Henricks v. United States

Henricks owned a towing business, an auto body shop, and a vehicle dealership, which he used to defraud insurance companies by filing fraudulent claims. Henricks’s wife, Catherine, worked at the companies sporadically and was an officer of two of them and a member of the other. She opened bank accounts and signed loan documents on behalf of the companies. Henricks pleaded guilty to mail fraud and immediately began to hide assets. He was sentenced to imprisonment and ordered to pay restitution of $1,306,608.72. Catherine filed for divorce and for bankruptcy. Catherine entered an appearance as an interested person in Henricks’s criminal case. The district court found that Henricks had defaulted on his restitution payments and that the divorce was a sham, then determined the parties’ interests in properties so that Henricks’s property could be directed toward restitution. The Seventh Circuit vacated. The court had jurisdiction under the Fair Debt Collection Procedures Act to decide the parties’ property interests in Henricks’s criminal case and did not violate Catherine’s due process rights. The court, however, improperly relied upon post‐judgment conduct instead of determining the parties’ property interests as of the date of the judgment lien. Whether the divorce was a sham was relevant to whether Henricks’s defaulted on restitution, but is irrelevant to the parties’ ownership interests on the judgment date. View "Henricks v. United States" on Justia Law