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Bellizia Law Office
395 Franklin Street
Bloomfield, NJ 07003
Tel: 973-202-6160
Fax: 973-743-2290
info@prosperlawoffice.com
The most common scheme utilized in fraudulent bankruptcy filings involves the concealment of a debtor's assets. The concealment of assets encompasses approximately seventy percent of bankruptcy fraud. Concealment prevents these assets from being liquidated and transferred to creditors to extinguish debt.
Concealing assets from a bankruptcy court may be perceived as fraud. For example, an individual in Chapter 7 bankruptcy lists his/her assets as being below his/her liabilities.
While this should be the typical situation in most bankruptcy filings, the eventual outcome is not. After the debtor's bankruptcy is dismissed, he/she seems to continue living an extravagant lifestyle. Debtors may be reported by their neighbors, who claim that the debtors have concealed several assets from the bankruptcy court, including boats, Rolex watches, and country club memberships. An investigation determines the debtors did not list these assets on their bankruptcy schedules in hopes of avoiding total liquidation of their assets.
In the case of a business filing for bankruptcy protection, concealment of assets typically occurs on a larger scale. For example, a business owner places his company in Chapter 11 bankruptcy because the company is facing a severe cash shortage. However, just prior to filing for bankruptcy, the business owner transfers large sums of cash and other company assets to family members as well as outside business interests which the owner controls. The debtor's objective is to protect these assets from sale or liquidation. The concealment of a debtor's assets remains the most significant aspect of law enforcement investigation and prosecution.
Bankruptcy fraud also involves schemes to include petition mills, multiple filing, false statements, trustee fraud, attorney fraud, forged filings, embezzlement, credit card fraud, and "bust-outs." After the concealment-of-assets fraud schemes, petition mills and multiple filings are the most prominent bankruptcy fraud schemes:
Sometimes people file for bankruptcy in different states, utilizing true personal identifiers; or use false names and/or Social Security Account Numbers (SSAN) to file in the same or different states. Typically, when a debtor files several bankruptcies in two or more states, he/she lists nearly identical assets and liabilities in each filing. The debtor becomes discharged from the debts and, in the process, makes off with several of the assets left off of a particular petition. If the debtor feels that he will be caught, he/she simply travels to another state and files for another bankruptcy.
It takes an attorney with the confidence and experience of a former prosecutor to properly deal with authorities when it comes to defending you against these charges. If you, a friend or family member have been accused or charged with such a crime, please do not hesitate to contact Mr. Bellizia immediately. Criminal matters are not problems that will go away when ignored. Early intervention in criminal matters, may achieve outstanding results, and will be instrumental to the outcome of your case.