After trying to get his ex-wife investigated, man winds up under the scrutiny of the FBI himself
Things have gone rather horribly south for a Sacramento businessman who invited the FBI to investigate his ex-wife. Instead of arresting her, the Feds found that he’d been hiding money for years to avoid paying alimony and child support and he was charged with money laundering and fraud. On Mar. 5, he was sentenced to 17 years and eight months in prison and fined $500,000. And he’ll have to pay back his family.
According to the Sacramento Bee, Steven K. Zinnel, now 50, and his wife split in 1999. They had two sons. The divorce was not amicable and Zinnel, a successful Gold River businessman declared bankruptcy during the proceedings. But his bankruptcy, finalized in July 2005, was fake. He had put his money in accounts with other people’s names. He had hidden assets in shell companies. As the case proceeded through family court, he continued to disguise his wealth so that he would pay less in child support. (Child support payments in California are calculated according to a formula, rather than set by the court.)
He and his lawyer (and according to court documents, alleged lover) Derian Eidson set up a trust through which he could essentially launder money from an investment in an electrical firm and some real estate. Nobody in bankruptcy court cottoned to their ploy, so the pair were in the clear until Zinnel decided to spike the ball. He asked the FBI to investigate his ex-wife, Michelle, for trying to get illegal access to his private health insurance information.
But the FBI don’t muck around, and when the Feds heard Michelle’s side of the story, they began to get much more interested in Zinnel’s bankruptcy than her alleged offense. Or as Judge Gregory G. Hollows colorfully put it during one of the many motions, “having roused the beast, like the professor in Frankenstein, [Zinnel] was soon fighting off his own creation.”
The president of the electric substations company that was paying Zinnel off the books agreed to cooperate with the Feds and set up a meeting between Eidson, the lawyer-alleged-lover, and some undercover agents. It wasn’t long before Zinnel and Eidson were indicted. Far from being bankrupt, he was found to be worth several million dollars. In July 2013, he was convicted of 15 counts of bankruptcy fraud and money laundering. And on Wednesday, he was ordered to forfeit $2.8 million of his assets, pay a half million dollar fine and serve 17 more years in prison. (He’s been incarcerated since July.)
Calling Zinnel both “narcissistic,” and “charismatic,” U.S. District Judge Troy L. Nunley cited his repeated deceptions—of the U.S. Bankruptcy Court, of the court’s trustee, and of state family court—in handing down a harsh sentence. “You don’t lie before a court of law,” Nunley said. “You don’t continue to lie, which is what you did.”
According to the Sacramento Bee, after his conviction, Zinnel called one of his sons (now a teenager) from prison to explain that it was all his ex-wife’s fault. His restitution to his ex-wife and sons will be decided by the family court at a later date. But there’s not much money to be made in prison, so it looks like he’ll be relieved of his future child support obligations.