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The Most Common Forms of Bankruptcy Fraud

Posted on December 3, 2019by Admin

Bankruptcy laws require that the filer be honest and open about his or her financial situation, including disclosing all assets and debts. While no one wants to lose property to pay off creditors, some assets must be sold during the bankruptcy case to pay off the filer’s debts. If a filer actively tries to hide or fails to disclose information in hopes of keeping it from the bankruptcy court, this is called bankruptcy fraud and it can cause your case to be dismissed.

Hiding Assets

Concealing assets is one of the more common forms of bankruptcy fraud. Approximately 70 percent of all cases where some type of fraud was reported involved concealment of assets. It can involve the person simply leaving a certain asset off the list of those reported to the bankruptcy trustee. It can also involve hiding the asset through a fraudulent transfer, including giving the asset to someone else to keep it during the duration of the bankruptcy case, with the intent that the person holding the asset will return it after the case concludes. If this type of fraud is discovered, the filer and the person holding the asset could be held liable for bankruptcy fraud.

What It Means to Commit Bankruptcy Fraud

Posted on February 21, 2019by Admin

When filing for bankruptcy, it is extremely important that you fully disclose all information requested and that all information provided be accurate and true. Although, most people who file for bankruptcy are honest hardworking people, some individuals can be tempted to hide property and assets. This is called bankruptcy fraud, which is a federal crime that the U.S. Department of Justice takes very seriously.

Bankruptcy fraud occurs when a person knowingly and fraudulently commits certain prohibited acts in their bankruptcy case. It is estimated that somewhere around 10 percent of all U.S. bankruptcy filings include some form of bankruptcy fraud. If this fraud is discovered, the person committing the fraudulent act can face fines up to $250,000 and even imprisonment for up to five years in federal prison.

The four most common types of bankruptcy fraud include: concealment of assets, petition mills, multiple-filing schemes, and bust-out schemes. It must be shown that the person intended to commit the crime of bankruptcy fraud, which means that intent to deceive must be present. The person must have planned to commit the fraudulent act. If, for instance, someone makes a mistake in their forms or accidentally forgets an asset when preparing the documents, fraudulent intent is not necessarily there.

One of the most common types of bankruptcy fraud is concealment of assets. Concealing assets accounts for approximately 70 percent of all bankruptcy fraud cases reported. A person should never assume they can outsmart the bankruptcy court. Bankruptcy trustees are experts at finding undisclosed cash, property, vehicles, boats, jewelry, antiques, and collectibles. If you are caught trying to hide assets, the consequences are big. Your discharge will be denied, and you will be unable to discharge the debts you listed in a subsequent bankruptcy filing.

Another form of bankruptcy fraud is making false statements either in sworn documents filed with the court or in person to the bankruptcy trustee. Debtors are required to fill out a bankruptcy petition and a number of other supporting documents, which includes a schedule of income and assets as well as a sworn financial declaration. By submitting these documents, you are swearing that all information provided is completely true.

Bankruptcy fraud can also be committed by someone filing too many bankruptcy cases in two or more states. These filings can be made using the same name and information or also false name and information, so long as they were filed by the same person. In these types of cases, the debtor will list the certain assets on some claims while other assets on the others, thus confusing the system. The ultimate goal of these multiple filings is to keep assets from total liquidation, giving the person time to conceal assets he or she wishes to keep.

Another form of bankruptcy fraud that seems to focus heavily on non-English speaking claimants involves bankruptcy petition mills. These “mills” are fraudulent schemes committed by a third-party, where that person claims to be a consultant who can help someone avoid eviction. That person gets all of the tenant’s information and files a bankruptcy petition without the tenant ever knowing. While the bankruptcy case is pending, the perpetrator of the crime will often completely clean out the tenant’s bank accounts and destroy his or her credit. Sadly, these types of schemes are on the rise, especially in areas where many non-English individuals reside.

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If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Mistakes to Avoid Before Filing for Bankruptcy

Posted on December 21, 2018by Admin

Making the decision to file for bankruptcy is never an easy one. Once you decide to file for bankruptcy, it is important that you avoid making mistakes that could impact your case or jeopardize your debts from being discharged. Here are the top bankruptcy mistakes you should avoid before filing.

