Offenses Relating to the UCC

In Colorado, offenses related to the Uniform Commercial Code (UCC) can result in criminal charges. This includes unlawful commercial practices involving goods, security interests, receipts, and failure to pay over proceeds. Offenses related to the UCC may be charged as a misdemeanor or felony offense, depending on the nature of the violation. In this article, our Colorado criminal defense lawyers will address:

Ucc
In Colorado, offenses related to the Uniform Commercial Code (UCC) can result in criminal charges. This includes unlawful commercial practices involving goods, security interests, receipts, and failure to pay over proceeds.

1. What is the UCC?

The UCC is the “Uniform Commercial Code.”1 The UCC, as adopted by Colorado, is a set of rules and regulations governing business and commercial transactions. The UCC provides standards for conducting the sale or transfer of property and goods among business.

Violations of the UCC generally provide for civil damages for the parties involved. However, some UCC-related offenses may also include criminal penalties. In Colorado, offenses related to the UCC are detailed in a number of criminal code statutes.2

2. What are offenses related to the UCC?

The definitions in the Uniform Commercial Code in Colorado apply to the criminal code sections 18-5-502 to 18-5-511. This includes:

  • Failure to pay over assigned accounts
  • Concealment or removal of secured property
  • Failure to pay over proceeds
  • Fraudulent receipts
  • False statements in receipts
  • Unmarked duplicate receipts
  • Commingled warehouse goods
  • Delivery of goods without receipts
  • Mortgaged goods receipts

The penalties for offenses related to the UCC range from a class 2 misdemeanor to a class 5 felony. Penalties may depend on the specific violation and the value of the offense involved.

2.1. Failure to pay over assigned accounts

Where, under the terms of an assignment of an account, the assignor collects the proceeds from a debtor and wrongfully fails to pay over to the assignee the proceeds, the assignor is guilty of a criminal offense.3

If the amount of proceeds wrongfully withheld amounts to $1,000 or more, failure to pay over assigned accounts is a class 5 felony. The penalties for a class 5 felony conviction include 1 to 3 years in prison and a fine of up to $100,000. If the amount of the proceeds withheld is less than $1,000, the person commits a class 1 misdemeanor. The penalties for a class 1 misdemeanor conviction include 6-18 months in jail and a fine of up to $5,000.

2.2. Concealment or removal of secured property

If a person has given a security interest in personal property as security interest knowingly conceals or removes the encumbered property from the state of Colorado without written consent of the secured creditor, they are guilty of a criminal offense.4

If the amount of the security interest concealed amounts to $1,000 or more, concealment or removal of the secured property is a class 5 felony. The penalties for a class 5 felony conviction include 1 to 3 years in prison and a fine of up to $100,000. If the amount of the concealed security property is less than $1,000, the person commits a class 1 misdemeanor. The penalties for a class 1 misdemeanor conviction include 6-18 months in jail and a fine of up to $5,000.

2.3. Failure to pay over proceeds

Under the terms of certain security interest agreements, a person gives a security interest in personal property to another party while they retain possession of the encumbered property. If the person in possession of the property has the liberty to sell the property, he or she is required to account to the secured creditor for the proceeds of the sale or other disposition.

If the person in possession of the encumbered property willfully and wrongfully fails to pay to the secured creditor the amounts due on account, the person giving the security interest commits a criminal offense.5

If the amount of proceeds wrongfully withheld is $1,000 or more, failure to pay over proceeds is a class 5 felony. The penalties for a class 5 felony conviction include 1 to 3 years in prison and a fine of up to $100,000. If the amount of proceeds withheld is less than $1,000, the person commits a class 1 misdemeanor. The penalties for a class 1 misdemeanor conviction include 6-18 months in jail and a fine of up to $5,000.

2.4. Fraudulent receipts

When a warehouse receives goods, they may issue a receipt that the goods have been received. However, if a warehouse issues a receipt for goods that have not actually been received by the warehouse or are not under the actual control of the warehouse at the time the receipt is issued, they may be guilty of a class 6 felony.6

The penalties for issuing fraudulent receipts include 12-18 months in prison and a fine of up to $100,000. There is also a mandatory 1-year parole period.

2.5. False statements in receipts

A warehouse agent or officer who fraudulently issues a receipt for goods knowing that the receipt contains a false statement commits a class 2 misdemeanor. Assisting or aiding in issuing a fraudulent receipt is also a criminal offense. The penalties for false statements in a warehouse receipt include up to 1 year in jail and a fine of up to $1,000.7

2.6. Unmarked duplicate receipts

Issuing a duplicate receipt or additional receipt without marking the duplicate receipt may be a felony. A warehouse officer or agent that issues a duplicate receipt for goods knowing that a former receipt was already issued for the same goods, without placing the word “duplicate” on the face of the receipt commits a class 6 felony. The penalties for issuing fraudulent receipts include 12-18 months in prison and a fine of up to $100,000.8

2.7. Commingled warehouse goods

If a warehouse owner who solely or jointly owns goods in the warehouse issues a negotiable receipt for the goods that does not state the ownership of the goods commits a class 2 misdemeanor. The penalties include up to 1 year in jail and a fine of up to $1,000.9

2.8. Delivery of goods without receipts

A warehouse that delivers goods out of the possession of the warehouse, knowing that a negotiable receipt which would transfer the right of the possession of those goods is outstanding and uncancelled, without obtaining the possession of that receipt, commits a class 2 misdemeanor. The penalties for delivery of goods without a receipt include up to 1 year in jail and a fine of up to $1,000.10

2.9. Mortgaged goods receipts

Any person who deposits goods to which he or she does not have a title and takes a negotiable receipt that the person afterward negotiates for value with intent to deceive commits a class 2 misdemeanor. The penalties for wrongfully negotiating a receipt to deceive include up to 1 year in jail and a fine of up to $1,00011

3. Related Offenses

Commercial code offenses may be related to other criminal charges involving business practices. Deceptive business and sales practices can result in theft or fraud offenses. Some deceptive business practices are a violation of the Colorado Consumer Protection Act, which provides for civil and criminal penalties.

3.1. Deceptive Sales and Business Practices

In Colorado, deceptive sales or business practices could lead to criminal charges. Deceptive sales activities include false advertising, making false statements to generate business, promoting a pyramid scheme, or using fraudulent financing. Deceptive business practices could result in misdemeanor or felony theft charges in Colorado, depending on the nature of the violation.

Call us for help...

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If you have been accused of offenses related to commercial business practices, please contact us at Colorado Legal Defense Group. Our caring Colorado defense attorneys have many years of experience representing clients who have been charged with commercial fraud offenses. We are among the best Colorado criminal defense attorneys to call. Contact us today for a free consultation by phone or in-person or in our Denver law office.


Legal References

  1. C.R.S. 4-1-101 (Uniform Commercial Code)
  2. C.R.S. 18-5-501
  3. C.R.S. 18-5-502
  4. C.R.S. 18-5-504
  5. C.R.S. 18-5-505
  6. C.R.S. 18-5-506
  7. C.R.S. 18-5-507
  8. C.R.S. 18-5-508
  9. C.R.S. 18-5-509
  10. C.R.S. 18-5-510
  11. C.R.S. 18-5-511

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