United States District Court, S.D. Illinois
Gargula, Plaintiff, represented by Gerald M. Burke, Assistant
U.S. Attorney, Mark D. Skaggs, USDOJ - Office of the U.S.
Trustee & Russell C. Simon.
Wendell Taylor, Defendant, Pro Se.
X'Lexus Johnson, Debtor, Pro Se.
MEMORANDUM AND ORDER TO SHOW CAUSE
PHIL GILBERT, District Judge.
matter comes before the Court on the report, recommendation
and certification ("Report") (Doc. 4) of Bankruptcy
Judge Laura K. Grandy finding respondent Wendell Taylor
violated the terms of a Consent Judgment and Injunction
entered in In re Cross, Bank. Case No. 11-32217,
Adv. Case No. 11-3392, (Bankr. S.D. Ill.), and subsequently
violated 11 U.S.C. § 110 in a number of ways in connection
with the bankruptcy proceeding of debtor X'Lexus Johnson.
Judge Grandy recommended sanctions as well as findings of
civil and criminal contempt. Taylor filed an objection to the
Report (Doc. 10).
matter arose in connection with Johnson's bankruptcy
after her voluntary Chapter 13 petition was dismissed for
want of prosecution because she failed to submit the required
documents with her petition. In considering Johnson's
motion to reinstate her case, the Bankruptcy Court came to
believe Taylor had prepared Johnson's petition in
violation of the In re Cross Consent Judgment and
Injunction, in which he agreed to a Bankruptcy Court order
enjoining him permanently from acting as a bankruptcy
petition preparer. The Bankruptcy Court was tipped off to
Taylor's alleged involvement at an August 13, 2015,
hearing on Johnson's motion to reinstate her case. At
that hearing, Johnson indirectly identified Taylor as the
person who prepared her petition; she said it was the same
preparer who had helped her aunt prepare her petition, and
Bankruptcy Court records reflect that was Taylor. The
Bankruptcy Court found Johnson's testimony credible. Of
course, Taylor did not receive notice of the hearing because
Johnson's petition did not disclose that Taylor prepared
her petition, and until the hearing, there was no indication
he was connected to the case.
information that came to light at the August 13, 2015,
hearing spurred the United States Trustee to file a motion
for sanctions against Taylor and for a referral from the
District Court for possible criminal prosecution (Doc. 2).
The United States Trustee's motion was based in part on
Taylor's apparent preparation of Johnson's bankruptcy
petition. The motion was served on Taylor by mail. Judge
Grandy set a hearing on that motion for October 15, 2015, and
notice of that hearing was served on Taylor by mail. He
failed to appear at the hearing
considering the United States Trustee's motion and
Taylor's failure to appear at the October 15, 2015,
hearing, Judge Grandy issued the Report finding Taylor had
violated the Consent Judgment and Injunction in In re
Cross, had independently violated various provisions in
11 U.S.C. § 110, and recommending that the Court withdraw, in
part, the Bankruptcy Court reference in the instant case and
in In re Cross pursuant to 28 U.S.C. § 157(d) for
the limited purpose of considering criminal contempt
proceedings or further civil contempt proceedings against
Wendell Taylor for the foregoing violations. Judge Grandy
â¢ Granting the U.S. Trustee's motion for sanctions (Doc.
â¢ Imposing fines of $7, 500.00 pursuant to 11 U.S.C. § 110(
l )(1) and (2), payable to the United States
Trustee, for violations of 11 U.S.C. §§ 110(b)(1), (b)(2),
(c)(1), (e)(2)(A), and (h)(2);
â¢ Imposing a $2, 000.00 fine payable to debtor X'Lexus
Johnson pursuant to 11 U.S.C. § 110(i)(1);
â¢ Ordering that Taylor fully disgorge and forfeit the $400.00
fee that he received in this case;
â¢ Finding that Taylor is in civil contempt of the Consent
Judgment and Injunction entered by the Bankruptcy Court on
March 13, 2012, in In re Cross, Bank. Case No.
11-32217, Adv. Case No. 11-3392; and
â¢ Finding that Taylor is in criminal contempt of the Consent
Judgment and Injunction entered by this Court on March 13,
2012, in In re Cross, Bank. Case No. ...