Filing too quickly

Bankruptcy is an excellent way to wipe out burdensome debt. However, you are limited to how often you can do so. The law places a limit on how often a person can file for bankruptcy. An attorney can advise you if the timing is right for bankruptcy and make sure your assets and income allow you to qualify for Chapter 7 bankruptcy,

Waiting too long to file

It can also be a mistake when someone waits too long to file for bankruptcy. In fact, a recent study revealed some of the downsides of waiting to file for bankruptcy. Many times, it is best to file for bankruptcy quickly in the event the filer wishes to avoid wage garnishment or has a lawsuit pending against them due to outstanding debt. Initiating a bankruptcy proceeding will allow an automatic stay to be issued, which puts an immediate halt to any collections actions that are ongoing at the time of filing. However, if the filer waits too long, once a wage garnishment is issued, he or she will not be able to eliminate that debt, which would not have been the case if he or she had filed before the final judgment was issued.

Incorrect or Inaccurate Information

When filing for bankruptcy, you are swearing under penalties of perjury that all information regarding your assets, income, debt, expenses and financial history is complete and accurate. If you make a mistake, fail to disclose an asset or file incomplete information, the bankruptcy court may dismiss the petition. If the court believes that you knowingly misrepresented anything at all, you could also be subject to criminal penalties, which includes fines even jail time.

Incurring more debt

Some people when they know they are going to be filing bankruptcy, run up additional debt on credit cards or take out loans. If you run up too much debt 70 to 90 days before filing on purchases that are not otherwise considered daily necessities, the creditor for this debt will likely object to a discharge by stating that you incurred this debt without any intention of paying it back in full. This practice is known as “presumptive fraud” and can result in the debt not being discharge.

Hiding assets

Another mistake some filers make before officially starting the bankruptcy process is hiding or moving assets to a friend or family member to keep them from being subject to liquidation. It can be tempting to want to hide an asset that would be subject to liquidation in hopes of keeping it safe, but this is considered bankruptcy fraud and can result in your case being dismissed and even criminal penalties, including fines and jail time.

Incoming assets

If you anticipate receiving a large amount of money or substantial assets in the near future, such as a sizeable inheritance or tax refund, it may be best to hold off on filing for bankruptcy. Once these funds are received, they may not be exempt from liquidation in a bankruptcy case. This money could alternatively be used to pay off creditors or attempt to get out of debt outside of bankruptcy. However, it is best to first consult with an experienced bankruptcy attorney if you believe you will be coming into money and are considering bankruptcy.

Related Resources:

NOLO.com

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Lawyer Fined and Sentenced for Bankruptcy Fraud

Posted on December 7, 2018by Admin

A Scottsdale lawyer was fined nearly $1.4 million dollars and sentenced to 18 months in prison after pleading guilty to bankruptcy fraud. Scott Allan Maasen pleaded guilty to one count of concealment of assets in bankruptcy, a Class D felony.

His sentence includes three years of supervised release after the prison term. Maasen was also ordered to forfeit a residence in the exclusive Silverleaf neighborhood in north Scottsdale, according to court documents. The house near Thompson Peak Parkway and Horseshoe Canyon Drive is on the market for $1,595,000.

Maasen filed for bankruptcy in 2009 after he stopped making payments on a $1.5 million loan guaranteed by the Small Business Administration. He admitted to purchasing a $90,000 engagement ring for his fiancée during the bankruptcy proceedings and did not disclose it, according to court documents. He concealed the purchase by using a credit card and bank account in his father’s name.

Although, most people who file for bankruptcy are honest hardworking people, some individuals can be tempted to hide property and assets. Here are some examples that if caught, could be considered criminal:

Failing to list all assets on the appropriate bankruptcy schedule;
Concealing a property transfer prior to the bankruptcy filing (i.e. – giving a boat or car to a friend or family member);
Creating a false document;
Destroying or withholding documents, and
Paying someone to help hide property from the court.

The consequences of engaging in such activities are harsh. Anyone who makes a knowingly false statement in association with a bankruptcy filing can be assessed fines up to $250,000 and receive up to 5 years in prison. Regardless of your occupation or status in life, if you are found guilty of bankruptcy fraud- you face real consequences, criminal prosecution and even jail time.

