Judge asks if feds considering ‘other form of action’ in bankruptcy investigation of former Milford strip club owner

In a hearing last month in federal bankruptcy court, attorney Kenneth Krayeske said the check was only a fraction of “more than $400,000 that Mr. Regensburger had in his hands.” during the “clawback” period granted to the authorities. in bankruptcy to search for a debtor’s assets.

Before making his decision, the judge asked a Justice Department lawyer representing the United States trustee, who supervises bankruptcy fileswhether federal attorneys are considering “any other form of action” in the case.

“I can’t comment other than to say that the US administrator processes the documentation he receives from attorney Krayeske,” attorney Holley Claiborn replied. “Where this will lead remains to be determined.”

“Understood,” Manning said. “I just wonder if people are considering any other form of action other than actions in bankruptcy court. In any case, you will all think about it and we will take it from there.

Neama Rahmani, a former Assistant United States Attorney and the president of Los Angeles-based West Coast Trial Lawyers said Friday the bankruptcy trustee has “broad authority to investigate and prosecute bankruptcy fraud, if that’s what’s going on in the case. Regensburg”.

“Prosecutors take referrals from judges very seriously, so Regensburger must proceed with caution,” Rahmani said.

Regensburger could not be reached for comment on Friday.

Some of the checks he cashed were signed by Gus Curcio Sr., a Stratford resident and notorious mobster with ties to Keepers.

Krayeske tried to get Regensburger to pay a judgment won by the six dancers in a lawsuit saying they were not paid minimum wage or overtime while working at the Woodmont Road club in Milford.

The state Court of Appeals considered an appeal filed by Keepers in the nearly seven-month lawsuit.

Regensburger, who is representing himself in the bankruptcy case, did not participate in last month’s bankruptcy hearing, but in a filing opposing the pending case, he said that Krayeske had “reprimanded and abused” him while he was “on a mission to get blood”. of a stone.

“The UST (United States Trustee) has allowed Attorney Krayeske’s sideshow to go on long enough and there is clear evidence that the debtor does not have the assets sought by creditors,” Regensburger wrote.

Another objection to continuing the case came from Curcio, who was convicted of extortion in the 1980s, for whom Regensburger had several business connections and worked as a titular “figurehead,” according to depositions.

Through a lawyer, Curcio, who is on Regensburger’s list of creditors, said “none of the Court’s precious resources need be expended on this particular case.”

But at the hearing, Claiborn told Regensburger “there are more questions to ask.”

“There are a number of checks made out to cash or payable to Mr. Regensburger that require explanation,” Claiborn said, citing documents filed by Krayeske. “It’s a proper area of ​​investigation that we need to follow up on to determine if this is income for Mr. Regensburger or something else.”

She also said extending the case would benefit all of Regensburger’s creditors, including Curcio, whose objection she called “unusual.”

Krayeske said the process is slow because “Mr. Regensburger’s finances are inextricably linked to those of Mr. Curcio.

He said neither had been very forthcoming in depositions in the case — and that Curcio had invoked his Fifth Amendment right against self-incrimination more than 500 times during interrogations, including when was asked for his date of birth.

“We are actively seeking information to help us understand what assets are available to satisfy judgment creditors,” Krayeske said.