- January 23, 2017
- Thomas Adam
- Bankruptcy
Important Information for Filing Bankruptcy in Jacksonville, FL
As FBI Agent William J. Maddalena stated in a recent press release, “[f]ederal bankruptcy proceedings can be a lifesaver for honest individuals overwhelmed by debt.” But why was an FBI agent talking about filing bankruptcy? Isn’t the FBI’s job to investigate crimes?
Bankruptcy Fraud is a Crime
As a matter of common sense and ethics, most bankruptcy filers know that they should not lie in their bankruptcy filings. 
But sometimes, individuals and businesses do make misrepresentations in their filings or take action like moving their assets shortly before filing for bankruptcy to “protect” them. It’s just “working the system,” right? Wrong.
Bankruptcy fraud is not just ethically wrong, it is a crime. The criminal law provisions governing bankruptcy fraud can be found at 18 U.S.C. §§ 152 to 157. There are different types of bankruptcy fraud but it usually involves some type of false statement or hiding of assets. 18 U.S.C. § 152 sets out many of the common types of criminal bankruptcy fraud, including:
- Concealing property from the bankruptcy trustee or creditors;
- Making a false statement under penalty of perjury; and
- Concealing, destroying, or improperly doctoring documents related to finances;
Violation of the criminal provisions will result in a fine and could result in prison time. Just ask Teresa and Joe Giudice, the former stars of the Real Housewives of New Jersey, who were both sentenced to prison time for their bankruptcy fraud.
The laws are not one sides, creditors can also be prosecuted if they engage in fraudulent behavior in connection with bankruptcy proceedings. Among other things, creditors are prohibited from filing false claims against debtors and from offering not to take action in a bankruptcy proceeding in exchange for money, property, or other compensation.
Florida US Attorney Charges 8 Defendants
A few months ago, the US Attorney for the Southern District of Florida brought bankruptcy fraud charges against eight different defendants across five cases. The five cases combined involve allegations of the concealment of $3 million in assets in connection with Chapter 7 cases.
Of those five cases, the United States v. Kathleen Anne Smith Cutuli and Gregory Lee Cutuli, stands out for the high dollar value involved. The case alone involves allegations of the concealment of $2 million in assets including $114,000 in household furnishings and goods in connection with a Chapter 7 case. Another of the cases, United States v. Rebecca Solemani-Appelbaum, is based on allegations that the debtor transferred over $100,000 into a family member’s account over which she had full control.
The above referenced press release indicated an intent by the US Attorneys Office, FBI, and Bankruptcy Trustees to continue working together to investigate and bring charges for criminal bankruptcy fraud.
Avoid Dangerous Mistakes When Filing Bankruptcy
To avoid the threat of criminal prosecution, or simply, mistakes that could jeopardize your ability to obtain relief through filing bankruptcy proceedings, the attorneys at Adam Law Group recommend that you work with a Florida bankruptcy attorney and use diligence and care when collecting and completing paperwork for your personal or business bankruptcy.