Minneapolis bankruptcy trustee 'smelled a rat' and got the goods on a jewelry store owner

Daniel Rohricht seemed to get through his Chapter 7 bankruptcy pretty smoothly.

The jewelry in his two failed stores was gone, he told the court, sold off or dismantled and in some cases melted down. Although an angry federal bankruptcy judge declared Rohricht owed more than $253,000, she had no proof that he was hiding assets. The settlement gave his creditors just $17,500.

But Rohricht hadn't figured on the relentlessness of Nauni Jo Manty.

Manty, a Minneapolis attorney appointed as a trustee to represent the creditors, would not let go. For four years, she pursued Rohricht from one store location to another, from Minnesota to Wisconsin. She posted a process server outside one store to watch his comings and goings. She sent a secret shopper in to photograph his inventory. She had his truck followed.

Now Rohricht, 62, awaits sentencing and a prison term of up to two and a half years and a $50,000 fine under federal guidelines, after pleading guilty last month to concealing bankruptcy assets. No sentencing date has been set.

Manty, who has a reputation for digging deep into cases, gets high marks in the world of bankruptcy law in Minnesota.

"She is dogged in her pursuit," says Tim Pramas, an attorney who worked on the case with her and now is employed by the general counsel office at the University of Minnesota. "She takes her responsibilities very seriously."

But the court record is replete with examples of Manty's methodical pursuit of Rohricht. Manty "smelled a rat and decided something was missing," Bankruptcy Judge Nancy Dreher, said in her findings in 2011. Dreher, who died in 2012, cited Manty's "exceptional detective work," which prompted a criminal investigation.

In April, Rohricht was charged with concealing bankruptcy assets. In May, he pleaded guilty. The case is being prosecuted by assistant U.S. attorneys John Kokkinen and David MacLaughlin.

"When a debtor seeks the protection of a bankruptcy court," said MacLaughlin, "he has to make a deal, he has to be honest about his assets to get bankruptcy protection. Rohricht failed entirely to live up to his end of that obligation and his repeated egregious conduct ranks among the worst bankruptcy fraud cases that this office has handled."

In an interview, John Conard, Rohricht's attorney, said his client understood he had made a mistake. "During the whole course, he was facing a business failure, the collapse of the economy and some serious medical difficulties," said Conard. "He is going to take full responsibility for what he did wrong, and we will be arguing the mitigating factors with the court."

Four years ago, Rohricht was not quite as contrite. "Everybody thought I had all this money hidden and it was another mini-Denny Hecker deal," he told the Star Tribune, referring to the auto dealer now in prison for fraud. "I'm not gonna say that I'm lily-white, but I'm gonna say that anything I did was not done in a malicious way. I was a guy doing business, trying to make a living and pay his bills."

After his Woodbury and Apple Valley stores went bankrupt in 2009, he opened another store in the same Woodbury strip mall.

Manty, the newly appointed trustee, sent Jacqueline Kuiper, another attorney in her firm, to pose as a woman looking for a "big stone" for a wedding ring that her boyfriend was going to buy her. Kuiper arrived at the store with her "boyfriend."

Rohricht told her he had more jewelry at home and said he'd bring it in. Kuiper later returned to the store without the "boyfriend" and said she would need to photograph the jewels so she could show them to him, court records show.

Meanwhile, the bankruptcy proceeded, with a court judgment that Rohricht owed $253,000 to about 20 creditors. But Rohricht told the court he no longer had the jewelry because whatever was left had been dismantled or melted down and sold.

Having exhausted collection efforts, Manty agreed to settle in 2011 for $17,500. However, she inserted a clause in the settlement document stating that should she "become aware of assets or moneys not disclosed by Rohricht … this settlement agreement will be deemed void" and the $253,000 judgment reinstated.

Within a year, she had the evidence.

Rohricht bought a jewelry store in Hayward in northern Wisconsin, and Manty learned from the previous owner, Tim Weisheipl, that Rohricht delivered plastic storage bins full of jewelry to the store. Manty e-mailed photos taken by her secret shopper, and Weisheipl identified nine rings and a set of earrings that Rohricht had brought into his store.

"Rohricht has testified under oath on numerous occasions that he has turned over all the jewelry inventory to the trustee and that the inventory no longer exists," Manty wrote in a memo asking to seize property at the Wisconsin store. "The trustee has discovered that Rohricht's testimony is and has been false."

Authorities seized jewelry and loose diamonds Rohricht had hidden from the court.

Manty "did some really good sleuthing," says attorney Pramas. She also reported that a 2006 Ford F350 pickup truck had not been sold as he had claimed and was still in Rohricht's possession.

"This guy is so slick and so good he was able to outsmart people," said Weisheipl.

He said Manty appeared determined to stop him. "She seemed to have a real pit bull mentality," he said. "She just wasn't going to let go."