Larry Lee Reed of Encino was arrested on suspicion of fraud last week for allegedly hiding hundreds of thousands of dollars worth of assets when he declared bankruptcy, according to the U.S. attorney’s office. The 66-year-old man now faces eight counts of bankruptcy fraud.
According to Angela J. Davis, assistant U.S. attorney, Reed filed for Chapter 7 bankruptcy in 1997, claiming $11,000 in assets and more than $70,000 in credit card debt. According to FBI agents, Reed allegedly bought a house in Missouri.
An investigation revealed that shortly after he filed for bankruptcy, Reed completed a homeowners insurance application, claiming valuable assets including jewelry valued at $69,000, a gun collection worth $75,000, and paintings and sculptures valued at $190,000. If convicted, Reed could face up to 40 years in prison and $2 million in fines.