How to Defend Against Bankruptcy Fraud Allegations

Bankruptcy fraud is a federal crime that covers a wide range of offenses such as:

  • Misrepresenting Income
  • Concealment of Assets
  • Destruction of Records
  • Overstating Expenses
  • Perjury

When it comes to bankruptcy cases, federal prosecutors have the burden of proving the crime, while the defendant has the right to mount a defense that identifies flaws in the prosecution's case.

What Is the “Burden of Proof”?

As stated above, prosecutors have the burden of proof, which means defendants accused of bankruptcy fraud aren’t required to prove their innocence. Instead, the government has the burden of presenting convincing evidence to show beyond a reasonable doubt that the defendant committed the alleged crime.

Common Bankruptcy Fraud Defenses

Although defendants in these cases don’t necessarily need to prove their innocence, most still try to refute the prosecution’s case with the following common defense strategies:

#1: Mistake

Depending on the facts of the case, the defendant might claim that the reason they didn’t list a valuable asset or disclose the transfer of an asset in their bankruptcy petitions was completely accidental. This would mean the debtor needs to present evidence that the person preparing the petition knew about the missing information but the debtor didn’t notice that it wasn’t included before signing the schedules and statements that were filed with the bankruptcy court.

#2: Statute of Limitations

In some cases, the debtor can make the argument that the statute of limitations for prosecuting the alleged crime expired. The statute of limitations for most bankruptcy crimes is five years from the date of the offense. If the debtor is accused of concealing assets, then the statute of limitations period is five years from the date of discharge or the denial of discharge.

#3: Withdrawal or Renunciation

Debtors can also testify or present evidence that a correction was made to the bankruptcy paperwork as soon as the debtor realized the error or regretted the decision to intentionally omit the asset.

Talented & Compassionate Bankruptcy Fraud Attorneys

Have you or someone you know been accused of committing bankruptcy fraud? If so, please don’t hesitate to get in touch with our experienced federal crimes attorneys at Lessem, Newstat & Tooson, LLP. We have a stellar reputation for devising strong defense strategies in these types of cases, and we are prepared to get to work fighting for the justice you deserve.

To request a free case consultation with our law firm, please call (800) 462-7160 today.