December 26, 2024 – The Justice Department’s U.S. Trustee Program (USTP) and Tax Division recently obtained denial of bankruptcy discharge for a married couple in Oklahoma who failed to keep sufficient records, failed to file tax returns for several years and could not satisfactorily explain their loss of $90 million in assets in the years leading up to the bankruptcy.

On Nov. 22, after a three-day trial, the Bankruptcy Court for the Northern District of Oklahoma entered judgment denying a discharge for chapter 7 debtors Tucker and Vickie Link. The Links listed about $79,000 in assets and debts of more than $30 million, mostly tax liabilities to the IRS. The Links maintained a web of foreign and domestic corporate structures that they used to support a lavish lifestyle, including a yacht, an operating ranch and three homes. Despite Tucker Link’s substantial experience in financial services and accounting, the couple had not filed individual tax returns or maintained business records beyond bank statements and promissory notes since 2016. At trial, the evidence revealed that the Links had lost about $90 million in assets since 2006.

The United States — represented by the Tax Division — and the U.S. Trustee filed separate complaints seeking to bar the debtors’ discharge on numerous grounds. After trial, the court issued an opinion denying the discharge. The court based its decision on the debtors’ failure to keep books and records in a way that creditors and the court could gain a meaningful understanding of their financial condition and the debtors’ failure to satisfactorily explain their loss of assets. As the court noted, “[t]o say the Links have created a tangled mess of financial structures that defy understanding is an understatement of epic proportions.”

One of the USTP’s core functions is to combat bankruptcy fraud and abuse through civil enforcement actions against debtors who engage in fraud or otherwise abuse the bankruptcy system. When circumstances warrant, the USTP takes action to deny those debtors a discharge. Under section 727(a)(3) of the Bankruptcy Code, debtors are not entitled to a discharge if they unjustifiably conceal, destroy, mutilate, falsify or fail to maintain or preserve records about their financial condition or business transactions. Under section 727(a)(5), the court can deny a discharge based on a debtor’s failure to satisfactorily explain any loss or deficiency of assets to meet the debtor’s liabilities.

“Bankruptcy requires transparency by debtors seeking the fresh start of a bankruptcy discharge,” said Director Tara Twomey of the Executive Office for U.S. Trustees. “In cases such as this, involving financially sophisticated debtors, there is no excuse for haphazard recordkeeping and opaque explanations for such significant losses.”

The USTP’s mission is to promote the integrity and efficiency of the bankruptcy system for the benefit of all stakeholders — debtors, creditors and the public. The USTP consists of 21 regions with 89 field offices nationwide and an Executive Office in Washington, D.C. Learn more about the USTP at www.justice.gov/ust. 

Source: DOJ Release