Chicago Man Sentenced to 33 Months in Prison

HAMMOND- Rajesh Kanuru, 46 years old, of Chicago, Illinois, was sentenced by United States District Court Chief Judge Jon E. DeGuilio after pleading guilty to wire fraud and embezzlement against a bankruptcy estate, announced United States Attorney Clifford D. Johnson.

Kanuru was sentenced to 33 months in prison, 2 years of supervised release and ordered to pay $348,388.50 in restitution. 

According to documents in this case, Kanuru was an attorney with a practice located in Chicago, Illinois. From March 2012 through August 2018, Kanuru devised a scheme to defraud clients who had filed for bankruptcy, the Bankruptcy Trustee and the U.S. Bankruptcy Court for the Northern District of Indiana. In particular, Kanuru represented clients in a personal injury lawsuit. When these clients later filed for bankruptcy, Kanuru was appointed by the bankruptcy court to gather the settlement proceeds from their personal injury lawsuit to turn over to the bankruptcy estate on behalf of the clients. Instead, Kanuru embezzled the personal injury settlement proceeds totaling $348,388.50 for his own personal use and benefit.

“The Bankruptcy system, to work as it is designed, relies upon attorneys to act in the best interest of their clients and to comply with orders issued by the Bankruptcy judges,” said United States Attorney Clifford D. Johnson.  “When, as happened in this case, an attorney violates both his clients trust and his obligations to the Bankruptcy court to unlawfully enrich himself, my Office will seek justice by prosecuting to the fully extent of the law.”

“Abuse of the bankruptcy system by embezzling estate funds and concealing those acts strikes at the very core of the integrity of the bankruptcy system and undermines public confidence in that system,” stated Nancy J. Gargula, United States Trustee for Indiana, Central and Southern Illinois (Region 10).  “Today’s sentencing sends a strong message that these actions will not be tolerated. I am grateful to U.S. Attorney Johnson and our law enforcement partners for their strong commitment to combating fraud and abuse in bankruptcy cases.”

The United States Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws.  Region 10 is headquartered in Indianapolis with additional office in South Bend, IN and Peoria IL.

The investigation was conducted by the United States Postal Inspection Service in collaboration with the Northern Indiana Bankruptcy Fraud Working Group coordinated by the United States Trustee for Region 10. The case was prosecuted by Assistant U. S. Attorney Luke Reilander.

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