A Gold River businessman and a Southern California lawyer have been indicted by a federal grand jury in Sacramento in a multimillion-dollar bankruptcy fraud and money laundering scheme.
The grand jury on Wednesday returned a 16-count indictment charging Steven Zinnel, 47, of Gold River, and Derian Eidson, 47, of Yorba Linda, with bankruptcy fraud, conspiracy to commit money laundering and money laundering, according to a federal Department of Justice news released.
The indictment alleges that Zinnel used Eidson, who is a lawyer, and others to hide Zinnel's property before and during his personal bankruptcy proceeding. In Zinnel's bankruptcy, he claimed $842,620 in assets, $2,013,896 in secured debt and $4,036,466 in unsecured debt. After the discharge of the bankruptcy, Zinnel, Eidson and at least one other person allegedly laundered funds back to Zinnel's benefit through Eidson's company, her attorney-client trust account and her personal bank account.
The indictment alleges that Zinnel, throughout this period, used several different corporations registered in others' names to disguise his control of property and direct the disposition of money. Edison allegedly gave him signature authority over her company's bank account, which he used for his personal expenses.
Among the things Zinnel hid from the bankruptcy was an investment in an electrical infrastructure company in which he had invested as a "silent partner," according to the indictment.
Zinnel invested hundreds of thousands of dollars and prepared the corporate filings but appeared in no public filing of the company. For years, this company paid distributions to Zinnel as a partner, but those distributions were disguised as payments to Eidson's company for equipment, consulting and legal work.
Later, when the person in charge of the company stopped paying distributions to Zinnel through Eidson's company, Zinnel and Eidson worked together to demand a final $4 million payments, which they wanted falsely characterized as a payment to end a consulting agreement, according to the indictment.
The indictment also alleges that Zinnel used a separate set of corporations, owned in title by another person but actually controlled by Zinnel, to hide some Rancho Cordova real estate from bankruptcy. The indictment seeks to forfeit Zinnel's interest in that real estate.
Zinnel and Eidson's scheme allegedly began after Zinnel was involved in a contentious divorce proceeding and warned his ex-wife that he would enter bankruptcy proceedings and she would receive almost no support.
The case resulted from an investigation by the FBI and IRS Criminal Investigation.
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