If you are charged with bankruptcy fraud, you may not know what steps to take next. Bankruptcy fraud almost always involves the concealment of assets. Since creditors are only allowed to liquidate assets listed by the debtor, a debtor can fraudulently retain concealed assets despite owing an outstanding debt. Further concealment can take the form of a debtor transferring ownership of the undisclosed assets to family, friends, or associates.
Concealing some of your assets, falsifying bankruptcy forms, and committing perjury may seem like protecting yourself and your interests, but it can actually come with broad consequences. Once a bankruptcy investigation is opened, it can lead to a civil lawsuit and criminal charges filed against you. However, a skilled and trusted federal criminal defense lawyer can work with you to make sure your rights are protected and work to mitigate any charges against you.
What Is Bankruptcy Fraud?
Bankruptcy fraud is considered a federal crime that can take any of the following forms:
- A debtor knowingly concealing assets with the intention not to forfeit the assets
- An individual filing for bankruptcy multiple times in different jurisdictions, using either the same name and information, false information, a combination of real and inaccurate information, or aliases
- Bribing a court-appointed trustee to protect your interests
- Intentionally providing false information or filing incomplete bankruptcy forms may be considered to be perjury
Bankruptcy fraud makes loans more expensive, as it raises the risk and costs of lending. Working with a bankruptcy fraud lawyer can help increase your chances of lessening the charges against you, no matter the kind of fraud you took part in.
Common Forms of Fraud
Depending on your specific case, a bankruptcy fraud lawsuit could result in having the case dismissed, a significant fine imposed by the court, or a prison sentence. The two types of bankruptcy fraud that you may be charged with include:
This does not amount to a criminal charge. It can take the form of intentionally omitting a creditor or serial filing to slow the court process. Civil fraud is punishable by the debtor losing the protection of exemptions, being fined, or in the best-case scenario, having the case dismissed.
If you are found guilty of bankruptcy fraud, you will likely face a hefty fine, a prison sentence, or both. Criminal fraud takes the form of concealment of assets, taking out loans without the intention to repay them, or petition mills. Anyone who assisted the debtor in committing bankruptcy fraud is also subject to criminal charges.
Bankruptcy Fraud Investigation Process
If a trustee suspects the debtor or creditor committed bankruptcy fraud, the investigation process will take the following steps:
- Examination: The trustee can require that the creditor, debtor, or other person submit for questioning or produce documents that may prove the alleged fraud.
- An adversary proceeding: Based on the evidence brought forward suggesting fraud, the trustee can file an adversary proceeding, which is a lawsuit in the bankruptcy court.
- A temporary injunction: If enough evidence is brought forward proving fraud or illegal transfer of assets by the debtor, the trustee can request the court to issue an injunction prohibiting the debtor from engaging in specific actions.
- A criminal prosecution: Bankruptcy fraud can be charged as a criminal and civil offense. Consequently, when there’s enough evidence of fraud, the trustee can ask the United States Attorney to file and prosecute criminal charges.
When facing a federal criminal investigation, you have the right to an attorney, especially one skilled in handling federal criminal charges. The right attorney can be highly crucial to the outcome of your case.
What Are the Criminal Penalties for Bankruptcy Fraud?
If you are convicted of bankruptcy fraud, you may face a penalty of up to five years in prison, a fine of up to $250,000, or both. Additionally, if found guilty of other crimes that violate bankruptcy law, such as perjury, they could result in a separate criminal charge.
If you’re charged and convicted of bankruptcy fraud, the conviction record may permanently affect your future employment and business opportunities. Partnering with a bankruptcy fraud lawyer can help protect your rights and make sure there are no extraneous charges against you.
Contact a Louisiana Federal Criminal Defense Attorney Today
At John D. & Eric G. Johnson Law Firm, we understand that facing federal charges can be a confusing and terrifying time. Our attorneys are knowledgeable and skilled to guide you through your case and will fight aggressively to get you the best outcome we can.
Regardless of how complex your case may seem, our attorneys will work with you every step of the way. Contact us today by calling us at (318) 377-1555 or by filling out our contact form to schedule a consultation.