Bankruptcy fraud in Nevada is when a person who is pursuing bankruptcy protection tries to defraud the Court by intentionally filing fraudulent documents or making false claims. Typical fraudulent acts that may invite prosecution include the concealment of assets, destruction of paperwork and records, and untrue declarations.
The rise of bankruptcy cases has inevitably spurred a rise in the white-collar crime of bankruptcy fraud. The punishment may include steep fines and years in prison. However, a Nevada criminal defense attorney who is experienced in this kind of law may be able to get the charges lessened or thrown out altogether.
This article gives a summary of the federal crime of bankruptcy fraud as defined in 18 USC 157. Continue reading to learn about the definition of bankruptcy fraud, how to defend against criminal charges, and what penalties a conviction may carry.
What is bankruptcy fraud?
Criminal defense attorney Michael Becker provides an example of bankruptcy fraud:
Example: Nelson applies for bankruptcy protection in Henderson. He files a “plan of arrangements” where he lies about receiving a loan from the U.S. Small Business Administration (SBA) when he actually did not. If Nelson is caught, the U.S. Marshals Service could book him at the Henderson NV Detention Center for bankruptcy fraud for intentionally lying about the loan.
Note that Nelson would not be guilty of fraud if he honestly believed that he received the loan or if he accidentally submitted the loan information. Federal fraud law is meant only to punish people who deliberately try to perpetrate a fraudulent scheme.
Also, note that falsification of bankruptcy forms could cause the defendant to be charged with perjury as well.
What are the best defenses?
Every bankruptcy is different, and the specific circumstances of the case determine which defense strategies would be the most successful to fight fraud charges. Below are some of the more common defenses:
- Lack of intent to defraud. Bankruptcies are very complex processes, and courts fully expect that people will make honest mistakes when completing and submitting paperwork. If the defense attorney can show that the defendant always acted in good faith and never deliberately set out to trick the system, the defendant should not be held criminally liable.
- Lack of sufficient evidence to convict. In all criminal cases including bankruptcy fraud, the U.S. Attorney’s Office bears the burden of proof to demonstrate to the court that the defendant is guilty beyond a reasonable doubt. Consequently, the defense attorney’s responsibility is to carry out a thorough investigation to attempt to show the court that there is inadequate evidence to justify a criminal conviction.
- Lack of proper police protocol. On occasion, a whole criminal case can be dropped based solely on police misconduct. If law enforcement may have conducted an illegal search to find evidence in a bankruptcy fraud investigation, then the defense lawyer could file with the judge a “motion to suppress evidence“. If the Nevada Federal Court proceeds to grant the motion and disregard all the illegally-obtained evidence, then the prosecution may dismiss the entire case because of insufficient evidence to convict.
The sentence for a conviction of the federal crime of bankruptcy fraud in Nevada is:
- up to five years in Federal Prison, and/or
- a fine