Mary Cossey

Mary Cossey ordered to pay over $80,000 in restitution

Contributed By:The 411 News

Mary Lois Cossey, age 55, of Munster, was sentenced by United States District Court Judge Philip P. Simon following her August 2021 plea of guilty to one count of wire fraud, announced United States Attorney Clifford D. Johnson of the Northern District Court in Hammond.

Cossey was sentenced to a term of 2 years’ probation, and was ordered to pay $81,159.97 in restitution to the Chapter 13 Trustee appointed to administer her case for the benefit of her creditors.

Federal prosecutors initiated charges against Cossey in August 2020 of misusing the bankruptcy rules.

Claiming over $450,000 in debts, facing foreclosures on her home in Munster and a rental property in Gary, and only $50 in her BMO Harris checking account, Cossey received permission to file a Chapter 13 bankruptcy petition in December 2013.

Chapter 13 required Cossey to follow a payment plan worked out by a bankruptcy trustee to satisfy creditors, required the reporting of all income, and not incur more debt.

Cossey exited Chapter 13 in January 2019 keeping her home and rental property, and paying only pennies on the dollar for unsecured debts totaling $125,000.

But investigators found Cossey had hidden from the bankruptcy court “cash, income, and assets valued in the hundreds of thousands of dollars.” Their claim was Cossey "devised a scheme to defraud her creditors and the Chapter 13 bankruptcy trustee by misusing and abusing the federal bankruptcy system."

According to documents in this case, Cossey engaged in a scheme to defraud the Chapter 13 bankruptcy trustee and her creditors in order to take advantage of the benefits of bankruptcy – including the imposition of a stay on collection and elimination of debts – without making the financial sacrifices required under Chapter 13 of the Bankruptcy Code.

Cossey did not disclose on her bankruptcy petition a debt relationship with her personal friend and creditor, identified in the indictment as Individual A.

Even though she was prohibited from incurring new debts during her bankruptcy case, Cossey charged over $240,000 on Individual A’s credit card during the course of her bankruptcy for personal expenses including multiple vacations, luxury clothing and accessories, and jewelry.

Cossey incurred other post-petition debts without the permission of the Chapter 13 bankruptcy trustee and failed to disclose changes in her employment and income during her case. Cossey repaid most of her debt to Individual A, while unsecured creditors received only 27% repayment for debts that were discharged in bankruptcy.

Story Posted:01/15/2022