Criminal Bankruptcy Fraud -
Conviction of a Crime Under Section 152
For a conviction of a crime under Section 152, the prosecutor must prove that the act was done "knowingly and fraudulently". The term "knowingly" means that it was done voluntarily and intentionally, i.e., not by accident, inadvertence, or mistake.
The prosecutor does not have to show that the defendant knew he was breaking the law, so ignorance of the law is no excuse. The word "fraudulently" means that the act was done with the intent to deceive. Intent to deceive is most often shown by the overall circumstantial evidence, as it is not often that a debtor will admit such an intent.
The government will also need to prove that the defendant
was contemplating bankruptcy or intended to defeat the bankruptcy
laws. This can be shown by the poor financial condition of the debtor
and/or his company, the failure to pay creditors, hiding or diverting
assets, and secret deals by a company's insiders to defeat the claims
of creditors by transferring assets to a newly-created company.
Written by Henry Rendler
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