Kahrig enters guilty plea to bankruptcy fraud charge

All told, Kahrig concealed hundreds of thousands of dollars in assets from his creditors, according to United States Attorney Rachelle Aud Crowe. He could receive up to five years in prison and a $250,000 fine at his Feb. 2, 2023 sentencing hearing in East St. Louis.

“Individuals who hide assets and make false statements on bankruptcy pleadings not only defraud their creditors, but they use the federal courts as a part of their fraud,” said Crowe.

“That is an intolerable abuse of the bankruptcy system which demands transparency and forthrightness by those seeking to have their debts discharged or restructured,” she said. “Those who engage in such behavior will be held accountable by this office.”

The case is being prosecuted by Assistant United States Attorney Peter T. Reed.

As part of his Oct. 28 plea, Kevin Kahrig admitted he transferred $277,850 in cash and checks to Catharine Kahrig in 2016 and then closed all his bank accounts the next year. Kevin Kahrig hid those cash transfers and many of the closed accounts in his later filings with the bankruptcy court, officials said.

“Kevin Kahrig chose lies and deception at every step to conceal assets and escape financial obligations” said FBI Springfield Field Office Special Agent in Charge David Nanz. “The FBI takes our responsibility to pursue allegations of bankruptcy fraud very seriously and will always work to hold accountable those who try to bypass the system.”

According to court documents, Kahrig also took his name off a lakefront home he co-owned with Catharine Kahrig and hid the transfer from the bankruptcy court. He also sold a boat before bankruptcy and gave the $395,000 he got from the sale to Catharine Kahrig. Kevin Kahrig disclosed the boat sale to the bankruptcy court but lied about the amount he received and did not disclose that he had given the proceeds to Catharine Kahrig.

“Concealing assets in a bankruptcy proceeding is a crime that threatens the integrity of the bankruptcy process and public confidence in that process,” stated Nancy J. Gargula, United States Trustee for Indiana and Central and Southern Illinois (Region 10). “We are grateful to all of our law enforcement partners in this case and, in particular, to United States Attorney Rachelle Aud Crowe for her commitment to pursuing those who lie about assets in bankruptcy.”

The investigation was conducted by the Federal Bureau of Investigation’s Springfield Field Office in collaboration with the Southern District of Illinois Bankruptcy Fraud Working Group coordinated by the U.S. Trustee for Region 10, after a referral by the U.S. Trustee. The trustee program is designed to protect the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. Region 10 is headquartered in Indianapolis, with additional offices in Peoria and South Bend, Indiana.