Bankrupt lawyer’s car turns heads
Coeur d’Alene bankruptcy attorney Craig D. Odegaard filed for bankruptcy two years ago.
Well-versed in the law, he sought to apply his 16 years of expertise to his own problems and shed debts, including $39,150 owed on 14 credit cards and $34,800 for telephone book advertisements.
It worked well at first – at least until he was spotted behind the wheel of a new Corvette just weeks after the court allowed him to renege on all of his bills except his college loans and taxes.
When a tipster called North Idaho bankruptcy trustee Ford Elsaesser about the sports car, he reopened Odegaard’s case and alleged that the attorney had concealed an income stream totaling tens of thousands of dollars from contingency case clients.
Within the two-month period that his bankruptcy was being finalized and debts purged, Odegaard quietly earned $53,747 from three separate cases – enough to pay $48,000 cash for the new Corvette, according to court records filed by Elsaesser, who labeled the transactions a fraud.
Today, Odegaard calls the entire episode and his failure to report the income in his bankruptcy case a misunderstanding.
“I realized I had made a mistake,” he said last week.
Odegaard said he has since converted his no-asset bankruptcy case to a wage-earner petition that calls on him to pay all of his debts in full over the next several years. He sold the Corvette and borrowed money against his suddenly more valuable Upper Hayden Lake Drive home, which ballooned in worth from the $200,000 Odegaard listed in court documents in October 2004 to $400,000 by December 2005.
His actions drew the interest of the U.S. Trustee’s Office, a division of the U.S. Dept. of Justice that watchdogs bankruptcy cases and steps in when fraud is reported.
After reviewing the case, the U.S. Trustee overseeing the case accused Odegaard and his wife of “bad faith” and engaging “in a course of conduct specifically designed to deprive their creditors of payment, while at the same time snatching estate assets for their personal benefit.”
The U.S. Trustee’s Office refers suspected bankruptcy fraud to the Federal Bureau of Investigation. FBI Special Agent Bryant Gunnerson, of Coeur d’Alene, declined to say whether the agency is looking into Odegaard’s case.
Odegaard said he filed for bankruptcy under the weight of medical bills, marital problems that ended in a divorce from wife and co-bankruptcy filer Tammy Odegaard last March, and a business slump.
He no longer works bankruptcy cases, partly because of bankruptcy law changes, and partly because “I find it distasteful, uncomfortable and I don’t want to do it,” he said.
Practicing by himself, he now focuses on divorce, custody and personal injury cases.
The promise to repay all debts and regain financial health is a show of good faith, Odegaard said.
The trustee’s assertion that the bankruptcy case was a ruse is incorrect, Odegaard said.
“I listed all my assets the best I could,” he said.
He said he had forgotten or overlooked the contingency clients, calling them cases he had spent mere hours working on, and ones that were set for trials months out.
“I put so little work into those cases that they didn’t even enter my mind,” Odegaard said.
Elsaesser said even though money from the contingency cases was not in Odegaard’s hands at the time of the bankruptcy filing, Odegaard had legal obligations to report the cases as an asset. Elsaesser likened the situation to somebody holding a lottery ticket at the time they file.
That ticket, and thus its potential, belongs to creditors – the people owed money – not the person who filed for bankruptcy, Elsaesser said.
“Any lawyer with a working knowledge of bankruptcy law would know that,” he said, pointing out that Odegaard advertised himself as an expert bankruptcy lawyer.
Odegaard said he had no idea the cases would net him the $53,747 so quickly, or that his home would be worth so much more.
“In the spring, things improved,” Odegaard said. “Sink or swim … that’s what lawyering is.”