# Did This Person Commit a Crime? **URL:** \ **Category:** Factual Questions\ **Created:** [July 25, 2013, 7:14pm UTC](https://boards.straightdope.com/t/did-this-person-commit-a-crime/664514 "2013-07-25T19:14:18Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![HeyHomie](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/heyhomie/32/207_2.png) [@HeyHomie](https://boards.straightdope.com/u/HeyHomie)\ **Post date:** [July 25, 2013, 7:14pm UTC](https://boards.straightdope.com/t/did-this-person-commit-a-crime/664514/1 "2013-07-25T19:14:18Z")
You are not my lawyer, I am not your client. A local businessman filed bankruptcy, owing tens of millions to the IRS, vendors, defrauded customers, etc. Since the bankruptcy was filed, the businessman has hidden millions of dollars in cash, precious metals, and merchandise through leases in hi son’s name and in a shadow corporation owned by his son. Are either the businessman or his son criminally liable, and if so what kind of time are they facing? ---
**Author:** ![dolphinboy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dolphinboy/32/330_2.png) [@dolphinboy](https://boards.straightdope.com/u/dolphinboy)\ **Post date:** [July 25, 2013, 7:26pm UTC](https://boards.straightdope.com/t/did-this-person-commit-a-crime/664514/2 "2013-07-25T19:26:48Z")
During the bankruptcy process you are required to declare ALL of your assets, not just the ones you want them to know about. You have to swear that the information you provide is accurate under penalty of perjury I think. If you intentionally hide assets in order to defraud the bankruptcy court I believe a crime has been committed, although I am not a lawyer so I can’t tell you which one. As far as ‘giving’ assets to relatives in order to defraud a bankruptcy I believe that is also a crime. If your relative is knowingly involved in the fraud I believe they have committed a crime also. A lawyer type will be along shortly to spell it all out… ---
**Author:** ![Oakminster](https://avatars.discourse-cdn.com/v4/letter/o/77aa72/32.png) [@Oakminster](https://boards.straightdope.com/u/Oakminster)\ **Post date:** [July 25, 2013, 8:52pm UTC](https://boards.straightdope.com/t/did-this-person-commit-a-crime/664514/3 "2013-07-25T20:52:15Z")
Assuming the facts in the OP are correct and provable, then the businessman and his son could be charged under [18 USC 152](http://www.law.cornell.edu/uscode/text/18/152), and if convicted could be sentenced to up to five years and face a hefty fine for each count. ---
**Author:** ![pravnik](https://avatars.discourse-cdn.com/v4/letter/p/8edcca/32.png) [@pravnik](https://boards.straightdope.com/u/pravnik)\ **Post date:** [July 25, 2013, 8:55pm UTC](https://boards.straightdope.com/t/did-this-person-commit-a-crime/664514/4 "2013-07-25T20:55:53Z")
Yes, concealment of assets is a crime. > [@](#): > > A person who— > > (1) knowingly and fraudulently conceals from a custodian, trustee, marshal, or other officer of the court charged with the control or custody of property, or, in connection with a case under title 11, from creditors or the United States Trustee, any property belonging to the estate of a debtor; > > (2) knowingly and fraudulently makes a false oath or account in or in relation to any case under title 11; > > (3) knowingly and fraudulently makes a false declaration, certificate, verification, or statement under penalty of perjury as permitted under section 1746 of title 28, in or in relation to any case under title 11; > > (4) knowingly and fraudulently presents any false claim for proof against the estate of a debtor, or uses any such claim in any case under title 11, in a personal capacity or as or through an agent, proxy, or attorney; > > (5) knowingly and fraudulently receives any material amount of property from a debtor after the filing of a case under title 11, with intent to defeat the provisions of title 11; > > (6) knowingly and fraudulently gives, offers, receives, or attempts to obtain any money or property, remuneration, compensation, reward, advantage, or promise thereof for acting or forbearing to act in any case under title 11; > > (7) in a personal capacity or as an agent or officer