Bankruptcy Fraud Defense Lawyer in Naples
Let us help you navigate through your tough federal criminal case
Federal law oversees the bankruptcy process. As a result, bankruptcy fraud is prosecuted as a federal crime. Because a successful bankruptcy filing typically allows debtors in Naples, Florida, to discharge debts or a portion of them, the government is wary of people trying to game the system. The most common offenses involve hiding assets to avoid their liquidation or failing to disclose all financial holdings or income. However, fraud within the bankruptcy system arises in many ways. A knowledgeable Naples bankruptcy fraud attorney understands the criminal statutes meant to penalize alleged fraudsters. People under investigation for fraud in connection with a bankruptcy can receive comprehensive legal advice and representation from Joffe Law, P.A.
Types of bankruptcy fraud
Concealment is by far the most common accusation aimed at bankruptcy filers with roughly 70 percent of criminal cases allegeding that defendants willfully concealed assets from the bankruptcy court. Simply not telling a court about an asset represents the most basic form of concealment. People also try to shift assets our of their names by transferring them to relatives, friends or colleagues.
In addition to concealment and asset transfer, U.S. Code, Title 18 specifies these actions as bankruptcy crimes:
- giving false testimony at a creditors meeting or court hearing
- entering false information on bankruptcy schedules
- filing a false proof of creditor’s claim
- offering or accepting a bribe in connection with a bankruptcy case
- altering or withholding financial records
- impeding an conservator’s or liquidating agent’s investigation
- embezzling of the bankruptcy estate by someone involved in post-petition estate administration
- self-dealing by a trustee or debtor-in-possession
- filing for bankruptcy as part of a fraud scheme
- making multiple filings in multiple jurisdictions for the purpose of concealing property
This list reveals that debtors are not the only parties to a bankruptcy who might engage in fraud. Attorneys and trustees may commit fraud by making false promises, soliciting bribes or taking money or assets from debtors. Creditors may also break the law if they attempt to make a false claim upon some part of an estate.
In fact, an increasing portion of bankruptcy fraud cases prosecute petition mills. These businesses take advantage of desperate debtors threatened by eviction by charging them high fees to prepare their bankruptcy filings. They intentionally delay the process for the purpose of charging more fees.
Do not say anything that might incriminate you. Speak with an attorney first.
Bankruptcy fraud may be investigated by federal agencies like the Internal Revenue Service and Federal Bureau of Investigation. These agencies worked together to produce an indictment against a husband and wife in Naples. The husband allegedly concealed a safety deposit box at a bank from the bankruptcy trustee and creditors after filing a Chapter 11 bankruptcy action. Additionally, the indictment charged both the husband and wife with conspiring to structure bank account withdrawals for the purpose of avoiding automatic bank reports about their cash transactions. Funds were placed in a new account opened by the wife and then withdrawn in amounts below $10,000.
The desire to keep money instead of give it up to creditors continually tempts people to avoid mentioning sources of income. For example, a man who was expecting a settlement from a personal injury case failed to include the anticipated income on the bankruptcy filings. The settlement, however, was reported in the news, and a creditor alerted the trustee to the missing information.
Bankruptcy fraud penalties
For a debtor, a conviction for bankruptcy fraud will very likely prevent the discharge of debts. Furthermore, some or all of the following penalties may result:
- prison time
- community service
- payment of restitution
Each criminal charge has the potential to produce a 20-year prison term, and fines can be as high as $250,000. Prosecutors usually apply multiple charges in cases of white collar crime. Accusations of bankruptcy fraud could lead investigators to other offenses, like tax evasion or wire and mail fraud. Every criminal charge increases the complexity of the case, which makes the guidance of a defense lawyer experienced with federal financial crimes especially vital to developing a thorough defense strategy.
Even under honest circumstances, filing for bankruptcy presents most people with complex challenges. Correctly disclosing every aspect of finances often requires people to depend on advice from bankruptcy attorneys. Mistakes can and do happen, which means that a defense strategy may be founded upon the argument that errors were the source of false, misleading or missing information and not the intention to break the law.
At times, people may argue successfully that a legitimate reason was behind the transfer of an asset, such as the need to help a family member facing hard times. The chance to take advantage of a tax break may have motivated the sale of an asset. A defense attorney could strive to communicate these circumstances to counteract accusations of fraud.
When a conviction appears likely, a defense attorney might negotiate a lenient sentence by forging an agreement that pays creditors. Statutes of limitations can also offer relief when accusations rely on actions that happened too far in the past to prosecute.
Talk to a federal criminal defense lawyer
Going through a bankruptcy action is usually a very stressful time in someone’s life. The emergence of a criminal investigation could sow panic in an individual who was seeking a fresh start financially. A sense of urgency may prompt someone to speak to investigators without the benefit of legal advice. However, any debtor, creditor, professional or businessperson accused of bankruptcy fraud should consult a lawyer capable of evaluating the situation and recommending appropriate next steps. The proper application of bankruptcy law is not always clear, and a federal criminal defense attorney might prepare a viable defense strategy.