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Local business owner concedes fraud in Chesapeake court
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As reported earlier by the Virginian-Pilot, George Christian, founder of Financing Alternatives, Inc., admitted in open court at a pre-trial hearing that he failed to deliver promised computer products to thousands of paying customers. By his admission, he is accepting responsibility for bilking millions of dollars from people through his business scheme.
Or is he accepting responsibility? According to the article, both Mr. Christian and his company filed bankruptcy last month. Therefore, depending under which chapter of the United States Bankruptcy Code he filed, very few of his assets may be collectible against Mr. Christian by his creditors or the people he cheated.
However, bankruptcy law does not allow a discharge of a debtor’s debts if he obtained them through fraud. Since Mr. Christian has apparently conceded to committing fraud in open court, he won’t be able to discharge his obligations to his customers. The state can file an adversary proceeding in federal bankruptcy court to disallow Mr. Christian’s discharge of his debts based on his concession of fraud. If no discharge is granted, then creditors can continue to attempt to collect a repayment of past debts and obligations.
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