Florida’s bankruptcy process requires that all owned property as well as any assets that are transferred to others within a specified period be listed. If somoeone files for bankruptcy, but omits information regarding assets, he or she may be investigated and charged with this type of fraud, a white collar crime that is categorized as a federal offense. The seriousness of related charges in Broward County and elsewhere in Florida make it imperative that you retain an experienced Naples or Fort Lauderdale bankruptcy fraud defense attorney who specializes in federal cases.
Bankruptcy fraud usually takes place in one of four general forms:
- The filer attempts to hide assets in an effort to avoid forfeiting them.
- The filer deliberately submits false or incomplete documents.
- A person files multiple times using false or real information, or a combination thereof, in multiple jurisdictions.
- The filer bribes a court-appointed trustee.
Do not say anything that might incriminate you. Speak with an attorney first.
Approximately 70 percent of bankruptcy fraud cases involve the concealment of assets. Some people who file a bankruptcy claim are tempted to hide certain assets because creditors can only liquidate items that are disclosed by the debtor in the bankruptcy paperwork. A filer may illegally transfer assets to friends, associates, and family members in an effort to keep assets that would otherwise be liquidated. In some cases, a bankruptcy lawyer may also be accused of bankruptcy if he or she is alleged to have intentionally filed paperwork that included false information. Similarly, creditors may also be convicted of bankruptcy fraud if they provide false information in an effort to recover more money than the they are owed. Even trustees sometimes commit fraud by raiding bankruptcy funds for their own personal gain. Regardless, bankruptcy fraud is treated as a very serious crime with severe penalties.
Another form of bankruptcy fraud that is on the rise in the U.S. is the use of petition mills to defraud individuals. Petition mills present themselves as consulting agencies that can help tenants avoid eviction. The petition mill will file for bankruptcy in the tenant’s name and drag out the process while charging inflated fees. In the end, the tenant is left with bad credit and no savings.
An individual may commit fraud by filing for bankruptcy in multiple jurisdictions by using the same name in some locations and aliases or other false information elsewhere. Filing in multiple jurisdictions delays asset liquidation by slowing down the entire bankruptcy process. While multiple filing does not alone constitute a criminal act, it is typically used as a tactic to facilitate concealment, which is illegal.
Punishments for bankruptcy fraud
The most immediate consequence of being convicted of bankruptcy fraud is the judge will typically refuse to discharge the individual’s debts and throw his or her case out of court. The court may also liquidate the person’s assets to pay creditors. In some cases, the plaintiff may agree to accept half of the payment owed in a deal that allows the debtor to reduce his or her imprisonment time by half. Bankruptcy crimes are investigated by the FBI. If the agency believes a federal crime took place, the case is then transferred to the Department of Justice for prosecution. If convicted, the defendant may be required to be monitored or go on probation, go to prison for up to twenty years, pay a fine of up to $250,000 for each count, pay restitution, and/or complete a required amount of community service. Bankruptcy fraud often takes place in combination with other crimes which may include perjury, tax fraud, bank fraud, wire mail fraud, identity theft, and conspiracy, each of which are charged as separate and distinct violations that carry their own sentencing.
There are several defenses an accused person may raise in response to being accused of bankruptcy. Perhaps the most obvious defense is to claim he or she provided false information or failed to disclose certain assets by mistake. A defendant may submit evidence that his or her attorney knew about the undisclosed assets or information that was omitted and argue that he or she simply did not notice prior to submitting the documents to court that there were omissions or false information. Similarly, a defendant may prove he or she did not intend to commit fraud by producing paperwork that was submitted to correct the false information or omission once discovered by the defendant. In some cases, the defendant may argue that his or her actions were actually done for a legitimate purpose despite appearing to be fraudulent. For example, he or she may have sold an asset to take advantage of a tax break or transferred the asset to help a family member who needed assistance at the time. Bankruptcy cases are also subject to statutes of limitations; therefore, if the action is brought after the deadline has elapsed, the defendant may argue that he or she cannot be convicted because the case was filed outside of the legally permissible time frame.
Retain a skilled attorney
Anyone who is under investigation for bankruptcy fraud should immediately contact a Naples, Broward County or Fort Lauderdale bankruptcy fraud defense attorney. While it may be tempting to talk to someone about the investigation, federal fraud lawyers strongly advise against discussing the pending case with anyone other than an attorney. Conversations between the person who is the subject of the investigations and potential witnesses may become a point of focus at trial. Speaking with someone else about the matter may also lead to that party being subpoenaed when they otherwise may not have been contacted. Joffe Law, P.A. stands ready to help with your federal case.