Amana couple convicted of bankruptcy fraud

Gerald and Fay Schuerer of Amana were convicted of defrauding bankruptcy creditors out of more than $350,000 in property this week following a six-day trial in Pensacola, Fla.

Gerald Schuerer, 60, and Fay Schuerer, 58, were convicted of mail fraud and bankruptcy fraud on Monday, Nov., 8, following three hours of jury deliberations, according to the United States Attorney for the Northern District of Iowa.

The couple formerly owned the Colony Haus restaurant at I-80 exit 225 near Little Amana before running into financial trouble with a convenience store business that later closed. They had been indicted by a federal grand jury in Florida, where they had moved and filed their bankruptcy case to take advantage of the state's more liberal bankruptcy filing laws.

Evidence presented at trial indicated the couple protected from creditors before their bankruptcy filing through sham sales to relatives with understandings that they would reacquire the assets after their bankruptcy protection was granted.

Among the assets were a vehicle, boats, jewelry, stocks and other investments owrth about $380,000.

The Schuerers were released on bond pending sentencing by United States District Court Judge Casey Rogers at a date to be set later. The maximum possible sentence for the offenses would be 30 years in prison, a fine of $500,000, and six years supervised release.

The case was investigated by the Federal Bureau of Investigation with help from the Office of United States Bankruptcy Trustee in the northern districts of Iowa and Florida. It was prosecuted through efforts of the Bankruptcy Fraud Task Force of the Northern District of Iowa.

The federal government plans to seek restitution for the Schuerers' creditors at sentencing, according to a prepared statement released by United States Attorney Stephanie Rose.

Attorneys for the couple had filed a brief at the conclusion of the trial asking the judge to order acquittal. The defendants argued among other things that the property transactions in the case met the legial standards for the “good faith purchaser for value” defense, which included payment of payment of market value or a minimum reasonably equivalent value, and transfer of proof of ownership.