Date: 03-05-2018

Case Style:

Case Number: 3:16-cr-00472-N-1

Judge: David Godbey

Court: United States District Court for the Northern District of Texas (Dallas County)

Plaintiff's Attorney: David Jarvis and Walt Junker

Defendant's Attorney: Martin Lee LeNoir, Michael Mowla and Brad Wyatt

Description: Dallas, TX - Federal Jury Convicts Dallas Man of Bankruptcy Fraud

Gary Beach, 66, of Dallas, Texas, was convicted of four bankruptcy related felony counts following a seven-day trial before U.S. District Judge David Godbey.

According to evidence presented at trial, Beach obtained a $857,500 home and tried to hide $15,000 in monthly payments before he filed for bankruptcy protection from an $812,000 debt created by a lawsuit that Beach brought and lost.

Specifically, following an $812,000 loss in a civil trial in Harris County, Texas, Beach used a trust fund created by his father to hide payments that he was receiving for continuing to work in the oil and gas industry. Beach signed an agreement with Black Horse Resources (owned by his brother-in law in Utah) to perform consulting work in the development of an oil field. This participation agreement obligated Black Horse to pay a $15,000 monthly management fee for the services. However, the agreement purported to have Beach performing the services on behalf of his father’s Beach 2010 Trust. As the sole trustees and beneficiaries of the trust, Beach and his son had complete control over the money and it was channeled to pay Beach’s living expenses of nearly $10,000 a month. Three months later, Beach formed Beach Petroleum, LLC, with himself as sole manager. That same day, Beach had the trust transfer its interest in the participation agreement to Beach Petroleum, so that all future $15,000 monthly consulting fee payments could be made to Beach Petroleum. As sole manager of Beach Petroleum, Beach had direct control over the $15,000 payments.

Before Beach filed for bankruptcy, Black Horse paid $120,000 in consulting fees to either Beach directly or to Beach indirectly through payments to Beach Petroleum. The payments continued and reached $210,000 before Beach’s last deposition. Beach did not disclose any of this money until he was confronted with documentary proof of their existence under cross-examination during a bankruptcy deposition. Even then, the payments continued and approached half a million dollars.

Three days before Beach filed for bankruptcy protection, he also used the trust to purchase a residence in Highland Park, Texas for $857,500. Additional monies were then spent on improvements to the house until it was worth almost $1 million dollars.

The United States Trustee’s Office referred Beach’s false statements to the United States Attorney’s Office. After an investigation and trial, Beach was convicted of three separate counts of the felony offense of Making False Statements Under Penalty of Perjury for certain bankruptcy documents that he filed omitting the $15,000 payments. Beach was also convicted of Making a False Oath for giving intentionally false testimony about the payments from Black Horse Resources during one of his bankruptcy depositions.

For each count of conviction, Beach faces a maximum penalty of 5 years in federal prison and a $250,000 fine. Beach will remain on bond pending sentencing, which is set for June 4, 2018.

This case was investigated by the United States Postal Inspection Service.

Outcome: Guilty

Plaintiff's Experts:

Defendant's Experts:

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