Earlier this week, it was announced that a practicing accountant and disbarred attorney had pleaded guilty to a single count of Bankruptcy fraud and one count of Tax Evasion. J. Douglass Jennings once claimed in a commercial that he managed “one of the nation’s leading estate and tax planning law firms.” The attorney has appeared on talk-shows and has authored two books. Jennings also advertised that he took a “faith-based” approach to financial planning.
According to the plea agreement, Jennings admitted that beginning in January of 2010, he designed a scheme to defraud his unsecured creditors by concealing certain assets. Then, he filed a voluntary bankruptcy. In total, Jennings defrauded his unsecured creditors by concealing assets and income value at roughly $1.5 million. He attempted to hide the following items.
- Stock interest in a real-estate venture worth approximately $1 million
- 53.2-foot luxury yacht referred to as the “Sea Eagle” valued at roughly $150,000
- Antique silver items worth approximately $165,139
While the bankruptcy case was pending, Jennings obtained salary payments and other benefits, which were prohibited by the Bankruptcy Court. In total, it is believed that Jennings caused unsecured creditors to lose $1,453,833.
Jennings also pleaded guilty to tax evasion. Between August 2011 and April of 2013, Jennings owed tax to the IRS for calendar years 2005 through 2009. The amount owed was roughly $2,852,545. The defendant has previously agreed to pay the money. He had also agreed to pay a civil fraud penalty of $2,031,837 and interest of $1,042,711.
It was alleged that Jennings tried to avoid paying the taxes by concealing his assets during the bankruptcy case. Jennings pleaded guilty to tax evasion and admitted that a criminal judgment in the amount of $5,927,093 should be entered against him.
On August 16, 2017, the defendant’s wife, Peggy Jennings, pled guilty to bank fraud. Mrs. Jennings admitted to her involvement in the scheme and confessed to forging her mother’s signature on loan documents. She also fraudulently transferred funds into her mother’s bank accounts to make it appear that her mother had a substantial income.
Mrs. Jennings agreed to pay restitution of $145,481.71 and a fine of $50,000. She is scheduled to be sentenced on November 13, 2017. Mr. Jennings will appear in court on December 11, 2017.