of any person or corporation, in contemplation of a case under title 11 by or against the person or any other person or corporation, or with intent to defeat the provisions of title 11, knowingly and fraudulently transfers or conceals any of his property or the property of such other person or corporation; > > (8) after the filing of a case under title 11 or in contemplation thereof, knowingly and fraudulently conceals, destroys, mutilates, falsifies, or makes a false entry in any recorded information (including books, documents, records, and papers) relating to the property or financial affairs of a debtor; or > > (9) after the filing of a case under title 11, knowingly and fraudulently withholds from a custodian, trustee, marshal, or other officer of the court or a United States Trustee entitled to its possession, any recorded information (including books, documents, records, and papers) relating to the property or financial affairs of a debtor, shall be fined under this title, imprisoned not more than 5 years, or both. [18 USC § 152 - Concealment of assets; false oaths and claims; bribery](http://www.law.cornell.edu/uscode/text/18/152) Or, on preview, what Oakminster said. ---
**Author:** ![drachillix](https://avatars.discourse-cdn.com/v4/letter/d/48db29/32.png) [@drachillix](https://boards.straightdope.com/u/drachillix)\ **Post date:** [July 25, 2013, 9:11pm UTC](https://boards.straightdope.com/t/did-this-person-commit-a-crime/664514/5 "2013-07-25T21:11:28Z")
With all due respect to the legal presence in the thread, the answer could be very different depending on the structure of his company and the nature of the services provided. Assuming he is incorporated there are all kinds of mitigating factors where he personally might have been receiving substantial compensation. If they lost a major contract or a major project crashed and burned generating massive liabilities they were unequipped to handle (say a construction project where the developer went belly up halfway through the project but did not promptly notify the builder, leaving them hanging with bills for materials and payroll they cannot cover without ongoing payments specified in the contract.) Now if he was purchasing items with corporate funds but squirreling them away for himself that is a different problem and also illegal from a different angle. As far as the son, once again, depending on the specifics his son could be set up as a legit vendor providing a service. They would need to claim a business need to pay SonCompany for a service or product. The IRS will eventually unravel all the BS if they just have a pile of consulting companies paying consulting companies who hire more consultants to consult on things to the point that we wonder who is really consulting who on what? 😃 ---
**Author:** ![pravnik](https://avatars.discourse-cdn.com/v4/letter/p/8edcca/32.png) [@pravnik](https://boards.straightdope.com/u/pravnik)\ **Post date:** [July 25, 2013, 9:23pm UTC](https://boards.straightdope.com/t/did-this-person-commit-a-crime/664514/6 "2013-07-25T21:23:21Z")
The op’s scenario was that “since the bankruptcy was filed, the businessman has hidden millions of dollars in cash, precious metals, and merchandise through leases in his son’s name and in a shadow corporation owned by his son.” I can’t see any other way to read that other than concealing assets. ---
**Author:** ![jtur88](https://avatars.discourse-cdn.com/v4/letter/j/e9c0ed/32.png) [@jtur88](https://boards.straightdope.com/u/jtur88)\ **Post date:** [July 25, 2013, 9:28pm UTC](https://boards.straightdope.com/t/did-this-person-commit-a-crime/664514/7 "2013-07-25T21:28:27Z")
Nothing you have done is a crime until you are convicted in a court of law. The person described might have a very good lawyer who will convince a judge or a jury of the innocence of his client, and then nothing that he did is a crime. ---
