Bankruptcy Fraud

Bankruptcy fraud is a white-collar crime with serious repercussions for those found guilty of committing the offense. It’s also considered a federal crime, and authorities endeavor to impose the severest penalties available. This is why having an expert bankruptcy fraud defense attorney by your side is so important.

It’s estimated that around 10% of the total number of people who file for bankruptcy do so fraudulently. Within the 10% of fraudsters, 70% conceal assets, so they aren’t on the list of forfeited items.

If you’re facing criminal charges for concealing assets or committing any other type of bankruptcy fraud, you need an experienced bankruptcy fraud defense attorney in California.

What is Bankruptcy Fraud in California and Why You Need A Bankruptcy Defense Attorney?

This white-collar crime occurs when you intentionally supply false information when you file for corporate or personal bankruptcy. This means fewer assets are liquidated, decreasing the amount of money made available to pay creditors.

In California, providing false information to commit bankruptcy fraud includes perjury. In Los Angeles, a bankruptcy fraud defense attorney who can think quickly on their feet and adapt their arguments to accommodate new evidence is essential to your defense. 

As white-collar crime isn’t violent in any way, many people consider it a victimless crime and perhaps not as serious as violent crime. This is not true, as creditors can lose assets of considerable value. Fraudulent behavior can impact small businesses significantly and is even felt by large corporations.

Fraudulent activities generally occur after a debtor is declared insolvent. However, there are instances when a debtor goes on a final fling using bad checks or overdrawn credit accounts before filing for bankruptcy.

This is considered fraud on its own, but it may include other bankruptcy crimes, including concealing assets. 

Different Types of Bankruptcy Fraud

Bankruptcy fraud has many forms, including those shown below.

Concealing Assets

Assets are intentionally hidden, taking them out of the pool of assets that will be liquidated to pay creditors. Methods include transferring money or fixed assets to relatives, so they aren’t in the debtor’s name.

Filing Multiple Times

The debtor sometimes files for bankruptcy or insolvency using false or true information in different jurisdictions. They list most of the same assets on each claim but intentionally omit assets from the claims. The assets are effectively hidden and are safe from liquidation.

Petition Mills

In this instance, fraudsters continually accumulate debt and file for bankruptcy. One method is when fraudsters provide assistance to tenants who are in financial difficulties and about to be evicted. While assisting the tenant with admin, fraudsters file for bankruptcy using the tenant’s details. 

The tenant is made to pay expensive service fees to fraudsters who are supposedly fighting against their eviction. In the meantime, the fraudster empties the tenant’s bank accounts and racks up mountains of debt. 

18 USC 157: Unlawful Acts in Bankruptcy Fraud

According to the United States Department of Justice (DOJ), 18 USC § 157 prohibits devising or intending to devise a scheme or artifice to defraud and, for purposes of executing or concealing the scheme.

For example, a debtor owes many retailers thousands of dollars for purchasing luxury items. However, he can’t or won’t pay them and knows that all these luxurious assets will be liquidated to pay his debts. He doles them out to his friends and relatives so they can’t be considered his property. He leaves only a few items that have little to no value, severely curtailing the funds available for his creditors. 

The U.S. Department of Justice states that 18 USC § 157 isn’t the only statute covering bankruptcy fraud crimes.

• 18 USC § 152 covers: Concealment of assets, false oaths, and bribery
• 18 USC § 153 covers: Embezzlement against the state
• 18 USC § 154 covers: Adverse interest and conduct of officers
• 18 USC § 155 covers: Fee agreements in cases of title 11 and receiverships
• 18 USC § 156 covers: Knowing disregard of bankruptcy law
• 18 USC §1344 covers: Bank fraud

Charges of bankruptcy fraud can be filed with any combination of the above, but a rock-solid bankruptcy fraud defense attorney in California, along with a team of investigators, will raise sufficient reasonable doubt for the charges to be dismissed or for a light sentence to be imposed.

What are the Penalties for Committing Bankruptcy Fraud in California?

Bankruptcy fraud is a felony and is tried in federal court. The punishment for this type of fraud is steep. Defendants face up to five years in prison and/or a fine of up to $250,000. Note that bankruptcy fraud convictions don’t require the commission of fraud, the intention is enough to send you to prison.

You need to be backed by a bankruptcy fraud attorney in California, such as the skilled attorneys you’ll find at LibertyBell Law Group.

How Can a Bankruptcy Defense Attorney Defend You?

There are three common defenses against bankruptcy fraud charges.

1. Lack of Intent

All that’s needed to be found guilty of bankruptcy fraud is the proven intention to commit fraud. The burden of proof is on the prosecutor. All your bankruptcy lawyer has to do is show the judge and jurors that you made an honest mistake, which can happen to anyone.

2. Lack of Evidence

It’s tricky for prosecutors to uncover enough evidence that proves guilt beyond a reasonable doubt. A good defense lawyer will easily pick apart the evidence, showing that it was never strong enough to lay charges against you.

3. Law Enforcement Misconduct

It’s possible that the police failed to follow the investigation by the book. A small mistake, an impatient officer, or a break in the chain of evidence could result in the charges being dropped or the evidence being suppressed.

Have Our Bankruptcy Defense Attorney in California Represent You in Court

Most white-collar crimes are tried in federal courts, so immediately you need a bankruptcy fraud defense attorney who has a history of success when up against prosecutors gunning for a guilty verdict.

At LibertyBell Law Group, our bankruptcy fraud defense lawyers in California have the experience, success, and skills—not to mention our dedicated team, necessary to sow the seeds of doubt in jurors’ minds. 

We are available 24/7, so you can reach us whenever you need an attorney on your side. To learn more about our unique law practice, fill out our online form at LibertyBell Law Group today!