Bankruptcy

Simple Overview of Fraud

Simple Overview of Fraud

Simple Overview of Fraud

It may not initially seem like bankruptcy fraud is a serious problem facing the United States. Especially if one is removed from the whole arena of bankruptcy, he or she has probably never even thought about filing for bankruptcy legally, let alone unlawful declarations of bankruptcy.
Nevertheless, considering the high numbers of Americans filing for personal bankruptcy in recent years, as well as the amounts of money and shareholders/employees that may be affected by the crooked practices of corporate debtors, fraud investigation is a major mission of the Federal Bureau of Investigation and other organizations. In short, bankruptcy fraud is something to take seriously in bankruptcy cases, and thus suspicions of such wrongdoing with adversary proceedings may have serious implications for applicants.
The following are notes on the prevalence of fraud investigation in United States bankruptcy courts:
Bankruptcy fraud is by no means exclusively a white-collar crime, as any petitioner may be guilty of misinforming creditors and the trustee. Nonetheless, the examples of Chapter 11 filers that have engaged in crimes and have thus resulted in adversary proceedings and fraud investigation have all the more resonance because of the size of the corporation involved and the extent to which these companies aimed to deceive authorities and the public (e.g. the Enron fiasco).
It is thus no wonder that the FBI, SEC and other prominent governmental subsets are so aggressive in trying to stamp out bankruptcy fraud. What’s more, the fraud investigation for evidence of illegitimacy in filing for bankruptcy often turns up signs of other misdeeds. Familiar crimes tied to fraud in bankruptcy include corruption, identity theft and money laundering. As there are many catalysts for the onset of adversary proceedings, bankruptcy fraud may manifest in a variety of different ways.
As fraud investigation results have taught us, however, certain fraudulent activities are more common than others, and therefore, are that much more dangerous. One frequent embodiment of bankruptcy fraud and grounds for prosecution is known to most experts as “concealment of assets,” which is a deliberate refusal to list assets that may be sold and distributed amongst creditors.
Another instance of fraud that is all too present in corporate debt adjustment is the occurrence of multiple filings of bankruptcy. Certainly, this applies not to legal repeat filings with the same court over time, but numerous concurrent applications in more than one state and perhaps even more than one alias. Fraud investigation within the sphere of bankruptcy, as noted, is a pressing concern for the U.S. federal government.
With so many cases on the national docket each year, however, and potentially hundreds of claimants per Chapter 11 case, the scrutiny to which this investigation must be subjected is a major undertaking in its own right. In truth, average citizens may not be able to be much help in detecting bankruptcy fraud, but nonetheless, if they or any other third parties have information regarding possible infraction of the rules by the debtor, they are encouraged to report as much.
The Office of the Trustee (or in select instances, the state bankruptcy administrator) runs a hotline whereby individuals may call in to report details on a miscarriage of bankruptcy belief, and what’s more, are assured their anonymity in the process.
Share

