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Westport Man Faces Five Years for Fraud

WESTPORT, Conn. – Westport resident Daniel Steinberg faces a maximum of five years in prison after he pleaded guilty to one count of bankruptcy fraud Tuesday in Bridgeport, U.S. Attorney David B. Fein announced.

Steinberg, 42, was the manager of Reservoir Corporate Group LLC, a bankrupt company that owns an office building in Shelton. Prosecutors say Steinberg illegally transferred $700,000 to himself from August 2009 to August 2010. The money, prosecutors say, was used for personal expenses and the expenses of other businesses tied to Steinberg.

To conceal the fraud, prosecutors say Steinberg falsified the company's books and records during the bankruptcy proceedings and provided false financial information to the Office of the U.S. Trustee.

In pleading guilty, Steinberg admitted that he illegally transferred additional funds before the bankruptcy filing, bringing the total amount of embezzled funds to more than $950,000.

Reservoir Corporate Group LLC remains in bankruptcy and, according to Bankruptcy Court records, faces about $47 million in claims from creditors.

Steinberg is scheduled to be sentenced Oct. 21. In addition to five years in prison, he faces an order of restitution to repay the victims and a fine of up to $250,000.

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