Bankruptcy trustees are experts at finding undisclosed cash, property, vehicles, boats, jewelry, antiques, and collectibles. If you are caught trying to hide assets, the consequences are big. Your discharge will be denied, and you will be unable to discharge the debts you listed in a subsequent bankruptcy filing.

Click here to read more on this story.

If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

What is considered bankruptcy fraud and what are the consequences?

Posted on February 23, 2018by Admin

When you file for bankruptcy, you are required to list all of your property and any assets you have transferred to others within a particular time period on your bankruptcy paperwork. Failing to do so can cause you to be accused of bankruptcy fraud. The relief bankruptcy affords you is a powerful one, and frees you from the burden of overwhelming debt. However, it does cost your creditors. Bankruptcy law attempts to mitigate this loss by establishing a bankruptcy ‘estate’ (i.e. – the remaining property) after your exemptions (those assets which are kept to maintain a job and household).

Failing to list all assets on the appropriate bankruptcy schedule;
Concealing a property transfer prior to the bankruptcy filing (i.e. – giving a boat or car to a friend or family member);
Creating a false document;
Destroying or withholding documents, and
Paying someone to help hide property from the court.

Related Resources:

https://www.nolo.com/legal-encyclopedia/bankruptcy-fraud.html

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Former “Dance Moms” Star Abby Lee Miller Begins Prison Sentence for Bankruptcy Fraud

Posted on July 24, 2017by Admin

Abby Lee Miller, star of the hit reality TV show “Dance Moms,” began her sentence in federal prison this month, more than a year after pleading guilty to fraud in a Pittsburg federal court. Her sentence is 366 days in prison after pleading guilty to bankruptcy fraud and bringing in more than $120,000 worth of Australian currency into the United States, unreported.

Federal prosecutors charged that Miller was in the middle of Chapter 11 bankruptcy when she attempted to hide $775,000 in income from her Lifetime network reality show and its spinoffs.

The investigation was prompted after the bankruptcy judge in Miller’s case was channel-surfing one night and saw the reality star on TV in December 2012 and figured she had to be making more than the $8,899 in the monthly income she was claiming.

On a lighter note, Miller’s prison diet will be fruit, hot grits, whole wheat bread with jelly, and skim milk for breakfast; burgers with a choice of fries or a baked potato and fruit for lunch; and a deli sandwich or hummus wrap for dinner during her first week in prison, according to TMZ Live.

Click here to read more on this story.

If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Sycamore Attorney Charged with Bankruptcy Fraud

Posted on December 28, 2016by Admin

Kevin O. Johnson, also known as “K.O. Johnson,” was indicted by a federal grand jury on charges of bankruptcy fraud. He is charged with four counts of bankruptcy fraud and four counts of making a false oath in a bankruptcy case under penalty of perjury, fraudulently withholding information pertinent to the case and concealing assets.

Johnson, whose practice included bankruptcy law, filed a Chapter 7 Bankruptcy Petition on Dec. 31, 2011. The indictment alleges that Johnson fraudulently concealed property from the bankruptcy trustee, creditors, and the United States Trustee, including complete information of about $1,790,000 of account receivables owed to Johnson by his present and former clients.

The indictment also charges Johnson with the following:

Failing to comply with a court order requiring him to turn over all proceeds from the collection of account receivables;
Having directed clients not to send any payments to the Bankruptcy Trustee and asking clients to sign misleading documents about the nature of payments they made, despite Johnson knowing that all future account receivable payments were required to be made to the Trustee;
Making false statements concerning his security interests and liens on the $1,790,000 of account receivables;
Removing invoices and fee agreements from client files;
Obstructing the Bankruptcy Trustee by omitting a bank account used to deposit a check received in payment of an account receivable owed to Johnson at the time he filed for bankruptcy.

Each charge in this case carries a maximum penalty of up to five years in prison, and a fine of up to $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greater. The Court may also impose a sentence of probation of one to five years, and a term of supervised release of up to three years.

Bankruptcy trustees are experts at finding undisclosed cash, property, vehicles, boats, jewelry, antiques, and collectibles. If you are caught trying to conceal assets, the consequences are big. Your discharge will be denied, and you will be unable to discharge the debts you list in a subsequent bankruptcy filing. In addition, you can face serious fines, even jail time.

Click here to read more on this story.

