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Bankruptcy Fraud

Federal bankruptcy laws provide certain protections to individuals struggling with significant debt, and if you knowingly abuse these protections by making a false statement on a bankruptcy filing, knowingly conceal or transfer assets to prevent them from being distributed to your creditors as part of your bankruptcy plan, or otherwise violate federal bankruptcy law, you could be charged with bankruptcy fraud, which is a federal offense. If you or a loved one has been accused of bankruptcy fraud in California, you could face significant criminal penalties, possibly including a fine and imprisonment for up to five years. Federal criminal cases are serious and uniquely complex, and without a knowledgeable federal criminal defense lawyer representing your case in federal court, you stand to lose a great deal, possibly including your freedom. Contact Daniel R. Perlman and his team of experienced federal bankruptcy fraud attorneys at Federal Criminal Defense Pro today to find out how we can help.

Knowledgeable Federal Bankruptcy Fraud Lawyers

As the federal government cracks down on fraud and other financial crimes, individuals accused of bankruptcy fraud in Los Angeles or Southern California risk facing aggressive investigation, and as the severity of the potential criminal consequences increases, so too does the need for expert legal guidance from an attorney with experience defending fraud cases on a federal level. Whether the allegations of bankruptcy fraud against you involve a complex fraud scheme with various moving parts or a simple unreported transfer of valuable assets, you could be charged with a federal crime and face several years in prison as a result, which is why effective representation by a knowledgeable criminal defense attorney licensed to practice in federal court is critical.

Regardless of the extent of the fraud allegations against you, enlisting the help of a defense lawyer with extensive experience in federal criminal defense who can strategize the best possible defense based on the unique circumstances of your case is your best chance for beating the charges and avoiding a prison sentence and other life-changing criminal penalties. Daniel R. Perlman and the defense attorneys at Federal Criminal Defense Pro have years of experience representing clients in criminal cases prosecuted in the California state court system and in federal courts across the United States, so whatever the nature of the criminal charges you are facing, don’t hesitate to call. We offer prospective clients a free initial consultation and case evaluation, so you can discuss your bankruptcy fraud charges with a knowledgeable federal criminal defense attorney with no obligation to hire our firm.

What is Fraud?

To commit the crime of fraud is to lie or use deceit in order to take something of value from someone else. Fraud is a white-collar crime, or a nonviolent, financially-motivated crime, typically committed by business executives and government professionals, and these types of federal crimes are punished harshly under federal law. There are many different types of fraud that can be charged and tried in federal court, including bankruptcy fraud, mail fraud, wire fraud, securities fraud, mortgage fraud, and credit card fraud, and while the essential components of a federal fraud case can be similar from offense to offense, each type of fraud has unique elements that set it apart from other fraudulent criminal conduct.

What is Bankruptcy Fraud?

Bankruptcy fraud is an umbrella term used to describe a variety of criminal offenses that can occur in a Chapter 7, Chapter 13 or Chapter 11 bankruptcy case. The crime of bankruptcy fraud involves filing a petition for bankruptcy protection, or any document in a petition for bankruptcy protection, as part of a scheme or ploy to defraud creditors. The crime of bankruptcy fraud can also be charged against individuals who make any false claims, fraudulent representations or false promises in relation to a bankruptcy proceeding.

The criminal laws dealing with federal bankruptcy fraud were established to promote honesty and transparency in all bankruptcy proceedings and to ensure that as large a portion of the filer’s estate as possible is distributed to the unpaid creditors in a bankruptcy case. Under 18 U.S. Code § 157, a person commits the crime of bankruptcy fraud when he or she, “having devised or intending to devise a scheme or artifice to defraud and for the purpose of executing or concealing such a scheme or artifice or attempting to do so –

(1) files a petition under title 11, including a fraudulent involuntary petition under section 303 of such title;

(2) files a document in a proceeding under title 11; or

(3) makes a false or fraudulent representation, claim, or promise concerning or in relation to a proceeding under title 11, at any time before or after the filing of the petition, or in relation to a proceeding falsely asserted to be pending under such title.”

The various unlawful, bankruptcy-related acts that can result in bankruptcy fraud charges in California and across the United States include the following:

  • Falsifying bankruptcy forms
  • Concealing or transferring assets to keep them from being distributed to creditors
  • Bribing a court official
  • Making false statements under oath (perjury)
  • Concealing or destroying records
  • Embezzlement from the bankruptcy estate
  • Filing bankruptcy in multiple jurisdictions
  • Filing bankruptcy using multiple different identities

How is Bankruptcy Fraud Punished?

Federal bankruptcy fraud is governed by 18 U.S.C. § 152 to 157 and the provisions of these federal statutes apply to any arrangement, proceeding or plan under the Bankruptcy Code, Title 11, United States Code. If you are facing bankruptcy fraud charges in federal court, it is imperative that you understand the potential criminal punishment you could face upon conviction, which, in a federal case, is contingent on the recommendations of the federal sentencing guidelines.

Generally speaking, the federal sentencing guidelines call for a maximum prison sentence of five years for individuals convicted of bankruptcy fraud in federal court, plus a potential fine of up to $250,000. However, there are a number of federal statutes prohibiting specific types of bankruptcy fraud and each carries its own potential penalty for violations of the statute. The punishments associated with the various types of bankruptcy fraud governed by federal law are as follows:

  • A violation of 18 U.S. Code § 152 “Concealment of assets; false oaths and claims; bribery” is punishable by a maximum prison sentence of five years and/or a fine.
  • A violation of 18 U.S. Code § 153 “Embezzlement against estate” is punishable by a maximum prison sentence of five years and/or a fine.
  • A violation of 18 U.S. Code § 154 “Adverse interest and conduct of officers” is punishable by a fine and forfeiture of the individual’s office.
  • A violation of 18 U.S. Code § 155 “Fee agreements in cases under title 11 and receiverships” is punishable by a maximum prison sentence of one year and/or a fine.
  • A violation of 18 U.S. Code § 156 “Knowing disregard of bankruptcy law or rule” is punishable by a maximum prison sentence of one year and/or a fine.

