After our post aboutTroubleshooter Tom Martino's bankruptcy filing
, prompted by alleged liabilities of $78 million (a figure he disputes), we published a sequel aboutpotential asset-shifting in his wife Holly Whitrock-Martino's bankruptcy
, echoing similar claims by a bank in his current case. Martino branded Mike Willis, Holly's ex-husband and the source of the second assertion, as a liar. But a document provided by Willis backs up his story.
According to Willis, Holly filed for bankruptcy in September 2004 at Martino's urging in an effort to distance herself from potential liability for Willis's debts. "I had a couple of business loans," Willis said on Monday. "Holly's name wasn't on them, but Tom was afraid it would come back on her somehow. It seemed kind of silly to me to file bankruptcy, but he said, 'I'm going to have her do this.'"
In the divorce, Willis gave Holly "probably a couple hundred grand in household goods and stuff," he recalled. "And because I was a party to the bankruptcy -- they had some of my debts listed -- I got the papers, too. And she had all her debt listed, for things on credit cards and stuff. But she didn't list any assets. And I thought, 'Wait a minute. I had to give her a bunch of stuff in this divorce. That doesn't seem right.'"
Shortly thereafter, Willis went on, he called the bankruptcy trustee. "He said, 'We'll go to him and make him address this.' And then I asked, 'Isn't that bankruptcy fraud?' And he said you'd have to go to the FBI and file charges about that. So I went to the FBI, but they never opened a formal investigation."
Why not? "The agent I was dealing with told me, 'Mike, because you blew the whistle on them, they have now modified the bankruptcy,'" listing the assets that hadn't been included previously. "'And because the bankruptcy hadn't been finalized before you blew the whistle, there's technically no fraud.'"
In response to these assertions, Martino said he had nothing to do with his wife's bankruptcy and branded the tale "an absolute lie from someone who hates us."
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Offended by this statement, Willis located the original bankruptcy papers. A document dated December 28, 2005 contains the following passage: "Trustee asserts Debtor might have transferred certain property pre-petition or might have otherwise failed to disclose certain property. Debtor and the Trustee have agreed to settle all potential claims the estate might have against Debtor in exchange for a lump sum payment to the estate..."
Look below to read the document, which can also be accessed by clicking here.
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