Related Articles

Bankruptcy News

There’s No Substitute for Doing High Quality Work: Tracy Wrisinger Kansas City, MO—For Tracy Wrisinger of Kansas City's Sader Law Firm, learning the ins and outs of bankruptcy law started because of a desire to help small business owners.
Helping Soldiers get a Fresh Start: Erin B. Shank Helping Soldiers get a Fresh Start: Erin B. Shank Waco, TX—Becoming a mother changed Erin B.
The Student Loan Lawyer: Joshua Cohen Cromwell, CT—Don't call Joshua Cohen a bankruptcy attorney.
Always Ready for a Challenge: Brian Zinn Always Ready for a Challenge: Brian Zinn Fort Myers, FL—In a state like Florida, the bankruptcy laws don't always seem to make sense.
Bankruptcy Attorney, Bruce Levitt Appreciates the Value of Good Advice Bankruptcy Attorney, Bruce Levitt Appreciates the Value of Good Advice South Orange, NJ—Attorney Bruce Levitt says that practicing bankruptcy law has made him more fully understand how unpredictable life can be across the economic spectrum.
Upfront and Honest: Steven Neuner Marlton, NJ—After three decades of practicing bankruptcy law for creditors and debtors alike, as well as serving as a mediator and arbitrator, Steven Neuner knows every side of the federal bankruptcy code.
Focused On Your Exit Strategy: Stuart Nachbar Focused On Your Exit Strategy: Stuart Nachbar Livingston, NJ—Bankruptcy attorney Stuart Nachbar says that one of the biggest obstacles to people who are thinking of filing is misinformation.
Bankruptcy and the Human Condition: Anerio Altman Laguna Hills, CA—Bankruptcy attorney Anerio Altman never intended to become a lawyer.
Bankruptcy Attorney, Theodore Araujo Talks Greed in the Mortgage Market. Syracuse, NY—According to Theodore Araujo, the recently appointed Chair for the National Association of Consumer Bankruptcy Attorneys (NACBA) for the Northern and Western Districts of New York, bankruptcy is “the great equalizer.
Understanding the Power of Bankruptcy Law: Eric Ruff Understanding the Power of Bankruptcy Law: Eric Ruff Gainesville, FL—Working today as an attorney at the Florida bankruptcy law firm of Ruff & Cohen, P.
From CIA Agent to Bankruptcy Attorney: John Merna From CIA Agent to Bankruptcy Attorney: John Merna Virginia Beach, VA—Don't try to tell John Merna that bankruptcy filers are irresponsible.
Bankruptcy Attorney, Jeffrey Wishman Discusses the Dangers of Credit Card Interest Los Angeles, CA—Bankruptcy law wasn't what Jeffrey Wishman thought that he'd be doing when he became a lawyer.
Disclosure, Disclosure and Disclosure: Adam Schachter Disclosure, Disclosure and Disclosure: Adam Schachter Houston, TX—When he was a junior in college, Adam Schachter weighed his career options and made a momentous decision.
Helping Clients Get Control Over Their Financial Situation: John Scura Wayne, NJ—“I've known bankruptcy for a long time before I was a lawyer,” attorney John Scura told laws.
Bankruptcy Attorney Ronald Cohen talks BAPCPA Bankruptcy Attorney Ronald Cohen talks BAPCPA New York, NY—As head of the Bankruptcy and Corporate Reorganization practice at New York's Seward & Kissel, Ronald Cohen is an expert in helping both creditors and debtors get a fair deal when corporations declare bankruptcy.
Bad Things Happen to Good People: Bradford Botes Bad Things Happen to Good People: Bradford Botes Birmingham, AL—As a principal at bankruptcy specialty firm Bond & Botes, Bradford Botes has learned a lot from consumers who need to file for relief from their debts.
Helping Clients with Real Problems Find Real Solutions: Bruce Weiner Helping Clients with Real Problems Find Real Solutions: Bruce Weiner Brooklyn, NY—When the law firm he was working at began to take bankruptcy cases, Bruce Weiner started putting his knowledge of the bankruptcy code to work.
Thinking Outside the Box: Gary Fraley Thinking Outside the Box: Gary Fraley Sacramento, CA—When it comes to choosing clients, bankruptcy attorney Gary Fraley knows whose corner he wants to be in.
Bankruptcy Attorney, David Edelberg Makes the Best Out of a Challenging Situation. New York, NY—For David Edelberg, bankruptcy attorney at the New York and New Jersey firm of Nowell Amoroso Klein Bierman, working in bankruptcy at a general practice firm means being able to give better service to his clients.
Bankruptcy Attorney, Carl Gustafson Discusses Student Loan Debt and Excessive Lending Bankruptcy Attorney, Carl Gustafson Discusses Student Loan Debt and Excessive Lending Pleasant Hill, CA—After attending law school at Berkeley's Boalt Hall, Carl Gustafson knew exactly what legal field he wanted to practice in.
Keeping Promises: Steven Trezza Keeping Promises: Steven Trezza Tucson, AZ—For Steven Trezza, going into bankruptcy law was all about who he would be representing.
Quality Over Quantity: Diane Drain More on News at LAWS.

Guide To: Bankruptcy Lawyers

Guide to Finding Bankruptcy Lawyer Guide to Finding Bankruptcy Lawyer Questions to ask, Fees, Preparing for appointment.
Guide to Finding Chapter 7 Lawyer Guide to Finding Chapter 7 Lawyer How do I find a Chapter 7 Bankruptcy Lawyer?Chapter 7 Bankruptcy (also called a “straight bankruptcy” or “liquidation”) is the process by which a debtor’s assets are liquidated to repay the debts.
Guide to Finding Chapter 13 Lawyer Guide to Finding Chapter 13 Lawyer How do I find a Chapter 13 Bankruptcy Lawyer?Chapter 13 bankruptcy lawyers help individuals that intend to file for bankruptcy navigate the legal system by selecting an appropriate bankruptcy option, obtain appropriate credit counseling and emerge from bankruptcy after a repayment plan has been fulfilled.