The U.S. Attorney's office just released the following verbatim statement:

Natchez, Miss – Michael E. Earwood, 60, an attorney from Madison, Mississippi, pled guilty in U.S. District Court today to one count of Bankruptcy Fraud, U.S. Attorney Gregory K. Davis, FBI Special Agent in Charge Daniel McMullen, and Acting U. S. Bankruptcy Trustee Henry G. Hobbs, Jr. of Region 5 announced.

During the plea hearing, Earwood admitted devising and executing a scheme to obtain money from a business partner by falsely representing that the money would be used to maintain real property owned by the business, Kinwood Capitol Group. He admitted transferring title to the real property assets of the business without the knowledge and consent of his business partner, who held a majority interest in the assets of the business. Earwood admitted that he transferred these assets to his own company named Northlake Development. He then used that property as collateral for bank loans to his company, Northlake Development, but still continued to solicit money from the business partner for a period of time thereafter. Earwood admitted that when the bank attempted to foreclose on the Northlake Development loan, he placed Northlake Development into bankruptcy, and continued to conceal the unauthorized transactions from his business partner and the banks from which he had obtained loans.

Earwood will be sentenced on October 25, 2012 at 10:30 a.m., and faces a maximum penalty of five years in prison and a $250,000 fine.

This case was prosecuted by First Assistant U.S. Attorney Harold Brittain, Assistant U.S. Attorney Carla J. Clark, and Special Assistant U.S. Attorney Sammye Tharp. The investigation was conducted by the Federal Deposit Insurance Corporation-Office of Inspector General (FDIC-OIG) and the Federal Bureau of Investigation, assisted by the Office of the U.S. Bankruptcy Trustee, Region 5.