Lawyer for Chris Pettit raises concerns about the ‘authenticity’ of $270 million in bankruptcy claims

A lawyer for Chris Pettit, in a letter to the judge presiding over the ex-attorney’s bankruptcies, has raised questions about the “authenticity” of the $270 million in claims submitted by creditors in the case.

The “obvious concern is that some creditors may take substantially more dividends than they are entitled to the detriment of honest creditors,” wrote San Antonio bankruptcy lawyer Ron Smeberg.

Pettit is in jail awaiting trial in connection with the alleged theft of millions of dollars from his former legal clients. He pleaded not guilty after his indictment on
five counts of wire fraud and three counts of money laundering
last week.


Judge denies Chris Pettit’s release on bond, will remain jailed until his criminal trial

Pettit filed for bankruptcy protection
for himself and his law firm June 1 amid
mounting lawsuits that alleged he had defrauded clients. He afterward
surrendered his law license
and shuttered his offices.

Smeberg said questions about the creditors’ claims “developed” during a detention hearing Tuesday in federal court in which prosecutors argued Pettit should remain incarcerated pending trial.

FBI agent Thomas Sweatt tested the “current claims” against Pettit were in the range of $30 (million) to $70 million, Smeberg wrote in his letter Wednesday to Chief US Bankruptcy Judge Craig Gargotta.

“There appears to be a $200 million dollar disconnect between the FBI investigation and filed claims,” Smeberg added.

Sweatt, while on the witness stand, said the ongoing investigation had identified about 60 victims but said the number was increasing and their losses could exceed $70 million.

“Every week we almost identify new potential victims,” he said. “As we get further and further, we see where victim funds have been misappropriated.”

Pettit reported about $112 million in liabilities in each of the bankruptcy cases.


The fraud

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