If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Business Owners Convicted of Bankruptcy Fraud

Posted on August 26, 2016by Admin

Two Louisiana business owners were convicted by a federal jury of concealing assets during their bankruptcy and making false statements under penalty of perjury. According to the testimony, Brian and Debra Spurin filed for Chapter 7 bankruptcy in September 2005 and submitted various bankruptcy schedules and a statement of financial affairs, all signed as true and correct under penalty of perjury.

However, they failed to disclose real property as required, nor did they list all of the businesses they established and had an interest in, which included Golden Choice Financial, LLC; Golden Athletics Financial Services, LLC; J&S Management and Marketing, Inc.; and International Oil, Gas and Mineral Management, Inc. The assets of these companies were never listed, including the home in which the couple lived in and the vehicles they used.

In total, the couple fraudulently concealed approximately $400,000 worth of assets from the bankruptcy proceeding.

The defendants each face a fine of $250,000, imprisonment for not more than five years, or both, for each count of concealment of bankruptcy estate assets and making a false statement under penalty of perjury.

Click here to read more on this story.

If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

‘Dance Moms’ Star Will Plead Guilty to Bankruptcy Fraud

Posted on June 27, 2016by Admin

Abby Lee Miller, star of the Lifetime network reality show, “Dance Moms” is scheduled to plead guilty to bankruptcy fraud and failure to report more than $10,000 worth of Australian currency she brought into the country.

Miller is accused of violating a law that requires people to report bringing more than $10,000 worth of foreign currency into the country. Court documents also seek to have her forfeit at least $120,000- although prosecutors would not confirm whether that is the value of Australian currency she failed to report.

The outspoken reality star was first charged last year with illegally trying to hide $775,000 worth of income from “Dance Moms” and spinoff projects during her Chapter 11 bankruptcy.

The FBI and other agencies determined Miller hid more than $228,000 of income from appearances on “Dance Moms” and a spin-off, “Abby’s Ultimate Dance Competition” and nearly $550,000 more from personal appearances, dance sessions and merchandise sold through her personal website.

Click here read more on this story.

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Former CEO of Monarch Mortgage indicted on seven counts in federal court, including bankruptcy fraud

Posted on June 21, 2016by Admin

Edward “Ted” Yoder, former CEO of Monarch Mortgage, faced a federal judge on seven charges, including bankruptcy fraud. The judge told the former bank head that he did not qualify for a court-appointed attorney, for which tax dollars would pay. Yoder was picked up by ten FBI agents, wearing a shirt that read, “Some guys have all the luck.”

Many people in Hampton Roads trusted him with their money for their most prized possession- their home. Now he is being accused of illegally handling funds. Court records accuse Yoder of hiding money, property and investments collectively valued at more than one million dollars from bankruptcy trustees.

Essentially, the case alleges when Yoder filed for bankruptcy, he concealed some of his assets by hiding them in another person’s account.

Yoder’s co-conspirator, Susan Spearman, a woman who has already pled guilty in federal court, must cooperate in any additional grand juries or trials. According to court records, Yoder owned shares of SIRIUS stock, valued at about $350,000. On October 5, 2012, Yoder had those shares sold and netted $339,660.19. Right after that, the U.S. attorney says Yoder transferred most of that money to the woman who aided him: Susan Spearman.

Two months later for the purpose of “concealing the scheme,” Yoder filed for bankruptcy. The court documents said he “never disclosed the sale of the stock or the transfer to Spearman in his bankruptcy case.” In addition, during this time as alleged in the statement of facts, Yoder told Spearman to transfer the money back to him.

Yoder maintains his innocence and has been a fixture on the Hampton Roads financial circuit for decades. Some wonder if this will result in implications for the financial industry.

Yoder is expected back in court for his arraignment on June 22, 2016.

This should come as a warning to anyone who plans to hide assets from the bankruptcy court. Bankruptcy trustees are experts at finding undisclosed cash, property, vehicles, boats, jewelry, antiques, and collectibles. If you are caught trying to hide assets, the consequences are big. Your discharge will be denied, and you will be unable to discharge the debts you listed in a subsequent bankruptcy filing. In addition, the potential penalty for bankruptcy crimes includes fines and imprisonment of up to five years.

Click here to read more on this story.