Bremer County woman who hid $147K inheritance in bankruptcy sentenced to prison term

CEDAR RAPIDS — A Bremer County woman who concealed a $147,000 inheritance from creditors in a bankruptcy case was sentenced Thursday to two months in federal prison.

Debra S. Leisinger, 58, of Sumner, pleaded in August to one count of bankruptcy concealment.

According to a plea agreement, Leisinger on Dec. 8, 2022, filed for Chapter 7 bankruptcy. When a debtor files a petition seeking protection from creditors under the bankruptcy laws, a “bankruptcy estate” is created, which is comprised of all property belonging to the debtor. Debtors must truthfully disclose their assets to the court.

Leisinger admitted she fraudulently concealed a $147,969 inheritance check on the date she filed for bankruptcy protection, according to the plea. An attorney had handed Leisinger the check on Dec. 1, 2022, but Leisinger did not immediately cash it. Instead, she cashed the check Dec. 16, 2022, and deposited in her account at a credit union.

Leisinger attempted to discharge over $65,000 in debts she owed to creditors while keeping her entire inheritance, prosecutors said.

Ultimately, the bankruptcy court’s U.S. trustee discovered Leisinger’s scheme. The bankruptcy action was dismissed and Leisinger’s inheritance was applied to repay her creditors. She then was charged criminally.

Assistant U.S. Attorney Timothy Vavricek said in a written argument for a prison term that Leisinger was familiar with the bankruptcy system because she also had filed for bankruptcy in 2006 and received a discharge in 2007.

“In the wider context, defendant’s acts of hiding her inheritance were brazen in that she affirmatively invoked and abused the bankruptcy system in order to preserve the benefit of her entire inheritance,” Vavricek wrote.

Leisinger also tested positive for amphetamines while on pretrial release but insisted she never used any control substances, according to the sentencing document. She also in a presentence interview told the probation office her residence was partly-owned by her children, though public records show her residence is solely in her name but that an empty lot is in the names of her children.

Leisinger had the ability to pay a fine and also to pay fees for her court-appointed attorney, Vavricek said in the document.

U.S. District Chief Judge Leonard T. Strand sentenced Leisinger to two months in prison and ordered her to pay $5,000 for her court-appointed attorney fees. She must also serve two years of supervised release following her prison term.

This case was prosecuted by Vavricek and was investigated by the FBI. The Office of the U.S. Trustee referred and assisted in the investigation.

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