The Hazard of Concealing Assets in Bankruptcy

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May 2003

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I waive the quantum o' the sin, 
The hazard of concealing: 
But, och! It hardens a' within, 
And petrifies the feeling! 
—Robert Burns 
Epistle to a Young Friend, st. 6
</blockquote>

The
federal government has had a statute prohibiting certain bankruptcy crimes in
its arsenal of weapons continuously since 1898. Section 29 of the Bankruptcy
Act of 1898 set forth the predecessors of current §§152(1)
(concealment of assets), 152(3) (false oath or account), 152(4) (false proof
of claim), 152(5) (receiving property after filing to defeat provisions of the
Bankruptcy Code) and 152(6) (transferring property with intent to defeat
provisions of Title 11).

The Bankruptcy Act also contained two provisions directed at officers of the court, which are now
codified in §§153 (embezzlement against the estate) and 154(1) and
(2) (adverse interest or conduct of officers). Section 29 was amended in 1926
to add what is now §152(7), which allows the government to prosecute
corrupt corporate officers involved in cheating the bankruptcy system, and to
reach wrongful acts taken in contemplation of bankruptcy. This amendment also
added the crimes currently found in §§152(8) (concealing, destroying
or making a false entry in documents) and 152(9) (fraudulently withholding
recorded information from trustee).

While Congress has tinkered with various technical aspects of the bankruptcy crime
laws since 1926, the Department of Justice has not substantially deviated from
prosecuting the offenses on the books at that time. Notwithstanding the
longevity of the laws criminalizing the concealment of assets and information
from the bankruptcy process, many persons who file for relief choose to try to
cheat the system. This article discusses the law of concealment in the hope
that debtors' counsel will be able to use it to facilitate better
decision-making by their clients.

<h3>The Statutory Scheme</h3>

In pertinent part, <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=p… U.S.C. §152</a> declares:

<blockquote>
A person who—
<blockquote>
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 U.S. Trustee, any property
belonging to the estate of a debtor; 
... 
[or] 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;
</blockquote>

shall be fined under this title, imprisoned not more than five years, or both.
</blockquote>

Section 152 was amended by the Bankruptcy Reform Act of 1994 to add numbers to the paragraphs;
prior to 1994, none of the distinct subparts of the statute were numbered, and
thus it is sometimes difficult to discern from the cases precisely which
offense a defendant was charged with violating. The 1994 amendment also added
the U.S. Trustee as a "victim" under §§152(1) and 152(9).
The new provisions apply to all crimes continued or committed after the
effective date.

Section 152 continues to be the most frequently used statute for charging bankruptcy
crimes, and sets forth the most common criminal violations. The separate
paragraphs of §152 create distinct crimes, and the violation of each
subsection may be indicted in independent counts. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=6…
States v. Montilla Ambrosiani, 610 F.2d 65, 69
(1st Cir.), cert. denied, 445 U.S. 930
(1980)</a>; <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=4…
States v. Arge, 418 F.2d 721, 722 (10th Cir.
1969)</a>; <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=3…
States v. Gordon, 379 F.2d 788, 790 (2d Cir.),

cert. denied, 389 U.S. 927 (1967)</a>;
<a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=2…
v. United States, 239 F. 16, 20 (3d Cir. 1917)</a>,
err. dism'd., <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=2…
U.S. 648 (1918)</a>. Violations of separate paragraphs of §152
constitute multiple counts because each requires proof of different facts. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=7…
States v. Roberts, 783 F.2d 767 (9th Cir. 1985)</a>;
<a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=4…
States v. Kaldenberg, 429 F.2d 161 (9th Cir.), cert.
denied, 400 U.S. 929 (1970)</a>; <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=6…
States v. Christner, 66 F.3d 922, 928 (8th Cir.
1995)</a>. See, also, <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=5…
States v. Falcone, 544 F.2d 607 (2d Cir.),

cert. denied, 430 U.S. 916 (1977)</a> (defendant charged with conspiracy, concealment of assets, false oath and
making a false entry in separate counts based on the entry of a false credit on
the accounts receivable records of the corporation).

<h3>Elements of the Offense</h3>

The
crime of concealing property from a bankruptcy has clear and concise elements.
To obtain a conviction, the government must prove the following beyond a
reasonable doubt:

<ol>
<li>the charged bankruptcy was in existence;

</li><li>certain property or assets belonged to the bankruptcy estate;

</li><li>the defendant transferred and/or concealed the property from the creditors, the
trustee or from someone charged with control or custody of the property;

</li><li>the defendant did so knowingly and fraudulently.
</li></ol>

Pattern Jury Instructions, U.S. Fifth Circuit District
Judges Association, No. 2.10 (1997); Devitt, Blackmar & O'Malley, 2 Federal
Jury Practice and Instructions, §24.03 (4th Ed. 1990); <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=6…
States v. Guiliano, 644 F.2d 85, 87 (2d Cir.
1981)</a>; <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=6…
States v. Beery, 678 F.2d 856 (10th Cir.),

cert. denied, 471 U.S. 1066 (1985)</a>.

