Last Updated on: 20th October 2023, 07:38 pm

Bankruptcy Fraud Charges: Here’s How a White Collar Crimes Lawyer Can Defend You

What is Bankruptcy Fraud?

Bankruptcy fraud basically means providing false information on your bankruptcy paperwork. This could include:

• Lying about your assets and income
• Hiding money or property from creditors
• Transferring assets to friends or relatives so they aren’t seized
• Destroying or concealing financial records

Prosecutors tend to pursue cases where the amounts are large or the filer was intentionally trying to defraud. But even accidental omissions can trigger charges.

What Are the Penalties for Bankruptcy Fraud?

Bankruptcy fraud is a federal crime prosecuted under 18 U.S.C. § 152. If convicted, penalties can include:

• Up to 5 years in prison
• Up to $250,000 in fines for individuals, $500,000 for organizations
• Restitution to creditors
• Forfeiture of fraudulent transfers or assets

That’s scary stuff. But don’t lose hope. An experienced white collar crimes attorney can often get charges dismissed or reduced to a misdemeanor. Keep reading to learn how.

How Can a Lawyer Defend Against Bankruptcy Fraud Charges?

An adept white collar crimes lawyer has many strategies to get bankruptcy fraud charges dropped or reduced. Here are some of the most common defenses:

Lack of Intent

For a bankruptcy fraud conviction, prosecutors must prove you intended to deceive. If errors were accidental, a lawyer can argue you lacked criminal intent. Common mistakes like forgetting an old bank account or misstating date ranges can often be chalked up to oversight versus purposeful lying. Your lawyer may be able to get charges dismissed for lack of intent to defraud.

Reliance on Attorney Advice

Most people hire a bankruptcy attorney to handle their filing. You can argue any misstatements were on the lawyer’s advice. “My attorney told me only to list accounts with balances, so that’s what I did,” is a viable defense. At minimum, it diffuses culpability – judges may go easier if a lawyer failed to properly advise you.

Statute of Limitations

For bankruptcy fraud, prosecutors have 5 years to press charges. If it’s been longer, a lawyer can argue the statute of limitations has expired. This is often a successful tactic, as bankruptcy fraud isn’t a priority for overburdened investigators.

Lack of Materiality

The government must also prove the alleged false statements were “material” – meaning significant enough to influence the bankruptcy court. If the amounts were small or wouldn’t have impacted the outcome, a lawyer can argue they weren’t material. Charges often get dismissed on these grounds.

Negotiate Plea Bargains

If the evidence is stacked against you, your attorney may negotiate a plea bargain. This involves pleading guilty in exchange for reduced charges or a lighter sentence. The lawyer may also negotiate ways for you to avoid jail time, like probation, house arrest, or community service.