A U.S. bankruptcy trustee is suing an Orange County businessman for providing unsatisfactory explanations for his finances.
William Harrington asked U.S. Bankruptcy Court in Poughkeepsie to not release Israel Laufer from his debts, in a May 4 adversarial complaint.
“The debtor is a sophisticated business person,” the complaint states. Yet, Laufer failed to keep records “from which the debtor’s financial condition or business transactions might be ascertained.”
Laufer petitioned for Chapter 7 liquidation on Nov. 5, 2025. He declared $3,141 in assets and $485,491 in liabilities.
The petition lists seven businesses: Albion Place Inc., IL Deals Inc. PowX Inc., Qtest Inc., Raevon Inc., The Laufer Group Inc., and Venza Inc. Most are based at his home in Monroe, and all are e-commerce enterprises, the trustee says, except QTest, a Covid-19 testing business.
The goal of Chapter 7 bankruptcy is to give the debtor a fresh start. The trustee’s job is to marshal the debtor’s assets and distribute them for the benefit of creditors.
Laufer testified that he has listed all assets and identified all creditors, according to the lawsuit.
Except for PowX, the trustee says, Laufer reported little or no income from 2022 through 2025. He allegedly failed to maintain accounting records; never filed tax returns for three businesses and sporadically filed tax returns for four businesses; and shows no salary from the businesses.
The trustee says Laufer controls at least 19 bank accounts, from which he transferred hundreds of thousands of dollars to and from himself and his businesses. From 2022 to 2024, for example, he allegedly transferred $746,000 from PowX to himself, his other corporations and others.
“Yet, the debtor has not maintained any books, accounting records, financial statements or other documents and papers,” the complaint states, “evidencing the income and expenses of PowX and the other Laufer corporations.”
Harrington argues that Laufer may not use Chapter 7 bankruptcy to release debts because he concealed, destroyed, mutilated, falsified or failed to keep or preserve information needed for determining his financial condition.
The trustee’s lawsuit mirrors allegations made in an adversarial complaint filed against Laufer in February. Performance Solutions LLC, of Natick, Massachusetts, accused Laufer of patent infringement by fraudulently selling foam roller fitness products under the PowX brand. It is demanding nearly $1.8 million from Laufer.
Laufer denied the allegations in his formal answer to the complaint, and accused Performance Solutions of using aggressive litigation tactics to destroy his business.
“To stop the financial bleeding and preserve what little remained of my life and finances,” he stated, “I filed for a Chapter 7 bankruptcy petition seeking a lawful fresh start.”