<h3>Definition of Concealment</h3>

As used in the concealment statutes, the term "concealment" has been
defined as any act done by the defendant that hides the existence of property
or assets belonging to the estate from anyone entitled to know about it, such
as a creditor, the trustee or a custodian. A "concealment" does not
require a physical secretion of the property in question, though such an act is
included within the scope of the statute. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=3…
v. United States, 342 F.2d 982, 985 (10th
Cir.), cert. denied, 382 U.S. 843 (1965)</a>.
The definition is expansive and means not only secreting, falsifying and
mutilating, but also preventing discovery, fraudulently transferring or
withholding knowledge or information required by law to be made known. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=7…
States v. Turner, 725 F.2d 1154, 1157 (8th Cir.
1984)</a>; <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=8…
States v. Weinstein, 834 F.2d 1454 (9th Cir.
1987)</a>. Thus, withholding information about an asset constitutes
concealment under 18 <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1….
§152. Coghlan v. United States, 147
F.2d 233 (8th Cir.), cert. denied,

325 U.S. 888 (1945)</a>; <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=9…
States v. Grant, 971 F.2d 799, 807 (1st Cir.
1992)</a>; <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=8…
States v. Weinstein, 834 F.2d 1454, 1461 (9th
Cir. 1987)</a>; <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=8…
States v. Jackson, 836 F.2d 324 (7th Cir. 1987)</a>;
<a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=7…
States v. Cherek, 734 F.2d 1248, 1254 (7th Cir.
1984), cert. denied, 471 U.S. 1014
(1985)</a>; <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=7…
States v. Turner, 725 F.2d 1154, 1157 (8th Cir.
1984)</a>.

Reported decisions on "concealment" cover a wide range of conduct, ranging
from the falsification of corporate books to hide a corporate asset, <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=8…
States v. Center, 853 F.2d 568 (7th Cir. 1988)</a>,
to the failure to account for the proceeds of the sale of a corporate asset, <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=7…,
supra.</a> The deliberate failure to
list the property or asset on the debtor's schedules—or to disclose
it in the Statement of Financial Affairs—is sufficient to conceal it from
creditors and the trustee. The intentional undervaluing of assets can be
considered a concealment crime. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=2…
States v. Walker, 29 F.3d 908 (4th Cir. 1994)</a>.
The crime of concealment is a continuing offense that covers conduct occurring
before and after the filing of a bankruptcy fraud case. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=2…
v. United States, 249 F.2d 385, 386 (5th Cir.
1957)</a>.

<h3>Definition of Property or Asset</h3>

The
phrase "property or asset" is defined in the broadest sense. The
terms have been construed expansively to include "any legal, equitable or
beneficial interest of the debtor in property existing on the date the
bankruptcy petition was filed, or that [the debtor] may have acquired after the
commencement of the case other than earnings from personal services or loan
proceeds." <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=9…
States v. Moody, 923 F.2d 341, 348 (5th Cir.),
cert. denied, 502 U.S. 821 (1991)</a>;
<a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
U.S.C. §541(a)(1)</a>. Money or cash, as well as any other property, are
included in the prohibition against transferring "property" under
§152. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=2…
States v. Wernikove, 206 F.Supp. 407 (E.D. Pa.
1962)</a>. See, also, <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=8…
States v. Goodstein, 883 F.2d 1362, 1369 (7th
Cir.), cert. denied, 494 U.S. 1007
(1990)</a>. All equitable interests in property held by a bankruptcy
estate must be disclosed. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=8…
States v. Weinstein, 834 F.2d 1454, 1461 (9th
Cir. 1987)</a>; <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=5…
States v. Moynagh, 566 F.2d 799, 803 (1st
Cir.), cert. denied, 435 U.S. 917 (1978)</a>;

<a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
States v. Schireson, 116 F.2d 881, 883 (3d Cir.
1940)</a>.

The
policy behind this all-encompassing definition is that the debtor must disclose
information about all property that might be the debtor's, even if the
status of the assets is uncertain. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=7…
States v. Cherek, 734 F.2d 1248, 1254 (7th
Cir.), cert. denied, 471 U.S. 1014
(1985)</a><. The definition of "property" found in the
Model Penal Code §223.0(6) may be used: "anything of value,
including any interests in real estate, tangible and intangible personal
property, contract rights and any claims to wealth."

