In an interesting case recently reported in (Consumer Bankruptcy News, vol.21, iss19, p, 3) involving both the bankruptcy and criminal laws , a person who had been first granted a Chapter 7 discharge claiming to be unemployed and having no income was arrested 5 months later. and charged with possession of and trafficking in crack cocaine.
The Office of the US. Trustee which oversees the bankruptcy process tried to reopen her case and have her discharge revoked based on fraud. The debtor was subsequently found guilty on several criminal counts including delivery of a controlled substance, criminal conspiracy, and child endangerment.
Despite the US Trustee introducing the criminal evidence into the bankruptcy proceeding, the Court found that the US Trustee hand not proved that the debtor actually derived income from these transactions during the pre-bankruptcy period and allowed the discharge to stand. U.S. Trustee v. Shiloh (In re: Lisa L. Shilo), 21 CBN 1025, 2011 W. 3204915 (Bankr. M.D. PA 7/26/11)