Bankruptcy is supposed to promise a fresh start. However, if you find yourself accused of bankruptcy fraud, you could face a serious federal offense. Bankruptcy fraud can carry up to five years in prison, plus prevent you from getting any debt relief in bankruptcy court.
At the Simmrin Law Group, we have dedicated bankruptcy fraud lawyers in Los Angeles who specialize in helping those accused of federal crimes like bankruptcy fraud. Depending on your situation, this may mean no prison time, a less serious charge, or simply winning your case. Fill out the form to the right or give us a call to schedule a free, no-obligation consultation today with our Los Angeles federal crimes lawyer.
What Is Bankruptcy Fraud?
The U.S. Bankruptcy Code is a set of laws that offers people a way to get relief from their debts. A bankruptcy case starts with filing a petition with the U.S. Bankruptcy Court.
Petitions are accompanied by lengthy schedules, showing all your assets, income, and debts. These records must be accurate. If not, you could expose yourself to bankruptcy fraud charges. Bankruptcy fraud occurs when someone intentionally provides false information or otherwise abuses the process, usually with the goal of financial gain. It can include:
- Filing false or fraudulent documents
- Concealing information (such as assets)
- Making false claims in a bankruptcy case
Even Something Minor Could Result in Your Conviction
Under bankruptcy fraud law, even relatively minor inaccuracies can count against you. For example, you could be prosecuted based on:
- The bankruptcy petition itself
- Any document supporting the bankruptcy petition
- Making a false or fraudulent statement (or false promise) in a bankruptcy proceeding
Technically, even people who are not filing for bankruptcy themselves can be guilty if they falsified information for a supporting document in the case. You can be found guilty of bankruptcy fraud if you intentionally concealed assets, destroyed or hid paperwork or records, or made sworn statements that aren’t true. However, to be convicted, the prosecution has to prove that you used some kind of “scheme or artifice” with the intent of fraud.
What Does It Mean to Use a “Scheme or Artifice” to Defraud?
Using a scheme or artifice to defraud means you planned to deceive or defraud someone through your bankruptcy filing.
There are several aspects to a fraud scheme. In order to be convicted, the following criteria must be met.
Intent to Defraud
The “scheme or artifice” is another word for a plan. If you didn’t plan or intend to defraud, you aren’t guilty.
Like with many other crimes, your purpose is very important in the eyes of the law. The court system was not designed to punish people for honest mistakes.
Action Taken
To be convicted of bankruptcy fraud, you must have intended to follow through on your plan, or you must have been hiding something.
One example of this is placing money in an offshore account and not mentioning it in your bankruptcy petition. This action makes it seem as though you have fewer assets than you have, allowing you to keep the money for yourself instead of paying it to your creditors.
Another type of plan is filing forged documents or altered bank statements in support of your petition.
False Statement
The “artifice” could also involve making a false statement in a sworn declaration or a proceeding with your bankruptcy trustee.
Remember that bankruptcy fraud laws are meant to protect banks and creditors. They are not designed to protect the person filing for bankruptcy. The result is that innocent people get accused of bankruptcy fraud simply because they made a mistake or didn’t understand the complicated bankruptcy system.
What Defenses Can I Use Against Bankruptcy Fraud?
If you are charged with bankruptcy fraud, your lawyers can use several different legal defenses to break down the prosecution’s case. Some of the most common defenses in bankruptcy fraud cases include:
- Lack of intent
- Lack of evidence
- Law enforcement misconduct
Lack of Intent
Bankruptcies can be complicated. There’s a lot of information involved, and it’s common for people to make mistakes when filling out paperwork. If your criminal defense lawyer in Los Angeles can show that you acted in good faith and did not mean to make misstatements or deceive anyone, you have a strong defense against a fraud charge.
Lack of Evidence
In all federal crimes, the U.S. Attorney’s Office bears the burden of proving beyond a reasonable doubt that you are guilty of all the elements of the offense. This is a difficult burden to meet. By attacking the government’s evidence, your lawyer may win your case by showing that the prosecutor simply doesn’t have enough evidence to convict you.
Law Enforcement Misconduct
Sometimes, charges can be dropped if there were problems with the way the police gathered evidence. The Fourth Amendment protects against illegal searches and seizures and other illegal types of investigative techniques. To legally search your person or property, law enforcement must either obtain a warrant or have probable cause.
Even if the search was legal, it might be possible to have the evidence suppressed if it was mishandled. Police must follow a proper chain of custody with evidence. Your lawyer can investigate what happened in your case and aggressively pursue this defense if appropriate.
Avoid a Charge of Bankruptcy Fraud
While there are many possible defenses to use to protect yourself from a bankruptcy fraud charge, the best defense is to avoid being charged altogether. Filing for bankruptcy can be complicated, and the potential consequences of a mistake are often devastating.
Hiring a bankruptcy attorney to help you in the preparation and filing of your bankruptcy petition can prevent you from making a costly mistake. An experienced bankruptcy lawyer can help ensure that all of your documents are filed properly and that the information you submit is accurate.
Many bankruptcy fraud charges stem from simple human error. Having an experienced attorney by your side can go a long way in protecting you from ever facing a fraud charge.
What Are the Penalties for Bankruptcy Fraud?
Bankruptcy fraud is a serious crime. The penalties can include a lengthy prison sentence, large fines, and formal probation. The sentence you will receive will largely depend upon the specifics of your case and whether you have a criminal record.
A bankruptcy fraud conviction can result in:
- Up to five years in federal prison
- Up to $250,000 in fines
- Formal probation
If you are convicted of bankruptcy fraud, you may also face a damaged reputation. Additionally, you will still have to deal with the debts that led you to file bankruptcy in the first place. Only this time, you will have no hope for relief from the bankruptcy court.
Federal prosecutors have the time, expertise, and resources to prosecute a bankruptcy fraud case to its fullest. You can put yourself on more equal footing by getting help from a federal crimes lawyer in Los Angeles, CA as soon as you know you might face criminal charges.
Talk to a Los Angeles Bankruptcy Fraud Lawyer for Free
If your bankruptcy filing has led to federal charges, you need help immediately. The Simmrin Law Group has a team of lawyers who have built their careers defending clients against bankruptcy fraud and other federal crimes. Don’t be outmanned by the U.S. Attorney’s Office.
Fill out our online contact form or give us a call and schedule a free, no-obligation consultation today. One of our Los Angeles bankruptcy fraud lawyers will review your case and advise you of all your legal options.