Is it a Crime to lie on your petition?
Yes, It is a FEDERAL CRIME TO LIE on your bankruptcy petition. 18 U.S.C. § 151 to 157 provide examples of bankruptcy crimes. These include knowingly and fraudulently concealing assets, lying under oath or on bankruptcy schedules, or knowingly and fraudulently filing a false proof of claim. Bankruptcy fraud can also be used to support a RICO claim.
Why you should be honest with your Attorney
Your Attorney may think of other creative but truthful ways to disclose your assets. These assets can be sometimes exempt from seizure in bankruptcy. If they are not your Bankruptcy Attorney can possibly find some alternate solutions to filing for Bankruptcy. On the other hand, your Bankruptcy Attorney may convince you that asset being liquidating in the Bankruptcy Estate may well be much better than holding on it. Either put all your cards on the table so you can prevent an investigation with the Trustee and the U.S. Attorney’s office.
You may not receive a discharge
The main reason you file for bankruptcy is to receive a discharge and or some sort of relief. Under 11 USC § 523 some of the exceptions to a discharge are fraud, concealment, embezzlement, ect, Basically, if you lie you are ruining your chances of being able to have those debts you listed discharged.
Examples of Bankruptcy Cases where someone lied
1. Almost 2 years after filing bankruptcy to the tune of $11 million in debt, Teresa is facing the possibility that her bankruptcy filing could be overturned. She is facing trial for bankruptcy fraud alongside her husband Joe Giudice. The Giudices’ trustee John W. Sywilok is accusing them of concealing assets and hiding income on their bankruptcy filing.
2. Recently, Former New York Mets and Philadelphia Phillies outfielder Lenny Dykstra has been indicted by a Los Angeles federal grand jury in a bankruptcy fraud case. The 48-year-old filed for bankruptcy in 2009, and is accused of later stealing and selling property from an $18.5 million estate. If found guilty on all charges, Dykstra faces a maximum of 80 years in prison.
3.On March 29, 2011, in Sacramento, Calif., James. D. Burke, of Vacaville, was sentenced to 15 months in prison, followed by three years of supervised release, and ordered to pay a $100,000 fine. Burke was convicted by a trial jury on May 27, 2010, of three counts of bankruptcy fraud. At trial, the evidence showed that Burke was formerly the president of Truck-A-Way (TAW), a Vacaville trucking company that hauled millions of dollars worth of tomatoes and other agricultural products throughout the Central Valley. After losing its largest client, Burke and his brother filed for bankruptcy on behalf of the company. During the course of the bankruptcy, he filed false documents and made false statements relating to TAW’s assets in an attempt to hide those assets from TAW’s numerous creditors. Those assets included numerous tractor-trailers that he had used to secure a $3 million loan, and approximately $4 million in TAW loans and revenue that Burke had diverted to his own accounts.
4. On March 9, 2011, in Atlanta, Ga., Robert Negrelli, of Alpharetta, Georgia, was sentenced to 15 months in federal prison and three years of supervised release on bankruptcy fraud charges.Negrelli falsely stated that his income from employment or operation of his business was only $81,000 in the two-year period before his bankruptcy filing. Negrelli’s federal income tax returns showed that in 2004 and 2005, he reported gross income of approximately $210,000 and $350,000, respectively. When confronted, he admitted he made significantly more income through the operation of Negrelli Realty. Similarly, Negrelli also falsely represented in the course of the bankruptcy case that he had listed all potential creditors in bankruptcy when he knew there were creditors with unsecured nonpriority claims that he failed to disclose.
5. On February 11, 2011, in Minneapolis, Minn., Dennis Hecker was sentenced to 120 months in prison and ordered to pay more than $31 million in restitution for conspiracy to commit wire fraud and bankruptcy fraud in connection with his scheme to defraud financial lenders and others out of millions of dollars. Hecker filed personal bankruptcy in June of 2009, seeking to discharge, among other amounts owed, the $10 million debt to Chrysler Financial. After filing bankruptcy, however, Hecker admittedly concealed assets from the bankruptcy trustee. For example, he transferred $33,057 into someone else’s bank account, over which he exercised control. He also transferred approximately $80,000 to that same individual, arranging for that individual to deposit the money, with instructions to return it to him later.
Given the highly interconnected and electronic public record access that is available to bankruptcy trustees as well as government investigators, getting caught is inevitable. SO DON’T LIE!
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