Trouble piles up on suspect

Former county welfare worker Melanie Cholewinski could face federal charges for filing for bankruptcy without disclosing more than $91,000 alleged to have been stolen from a public financial assistance fund.

A 20-count felony theft complaint last week accused Cholewinski, 36, of using her job with the Clark County Social Service Department to unlawfully funnel $91,235 in financial assistance checks to her husband between October 2008 and March 31. Her husband, Michael Wayne Brown, 36, was charged in the complaint also.

Both defendants, who are in custody at the Clark County Detention Center, are to make initial appearances today before Las Vegas Justice of the Peace Nancy Oesterle.

Cholewinski is alleged to have steered most of the missing taxpayer money, more than $79,000, to her husband after she had filed a Chapter 7 petition in U.S. Bankruptcy Court on April 10, 2009, records show.

In the petition, Cholewinski, who since has been fired from her $36,400-a-year job, listed $73,685 in debts and $16,940 in assets. She said she had $30 in her pocket and $50 in the bank at the time.

Nowhere in the Bankruptcy Court records did Cholewinski report the tens of thousands of dollars she is alleged to have taken over a 17-month period.

On July 28, three weeks before prosecutors filed the criminal complaint against her, all of her debts were routinely discharged in Bankruptcy Court.

Nancy Rapoport, a UNLV law school professor who specializes in bankruptcy, said federal authorities could prosecute Cholewinski for bankruptcy fraud if they determine she lied in court documents about the state of her financial condition. The felony charge draws a maximum fine of $250,000 and up to five years in prison.

Bankruptcy Court officials could rescind the order freeing Cholewinski of her debts, Rapoport said.

"You can't circumvent the prosecution of a crime by filing for bankruptcy," Rapoport said. "Bankruptcy is not literally a get-out-of-jail-free card."

Attorney Philip Goldstein, who represented Cholewinski in Bankruptcy Court, declined to comment on Thursday, citing attorney-client confidentiality. William Leonard, the bankruptcy trustee in the case, could not be reached for comment.

In her April 2009 bankruptcy petition, Cholewinski said she had a monthly income of $4,270, which was supplemented by $1,683 a month in "children's survivor benefits." She did not explain the benefits but said she had three sons, ages 11, 12 and 16. She listed $4,416 in monthly expenses.

Cholewinski reported $6,200 in outstanding student loans and other debts, including dental, medical, credit card and utility bills. She said she owed $12,860 on a 2006 Dodge Durango.

In an interview with detectives earlier this year, both Cholewinski and her husband admitted stealing the public money to help pay bills, a police affidavit alleges.

According to the affidavit, Cholewinski created seven phony financial assistance accounts in Brown's name and was able to obtain county checks for him to cash over the 17-month period

She entered false personal information into the Social Service Department's computer system in each case and did not support the seven cases with proper financial documentation, police allege.

Cholewinski, who was hired in September 2007, was responsible for determining whether people qualified for financial aid from the county, police said. Her job included meeting with clients and, if they qualified, creating a case file with specific financial information required to meet that eligibility for assistance.

The money came out of a Social Services Department fund to help the disadvantage pay for housing. County officials said the department handed out $6.2 million in housing aid in this past fiscal year.

Contact Jeff German at jgerman@reviewjournal.com or 702-380-8135 or read more courts coverage at lvlegalnews.com.