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Bankruptcy Fraud – Don’t Do It!
Bankruptcy fraud is a white-collar crime that takes four general forms.
#2 Filing false or incomplete forms
#3 Filing multiple times in multiple places
#4 Bribery (associated with other fraud such as identity theft, money laundering etc)
Let’s look at each of these.
Concealing assets: Some people think if they conceal assets they won’t have to forfeit them.
Concealment of assets accounts for nearly 70% of all bankruptcy fraud. Creditors in a bankruptcy case can only liquidate assets that are listed by the debtor. By failing to reveal one or more assets, the debtor can keep the assets despite having an outstanding debt. (Unless they are caught!)
Another method of concealing assets is for businesses or individuals to transfer these unrevealed assets to friends, relatives, or an associate so that the asset cannot be located. This type of fraud hurts lenders who passes on those costs to others who wish to borrow money.
#2 Filing False Forms
Petition mills are one type of bankruptcy fraud scheme on the rise in the United States by deceiving tenants. Petition mills tell a financially-strapped tenants they can help stop an eviction from their building by acting as a consulting service.
While the tenant thinks he is being saved from eviction, the petition mill actually files the tenant for bankruptcy and drags out the case while racking up exorbitant fees in the name of ‘service charges’. In doing so, they empty the tenant’s savings account, and ruin the tenant’s credit score.
#3 Filing multiple times
The idea behind multiple filing fraud is slow down the court systems’ ability to process a bankruptcy filing and liquidate the assets.
To accomplish this, they will file for bankruptcy in multiple states with the same name and information, using aliases and fake information, or some combination of the two. Many times multiple filings provide more cover for a debtor trying to engage in the concealment of assets.
The fourth kind of bankruptcy fraud is to use almost any last means possible to delay, stop, or change the proceeding illegally.
This could include:
Bribing a court-appointed trustee to alter or destroy documents. Unfortunately, usually actions such as this will require other illegal activity such as identity theft, mortgage fraud, money laundering, and public corruption.
Don’t Do It!
Bankruptcy fraud is a federal crime. Federal prosecutors can bring charges for suspected bankruptcy fraud under 18 U.S.C. § 151.
All prosecutors have to prove is show the defendant knowingly and fraudulently made a misrepresentation of material fact.
Bankruptcy fraud carries a sentence of up to five years in prison, or a fine of up to $250,000, or both. See 18 U.S.C. § 152.
Even if you have started bankruptcy filings, negotiations or discussions, you want Don Harris and his team of experts to review and prepare your case so you can have the advantage of Don and his team’s experience and skills working to get you the best results possible in the Albuquerque bankruptcy court.