Bankruptcy Fraud Defense Lawyer
in Fort Myers
David Joffe can fight for you in federal criminal court
Individuals and businesses utilize the bankruptcy process to alleviate overwhelming debt in the event of a legitimate crisis. A small percentage of ill-intended businesses and individual fraudsters use the same process to avoid paying debts they owe despite having the means to pay. The U.S. Trustees Program oversees bankruptcy; therefore, those who abuse the process may be investigated by the FBI and face charges for defrauding the federal government. If you’ve been charged in Fort Myers, seek the services of an expert bankruptcy fraud defense attorney like David Joffe.
Most bankruptcy fraud can be classified into one of four categories:
- concealment of assets
- providing false or incomplete information
- filing in several jurisdictions
- bribing a bankruptcy trustee
Bankruptcy fraud charges often accompany other white-collar crime allegations such as public corruption, money laundering, or identity theft. Federal defense attorneys represent individuals and businesses that have been accused of engaging in fraudulent activity during the bankruptcy process.
Concealment of assets
Approximately 70 percent of bankruptcy fraud cases involve the concealment of assets. The bankruptcy process requires the filer to list all assets. Because creditors can only liquidate assets the filer discloses in the list, some filers omit assets they wish to retain. To further hide their assets some filers transfer the assets they wish to conceal to friends, relatives, or associates prior to filing.
Providing false or incomplete information in a bankruptcy filing
There are several reasons a filer might feel motivated to omit information or make a false statement during the bankruptcy process. Filers are required to individually disclose the value of all assets. If the assigned trustee believes the filer is overvaluing or undervaluing one or more assets, the trustee may challenge the filer’s valuation. Filers who are found to have intentionally made a false statement may be charged with perjury in addition to potentially facing a bankruptcy fraud charge.
Do not say anything that might incriminate you. Speak with an attorney first.
How trustees determine the value of a filer’s assets
Approximately one month after filing for bankruptcy, a “Meeting of Creditors” typically occurs. At the meeting, the trustee may ask the filer about the value of the item that is suspected to be of a different value than listed. The inquiry may include asking the filer how he or she determined the stated value along with additional details the trustee may want to know about the item. The meeting is most often short in duration; therefore, trustees typically do not ask in-depth questions. However, at this meeting, the trustee may signal a suspected cause for concern regarding a potentially false statement made by the filer. If the trustee still has concerns about the stated value of one or more assets, the trustee may have an expert appraiser view the item, or he or she may simply want to personally examine the item.
Filing for bankruptcy in multiple jurisdictions
Multiple filing fraud is not inherently criminal; however, the practice is often used to cover other white-collar crimes. This type of fraud can involve:
- filing in multiple jurisdictions using the same name and personal data
- filing in multiple jurisdictions and using a false name and false data
- filing in multiple jurisdictions and using a combination of real and false data
Each jurisdiction operates individually; therefore, the courts do not share bankruptcy filing data. Duplicate filings clog the court system and delay the process. Fraudsters are able to block repossessions, defaults, and collections more than bankruptcy laws generally allow when they file multiple times with different courts. Mixing false information with the filer’s actual personal details further slows down the process. Though multiple filing is not inherently illegal, doing so may violate bankruptcy provisions and lead to other criminal charges, including perjury, identity theft, and other types of fraud.
Bribing a bankruptcy trustee
Bribing a bankruptcy trustee is a double-edged sword. The filer may be subjected to criminal court penalty, and the trustee will also likely face charges. Courts consider trustee bribery the worst of all bankruptcy fraud offenses. Whether the trustee solicits a bribe from the filer or if the filer pays a bribe to the trustee without prompting, the trustee betrays the confidence of the court and commits a federal crime if he or she requests or receives a bribe. It is also illegal for a filer to bribe a creditor and for a creditor to receive a bribe from a filer.
Petition mill schemes
Third parties who have no direct involvement in a bankruptcy filing may also be charged with bankruptcy fraud. Petition mill schemes are perpetrated by fraudsters who pose as financial and legal professionals or credit counselors. The fraudsters make false promises to people who are having financial troubles and claim they are able to effectively eliminate debt collections, repossessions, high-interest rates on loans, and other financial problems. In reality, these individuals offer unsound advice and hastily prepare bankruptcy filings for others that may be incomplete or filed improperly. Oftentimes, these fraudsters’ victims are unaware that bankruptcy has been filed in their names.
Who handles bankruptcy fraud investigations?
The FBI is the agency that is primarily charged with investigating bankruptcy fraud. However, the IRS often works with the FBI on bankruptcy fraud cases. The investigative process begins when the U.S. Trustees Program, which operates under the Department of Justice, discovers suspected fraud. The Trustees Program suspected cases of fraud to the U.S. Attorney and the FBI. The FBI and U.S. Attorney’s office work closely together, and if necessary, an FBI field office will open a case and begin conducting investigative interviews and reviewing the related financial documents. In more complex cases, the FBI may conduct undercover operations and court-authorized surveillance to gather evidence that can later be used during federal criminal court proceedings.
Other related charges are possible
Bankruptcy fraud is a federal offense that often accompanies other federal offenses. Therefore, someone who is accused of bankruptcy fraud may also face other federal charges. A Fort Myers criminal defense attorney who specializes in bankruptcy fraud cases can offer the legal representation and guidance defendants in bankruptcy cases need to protect their reputation and freedom. Our Fort Myers bankruptcy fraud attorney is available to represent individuals and businesses facing fraud allegations at all stages of the investigative process and in criminal court.
Contact us to receive a free case evaluation. We will keep your information confidential and provide sound legal advice to help you move forward.