**Author:** ![drachillix](https://avatars.discourse-cdn.com/v4/letter/d/48db29/32.png) [@drachillix](https://boards.straightdope.com/u/drachillix)\ **Post date:** [July 25, 2013, 10:43pm UTC](https://boards.straightdope.com/t/did-this-person-commit-a-crime/664514/8 "2013-07-25T22:43:10Z")
> [@pravnik](#): > > The op’s scenario was that “since the bankruptcy was filed, the businessman has hidden millions of dollars in cash, precious metals, and merchandise through leases in his son’s name and in a shadow corporation owned by his son.” I can’t see any other way to read that other than concealing assets. If his personal assets and those of the business are separate via incorporation, his personal finances could be legitimately separate. Just because your business is crashing and burning does not mean you cant still be a millionaire. It just means you let a failing model fail. ---
**Author:** ![RedSwinglineOne](https://avatars.discourse-cdn.com/v4/letter/r/a9adbd/32.png) [@RedSwinglineOne](https://boards.straightdope.com/u/RedSwinglineOne)\ **Post date:** [July 25, 2013, 11:11pm UTC](https://boards.straightdope.com/t/did-this-person-commit-a-crime/664514/9 "2013-07-25T23:11:23Z")
So I assume most business owners do something to insulate their personal assets from the business should a lawsuit or something else happen. Is there a way this is typically done? ---
**Author:** ![HeyHomie](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/heyhomie/32/207_2.png) [@HeyHomie](https://boards.straightdope.com/u/HeyHomie)\ **Post date:** [July 25, 2013, 11:23pm UTC](https://boards.straightdope.com/t/did-this-person-commit-a-crime/664514/10 "2013-07-25T23:23:50Z")
[http://www.illinoistimes.com/Springfield/article-12658-jeffrey-parsons-accused-of-lying.html](http://www.illinoistimes.com/Springfield/article-12658-jeffrey-parsons-accused-of-lying.html) ---
**Author:** ![gnoitall](https://avatars.discourse-cdn.com/v4/letter/g/bb73d2/32.png) [@gnoitall](https://boards.straightdope.com/u/gnoitall)\ **Post date:** [July 25, 2013, 11:26pm UTC](https://boards.straightdope.com/t/did-this-person-commit-a-crime/664514/11 "2013-07-25T23:26:28Z")
> [@RedSwinglineOne](#): > > So I assume most business owners do something to insulate their personal assets from the business should a lawsuit or something else happen. Is there a way this is typically done? Yeah. [Incorporation](http://en.wikipedia.org/wiki/Incorporation_(business)), as was mentioned just before your question: > [@drachillix](#): > > If **his personal assets and those of the business are separate via incorporation** , his personal finances could be legitimately separate. ---
**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\ **Post date:** [July 26, 2013, 12:16am UTC](https://boards.straightdope.com/t/did-this-person-commit-a-crime/664514/12 "2013-07-26T00:16:10Z")
> [@RedSwinglineOne](#): > > So I assume most business owners do something to insulate their personal assets from the business should a lawsuit or something else happen. Is there a way this is typically done? Limited liability is basically the whole point of incorporation. Donald Trump has had like a dozen businesses go tits up, but he still manages to have enough stashed away to keep that farm[sup]1[/sup] going. He’s never declared personal bankruptcy. [sub]1. You know, where they grow whatever the fuck that thing on his head is.[/sub] ---
**Author:** ![Procrustus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/procrustus/32/2994_2.png) [@Procrustus](https://boards.straightdope.com/u/Procrustus)\ **Post date:** [July 26, 2013, 12:24am UTC](https://boards.straightdope.com/t/did-this-person-commit-a-crime/664514/13 "2013-07-26T00:24:36Z")
> [@jtur88](#): > > Nothing you have done is a crime until you are convicted in a court of law. The person described might have a very good lawyer who will convince a judge or a jury of the innocence of his client, and then nothing that he did is a crime. Committing a crime is different than being convicted of a crime. If I throw my garbage out my car window, I’ve committed the crime of littering even if never charged or convicted. For any crime there is a chance that conviction won’t follow, but a crime was committed nonetheless. ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [July 26, 2013, 12:48am UTC](https://boards.straightdope.com/t/did-this-person-commit-a-crime/664514/14 "2013-07-26T00:48:46Z")
