U.S. Charges 78 With Bankruptcy Fraud

Nine lawyers, a former police officer and an electrician who bribed a former governor are among 78 people charged with bankruptcy fraud in the past two months, the Justice Department said.

Eighteen of the arrests came this week, said Deputy Attorney General Paul J. McNulty, who outlined the nationwide crackdown on people trying to conceal more than $3 million in assets, dubbed "Operation Truth or Consequences."

"In the end, we all wind up paying for fraud, in the form of higher interest rates and fees from companies that offer credit and loans," McNulty said.

Bankruptcy fraud often follows false claims on mortgages, banks and the mail, McNulty said.

The arrests are on track to outpace last year's estimated total of 100 bankruptcy fraud cases, the FBI said.

Among those charged was Kurt Claywell, an electrical contractor who admitted giving former Connecticut governor John G. Rowland expensive champagne and Cuban cigars for access to state contracts. Authorities in New Haven, Conn., said the assets Claywell tried to hide included a boat, a collection of rare books, 35 acres of land, $35,000 worth of wine and a gun collection.