Bankruptcy Fraud Attorneys are familiar with the law codified at 18 U.S.C. § 157, which sets forth the law concerning federal bankruptcy fraud. An Iowa couple, Gerald and Fay Schuerer, have also been forced to become familiar with this law as they were sentenced earlier this week to a combined 6 years in federal prison and nearly $400,000 in restitution for their role in a "complicated bankruptcy scheme."
Prosecutors argued that the Schuerers made sham sales of assets, such as vehicles, jewelry and stocks, to relatives with an agreement that they would get receive their possessions back after going through bankruptcy. Prosecutors further claim that the Schuerers then claimed to move to Florida where bankruptcy exemptions are more liberal than in their home state of Iowa, filed for bankruptcy protection, and then returned to Iowa to retrieve their property.
The U.S. Attorney's Manual states:
Title 18 U.S.C. § 157 prohibits devising or intending to devise a scheme or artifice to defraud and, for purposes of executing or concealing the scheme either (1) filing a bankruptcy petition; (2) filing a document in a bankruptcy proceeding; or (3) making a false statement, claim, or promise (a) in relationship to a bankruptcy proceeding either before or after the filing of the petition; or (b) in relation to a proceeding falsely asserted to be pending under the Bankruptcy Code.
Bankruptcy fraud cases will vary from cases like the Scheurers to false filings, multiple filings, concealment of assets, and petition mills. The penalties for bankruptcy fraud are up to 5 years imprisonment, fines, and restitution. Additionally, bankruptcy fraud cases often are accompanied by tax evasion charges, wire and bank fraud charges, and mail fraud charges.