A prominent Detroit bankruptcy attorney and a former federal bankruptcy court clerk were arraigned yesterday on charges that they conspired to manipulate the federal bankruptcy court's blind-draw system of assigning cases.
The attorney, Irving August, and former clerk, Kathleen Bogoff, were indicted last week by a federal grand jury investigating allegations of corruption and misconduct in the bankruptcy court.
Both Bogoff and August stood mute at their arraignment before U.S. Magistrate Paul Komives, who entered pleas of not guilty on their behalf. The seven-count indictment charges that from Oct. 3, 1979, through Oct. 3, 1980, August and Bogoff conspired to minimize the number of cases that were assigned to a bankruptcy judge noted for approving low fees in bankruptcy cases.
The indictment also charges that August tried to influence Bogoff to keep his law firm's cases from being assigned to the judge, and that Bogoff accepted gifts and money from August in conflict with federal law.
Another count in the indictment charged that August "knowingly and willfully corruptly endeavored to influence Judge Harry Hackett, in the discharge of his duties . . . by loaning $1,000 each to two friends of Judge Hackett and by paying expenses for Judge Hackett on golf outings."
Hackett, a 24-year veteran of the bankruptcy bench, retired after the investigation was launched early last year by the U.S. attorney's office in the Detroit and the FBI. Another judge has resigned, and the chief court clerk was convicted of improperly buying property from a bankrupt estate.
August, if convicted on all counts, faces up to 30 years in prison and a $35,000 fine. Bogoff, if convicted on all counts, faces up to 12 years in prison and $25,000 in fines.