What is Bankruptcy Fraud?

Bankruptcy fraud involves the intentional concealment of assets, income, or other material information from, or the intentional misleading of, the bankruptcy court, trustee, or creditors during a bankruptcy case. If you attempt to hide assets from the court, trustee, or creditors, or otherwise lie to them, you may be charged with bankruptcy fraud. The penalties for bankruptcy fraud can include fines, denial of discharge, and imprisonment.

Common Examples of Bankruptcy Fraud

• Failure to disclose in your bankruptcy petition assets, income, or bank accounts

• Lying under oath in your bankruptcy schedules or at the meeting of creditors

• Using another person or entity to hide or conceal ownership of property

• Transferring property to family or friends before filing your bankruptcy petition, with the intent to conceal it

• Filing bankruptcy using false documents or fabricated debts

• Destroying documents before or during your case

• Failure to disclose offshore accounts

Potential Defense Strategies a Ventura Bankruptcy Fraud Defense Attorney Can Analyze

• Lack of intent to defraud

• Illegal search or seizure

• Unintentional mistake

• Improbability of the government to prove its case beyond a reasonable doubt

• Materiality and disclosure: the alleged misstatement was immaterial, later corrected, or later disclosed in full before any harm

Like federal tax fraud cases, bankruptcy fraud cases often begin as an “eggshell audit” or “eggshell inquiry,” with the trustee’s office appearing to be making customary requests for documents. However, the the trustee may in fact be deciding whether to refer your case to the Office of the U.S. Trustee or the U.S. Department of Justice for possible charges. If you received a COVID or EIDL loan or SBA loan and are unable to prove how you used the loan proceeds, or are otherwise being questioned by the U.S. Trustee’s Office or the FBI, you would be wise to retain an attorney who understands bankruptcy law, tax law, and federal criminal law and procedure to try to limit any criminal exposure you may have and protect your rights. The government must prove its case beyond a reasonable doubt: don’t help them make their case for them.

To learn more about how to protect your assets and your rights, call Ventura bankruptcy fraud defense lawyer Ryan J. Casson at (805) 384-0400.