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Federal Bankruptcy Fraud

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18 USC 157

You hear all the time people saying when they rack up a bunch of debt or attempt to avoid paying taxes or get out of some sort of financial obligations that they’re just going to declare bankruptcy. The feds take these crimes very seriously and they will prosecute you under the US Code, 18 USC 157 if you’re involved with devising a plan to claim that you’re bankrupt, false certain false documents with the court and they find out about it.

Obviously, the more money that is involved when it comes to a bankruptcy fraud case in federal court, the more likely the prosecutors there are to take the case, follow through and prosecute it. If it involves a smaller amount of money, then the federal prosecutors are more likely to refer that case the state government that has jurisdiction over the bankruptcy fraud issue and let them deal with it. Also, they are going to look at what exactly is going on in a federal bankruptcy fraud case. Is it easy for them to prove? Do they have all the elements they need or is there confusion and issues with it where the criminal defendant would have a good defense to it?

The bankruptcy laws at the federal level are designed to protect against those individuals who are designing or getting involved with a plan or scheme in artifice, designed to try to avoid paying their debts by using the bankruptcy courts. Really, what the federal government is trying to protect against by using the United States Code Section 157, is those people who will go into Bankruptcy Court and file false documents or false forms. People who hide assets that they have in the process of trying to declare bankruptcy and not have to pay legitimate debts that they have. Making a false statement while in bankruptcy proceedings — all these things again, are designed to guard against people trying to get away with things related to declaring bankruptcy — utilizing our criminal process in such a way that is designed to defraud or trick the bankruptcy courts – designed to avoid paying legitimate debts that an individual has.

So, if you use the bankruptcy process and make a false statement and hide assets, then you’re going to be prosecuted for bankruptcy fraud. A lot of times if it’s significant enough, the federal government will get involved. Certainly, it can be prosecuted at the state level as a fraud charge, but when the federal government gets involved, usually what I see is they have policies designed to go after people who are doing it at a serious level – a lot of money involved – or their scheme in a very sophisticated manner. If that’s the case, then the federal government will come in. They will arrest you. They will seize all your assets and they will prosecute you and try to send you to federal prison if they think you’re committing bankruptcy fraud.

What Are Some Defenses To Federal Bankruptcy Fraud In Los Angeles And Elsewhere?

One good defense is obviously that you are not committing bankruptcy fraud and that you really are bankrupt and have no funds or assets to be able to cover all the debts you have racked up. Really, what the government is looking at is that you’re not involved in what is classically called a bust-out scheme, where you’re racking up debt – credit cards and various other debts – and then relying on the bankruptcy laws to be able to get out of paying the debt. This will put you in a position where the federal government is obviously going to prosecute you, and if you’re devising some sort of a plan — and they can prove it — to declare bankruptcy when you’re really not bankrupted or you actually forced yourself to become bankrupt because you had a plan to rack up debt and move money around so you could later go back to get the money. Obviously, if the federal government can prove that, then they are going to prosecute you, try to get the money back, take whatever assets you do have and criminally punish you for being involved in bankruptcy fraud.

Obviously, a complete defense would be listen, I wasn’t trying to defraud anybody. I didn’t lie about anything. I didn’t conceal any assets. If I made a mistake it was an honest mistake. I had an innocent intent. Really, the whole center or juxtaposition related to bankruptcy fraud relates to designing a plan or a scheme in order to avoid paying some debt or centered around declaring bankruptcy in some sort of a false manner. If the government can’t prove that you had some sort of a criminal intent — that you were lying, that you were hiding things and they’re not going to be able to prove the bankruptcy fraud against you.

So, obviously, bankruptcy fraud, when you evaluate it and you sit down with your attorney and discuss it, you’re really looking at the facts of the case. It’s case sensitive. What happened? Did you lie? Can they prove you lied? Did you hide assets? Do you have some assets that have not been reported? Do you have a bunch of debt that you intentionally ran up and now you’re trying to declare bankruptcy? These are some of the issues that are going to be thought about and dealt with when it comes to bankruptcy fraud cases.

Really, what you need to do is sit with your attorney. Be honest. Let your attorney evaluate all of the discovery related to the federal bankruptcy fraud case and the filing under 18 USC 157 and let them let you know what type of defenses you have after you have given them all the information related to your case. Don’t hide things. Don’t tell your attorney certain things because they’re going to come back up and your attorney is not going to be as prepared to deal with them as if you would have told them and let them know.

So, if you have a federal bankruptcy fraud case, your first move in not to talk to the authorities. Your first move it to talk to your federal criminal defense attorney and let them know what happened with your case and let them help you decide what your next move will be after that. These cases are serious. You could be facing up to five years in federal prison if you’re convicted. So, you obviously want to take it seriously and make sure that if you’re charged with federal bankruptcy fraud, you talk to somebody who has handled these types of cases before, had successful outcomes and knows that it takes to properly defend you and get you the best possible resolution for your federal bankruptcy fraud case.

What Should You Do if You Have A Federal Bankruptcy Fraud Case Pending Against You And They’re Charging You With A Violation Of 18 USC 157?

What you need to do is get in front of a criminal defense attorney quickly. Let him know what’s happening. I always suggest that you’re honest and tell him the trust about what you did and didn’t do and let them help you devise the plan to be able to defend yourself. Because you trying to defend yourself in a federal criminal setting is not a good idea unless you have federal criminal defense experience and know how to deal with these types of cases. Most people don’t have that and should rely on their federal criminal defense attorney to set up the plan, talk to them about it and really figure out what needs to be done in order to put you in the best possible position. The only way to do that is to be truthful with your attorney and let your attorney help you what the best approach is and what the best angle is, and how it can be figured out to get you out of the federal criminal justice system as fast as possible — see if your federal bankruptcy charges can be dismissed, of if it’s a situation where some sort of a plea bargain needs to be arranged on your behalf.

For more information on Federal Bankruptcy Fraud In California, a free initial consultation is your best step. Get the information and legal answers you are seeking by calling (213) 542-0994 today.