly, Kevin and the Mrs. don't seem like they "get it" and maybe they don't yet understand the full impact of their actions but they are at least starting to "get it" more and more as the process goes on and the pressure is building. Years may go by before criminal charges are pursued and even after the Kuleks are (hopefully) stripped of assets and fail to get a discharge, they'll still be worried about criminal charges. The guidelines on time served for theft are shockingly low in my opinion. They're looking at something like 2-3 years but may not serve any time at all if criminally convicted. Any time they serve may pale in comparison to the stress they are put under waiting to find out what happens.

All in all its sad seeing this type of thing happening. I don't feel bad for the Kuleks but it's disheartening that people act the way they do and at the end of the day it's little consolation to see them suffer. It doesn't "right" the wrong they've done.

This is how I always learned it. In other words, it's not an exception to the hearsay rule because it's not hearsay to begin with.

It may depend on the state but in my state, yes, his statements would be admissible (not hearsay because they are party admissions).

Also, you're not in Court so there's no harm telling his insurance carrier what he said.

Sigh, so typical. Keith did a good job keeping quiet and letting all those barbs bounce off of him.

It could be a crackhead!

This isn't very far from what happens in many cases. And I can assure you that doing things the right way does not involve setting up fake e-mail accounts.

If there were any actual evidence to come out of something like this, non-attorneys taking unilateral action in an attempt to "help" can actually cause a lot more work for the attorneys involved (jeopardizing or complicating the admissibility of evidence, giving the debtor more fodder for his claim that people on internet forums are harassing him, ect.). Counsel then may need to explain everything to the Court which may hurt credibility with the judge, cost the litigants more in attorney's fees, etc., etc.

Not my case, but I wouldn't want that type of "help" in any case of mine.

Call your lawyer, I'm sure they can advise you on this.

This argument over defamation seems crazy to me. So, can counsel for Virtua Pin now be sued for slandering Keith? She's accused him of being unethical in open court, and those statements are now "all over the internet." Furthermore, she knew they were going to end up on the internet. Where do you draw the line?

These safe harbors for defamation are there for a reason, so that people can litigate without having to worry about being sued for defamation. The court really needs to consider the chilling effect a ruling adverse to the trustee may have.

The standard for news/public figures is a little different but your point about the record being public is right. There's no new standard at play. A newspaper could go in and report on the case and it makes no difference. Nor should it matter if the pleadings are more detailed than required or customary. As long as there is a nexus to the suit and it's not flat-out baseless, the allegations should be protected.

If you make the standard too rigid then the system doesn't work because litigants are chilled from making claims that are based on fact, even if ultimately not successful. If you risk a defamation claim simply because you're not ultimately successful, then the standards are turned on their head.

Not only that but Federal Court's are shifting to require MORE detailed pleadings. Saying to little can lead to a defective pleading.

There are just SO many things wrong with making a defamation claim BASED ON PLEADINGS IN COURT too easy. I hope the Court puts a law clerk on this or the pleadings go well beyond the oral argument because if the Court gets this wrong it's setting a bad precident.

What a mess.

I don't disagree with you at the core, I was responding to your comment about suing news organizations. The standards there are a little different than the exception afforded to litigants in a lawsuit (which deals with the "litigation privilege"). See New York Times v. Sullivan, etc. for the general law on news organizations.

No, it's not unusual.

It's not unusual to be bummed at 341s, nunu-nunu-nahhh...

It's not unusual, to see a Kulek lie.

The Judge has surprised me a few times so far but a lot of this is likely protecting the record so that if/when she comes back in the future claiming she didn't know, she won't get very far. She unquestionably has notice of the trial date and I bet dollars to donuts she's listening to these hearings (at the very least after they are being posted here).

Keith obviously uncovered a pit of snakes with this thing and hopefully the Judge will figure that out when all the cards fall. It's really unfortunate that he's had so many stones thrown at him (personally) and it would be nice to see some vindication at the end of the day.

Anyone want to guess if Kulek shows up to trial today? I'm betting no-show.

The case is still active.

The parties in the Adversary Proceeding against Virtua Pin are still arguing over the defamation alleged by Virtua Pin against the Trustee. The Court ruled that the allegations in the pleadings are not actionable as defamation but is still considering whether publishing that information on the internet is somehow defamation. The Trustee just recently filed a Motion to Reconsider in an attempt to shut down that Counterclaim entirely.

The only other AP that's still open is the one against Amanda Kulek. A status conference on that is supposed to happen today at 1:30.

All the other APs seem to have settled out with payments or judgments against the named defendants.

I assume the Kuleks won't be getting discharges but haven't looked too deeply into that.

Just catching up here after many months. Usually, a Bankruptcy case being DISMISSED is BAD for the debtor (i.e. bad for Kulek). If you're Kulek and filing for Bankruptcy protection you want a "DISCHARGE", meaning your debt is forgiven and your creditors can no longer pursue you. "Dismissed" is bad because the Court rejected your case and now you are thrown to the wolves, who can pursue you indefinitely. Of course if you have no assets and gain no assets and have no job, there's not much meat to pick from the bones. It's still not a good result for a debtor to have his case dismissed.

That being said, I haven't read the pleadings and it's not clear to me exactly what was dismissed. There are a lot of ways to get things twisted in a case like this if you're not careful. For example, there are Adversary Proceedings within the Bankruptcy case that are like sub-lawsuits within the larger Bankruptcy case. If the Trustee brings an Adversary Proceeding against a party and that "AP" is dismissed, then that's typically bad for the unsecured creditors.

I do tend to agree with people who've said you have to be careful throwing good money after bad. It is very frequent in cases of theft that the bastard who stole your money wasted it away. Unfortunate but all too common.