Suspended attorney to serve 6 months for bankruptcy fraud, embezzlement

A suspended Fort Wayne attorney will serve six months in jail and has been ordered to pay nearly $240,000 in restitution after he pleaded guilty to embezzlement and tax fraud charges stemming from personal and client bankruptcy proceedings.

Randall Stiles, 45, was sentenced to six months in prison by Indiana Northern District Chief Judge Theresa L. Springmann, the Northern District U.S. Attorney’s Office announced Tuesday. Stiles was also ordered to pay $235,055.88 in restitution to the IRS and $3,535 to a victim in a bankruptcy case.

According to the Northern District Attorney’s Office, Stiles was practicing in U.S. Bankruptcy Court when he stole from a client and lied to a bankruptcy trustee about filing his tax returns. In addition to representing clients in bankruptcy proceedings, Stiles himself filed for bankruptcy in 2013.

Stiles pleaded guilty in September 2017 to two counts of felony bankruptcy fraud and a misdemeanor tax count. His plea agreement also requires him to file unfiled tax returns from 2009, 2010, 2011 and 2012.

“Attorneys have a duty and obligation to represent their clients fairly and with integrity,” U.S. Attorney Thomas Kirsch II said in a statement. “Stealing from clients and lying to the court violate the ethics of being an attorney and in this case violated the law.”

Stiles was suspended from the practice of law in Indiana prior to the filing of the charges in this case and has been under his most recent suspension since October 2014, when a suspension for noncooperation with the Disciplinary Commission was converted into an indefinite suspension. According to the Indiana Roll of Attorneys, the Fort Wayne attorney has been the subject of 11 disciplinary actions.

The case against Stiles came to the U.S. Attorney’s Office on a referral from the Region 10 U.S. trustee, which includes Indiana and southern and central Illinois. The U.S. Trustee Program is a Justice Department program designed to protect the integrity of the bankruptcy system. Region 10 is based in Indianapolis.

“Criminal bankruptcy fraud threatens the integrity of the bankruptcy system, as well as public confidence in that system,” Nancy J. Gargula, Region 10 trustee, said in a statement.

Stiles’ case was investigated by the FBI, IRS-Criminal Investigation Division and the Northern Indiana Bankruptcy Fraud Working Group and prosecuted by assistant U.S. attorneys Tina Nommay and Deborah Leonard.