U.P. gasoline vendor sentenced for bankruptcy fraud

MARQUETTTE — A long-time U.P. gasoline vendor was sentenced to prison for bankruptcy fraud, according to a press release from U.S. Attorney Andrew Birge.

Sixty-four year-old David Louis Vernier of Ishpeming was sentenced to 45 months in federal prison followed by three years of supervised release for committing bankruptcy fraud. David, the father of Brooke Vernier, came to the attention of special agents of the FBI as they investigated Brooke’s involvement in a $145,000 check-kiting scheme that she executed in 2012.

Brooke, the owner of numerous gas stations in the U.P., circulated a huge number of bad checks amongst seven different corporate bank accounts at three different banks in 2012. This temporarily led to the banks’ accounting systems to erroneously conclude that her accounts held more money than was actually there.

When the fraud was discovered, the banks had suffered a loss of more than $1.7 million. She was subsequently convicted of conspiracy to commit bank fraud, sentenced to 18 months in federal prison and was ordered to pay $1,780,232 in restitution to the banks.

FBI agents learned that Vernier ran a number of gas stations in the U.P. in the 2000s, but had fallen into debt. In October 2010, he filed for bankruptcy, claiming to have no real property, no income, no interests in any businesses and more than $3 million in debts.

The FBI’s investigation revealed that Vernier was actually involved in running his daughter’s businesses and being paid by them. The FBI also found that he had lied not only in his original bankruptcy petition, but also during subsequent bankruptcy proceedings and in testimony he gave in a related deposition. The investigation revealed that he was fraudulently attempting to discharge more than $3 million in debts while, at the same time, secretly retaining his assets and interested in various businesses.

Vernier’s requests to have his debts discharged were denied in U.S. Bankruptcy Court in May of 2012 because he had failed to retain business records that would have allowed Bankruptcy Court to thoroughly analyze his financial condition. During his sentencing on April 19th, the judge concluded that he scrambled his finances and destroyed records as part of a conscious business plan to defraud his creditors. It was also found that David’s wrongdoing was sustained over a long period of time.

During the sentencing hearing, Vernier gave a 40-minute long statement. The judge concluded that despite pleading guilty to bankruptcy fraud, Vernier had not accepted responsibility for his crimes.

The case against Brooke Vernier and the subsequent case against David Vernier were investigated by the FBI and prosecuted by Assistant U.S. Attorney Maarten Vermaat.