If your actions as an officer of the corporation are designed to “milk” the corporation, make transactions that basically mean the corporation ends up with nothing and you end up with everything personally, that’s fraud. (I.e. the corporation buys all sorts of fancy items on credit, sells them to the CEO for a dollar, has no way to pay and goes bankrupt.) Deliberately planning to go bankrupt that way is illegal. If the actions of officers of the corporation contributed to or permitted this scheme, they too may be personally liable in any civil lawsuit to recover the loss. The OP said “after going bankrupt”. When you or your corporation go bankrupt, you must declare all assets. How those assets are disposed of is up to the court, or a bankruptcy trustee. Hiding those assets is a criminal offense. Taking those assets is stealing. buying those assets needs the permission of the court or the trustee. [http://www.alger.ca/bankruptcy-fraud-alberta.htm](http://www.alger.ca/bankruptcy-fraud-alberta.htm) > [@](#): > > Q: What is Bankruptcy Fraud? > > A: Bankruptcy fraud occurs when people abuse the system and continue to obtain and use credit knowing that they can’t repay the money they are borrowing. There are also people who use bankruptcy to get out of situations that they have created themselves through bad faith and fraud. > \ > The most common offences committed under the BIA and the Criminal Code are when the bankrupt: > > - Fraudulently disposes of property before or after the bankruptcy; > - Makes false entries in a statement of account or hides, destroys or falsifies a document related to his/her property or affairs; > - Obtains credit or any other good through false representations; > - Conceals or fraudulently removes property, or conceals claims or debts; > - Obtains credit or engages in trade without informing the people involved that he/she is bankrupt (a person who is bankrupt and borrows $1,000 or more must inform the lender that he/she is bankrupt); > - Refuses to respond fully and truthfully to questions posed during an examination held in accordance with the BIA. Also in Canadian law (and I’m sure something similar in the USA) any transaction done in anticipation of bankruptcy, even an honest one, up to 6 months beforehand can be reversed by the court. If I clean out my bank account to pay off my debt to my friend before declaring bankruptcy, the other creditors may come after him for their fair share. If I made my mortgage payments on time but the bank calls the loan because they see the trouble coming, the court may reverse that. (of course, if I sell my house because I’m going under, but it’s a fair open sale and I get fair market value, no collusion obvious - no need to reverse it, it’s a normal business deal. But if I then take the proceeds and hide them, that money can be chased down…) Basically, in these situations, if you are thinking of something, the law has seen and heard it all before and has plugged that loophole. The only glaring loophole I’ve heard of is the Florida homestead law. It’s no surprise OJ Simpson (like many others) settled in Florida. Even though his mansion is worth millions of dollars, the Goldbergs can’t seize his “primary dwelling” in Florida to settle a debt. ---
**Author:** ![Elendil\_s\_Heir](https://avatars.discourse-cdn.com/v4/letter/e/7cd45c/32.png) [@Elendil\_s\_Heir](https://boards.straightdope.com/u/Elendil_s_Heir)\ **Post date:** [July 26, 2013, 12:51am UTC](https://boards.straightdope.com/t/did-this-person-commit-a-crime/664514/15 "2013-07-26T00:51:56Z")
> [@HeyHomie](#): > > [http://www.illinoistimes.com/Springfield/article-12658-jeffrey-parsons-accused-of-lying.html](http://www.illinoistimes.com/Springfield/article-12658-jeffrey-parsons-accused-of-lying.html) “Fibbed under oath.” Heh. ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [July 26, 2013, 1:12am UTC](https://boards.straightdope.com/t/did-this-person-commit-a-crime/664514/16 "2013-07-26T01:12:38Z")
