Raleigh Business Owner Sentenced to Prison for Bankruptcy Fraud

Summary

Tracey Dixon Perry, 51, owner of the Raleigh asphalt milling and paving business Dixon Paving, Inc., was sentenced to 16 months in federal prison, 12 months of home confinement and two years of supervised release, and ordered to repay $425,146 in restitution for concealing bankruptcy assets. Perry filed a Chapter 11 petition for Dixon Paving on February 14, 2020; four days earlier she had a secret account opened for an affiliate, Dixon Contracting, LLC, and she kept diverting checks payable to Dixon Paving into unmonitored accounts although the court required new DIP accounts for all receivables. On May 6, 2020 she obtained a $183,500 Paycheck Protection Program loan by checking no to the question asking whether the company was in an active bankruptcy, and hid it and an EIDL loan from the court. Chief U.S. District Judge Richard E. Myers II imposed the sentence.

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Full text

WILMINGTON, N.C. – A federal judge sentenced Tracey Dixon Perry, 51, to 16 months in federal prison, 12 months of home confinement, two years of supervised release, and to repay $425,146 in restitution for concealing bankruptcy assets. “This individual meticulously and purposefully hid her greedy milking from the U.S. government. She pocketed hundreds of thousands of ill-gotten dollars, exploiting a system that exists to help relieve companies in times of economic need,” said U.S. Attorney Ellis Boyle. “Play games, get the prize you deserve, and in this case, a one-way ticket straight to federal prison. Cheaters. Never. Win” Perry owned and operated Dixon Paving, Inc., an asphalt milling and paving business based in Raleigh. On February 14, 2020, Perry signed and filed a Chapter 11 bankruptcy petition on behalf of Dixon Paving in the U.S. Bankruptcy Court for the Eastern District of North Carolina. While the bankruptcy court permitted Dixon Paving to maintain business operations as a debtor in possession (DIP), the court required that the company establish new DIP bank accounts to deposit all business receivables. Investigators discovered that Perry circumvented these requirements through multiple fraudulent actions. Four days prior to the bankruptcy filing, Perry directed the opening of a secret bank account for an affiliated entity, Dixon Contracting, LLC, and later established a second concealed bank account for Dixon Paving on February 28, 2020. Perry deposited a substantial corporate check into one of the secret accounts on the day of the bankruptcy filing and continued to divert checks payable to Dixon Paving into unmonitored accounts throughout the proceedings. On February 28, 2020, Perry executed the corporation's schedule of assets and liabilities under penalties of perjury but intentionally omitted the secret accounts. In subsequent monthly operating reports, she falsely declared that Dixon Paving had deposited all income into the designated DIP accounts. On May 6, 2020, while the bankruptcy case was pending, Perry secured a $183,500 Paycheck Protection Program (PPP) loan by checking "no" on the application question asking if the company was involved in an active bankruptcy. She later submitted false monthly bankruptcy reports denying the receipt of third-party financing. Perry bypassed statutory requirements for court approval by entirely hiding the PPP loan from the bankruptcy court, and she used the same deceptive methods to conceal an additional loan from the Economic Injury Disaster Loan (EIDL) program. Ellis Boyle, U.S. Attorney for the Eastern District of North Carolina, made the announcement after sentencing by Chief U.S. District Judge Richard E. Myers II. The U.S. Department of Transportation and Office of Inspector General investigated the case. Valuable assistance was provided by the Office of the U.S. Bankruptcy Administrator for the Eastern District of North Carolina. A copy of this press release is located on our website .

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