In addition to facing significant criminal penalties, being accused of bankruptcy fraud can also result in your debts not being discharged, as Section 523(a)(2)(A) of the Bankruptcy Code prohibits the discharge of any debt obtained through “false pretenses, a false representation or actual fraud.” If this happens to you, your bankruptcy filing could be dismissed, your debts would still be owed, and under bankruptcy law, you would be required to wait a certain amount of time before re-filing for bankruptcy protection. Furthermore, certain bankruptcy fraud schemes involve multiple illegal acts (bankruptcy fraud plus wire fraud, tax fraud or mail fraud, for example), which means you could face criminal charges under several different federal criminal laws and be sentenced to a separate prison term for each offense.

Defending Against Bankruptcy Fraud Charges

Bankruptcy is intended to provide individuals experiencing financial hardship some relief from overwhelming debt, and given a large amount of money involved in many bankruptcy proceedings, federal authorities may scrutinize Chapter 7, Chapter 13 and Chapter 11 bankruptcy filings and bankruptcy proceedings for any signs of wrongdoing or fraud. If fraudulent activity is suspected, the matter is referred to the U.S. Attorney’s office or the FBI for investigation, which could disrupt the bankruptcy proceeding, result in a criminal indictment, or both. Federal bankruptcy fraud crimes are aggressively investigated and prosecuted by the federal government, and those suspected of taking advantage of the protections provided by federal bankruptcy laws are made an example of. Keep in mind though, the burden of proof in a federal bankruptcy fraud case is beyond a reasonable doubt, which means in order to prove that you committed such a crime, the government must establish each individual element of the crime to the extent that there can be no other logical explanation for the evidence presented at trial. Generally, proving that a defendant committed bankruptcy fraud in federal court requires the prosecution to establish an actual intent to deceive.

Effective Defense Strategies in Bankruptcy Fraud Cases

The statute of limitations for most instances of federal bankruptcy fraud is five years, which means the government must file an indictment within five years of the bankruptcy fraud offense in order to pursue federal charges against the individual suspected of committing fraud. If you have been accused of committing bankruptcy fraud in violation of federal law, you need a defense attorney in your corner who is familiar with the various defenses to federal bankruptcy fraud, such as the following:

  • Mistake – Your failure to disclose the transfer of a valuable asset in your bankruptcy petition was accidental.
  • Legitimate purpose – The act you are accused of committing was carried out in order to accomplish a lawful purpose (i.e. selling an asset for half its worth for the purpose of obtaining a tax deduction).
  • Withdrawal or renunciation – You either corrected an error soon after you discovered it or regretted the decision to intentionally omit an asset.
  • Statute of limitations – The statute of limitations for bankruptcy fraud has elapsed.
  • Lack of intent – You did not intend to commit fraud.
  • Insufficient evidence – The prosecution has insufficient evidence to prove the crime beyond a reasonable doubt.

Hiring the Right Bankruptcy Fraud Defense Attorney

Bankruptcy fraud is a unique crime and defending against accusations of bankruptcy fraud in federal court requires the expertise of a criminal defense attorney who has a clear understanding of the bankruptcy code, federal criminal law and the federal sentencing guidelines. The unfortunate truth is that, due to harsh anti-fraud laws and the overzealous prosecution of white-collar crimes, you could end up being charged with and convicted of bankruptcy fraud without even realizing that you broke the law. For instance, some individuals filing for bankruptcy accidentally withhold information that affects their bankruptcy filing, file incomplete bankruptcy forms, or transfer certain assets without intending to keep the assets from being distributed to their creditors. Whatever the circumstances of your criminal case, beating federal bankruptcy fraud charges requires a strategic defense plan built on the specific facts of your case and that is where Federal Criminal Defense Pro comes in. Our defense attorneys take bankruptcy fraud and other white-collar crimes extremely seriously and we have earned a reputation for providing clients across the country with competent, aggressive and effective legal representation in all types of federal criminal cases.

Consult Our Federal Bankruptcy Fraud Defense Lawyers

Being accused of bankruptcy fraud means you could end up having your bankruptcy filing dismissed, leaving you with debts you can’t afford to pay and subjecting you to continued collection efforts by creditors, such as foreclosure, repossession or wage garnishment. In more serious situations, you could even be charged with a federal crime punishable by a lengthy prison sentence and hefty fines. If you are under investigation for bankruptcy fraud, or if you are facing bankruptcy fraud charges in federal court, Daniel R. Perlman and our skilled defense attorneys at Federal Criminal Defense Pro can protect your rights and advise you on the best course of action for your specific situation. Our main goal in your criminal case is to keep you out of prison or minimize the potential criminal penalties you could face, and when you hire our firm, we will do everything in our power to help you get the best possible outcome in your case.

Free Bankruptcy Fraud Consultation

Our Clients Say

“About 3 years ago, I was in need of legal help. I was recommended to a different firm initially, but during my consultation realized I was being lied too so that with a sense of urgency, I would retain theyer services.  I left and did my own research and found Daniel Perlman. I decided to meet with him, who immediatly struck me as someone how knew what he was talking about.  He laid out all the different options for proceeding, and after defending me for about 4 months, got me the best possible outcome for my case.  Hes not the cheapest attorney, but being a small business owner, I understand that you get what you pay for, and with this firm, its money well spent.  I highly recommend his services and hope I never need them again.” – Rhett B.

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