Bankruptcy Fraud by Concealment of Property

Over the last ten years, bankruptcy proceedings have been on the rise throughout the United States due in part to a struggling national economy and the housing bubble burst. The benefit of a bankruptcy proceeding is the ability to discharge unpaid and insurmountable debt thereby allowing for one to start over in a sense. One unfortunate occurrence with bankruptcy is the hiding of certain assets from creditors who have lined up to be paid on the debts owed to them. While it is understandable that the idea of getting rid of personal property of true or sentimental value may be painful, if one knowingly and fraudulently conceals certain property from a bankruptcy proceeding, they could be charged in a Federal criminal court under this theory alone or in conjunction with wire fraud or mail fraud (link to “mail fraud”). As anyone can see, this can quickly take an unfortunate situation and make it exponentially worse. Should the United States Attorney’s Office elect to charge this crime, the defendant could face a prison sentence up to five years, in addition to a significant fine.

What is Bankruptcy Fraud by Concealment?

Bankruptcy Fraud by Concealment, in simple terms is when one who is in the midst of a bankruptcy, knowingly and fraudulently elects to hide or fail to disclose certain property or an interest in property from the creditors and Court. Broken down into the exact elements, in order for the United States Attorney’s Office to prove Bankruptcy Fraud under this theory they most prove the following beyond a reasonable doubt:

  1. On or about the date charged, a bankruptcy case docketed as case number (fill in the blank case number) was pending in the United States Bankruptcy Court for the District of (fill in the blank District), and (name of debtor) was the Debtor;
  2. the property or an interest in the property described in the indictment was a part of the Debtor’s bankruptcy estate; and
  3. the Defendant knowingly and fraudulently concealed the property from creditors or from the Bankruptcy Administrator or United States Trustee who had responsibility for the control or custody of the property.
Are There Defenses?

As with any criminal allegation there are often valid defenses that can be raised by a Federal criminal attorney. As crimes, including Federal bankruptcy fraud, are broken down into elements there is the requirement for this allegation that the United States Attorney’s Office prove that the act taken to conceal the property was undertaken with a “knowing” and “fraudulent” state of mind. They will often try to prove this by showing that property was hidden, destroyed, or that the defendant withheld information about the property’s existence or location. At times it can be shown that a defendant had no knowledge that they still possessed the property, was misinformed as to the property’s necessity to be disclosed, or if property had been transferred, that it wasn’t done so with an intent to defraud a bankruptcy proceeding.

How Can We Help?

Tampa Federal criminal lawyer Jason Mayberry is routinely in our Federal criminal court system representing those accused of a wide range of Federal crime. From Federal drug cases to Wire Fraud and Mail Fraud, our firm is prepared to offer you the best defense available. If you’ve been charged with a Federal crime, contact our office today at 813-444-7435 or at 727-771-3847 for a free consultation and let us review your case and all defenses possible.