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Bankruptcy Fraud

BANKRUPTCY: CONCEALMENT OF ASSETS - BANKRUPTCY PROCEEDING PENDING

18 U.S.C. § 152 makes it a crime for anyone to conceal property belonging to the estate of a debtor in bankruptcy. The possible punishment is a fine or imprisonment for not more than five, or both. In order to convict the government must prove each of the following beyond a reasonable doubt:

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That there existed a proceeding in bankruptcy;
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That certain property or assets belonged to the bankrupt estate;
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That the individual charged concealed such property from the creditors, custodian, trustee, marshal, or some person charged with control or custody of such property; and
• That the individual did so knowingly and fraudulently.


The word "conceal" means to secrete, falsify, mutilate, fraudulently transfer, withhold information or knowledge required by law to be made known, or to take any action preventing discovery. Since the offense of concealment is a continuing one, the acts of concealment may have begun before as well as after the bankruptcy proceeding began. An act is done fraudulently if done with intent to deceive or cheat any creditor, trustee, or bankruptcy judge.

It is no defense that the concealment may have proved unsuccessful. Even though the property document, books, or records in question may have been recovered for the debtor's estate, the individual still may be guilty of the offense charged. Similarly, it is no defense that there was no demand by any officer of the court or creditor for the property, document, books, or records alleged to have been concealed. A demand for such property, document, books, or records is not necessary in order to establish concealment.

BANKRUPTCY: PRESENTING OR USING A FALSE CLAIM

18 U.S.C. § 152 also makes it a crime for anyone to present or use a false claim in any bankruptcy proceeding. The possible punishment is a fine or imprisonment for not more than five, or both. In order to convict the government must prove each of the following beyond a reasonable doubt:

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That there existed a proceeding in bankruptcy;
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That the individual charged personally or by or through an agent, proxy, or attorney presented or used a claim for proof against the estate of a debtor;
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That such claim was false; and
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That such claim was presented or used knowingly and fraudulently.
• An act is done fraudulently if done with intent to deceive or cheat any creditor, trustee, or bankruptcy judge.