I promptly, and directly, explain to my
client:
- the bankruptcy code requires complete financial disclosure, and
- the bankruptcy papers filed with the court are signed under penalty of perjury.
If you get caught, the Federal Court
will ruin your day! That's right, they will make an example out of you. I do not want my name associated with such
activity.
This can lead to criminal sanctions; perhaps you have heard of something called "Fraud"; this is in addition to penalties provided within the bankruptcy code and rules. Sometimes proper planning can
accommodate my client's goals, but proper disclosure is a must.
Case in point. United States v. Turner (11th Cir., 2012).
In this case out of Alabama, Mr. Turner
failed to disclose the receipt of an insurance check he deposited
into a solely owned LLC, of which he was the only signatory on the
account. He also failed to disclose his LLC.
A jury convicted Mr. Turner of one
count of bankruptcy fraud, and four counts of making false entries in
his bankruptcy filings with the intent to impede, obstruct or
influence his bankruptcy case.
He was sentenced to 27 months incarceration, followed by 3 years of supervised release, and payment of $28,500 restitution and $500 special assessments. As of the writing of this blog, one
count, Count 6, was vacated on appeal, and the case has been sent
back to the lower court for resentencing.