Peter Pocklington, famous former owner of Wayne Gretzky and the Edmonton Oilers, moved to California to pursue business the American way. His Wiki page generously retells his version that he was “misled by other investors”, but essentially he bought companies, milked them for what he could, then let them go bankrupt - often not even completing the payments to the people he bought the compay off of. When this started to catch up to him, he filed for bankruptcy. His wife “owned” the house and all the expensive furnishings, he claimed he had nothing. When it was revealed he had hidden assets, apparently this was because “his bankruptcy lawyer misled him”. Marshalls raided his home, I recall hearing a radio show where one of his creditors gleefully described walking around the house directing the marshals to take sports memorabilia and even art off the walls. It seems he managed to evade actual prison time for his shenanigans, but barely. ---
**Author:** ![Buffalo\_Bilious](https://avatars.discourse-cdn.com/v4/letter/b/e99b99/32.png) [@Buffalo\_Bilious](https://boards.straightdope.com/u/Buffalo_Bilious)\ **Post date:** [July 26, 2013, 1:19am UTC](https://boards.straightdope.com/t/did-this-person-commit-a-crime/664514/17 "2013-07-26T01:19:01Z")
> [@jtur88](#): > > Nothing you have done is a crime until you are convicted in a court of law. There it is… Although it’s very far-fetched to believe that the subject transferred “millions” in cash and bullion AFTER declaring BK. Anyone with that level of financial accomplishment and savvy has to be smarter than to blatantly flaunt the US BK rules… They’re absolutely plain and simple. I’d guess he was operating as an S-Corp or LLC and he moved the money to avoid potential personal lawsuits. While the S-Corp or LLC insulates him from the sins of his company, a wily adversary lawyer could twist a screwdriver in his front door and expose his personal assets, depending on the level of shenanigans. He transferred assets and called BK to squelch that possibility. IANAL, though I wish I was paid like one. ---
**Author:** ![pravnik](https://avatars.discourse-cdn.com/v4/letter/p/8edcca/32.png) [@pravnik](https://boards.straightdope.com/u/pravnik)\ **Post date:** [July 26, 2013, 2:58am UTC](https://boards.straightdope.com/t/did-this-person-commit-a-crime/664514/18 "2013-07-26T02:58:28Z")
> [@drachillix](#): > > If his personal assets and those of the business are separate via incorporation, his personal finances could be legitimately separate. > > Just because your business is crashing and burning does not mean you cant still be a millionaire. It just means you let a failing model fail. They could be legitimately separate, but the OP specifically precludes that. The wording of the OP indicates that in his scenario the assets are not legally separate - after the filing of the bankruptcy the debtor is hiding his own personal assets in a corporation in an effort to prevent the trustee from finding out about them. Worded that way, it’s fraudulent concealment of assets. ---
**Author:** ![Elendil\_s\_Heir](https://avatars.discourse-cdn.com/v4/letter/e/7cd45c/32.png) [@Elendil\_s\_Heir](https://boards.straightdope.com/u/Elendil_s_Heir)\ **Post date:** [July 26, 2013, 4:45am UTC](https://boards.straightdope.com/t/did-this-person-commit-a-crime/664514/19 "2013-07-26T04:45:26Z")
> [@md2000](#): > > …It seems he managed to evade actual prison time for his shenanigans, but barely. > [@Buffalo\_Bilious](#): > > …a wily adversary lawyer could twist a screwdriver in his front door and expose his personal assets, depending on the level of shenanigans… Eeeeeevil shenanigans. ---
**Author:** ![JBDivmstr](https://avatars.discourse-cdn.com/v4/letter/j/b4bc9f/32.png) [@JBDivmstr](https://boards.straightdope.com/u/JBDivmstr)\ **Post date:** [July 26, 2013, 6:33am UTC](https://boards.straightdope.com/t/did-this-person-commit-a-crime/664514/20 "2013-07-26T06:33:19Z")
> [@friedo](#): > > Limited liability is basically the whole point of incorporation. > > Donald Trump has had like a dozen businesses go tits up, but _**he still manages to have enough stashed away to keep that farm[sup]1[/sup] going**_. He’s never declared personal bankruptcy. > > [sub]1. _ **You know, where they grow whatever the fuck that thing on his head is** _.[/sub] (bolding mine) A+ BWA-HA-HA-HA-HA-HA-HA! 😃 [Next page](https://boards.straightdope.com/t/did-this-person-commit-a-crime/664514.md?page=2)