McMenimen bankruptcy filing challenged in lawsuitBy JAMES A. KIMBLE
Union Leader Correspondent
November 02. 2012 1:07AM
An Exeter financial adviser facing charges that he allegedly embezzled roughly $1 million from his clients may have his bankruptcy proceedings blocked by one of his alleged victims.
Frederick "Rick" McMenimen was served a lawsuit filed in U.S. Bankruptcy Court on Wednesday, which alleges he cannot be discharged from his debt through Chapter 7 proceedings.
One of his alleged victims, Victoria Wagstaff of North Hampton, is arguing that McMenimen is barred from being eligible for bankruptcy because of his criminal theft case under way in federal court.
Wagstaff is one of two elderly widows allegedly duped by McMenimen into thinking that the checks they were writing to him were going into long-term investments, prosecutors said. Instead, McMenimen, a registered representative of Prudential, used the money between October 2008 to October 2011 to pay his home mortgage, boat docking fees and his children's school tuitions, according to court documents. The former Exeter High School hockey coach is now headed to trial in March on a 31-count indictment on charges of money laundering, tax evasion and mail fraud. He was indicted on the charges in October.
A federal judge allowed McMenimen on Wednesday to put off his criminal trial until March to better prepare his defense.
The lawsuit filed on Wednesday comes days after McMenimen filed a specific request in bankruptcy court seeking to void a $900,000 attachment that Wagstaff secured in Rockingham County Superior Court. She filed a civil lawsuit in Rockingham County in January that was essentially brought to a halt two months later as a result of McMenimen's Chapter 7 filing.
McMenimen's bankruptcy lawyer, Michael Feinman, argued that federal tax liens and two outstanding mortgages far outweigh the fair market value of McMenimen's main asset - his home at 6 Pumpkin Circle in Exeter - so he should be entitled to avoid Wagstaff's lien from the civil lawsuit.
Wagstaff has requested that a jury decide whether McMenimen is entitled to move ahead with his Chapter 7 claim.
McMenimen is also seeking to block a $1.5 million civil judgment awarded to the estate of his uncle, Samuel Pietropaolo. A jury agreed with Pietropaolo's estate that Pietropaolo was a victim of fraud regarding a life insurance policy bought in 1998.
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James A. Kimble may be reached at JKimble@newstote.com.