Federal Crime of Concealment of Assets – 18 U.S.C. § 152
When someone is filing for bankruptcy, it is expected that the individual truly and faithfully discloses all of their assets to the bankruptcy court so the court can appropriately assess what the bankruptcy filer can keep or must relinquish.
When people fail to disclose assets they own, they can be criminally charged under federal law for concealment of assets.
Nobody wants a bankruptcy case to turn into a criminal case, but this is what can happen when the government suspects that you are hiding assets.
Bankruptcy fraud is charged under the closely related 18 USC § 157 that makes it a crime to make false statements in a bankruptcy filing and to knowingly conceal assets or file a misleading financial statement in a bankruptcy petition.
Put simply, bankruptcy fraud involves the filing of a petition or document for bankruptcy protection as part of a scheme to defraud creditors.
Further, bankruptcy fraud charges could also be filed against individuals who make false claims, fraudulent representations, or false promises that are related to a bankruptcy proceeding.
There are many different statutes that can be used by a federal prosecutor to indict someone related to bankruptcy fraud, including mail fraud, wire fraud, tax evasion, identity theft, and face sentencing for each separate crime.
Bankruptcy fraud is a felony offense punishable by up to 5 years in a federal prison and a fine up to $250,000, and you could be ordered by the judge to pay restitution and forfeit assets you acquired through the scheme.
If you are facing an 18 U.S.C. § 152 concealment of assets charge, then it is important that you speak to legal counsel right away. Our federal criminal defense attorneys will review the laws below.
What is Concealment of Assets?
Concealment of assets, false oaths and claims: bribery under 18 U.S.C. § 152 is a federal felony charge that prohibits several types of behavior during a bankruptcy filing.
Once a bankruptcy is filed under Title 11 of the U.S. Code, this law makes it illegal to knowingly and fraudulently:
- Conceal property from a creditor or United States Trustee;
- Make a false oath or account in relation to a bankruptcy case;
- Make a false declaration, certification, verification, or sworn statement in relation to a bankruptcy case;
- Present any false claim or proof in relation to a bankruptcy case;
- Receive any material property from someone filing bankruptcy to help them avoid losing the property through bankruptcy;
- Give, offer, or receive or attempt to receive any money or property to help someone conceal assets in a bankruptcy;
- Transferring money or property to another person or corporation to conceal assets in a bankruptcy;
- Falsifying, concealing, altering, destroying, or making a false entry in any recorded information relating to the property of the debtor during a bankruptcy;
- Withholding any recorded information relating to the property or financial affairs of the debtor from the court or any authorized officer of the court.
If someone is accused of any of the above actions, they can be charged under 18 U.S.C. § 152 of the U.S. Code with a federal felony. Any combination of these acts can also result in multiple criminal counts.
Further, the United States Bankruptcy Code Section 523(a)(2)(A) prohibits discharging any debt obtained through false pretenses, representation, or fraud.
If this occurs, then your bankruptcy filing could be dismissed and you will still owe all the debts from which you were seeking relief. You will then have to wait a specific amount of time before re-filing for bankruptcy protection.
What Are the Related Federal Crimes?
The federal law regarding the concealment of assets can be found within Chapter 9 of Title 18 of the U.S. Code relating to bankruptcy. Other related crimes that can be found within this chapter include:
- 18 U.S.C. § 153 – Embezzlement against estate is punishable by up to five years in a federal prison and a fine;
- 18 U.S.C. § 154 – Adverse interest and conduct of officers is punishable by a fine and forfeiture of their office;
- 18 U.S.C. § 155 – Fee agreements in cases under title 11 and receiverships is punishable by up to one year in prison and a fine;
- 18 U.S.C. § 156 – Knowing disregard of bankruptcy law or rule is punishable by a maximum sentence of one year in prison and a fine;
- 18 U.S.C. § 157 – Bankruptcy fraud is punishable by up to 5 years in a federal prison, a fine, or both a fine and imprisonment.
These related crimes can be charged alongside concealment of assets charges or can be used to negotiate plea deals to avoid more serious charges.
This section also notes that the Federal Bureau of Investigation (FBI) and the Attorney General are designated to enforce these laws even though these are bankruptcy-related crimes.
What Are the Punishments?
18 U.S.C. § 152 concealment of assets is a federal felony charge that carries a maximum possible penalty of five years in federal prison and a fine by the court as outlined by the federal sentencing guidelines.
As noted above, other crimes within the same chapter of the U.S. Code that carry a five-year maximum sentence include embezzlement against estate at 18 U.S.C. § 153 and bankruptcy fraud at 18 U.S.C. § 157.
Other crimes within this chapter may be more forgiving such as adverse interest and conduct of officers at 18 U.S.C. § 154 where the maximum punishment is a fine or knowing disregard of bankruptcy law or rule at 18 U.S.C. § 156 where the maximum punishment is one year in jail and a fine.
Defending Federal Concealing Assets Charges
Bankruptcy is designed to provide people experiencing financial hardship some relief from overwhelming debt.
Thus, due to the large amount of money involved, federal authorities will often closely review Chapter 7, Chapter 11, and Chapter 13 bankruptcy filings and proceedings to identify potential fraud.
If they have a valid reason to suspect fraud, then the issue is normally sent to the Federal Bureau of Investigation (FBI) or the United States Department of Justice for an investigation.
If an indictment if filed, the burden of proof is the responsibility of the prosecution who has to prove their case beyond a reasonable doubt, which means each element of the crime must be established.
In order to prove a defendant committed the crime of concealing assets, the prosecutor will have to establish an actual intent to deceive.
The constant elements you will find across the concealment of assets statute are “knowingly and fraudulently.”
Thus, for a prosecutor to secure a conviction for concealment of assets, they must prove that the defendant knowingly and fraudulently took some action meant to conceal assets during a bankruptcy proceeding.
If the defendant did not knowingly conceal assets for some reason, such as lack of knowledge, capacity, or mistake, this can serve as a defense to the concealment of assets.
Perhaps we can show your act had a legitimate purpose, there is insufficient evidence to obtain a conviction, or the statute of limitations has expired.
As noted, when someone acts fraudulently, it means that they acted with the intent to defraud the victim.
Here, the victims are either the federal government or creditors who are allegedly purposely not shown all of the debtor's assets to avoid losing money or property to the creditor or the government.
If you are under a federal investigation for bankruptcy fraud or concealment of assets, you will need an experienced defense lawyer who knows how to deals with criminal cases in a federal courtroom.
We might be able to negotiate with the federal prosecutor for a favorable plea bargain or even the case dismissed.
Eisner Gorin LLP is located in Los Angeles County and serves clients facing federal charges across the United States. For an initial consultation, call 877-781-1570, or you can complete our contact form.