What is Bankruptcy Fraud?

Bankruptcy fraud is a specific type of federal offense for which a person can face charges under 18 USC 157. Like other forms of federal fraud, bankruptcy fraud requires intent or willfulness as an essential element of the offense. In other words, you cannot face bankruptcy fraud or most other fraud charges without the government being able to prove intent. At the same time, it is essential to understand what bankruptcy fraud can look like in practice, including constructive fraud.

Our federal white collar crime lawyers in Tampa can provide you with more information about the offense of bankruptcy fraud, and we can begin working with you on your defense today if you are being investigated for, or if you are facing, bankruptcy fraud or any other federal fraud charges.

Defining Bankruptcy Fraud

Under 18 USC 157, bankruptcy fraud is defined as a circumstance in which:

“A person who, 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,” does one of the following:

• Files a bankruptcy petition under the US Bankruptcy Code;
• Files a document in a bankruptcy proceeding under the US Bankruptcy Code; or
• “Makes a false or fraudulent representation, claim, or promise concerning or in relation to a proceeding” under the US Bankruptcy Code at any point in the bankruptcy process.

The language in the statute can apply to nearly any intentional act or claim made in a bankruptcy case that is designed to conceal or defraud — from intentionally concealing assets to failing to disclose certain assets or misrepresenting assets.

If a person is convicted of bankruptcy fraud under 18 USC 157, they can face a significant monetary fine and up to five years in prison.

Constructive Bankruptcy Fraud

Constructive fraud is distinct from bankruptcy fraud under 18 USC 157. Under the US Bankruptcy Code, if a person makes a fraudulent transfer in a bankruptcy case — which means transferring the property for less than its market value, or “less than a reasonably equivalent value” — then they can face allegations of constructive fraud.

The Bankruptcy Code distinguishes between constructive fraud and actual fraud concerning the transfer of property, defining the latter as a property transfer “the intent to hinder, delay, or defraud any entity to which the debtor was or became indebted.”

Contact Our Tampa Criminal Defense Attorneys Today If You Are Facing Federal Bankruptcy Fraud Charges 

If you filed for personal bankruptcy and have subsequently been investigated for bankruptcy fraud or charged with bankruptcy fraud under federal law, it is essential to begin working on your defense as soon as possible. Allegations of bankruptcy fraud need to be taken extremely seriously, and you will want to have one of the experienced Tampa federal fraud defense lawyers at the Law Offices of Daniel J. Fernandez, P.A. on your side. Do not hesitate to get in touch with our firm to learn more about our experience defending against bankruptcy fraud charges and handling other types of federal fraud charges. Contact us today to begin working on your defense.

Source:

justice.gov/archives/jm/criminal-resource-manual-879-bankruptcy-fraud-18-usc-157