Middleton man indicted on bankruptcy fraud

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A federal grand jury has indicted a Middleton man for bankruptcy fraud.

Paul Graves, 59, of Middleton, faces up to 30 years in federal prison. He and  his wife owned and operated Mauston Home Center LLC, a hardware business in Mauston, according to a news release. They owed $500,000 to creditors of the business.

Graves and his wife are accused of concocting a scheme from February 2009 to August 2012 to defraud those creditors. In 2009, according to the indictment, despite disclaiming the approximately $800,000 inheritance that he was entitled to as a result of his mother’s death in February 2009, he continued to control and use the property and assets from that inheritance.

The indictment also alleges that Graves concealed and failed to fully disclose assets from creditors when he filed for Chapter 7 bankruptcy May 12, 2010.

More specifically, Graves is accused of concealing his use and control of the inheritance that was fraudulently disclaimed in 2009, his ownership of a 9-acre island in Canada with a two-bedroom cabin used by the Graves for recreation since 1995, his wife’s joint ownership interest in a Jackson County home, her joint ownership of two bank accounts in Black River Falls worth about $200,000, he and his wife’s ownership of a rent-free home in Middleton that had originally been inherited and supposedly disclaimed by Graves, and a 2009 Mercedes ML350 SUV Graves bought with money from the disclaimed inheritance.

He will appear in U.S. District Court at 10 a.m. April 2 in Madison.