Sugar Land attorney indicted for bankruptcy fraud

Longtime Houston attorney Tom Kirkendall's observations on developments in law, business, medicine, culture, sports, and other matters of general interest to the Houston business, professional, and academic communities.

January 29, 2007
Local attorney accused of bankruptcy fraud

Bankruptcy is strong medicine with serious side effects, so it's not a remedy for legal problems to be taken lightly.

I don't know if local attorney Jose Antonio Villalon took the notion of filing bankruptcy lightly, but his multiple bankruptcy filings several years ago have resulted in a three-count indictment accusing him of bankruptcy fraud in connection with his alleged failure to disclose an interest in an oil and gas lease that he either owned or had transferred shortly before commencing his bankruptcy cases.

The news accounts about the U.S. Attorney's indictment againt Villalon is below.

Notably, Villalon did not even receive a discharge of his personal liability for his debts, which is the primary benefit of enduring a bankruptcy case in the first place. Both of Villalon's bankruptcy cases were dismissed before he received a discharge, and the second one was reopened after the trustee discovered the allegedly undisclosed asset.

Thus, Villalon's creditors still can recover their claims against his non-exempt assets, assuming that they can find them, and Villalon has only a criminal indictment and no discharge for all his bankruptcy trouble.

Serious side effects indeed.

Sugar Land attorney indicted for bankruptcy fraud

Jan. 29, 2007, 11:13PM

A Sugar Land attorney has been indicted, charged with bankruptcy fraud, the U.S. Attorney's Office announced today.

Jose Antonio Villalon, 58, has been charged in connection with an alleged scheme to conceal assets and defraud a trustee appointed to oversee the administration of a bankruptcy estate and his creditors.

The indictment was returned by a federal grand jury in Houston on Wednesday.

Villalon turned himself at the federal courthouse this morning.

At a hearing this morning before U. S. Magistrate Judge Mary Milloy, Villalon was arraigned and ordered released on bond.
Trial is set for March 19, 2007.

According to allegations in the indictment, Villalon, an attorney who claimed to be an expert in land title law, oil and gas law and real estate law, filed for bankruptcy and devised a scheme to defraud the trustee appointed to oversee his bankruptcy by concealing his interest in an oil and gas well called the "Gilfillian Interest" located in Jefferson County.

The Gilfillian Interest was a productive oil and gas well and had a value in excess of several million dollars, U.S. attorneys reported.
Villalon is accused of not listing his interest in the Gilfillian Interest, which he had purchased approximately two weeks before filing for bankruptcy.

Nor did Villalon disclose to the court or the trustee that he receive approximately $360,000 from leasing the Gilfillian Interest to a Houston company within days of filing for bankruptcy, according to the indictment.

Villalon allegedly created sham companies and used his relatives to conceal his true ownership interest in the Gilfillian oil and gas well, attorneys said.

An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted through due process of law.

Fort Bend Now

Sugar Land Lawyer Indicted For Bankruptcy Fraud
by FortBendNow Staff,
Jan 26, 2007, 04 06 pm

Sugar Land attorney Jose Antonio Villalon has been charged with bankruptcy fraud in a three-count indictment stemming from an alleged scheme he concocted to conceal assets and defraud a bankruptcy trustee.
According to an announcement by U.S. Attorney Don DeGabrielle, Villalon, 58, was indicted Wednesday by a federal grand jury in Houston.
DeGabrielle said Villalon turned himself in at the federal courthouse on Friday morning. At a later hearing before U.S. Magistrate Judge Mary Milloy, Villalon was arraigned and released on $5,000 bond. His case has been set for trial on March 19.
According to the indictment, Villalon, who claimed to be an expert in land title, oil and gas and real estate law, filed for bankruptcy and schemed to defraud the bankruptcy trustee overseeing his case by concealing his interest in a Jefferson County, Texas, oil and gas well.
The well had a value “in excess of several million dollars,” the indictment said, adding that Villalon bought it about two weeks before filing for bankruptcy.
He failed to disclose the asset in bankruptcy filings, the indictment said, “nor did Villalon disclose…that he received approximately $360,000” from leasing the well to a local oil and gas exploration company “within days of filing for bankruptcy.”
The indictment also said Villalon allegedly created sham companies and used his relatives to conceal his true ownership interest in the well.
Each count of the three-count indictment carries a maximum penalty of five years imprisonment, without parole, and a $250,000 fine, upon conviction, DeGabrielle said.
The case was investigated by the FBI with assistance from the U.S. Trustee’s Office. It’s being prosecuted by Assistant U.S. Attorney Quincy L. Ollison.
1 Ron - Jan 26, 10:20 pm
With a winning track record like that and being of such high moral and ethical standing, he should apply to work at the Ft. Bend County DA’s office. He would work well in the White Collar Crime section.

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