Drivers faked bankruptcy to avoid auto pound fees, feds allege
BY NATASHA KORECKI AND ART GOLAB Staff Reporters/@natashakorecki April 25, 2013 1:49PM
Updated: May 29, 2013 7:08AM
In a city well-practiced in the way of scams, this is a new one.
At least a thousand people may have retrieved cars towed by the city without paying any fines or fees to the city’s Revenue Department.
How they did it: They filed phony bankruptcies.
And they did it with help from a ring of people who charged up to half of what was owed to the city, according to charges filed Thursday by the U.S. Attorney’s Office.
Daniel Rankins, 30, of Chicago, was arrested Thursday after he took $600 to help an undercover FBI agent file bankruptcy in order to get his car released by the city, the complaint alleged.
Rankins, who was charged with bankruptcy fraud, was part of a ring that hung around the Department of Revenue payment center at 400 W. Superior St. and approached people whose cars had been towed.
For a cash fee, members of the ring would give people preprinted bankruptcy forms and even drive them back and forth between federal bankruptcy court and the Department of Revenue, according to the complaint.
Once the bankruptcy was filed, the city was required to release the vehicle.
In most of the cases, the people filing for bankruptcy never followed up and the cases were dismissed. They also claimed they were too poor to pay bankruptcy court fees.
After he was arrested, Rankins said he got involved as a client of the ring in order to get his own car back, then started steering others into the scheme, the complaint alleged.
The U.S. Attorney’s Office said others working with Rankins were under investigation.
The fraud was uncovered after the city Revenue Department alerted the bankruptcy trustee to “a significant increase in the number of individuals who appeared to be using bankruptcy as a means of obtaining the release of their vehicles from city auto pounds without paying associated fines or fees,” according to court papers.
Since May 2012, more than 1,000 bankruptcy petitions were self-filed listing the Revenue Department or the city auto pound as the only creditor, the charges say.
Rankins was ordered held until a preliminary hearing Monday.