Penal Code 155 PC – Fraudulent Conveyance by a Judgment Debtor

California Penal Code 155 PC is the law that defines the offense of fraudulent conveyance by a judgment debtor. This section makes it is a crime for a person to conceal or transfer personal property in order to avoid paying damages owed as a result of a lawsuit.

The language of 155 PC outlines that “every person against whom an action is pending, or against whom a judgment has been rendered for the recovery of any personal property, who fraudulently conceals, sells, or disposes of that property, with intent to hinder, delay, or defraud the person bringing the action or recovering the judgment, or with such intent removes that property beyond the limits of the county in which it may be at the time of the commencement of the action or the rendering of the judgment, is punishable by imprisonment in a county jail not exceeding one year, or by fine not exceeding one thousand dollars ($1,000), or by both that fine and imprisonment.”

Examples

• Upon losing a defamation lawsuit, Crystal transfers most of her money into overseas trusts to avoid paying the damages awarded in the case.
• In the middle of a personal injury case involving his misdemeanor hit and run charge PC 20002, Silas fears he will lose and sells off his two cars to avoid paying any damages.
• After a judge orders Jada to pay money for the property damage she caused in her DUI case, Jada gives her expensive jewelry collection to her sister and says she has no money to pay.

Fortunately, there are several legal defenses that a person can raise if accused of engaging in a fraudulent conveyance. These include demonstrating that a defendant:

• Had no aim to defraud;
• Acted under duress ; and/or,
• Was arrested without probable cause

Potential Penalties on Conviction

A breach of PC 155 is charged as a misdemeanor, unlike a California infraction. The crime is punishable by:

• Imprisonment in the county jail for not more than one year; and/or,
• A maximum fine of $1,000.

If the fraudulent conveyance involves stock in trade valued at more than $250, the crime will be charged as a felony. As such, it is punishable by imprisonment in the California state prison for either, sixteen months, two years, or three years.

The following are well explained in this article:

• 1. What is fraudulent conveyance by a judgment debtor?
  2. Legal defenses.
  3. What penalties, punishment & sentencing can one face on conviction?
  4. Offenses related to 155PC Fraudulent Conveyance by a Judgment Debtor

1. What is a fraudulent conveyance by a judgment debtor?

According to California Penal Code 155 PC, it is a criminal offense for a judgment debtor to hide or transfer “personal property,” or to move such property to a different county, in order to evade the payment of damages owed according to the judgment in a lawsuit.

California legislation says that a “judgment debtor” is simply a person who has to pay another party a sum of money (or damages) as a result of a court case.

This section can be violated by either: 

1. transferring property after being ordered to pay money in a court case; or
2. transferring property while the lawsuit is still underway and before the party has been ordered to pay anything.

Note that a party must act with the express intent to cheat the person attempting to recover the money or damages in order to commit the crime. The term “intent to defraud” refers to a desire to either:

• Forestall a person from getting paid;
• Increase the difficulty for a person to get paid; or,
• Delay a person from getting their payment. 

Pursuant to California Penal Code 7 PC, “personal property” includes cash, tangible items, chattels or property other than real estate, and things reflecting debt. 

2. Legal defenses

A person accused under PC 155 can challenge the accusation by raising a legal defense. A good defense can often get a charge reduced or even dismissed. Rather, it is critical for an accused to hire an attorney to get the most effective defense.

Three common defenses to PC 155 accusations are:

1. Lack of intent;
2. Duress; and/or,
3. No probable cause.

The “Lack of intent” defense

Remember that under Penal Code 155, a defendant is only guilty if he transfers, moves, or conceals property with the purpose to deceive. As a result, proving that an accused did not have the required intent is a strong defense to a Penal Code 155 allegation. It’s possible, for example, that a defendant moved property to support a family member in need rather than hiding it from a judgment creditor.

The “Duress” defense

Consider a situation in which a bank robber holds a pedestrian at gunpoint and instructs him to get into a running automobile and drive them away.

Duress is a legal defense in which a defendant essentially states, “He forced me to do it.” The defense only applies in the rare case where a person commits a crime (in this case, unlawfully transferring property to avoid paying damages) because he was threatened with death if he did not.

The “No probable cause” defense

Police must have probable cause before detaining or arresting a criminal suspect, according to the Fourth Amendment of the United States Constitution.

If a person was stopped or detained without probable cause for violating PC 155, any evidence gathered as a result of the illegal stop or arrest could be dismissed from the case. Charges may be dismissed or reduced as a result of this exclusion.

Based on all of the factors, “probable cause” simply implies that there is a reasonable belief that someone committed a crime.

3. What penalties, punishment & sentencing can one face on conviction?

A breach of Penal Code 155 PC would be charged as a misdemeanor crime and is punishable by:

• Imprisonment in the county jail for not more than one year; and/or,
• A maximum fine of $1,000.

If the case involves stock in trade worth more than $250, the crime will be charged as a felony, punishable by sixteen months, two years, or three years in a California state prison.

4.  Offenses related to 155PC Fraudulent Conveyance by a Judgment Debtor

There are three other offenses in the penal code related to fraudulent conveyances by judgment debtors. These are:

1. Fraudulent conveyance – CALIFORNIA PC 155;
2. Participation in a fraudulent conveyance – CALIFORNIA PC 531; and,
3. Check fraud – CALIFORNIA PC 476.

Our California criminal defense team at Spodek Law Group can give you a free, confidential consultation in office or by phone.  Contact us today!