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Strict Standards: date(): It is not safe to rely on the system's timezone settings. You are *required* to use the date.timezone setting or the date_default_timezone_set() function. In case you used any of those methods and you are still getting this warning, you most likely misspelled the timezone identifier. We selected 'America/New_York' for 'EST/-5.0/no DST' instead in /homepages/2/d279137232/htdocs/ml/mahanylaw/wp-includes/functions.php on line 52

Strict Standards: date(): It is not safe to rely on the system's timezone settings. You are *required* to use the date.timezone setting or the date_default_timezone_set() function. In case you used any of those methods and you are still getting this warning, you most likely misspelled the timezone identifier. We selected 'America/New_York' for 'EST/-5.0/no DST' instead in /homepages/2/d279137232/htdocs/ml/mahanylaw/wp-includes/functions.php on line 54

Strict Standards: date(): It is not safe to rely on the system's timezone settings. You are *required* to use the date.timezone setting or the date_default_timezone_set() function. In case you used any of those methods and you are still getting this warning, you most likely misspelled the timezone identifier. We selected 'America/New_York' for 'EST/-5.0/no DST' instead in /homepages/2/d279137232/htdocs/ml/mahanylaw/wp-includes/functions.php on line 55

Strict Standards: mktime(): It is not safe to rely on the system's timezone settings. You are *required* to use the date.timezone setting or the date_default_timezone_set() function. In case you used any of those methods and you are still getting this warning, you most likely misspelled the timezone identifier. We selected 'America/New_York' for 'EST/-5.0/no DST' instead in /homepages/2/d279137232/htdocs/ml/mahanylaw/wp-includes/functions.php on line 41

Strict Standards: date(): It is not safe to rely on the system's timezone settings. You are *required* to use the date.timezone setting or the date_default_timezone_set() function. In case you used any of those methods and you are still getting this warning, you most likely misspelled the timezone identifier. We selected 'America/New_York' for 'EST/-5.0/no DST' instead in /homepages/2/d279137232/htdocs/ml/mahanylaw/wp-includes/functions.php on line 50

Strict Standards: date(): It is not safe to rely on the system's timezone settings. You are *required* to use the date.timezone setting or the date_default_timezone_set() function. In case you used any of those methods and you are still getting this warning, you most likely misspelled the timezone identifier. We selected 'America/New_York' for 'EST/-5.0/no DST' instead in /homepages/2/d279137232/htdocs/ml/mahanylaw/wp-includes/functions.php on line 52

Strict Standards: date(): It is not safe to rely on the system's timezone settings. You are *required* to use the date.timezone setting or the date_default_timezone_set() function. In case you used any of those methods and you are still getting this warning, you most likely misspelled the timezone identifier. We selected 'America/New_York' for 'EST/-5.0/no DST' instead in /homepages/2/d279137232/htdocs/ml/mahanylaw/wp-includes/functions.php on line 54

Strict Standards: date(): It is not safe to rely on the system's timezone settings. You are *required* to use the date.timezone setting or the date_default_timezone_set() function. In case you used any of those methods and you are still getting this warning, you most likely misspelled the timezone identifier. We selected 'America/New_York' for 'EST/-5.0/no DST' instead in /homepages/2/d279137232/htdocs/ml/mahanylaw/wp-includes/functions.php on line 55

Lawyer, Client Indicted in Asset Protection Scheme Gone Wrong

by Brian Mahany

Yesterday the court unsealed the indictment of Peter Rogan and his attorney, Frederick Cuppy.  Rogan is the former owner and CEO of Edgewater Hospital in Chicago. Although Rogan sold the hospital years ago, prosecutors say he continued to manage and run the facility. Ultimately the hospital closed in 2001 after a number of doctors and administrators were indicted for federal health care fraud.  Prosecutors back then accused the hospital of paying kickbacks for patient referrals and ordering unnecessary tests and procedures.

The government and a lender sued Rogan civilly after the collapse of the hospital. The United States recovered a judgment of $64 million and Dexia Credit Local bank obtained a $124 million judgment. Neither of those judgments were paid.

The story might have ended there, however, the FBI says that Rogan and his attorney Cuppy obstructed justice by lying about and concealing Rogan’s interest in an offshore Bahamian trust. The indictment quotes Cuppy as telling the trustee, “Also it would be helpful if you can orally tell [Chicago lawyer] that no documents will be sent to anyone and that no information will be given out about the matter. That will allow him to disclose that he is unable to get any information about the trust…”

They also say that Cuppy and another lawyer formed a constellation of other entities including some international business corporations or IBC’s to  further conceal the true beneficial ownership of the trust.

The indictment charges Cuppy and Rogan with lying to the court. Rogan is charged with conspiracy to obstruct justice. Cuppy is charged with an additional 3 counts of perjury.  Conspiracy to obstruct justice carries a possible sentence of 20 years prison while each count of perjury carries up to 5 years in prison.

Creating offshore trusts to protect one’s assets is not illegal. Lying in court documents, concealing the trusts and falsely claiming to have no control over a trust is illegal.  The government says that Cuppy and Rogan used the complex constellation of other entities related to the trust to make it appear that Rogan did not have control of the assets and to prevent the creditors from learning the true ownership and control of the trust.  That’s where prosecutors say Rogan crossed the line from asset protection to criminal obstruction of justice.

Although Rogan’s offshore trust was created long before he was sued and prior to the demise of his hospital, his efforts to conceal the trust assets may earn him a lengthy prison stay.  Cuppy will likely never practice law again and also receive a lengthy prison stay. Courts are especially hard on lawyers who obstruct justice.

Brian Mahany is a lawyer concentrating in asset recovery and asset protection. He welcomes comments and questions, contact him by telephone at (414) 704-6731 (direct) or by email at brian@mahanylaw.com.  All calls are completely confidential.

(Asset recovery and fraud cases are primarily handled by the Mahany & Ertl, LLC law firm of Milwaukee. Attorney Brian Mahany is a principal in both law firms.)

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