In Nevada, bankruptcy fraud occurs when you try to deceive a bankruptcy court by intentionally filing fake documents or making false claims. Bankruptcy fraud is a federal crime that carries up to five years in prison and high fines.
The rise of bankruptcy cases has inevitably spurred a rise in white-collar crimes like bankruptcy fraud. However, a Nevada federal crimes lawyer who is experienced in this kind of law may be able to get the charges lessened or thrown out altogether.
In this article, our Las Vegas criminal defense attorneys discuss:
1. Elements of Bankruptcy Fraud
For you to be convicted of bankruptcy fraud in federal court, prosecutors must prove beyond a reasonable doubt that you intentionally defrauded – or tried to defraud – a financial institution. Common fraudulent acts in these types of cases include:
- the concealment of assets,
- destruction of paperwork and records, and
- untrue declarations.1
Example: When filing for bankruptcy in Las Vegas, Nelson 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 arrest him for bankruptcy fraud for intentionally lying about the loan.
Note that falsification of bankruptcy forms could cause you to be charged with perjury as well.
Also note that in Nevada, all federal criminal cases are heard in either one of two courthouses: Lloyd D. George Federal Courthouse in Las Vegas, or the Bruce R. Thompson Federal Courthouse in Reno.
Bankruptcy fraud is a felony.
2. Defenses
Every bankruptcy is different, and the specific circumstances of the case determine which strategies would be the most successful in fighting fraud charges. Below are two of the more common defenses.
- You Had No Intent to Defraud. Bankruptcies are very complex processes, and courts fully expect that people will make honest mistakes when completing and submitting paperwork. If we can show that you always acted in good faith and never deliberately set out to trick the system, you should not be held criminally liable.
- The Police Committed Misconduct. On occasion, a whole criminal case can be dropped based solely on mistakes by law enforcement. If the police may have conducted an illegal search, then we would ask the judge to suppress any illegally-obtained evidence. If the judge agrees, the U.S. Attorney’s Office may be forced dismiss your charge for lack of proof.
3. Penalties
A conviction of bankruptcy fraud carries a sentence of:
- up to five years in Federal Prison, and/or
- a fine.2
Note there are not federal prisons in Nevada, so any prison sentence would be served out of state.
Additional Reading
For more in-depth information, refer to these scholarly articles:
- Bankruptcy Crimes and Bankruptcy Practice – American Bankruptcy Institute Law Review.
- The Fraud Exception to Discharge in Bankruptcy: A Reappraisal – Stanford Law Review.
- Bankruptcy Fraud: Crime and Punishment – South Dakota Law Review.
- Consumer Bankruptcy Fraud and the Reliance on Advice of Counsel Argument – American Bankruptcy Law Journal.
- Bankruptcy Fraud: Crime without Punishment II – Com. Law Journal.