Ex-developer loses appeal in bankruptcy fraud case (Jan. 4, 2000)

Natalie Phillips

Former Anchorage developer Robert Kubick, now serving time for bankruptcy and tax fraud in a federal prison in California, may have to pay up to half a million dollars in restitution to his creditors, according to a recent ruling by the federal appeals court in California.

Kubick received a five-year sentence in early 1998 after he pleaded guilty to felony charges in what prosecutors have called the biggest individual bankruptcy fraud case in state history. He was sentenced to five years in prison and ordered to pay $24,000 in restitution, according to federal prosecutors.

Kubick, 59, appealed his sentence. While the 9th U.S. Circuit Court of Appeals rejected all his claims, it overturned District Court Judge John Sedwick's ruling that Kubick had to pay only $24,000 in restitution when 40 creditors were owed more than $15 million, according to Assistant U.S. Attorney James Barkeley.

TX: In sentencing Kubick, Sedwick followed statutes written before 1997 that said state restitution cannot be set higher than a criminal defendant's ability to pay. The appellate court judges ruled that the new Mandatory Victim's Restitution Act, which removes caps on restitution orders, applies to Kubick. The law was enacted to stop criminal defendants from pleading poverty at sentencing but then later profiting from their crimes by writing books and cutting movie deals once they are in prison.

Because the plea agreement Kubick signed stated he faced at most $500,000 in fines, the appellate court ruled Kubick could not be ordered to pay more than $500,000 in restitution, according to federal prosecutors.

A new hearing to reconsider the restitution has not been scheduled.

Kubick's attorney, Alan Ellis of Sausalito, Calif., could not be reached for comment.

''Even if there is an order for restitution, it will be a long time before we see any money out of Bob Kubick, '' said William Barstow, the government-appointed bankruptcy trustee.

Kubick, a flamboyant big game hunter who holds more than 250 records with the Safari Club International Record Book of Trophy Animals, was a science teacher who capitalized on Alaska's oil boom in the 1970s and early 1980s. He became one of Anchorage's most prominent oil boom developers. After the mid-1980s real estate collapse, he moved to Texas, leaving a trail of debts.

In 1991, he filed for bankruptcy. But Kubick wasn't broke. He used family members and friends to create ''shell corporations'' to hide cash and valuable property from the bankruptcy court. He buried $450,000 beneath homes of relatives in Oregon. He asked his wife to hide his vast collection of big game trophies. And he used his then teenage daughter as a front for $1.2 million in property.

His efforts unraveled when friends and family members began to talk. Relatives were granted immunity from prosecutors in the case. After Kubick was indicted by a federal grand jury, he had to be lured from Mexico to face the charges.

In 1997, Kubick agreed to plead to conspiracy to commit bankruptcy fraud and conspiracy to interfere with an Internal Revenue Service investigation. In exchange, prosecutors dropped other charges and agreed not to pursue an investigation related to some of his trophy animals, which were on lists of threatened or endangered species.

By Natalie Phillips
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