New York Federal Bankruptcy Fraud Lawyer

Bankruptcy fraud is defined as knowingly and fraudulently concealing assets from a bankruptcy trustee, making a false claim or account in relation to a bankruptcy proceeding, or destroying, or concealing records may be punished by up to five years' imprisonment. To knowingly commit fraud is to do so willingly/with willful intent.

The state of New York does not typically charge someone with bankruptcy fraud, but it depends. Under limited circumstances, a state could charge an individual with bankruptcy fraud for some acts that would be related to a federal bankruptcy action. If you are facing federal bankruptcy fraud charges, get in touch with a New York federal bankruptcy fraud lawyer today. A qualified white collar defense attorney can work diligently to build your case.

How Does the Bankruptcy Process Work?

There are a number of different ways whereby individual persons, couples or corporations can discharge of, or reduce, or consolidate debts. They do that using the federal bankruptcy laws. The most popular ones are Chapter 7, 11 and 13, and to start the process, they file a petition in federal bankruptcy court to either reduce, discharge or consolidate their debt. Bankruptcy is entirely a federal process and people cannot file for bankruptcy at a state court.

If someone is charged with federal bankruptcy fraud, their case will probably be heard in the New York Federal Court, either in the Eastern District of New York or in the Southern District of New York in New York City or elsewhere in New York; it could be the Western District of New York or the Northern District of New York.

Differences Between a Bankruptcy Lawyer and a Bankruptcy Fraud Lawyer

A New York federal bankruptcy fraud lawyer would be a lawyer who specializes in criminal defense versus a bankruptcy lawyer who is just trying to get a bankruptcy petition approved. A bankruptcy lawyer could get charged with bankruptcy fraud if they were aware that a false petition was being filed and aided in it or abetted in its filing.  A criminal defense lawyer or a bankruptcy fraud lawyer would only need to be called in once allegations arose that there was some wrongdoing in the process.

A person’s bankruptcy lawyer cannot also be their bankruptcy fraud lawyer. A bankruptcy lawyer is an individual who is marshaling together someone's debt and trying to consolidate them into the correct paperwork and arguing that an individual should have their petition granted. A bankruptcy fraud lawyer is someone who is familiar with federal criminal defense.

There may be a parallel bankruptcy petition handled in federal bankruptcy court – so an attorney may be dealing with two sets of federal courts with regard to the same set of allegations.

Federal Bankruptcy Fraud Investigations

Typically people do know that they are being investigated for bankruptcy fraud. For this type of situation, typically, they do because there will be a hearing in bankruptcy court on the petition itself and parties thereto will confirm that there has been some fraud and it will not likely be done in secret.

Often it is the FBI that investigates these charges. Sometimes, it is the IRS depending on the circumstances. The prosecutors in these cases are often the United States Attorney's Office in a federal case.

Generally in any state or federal case, an individual should speak with a lawyer before speaking directly with law enforcement. The reason for that, simply, is because an individual will be stuck with that statement throughout the course of the investigation or criminal trial and it may negatively affect the disposition. There may be a time to speak with law enforcement but it is best to speak with a lawyer first.

Is Bankruptcy Fraud One a Federal Offense or Is It a Term For Different Offenses?

Bankruptcy fraud is a term that encompasses many different fraudulent acts but the main statute is 18 USC 152. There is also 18 USC 1621 and 1623 which covers making false statements in any court, and that can obviously happen during a bankruptcy petition gone bad where someone lies.

The most common charge is bankruptcy fraud which is 18 USC 152. In addition, there is 18 USC 157 which is just a more generalized scheme to defraud by conducting or going through with a false bankruptcy petition and then, more generally, making a false statement before a court, and that could be by filing a false bankruptcy petition is punishable by 18 USC 1621 or 1623 and keep in mind that one course of conduct could result in many of these statutes if not all of them are being charged.

Fraudulent Concealment of Assets

Fraudulently or fraudulent, means acting with a criminally deceptive intent. Fraudulent concealment of assets occurs when they have someone who is going through with a bankruptcy and claiming that they have no funds to cover their bills or other debts and, in fact, they do and they lie on the bankruptcy petition or before the court in some other way, indicating that, in fact, they do not have money when they do.

The most common example of fraudulent concealment of assets would be when someone is lying about their own assets, either they have property or money and they do not declare it on the bankruptcy petition, because a bankruptcy petition requires that every single one of a person's assets and their debts be laid out, and if they are not 100% honest about it, then they could be charged with bankruptcy fraud.

People other than the person filing for bankruptcy be charged with bankruptcy fraud. Anyone who aided and abetted, for instance, the filing of a false bankruptcy petition could be charged with bankruptcy fraud.

Penalties

Typically, the bankruptcy fraud statutes have a five-year maximum sentence. That being said, if the fraud involved wire fraud or mail fraud, then the theoretical maximum can be increased to 20 years upon conviction. A skilled New York federal bankruptcy fraud lawyer can work to mitigate the penalties that an individual may face. Anytime that someone is manipulating the system in order to make their bankruptcy petition either more favorable or less favorable, and an individual pays either money or some other material good or service in exchange for that fraudulent conduct, that would be bribery of a bankruptcy creditor.

Civil Fraud Suits

Being charged with federal bankruptcy does expose individuals to civil liability. The individuals that could have been affected – the creditors– could sue ostensibly in federal court or maybe even in state court as a result of a successful criminal prosecution. 

Corporate Bankruptcy Fraud

An individual can be charged with bankruptcy fraud for doing something their corporate office instructed them to do. Even if a person does not know it might be fraud, in order to be convicted of fraud, a person still has to have the culpable mental state, the intent to commit the fraud. However, that can be gleaned merely by the circumstances.

Alternatively, a corporation can be charged with bankruptcy fraud for actions by its officers.  The board being unaware of the employee’s legal actions is not an adequate legal defense. It could be under very limited circumstances but typically it would just be a mitigating factor.

Role of a Federal Bankruptcy Fraud Attorney

If you can speak with an attorney early enough on when allegations are being made, sometimes these situations can be corrected and fixed or even explained before criminal charges are brought. The role of a New York federal bankruptcy fraud lawyer is to make sure that the bankruptcy petition, which is to reduce, consolidate or discharge of debt, successfully makes it through the bankruptcy court and is ordered by the judge. If you have been charged with federal bankruptcy, retain the services of a qualified bankruptcy fraud attorney, who can devote the time and resources necessary to build your case. Contact a lawyer today and know that you are in good hands.