Unwinding A 22-Year-Old Fraud On The Court

By Daniel Lev, SulmeyerKupetz ( January 27, 2017, 11:55 AM EST) -- A bankruptcy case that began in 1994 was reopened in July 2015 to allow a trustee to investigate fraudulently procured sales. This case is noteworthy due to the bankruptcy court's finding that there is no statute of limitations when a trustee seeks to unwind a fraud on the court under Rule 60(d)(3) of the Federal Rules of Civil Procedure. Due to the dogged determination of a single creditor, the bankruptcy cases of two brothers — Theodosios and Harry Roussos — who hatched a scheme in 1994 to shield two extremely valuable apartment buildings located in Venice and Santa Monica, California, from their creditors and a partial owner of the properties were reopened by the Office of the United States Trustee. By creating sham entities and knowingly submitting perjurious declarations, the Roussos brothers convinced the original bankruptcy court to approve sales of the properties for little, if any, consideration....

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