Concealing $300K in bankruptcy means 18 months in prison for Lexington businessman
A Lexington businessman who admitted concealing more than $300,000 from creditors during a bankruptcy was sentenced to 18 months in prison Tuesday.
A judge also could order Barry E. Sanders, 64, to pay restitution, but that issue hasn’t been resolved.
Sanders owned Trailblazers Inc., which sold car and truck accessories. He started the business in the late 1970s in Eastern Kentucky before moving it to Lexington, according to a court record.
Trailblazers ran into financial trouble in 2013. As Sanders was considering filing for bankruptcy, he transferred $315,000 from the business to his personal accounts.
He was supposed to report any money he received from Trailblazers in the year before he filed for bankruptcy in August 2013, but he did not disclose the $315,000 in transfers, according to a court record.
He returned some of the money to the business after filing bankruptcy, but kept about $220,000 of it, according to his plea agreement.
That meant the money was not available to pay creditors.
Sanders pleaded guilty to concealing assets during his bankruptcy.
Sanders only goal in seeking bankruptcy protection “was to short-change his creditors, while siphoning off enough corporate assets” to start another business, Assistant U.S. Attorneys William P. Moynahan and Erin M. Roth said in a sentencing memorandum.
The prosecutors said Sanders later managed Smokey Mountain Truck Outfitters, which his wife owns.
Sanders’ attorney, Fred E. Peters, said Sanders did not transfer any money to the new business.
The prosecutors sought a sentence for Sanders within the advisory guideline range between two years and two and a half years.
Sanders’ attorney, Fred E. Peters, argued for a lower sentence based on Sanders’ health problems, which include diabetes and prostate cancer.
Senior U.S. District Judge Joseph M. Hood sentenced Sanders in federal court in Lexington.
Sanders will be under court supervision for three years after he gets out of prison.
This story was originally published December 10, 2019 at 3:22 PM.
