Irvine Bankruptcy Fraud Lawyers
WHITE COLLAR CRIME CHARGES
Bankruptcy Fraud
White-collar crimes, though they typically do not involve physical harm, are not victimless crimes, and therefore may carry serious penalties upon conviction. Families and businesses alike can become financially destitute as the result of a white-collar scam. The Federal Bureau of Investigation (FBI) describes white-collar crime in three words: lying, cheating, and stealing. Nowadays, the term "white-collar crime" usually refers to a type of fraud. One such type of fraud is bankruptcy fraud.
Types of Bankruptcy Fraud
Bankruptcy fraud is a federal crime in the U.S. and takes on four general forms:
- Concealing assets to avoid forfeiting them;
- Filing incomplete or false forms;
- Filing several times, either with valid information in multiple states or with false information; and
- Bribing a court-appointed trustee.
According to the FBI, bankruptcy fraud is usually committed in tandem with other crimes, such as mortgage fraud, public corruption, identity theft, and money laundering. Almost 70 percent of all bankruptcy fraud involves a debtor concealing assets so as to avoid losing certain assets to creditors to help pay outstanding debts.
Bankruptcy Fraud Penalties
A person may be convicted of bankruptcy fraud if he or she is found guilty of committing any of the aforementioned offenses, but a person may also be convicted of bankruptcy fraud if he or she is found guilty of using the bankruptcy system to conceal and/or aid in a fraud scheme. To prove that fraud was committed, prosecutors must demonstrate that the defendant knowingly misrepresented and/or omitted material fact. If the defendant is found guilty, he or she would be subject to a maximum prison sentence of five years and/or a $250,000 fine. Because bankruptcy fraud and other white-collar crimes are financial in nature, penalties include heavy fines and perhaps even restitution for victims.
IRS Bankruptcy Fraud Statistics
The Internal Revenue Service (IRS) provides the following statistical information regarding incidents of bankruptcy fraud in the United States:
- In the 2009 fiscal year, there were 18 bankruptcy fraud investigations, 18 prosecution recommendations, 20 indictments, and 13 sentenced offenders.
- In the 2010 fiscal year, there were 27 bankruptcy fraud investigations, 10 prosecution recommendations, 14 indictments, and 21 sentenced offenders.
- In the 2011 fiscal year, there were 25 bankruptcy investigations, 16 prosecution recommendations, 9 indictments, and 23 sentenced offenders.
Warnings Signs Authorities Look For
According to the Credit Research Foundation (CRF), there are many red flags that could alert authorities to potential bankruptcy fraud, including:
- Multiple bankruptcy cases;
- Failure to keep proper business records;
- Concealment of assets;
- Missing or incomplete records or books;
- Incomplete information or unanswered questions on a debtor's statement of financial affairs and schedules;
- Frequent and unrecorded cash dealings;
- Conduct outside normal industry or business practices and standards;
- Transfer of property to shareholders, insiders, and/or relatives just before filing for bankruptcy; and
- Frequent changes to monthly operating records, schedules, and/or statements of financial affairs.
Protecting Your Financial Future
Although bankruptcy fraud is often committed in combination with other types of fraud, it is most often an act of desperation. A debtor does not want to be left penniless and without any assets to provide some level of financial security. Unfortunately, if a debtor is convicted of bankruptcy fraud, there is likely no recovering from the financial ruin that court fees, fines, and restitution may bring. If you are suspected of bankruptcy fraud in Orange County, the aggressive Irvine white collar crime defense attorney Jeremy N. Goldman can help. As an experienced bankruptcy fraud defense lawyer, Mr. Goldman has a thorough understanding of federal bankruptcy laws and is committed to using his knowledge and resources to ensure that your legal rights and financial future are protected. To find out more about avoiding excessive penalties, call today for a consultation at (800) 349-1619.
