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Businessman files second bankuptcy in as many months

| Saturday, May 12, 2012, 3:28 p.m.

A Mt. Pleasant Township businessman who is trying to extricate himself from debt after convictions on state tax evasion charges has filed for bankruptcy for the second time in as many months.

Charles "Chip" Santone filed for voluntary Chapter 13 bankruptcy in U.S. District Court in Pittsburgh, according to a petition that lists debts of more than $1.5 million and assets of just $107,200.

A U.S. District Court bankruptcy judge dismissed a similar petition in February because Santone had failed to complete the document. He refiled in March.

Under Chapter 13, debtors can pay off debts within three to five years and forestall foreclosure or repossession of property. Lawyers say it is an option for individuals who have sufficient income to pay living expenses and have money left over to pay debts.

According to the latest filing, Santone owes more than $1.4 million to secured creditors and more than $150,000 to unsecured creditors. He submitted a settlement plan under which he would pay a percentage of his debts.

The plan calls for him to pay more than $165,000 over the next three years to his secured creditors. He also would pay a minimum of $28,800 to satisfy debts owed to unsecured creditors, according to the petition. The judge will review the plan at a July 17 hearing before deciding whether to approve it.

On the petition, Santone lists his sources of income from employment with Chisan Inc., a management company in Greensburg, and CMS Sales & Rental, of United, a construction equipment sales company. He is listed as president of both firms on documents filed with the Pennsylvania Corporation Bureau.

According to the petition, his monthly income is $10,400, but his expenses are more than $10,700 a month.

When contacted, Santone said he had "no comment and no wish to talk to you again."

The bankruptcy petition shows the bulk of Santone's debts are for mortgages -- more than $1.1 million on real estate in Westmoreland County and Florida. It also lists more than $105,000 in legal fees owed to former lawyers and more than $43,000 in credit card bills.

He also lists continuing debts for payments on two Mercedes Benz sedans, a truck, a Subaru, a van and a trailer.

Santone already solved one of his financial problems that threatened the loss of his home, a spacious, rural estate located on 16 acres along Mt. Pleasant Road. He paid Westmoreland County $56,000 in taxes for the years 2001 and 2002.

The county had scheduled a public sale of the home on March 3, but his initial bankruptcy automatically stayed that proceeding and gave him time to pay the taxes. While a person is in bankruptcy, the legal action automatically halts all attempts to foreclose on real estate or take action to collect debts.

Santone still faces a mortgage foreclosure by a New York-based bank that alleges he owes $852,000 on the home. That case is pending in Westmoreland County, according to court records.

On the petition, Santone also lists a $125,000 debt to Dauphin County, which is for restitution of his tax bill to the state. In December, the state Department of Revenue filed a lien against Santone for his failure to pay more than $375,000 in restitution. That lien remains on file with the Westmoreland County Prothonotary's Office.

Santone, the former president of St. Clair Supply, got into serious financial difficulty in the late 1980s and early 1990s. His financial problems started with his failed business, a Greensburg-based cement and concrete block supplier.

He failed to pay state payroll and sales taxes and was convicted twice of state tax law violations. He was sentenced in 1991 to serve 11 to 23 months in prison for his conviction for sales tax evasion during the time he operated St. Clair Supply.

He was convicted again in 1999 on 22 counts of tax violations stemming from similar businesses he operated in Slippery Rock and Grove City.

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