Blumenthal: Bankruptcy court can't block criminal prosecution

John O'Brien Apr. 10, 2007, 1:00pm


HARTFORD, Conn. - Connecticut Attorney General Richard Blumenthal wants to keep possible the criminal prosecution of Mitchell Heffernan, who asked for protection in bankruptcy court.

A hearing is scheduled for today in U.S. Bankruptcy Court. Heffernan is the former president and chief executive officer of Mortgage Lenders Network USA, Inc., and cannot pay millions of dollars in wages owed to employees.

"More than money, this criminal prosecution is about sending a message: Failure to pay employees promised wages is illegal and will be punished," said Blumenthal, who filed an objection to Heffernan's request Thursday.

When Heffernan learned that the State's Attorneys Office was considering an arrest, Heffernan asked the bankruptcy court to block any attempt to criminally prosecute him.

Mortgage Lenders Network USA went bankrupt Feb. 5, still owing $2.5 million in wages to its employees.

In a report by The Associated Press, Blumenthal said that he has no intention of forcing Heffernan to pay up, though he admitted that sometimes monetary amounts can come into play when discussing a criminal plea.

"Criminal law breakers must be prosecuted, even when their companies are in federal bankruptcy," Blumenthal said. "States cannot be blocked by a bankruptcy court in Delaware from protecting their citizens against crimes.

"Our state's criminal prosecutors can and must be allowed to proceed without interference."

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