A U.S. Trustee claims that a Nanuet real estate broker has refused to turn over financial records or reveal apparent gambling debts and the sale of a yacht.
Fred Stevens, the trustee, filed an adversary proceeding against Joseph A. Brown, July 2 in U.S. Bankruptcy Court, Poughkeepsie, asking a judge to deny Brown’s petition to discharge his debts.
“The debtor has unnecessarily made the trustee’s job prohibitively difficult,” the complaint states.
Brown has been given numerous opportunities to produce records or amend false statements, according to Stevens, but has “failed to do these things and has failed to communicate with the trustee.”
Trustees monitor bankruptcy cases to ensure the integrity of the process.
Brown, of Rock Hill, Sullivan County, petitioned for personal Chapter 7 bankruptcy protection last December. He declared $21,910 in assets and $690,536 in liabilities.
He has operated a Re/Max real estate franchise in Nanuet since 2019. Previously, he ran Joseph Anthony Brown Realty, Prestige Realty Sales Corp. and Prestige Auto Sales, all in Goshen, Orange County.
Brown allegedly did not disclose that he owns the property in Rock Hill where he lives, the contents of a storage unit or the transfer of a $175,000 yacht within two years of filing for bankruptcy.
Stevens claims that Brown failed to disclose gambling losses or explain “the use and dissipation of over $26,000 in cash withdrawn from ATM machines at various casinos” in the months before the bankruptcy filing.
Brown got cash from ATMs at Resorts World Catskills Casino in Monticello and at the Borgata, Harrah’s, Hard Rock, Ocean and Tropicana casinos in Atlantic City from September 2019 through November 2020.
Brown “vehemently denied” using the cash for gambling, according to Stevens. Instead, Brown testified at an examination that he paid for gas, meals, drinks, shows, a gift for a girlfriend, “maybe pay for the lady’s dinner,” and then returned home with most of the money.
Regardless of whether Brown was truthful about the casino withdrawals, the complaint states, “his explanation for what the funds were used for is grossly deficient.”
Hudson Heritage Federal Credit Union also filed an adversary proceeding last month asking the court to declare that Brown’s debts may not be discharged.
Brown borrowed $30,685 in 2018 and secured the loan with his 2005 Meridian 459 Cockpit Motoryacht.
He made only two monthly loan payments, according to the complaint. Then in 2019, he sold the yacht to an individual who gave Brown about $5,000 and “forgave an undetermined sum of money owed by Brown.”
T.D. Bank was paid $90,000 to satisfy a lien on the yacht, according to the credit union, and T.D. Bank forgave $109,513 that Brown owed.
Hudson Heritage Federal Credit Union said Brown owes $42,841.
Stevens accuses Brown of failure to produce documents and financial information, making false oaths, withholding information, failure to explain loss of assets from casino withdrawals and refusing to obey a subpoena.
Brown’s bankruptcy attorney, David Hannihan, of Florida, Orange County, did not respond to a request for his client’s side of the story.
