Bankruptcy From Behind Bars

May 21, 2008 1:50 pm Published by

In this bankruptcy blog I’ve written about celebrities who filed bankruptcy, going on to build prosperous careers.  However, one story about a bankruptcy filed by a notorious criminal is nowhere near as inspiring as those celebrity successes.  As a bankruptcy lawyer in Indiana for more than twenty years, I take an interest in cases from other parts of the country. For one thing, I want to know the details of bankruptcy law in other states, since I was instrumental in drafting the most recent changes to the exemptions used in Indiana bankruptcy law.  I found the Straub case from the Connecticut bankruptcy court both highly interesting from a legal standpoint and, at the same time, highly disturbing.

Richard Straub had used his position as a state probation officer to sexually molest many of the teenage boys he was supposed to be helping.  Straub was eventually caught and sentenced to fifteen years in prison. State officials wanted to seize the $3600 a month pension Straub was receiving as a former state employee.  Here he was, collecting taxpayers’ money, while taxpayers’ money was keeping him in prison, at an estimated $450,000 cost for the fifteen year stay.  The courts ruled that employee pensions could not be revoked.  As a next step, the Connecticut state legislature filed a lawsuit against Straub on behalf of the men who, as boys, had been molested by him.  Straub countered by filing bankruptcy, naming his victims as creditors.  It gets curiouser…

Such a bankruptcy case had never been filed in Connecticut history.  The bankruptcy trustee approved a plan awarding the state $100,000 from Straub’s assets (not the pension – he still collects this monthly, and it’s now up to $4600 each month!), and awarding each of the eight victims a little under $4,500 each.

Connecticut Attorney General Richard Blumenthal commented that “This unique case involved state costs of incarceration, pension law, federal bankruptcy law, and victims’ rights law.”  He then went on to say:  “Certainly, nobody can claim this was some great example of justice.”  My feelings exactly!

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This post was written by Mark Zuckerberg

1 Comment

  • cory johnson says:

    It is stories like this that give the judicial system such a bad name. It has been my experience that right and wrong have nothing to do with the law, lawyers or the judicial system. For every story of the bad getting breaks there are a hundred stories of the good getting screwed