If
a debtor is uncertain as to whether certain property is legally required to be
included in the schedules, the debtor has a duty to disclose the property so
that the issue can be resolved. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
re Braymer, 126 B.R. 499, 503 (Bankr. N.D.
Texas 1991)</a>. An asset is property of the debtor estate even
where nominal title is held in another person or company name, if the estate
has paid for expenses related to the acquisition, repair or insuring of the
asset. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=7…
States v. Cherek, 734 F.2d 1248, 1254 (7th
Cir.), cert. denied, 471 U.S. 1014
(1985)</a>. If the law is uncertain as to whether the debtor will
receive property, the uncertainty may be relevant to the issue of the
defendant's intent to conceal the potential asset. See <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=4…
States v. Collins, 424 F.Supp. 465 (E.D. Ky.
1977)</a>. If the status of an asset is uncertain, the debtor is
nonetheless required to disclose its existence and provide the creditors an
opportunity to make inquiries or take action to determine the status.

"If
a debtor is uncertain as to whether certain property is legally required to be
included in the petition, the debtor's duty is to disclose the assets so
the question may be resolved. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
re Braymer, 126 B.R. 499, 503 (Bankr. N.D.
Texas 1991)</a>. For purposes of §152, it does not matter that
the property is ultimately determined under technical bankruptcy rules not to
be an estate asset; however, such circumstances would make it difficult to
prove that the defendant had the requisite specific intent to knowingly and
fraudulently conceal an asset. See <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=4…
States v. Martin, 408 F.2d 949, 953 (7th Cir.),</a> <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=3… U.S. 824 (1969)</a>; <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=7…
States v. Cherek, 734 F.2d 1248, 1254 (7th Cir.
1984), cert. denied, 471 U.S. 1014
(1985)</a>; <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=9…
States v. Beard, 913 F.2d 193, 197 (5th Cir.
1990)</a>.

Whether
property belongs to the bankruptcy estate is a fact question for the jury to
decide. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=8…
States v. Weinstein, 834 F.2d 1454 (9th Cir.
1987)</a>; <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=9…
States v. Robbins, 997 F.2d 390, 393 (8th
Cir.), cert. denied, 510 U.S. 948 (1993)</a>.
A bankruptcy court's finding that the asset in question is property of
the bankruptcy estate is admissible only on the question of notice, and the
jury must be given a limiting instruction not to substitute the bankruptcy
court's fact-finding for its own. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=9…; 997 F.2d at 393.d</a>.

Generally,
property that the estate (not the debtor) acquires after the filing of the
bankruptcy is an asset of the bankruptcy estate. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
U.S.C. §541(a)(7)</a>; see, also, <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
U.S.C. §541(a)</a>. This includes after-acquired property that is
comprised of the proceeds of estate property. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
States v. Messner, 107 F.3d 1448, 1453 (10th
Cir. 1997)</a>. Thus, chapter 11, 12 and 13 debtors are required to
report their post-petition income in monthly reports to the trustee—and
can be prosecuted for concealing any such income.

<h3>Transfer of Estate Property</h3>

As used in §152(7), the term "transfers or conceals" is used in
the disjunctive. Thus, proof of either an inappropriate transfer or an illegal
concealment, in conjunction with the other elements of the offense, is
sufficient to establish the commission of a bankruptcy crime. Concealment is
not a necessary element of a prohibited transfer. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=8…
States v. Weinstein, 834 F.2d 1454 (9th Cir.
1987)</a>; <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=3…
v. United States, 342 F.2d 982, 985 (10th
Cir.), cert. denied, 382 U.S. 843 (1965)</a>;
<a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=2…
States v. Switzer, 252 F.2d 139, 142 (2d Cir.),

cert. denied, 357 U.S. 922 (1958)</a>.

<h3>Pre-petition Concealment or Transfers</h3>

Pre-petition transfers and concealment of property require an additional intent
element—namely, that they were done "in contemplation of
bankruptcy" or "with the intent to defeat the provisions of Title
11." "[W]hen the concealment of several items of property precedes
the filing of the bankruptcy petition, the duty of the debtor to disclose is a
single duty to reveal all." <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=5…
States v. Moss, 562 F.2d 155, 160 (2d Cir.),
cert. denied, 435 U.S. 914 (1978)</a>.
Pre-petition concealment charges are often combined into one count to avoid
multiplicity issues. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=8…
States v. White, 879 F.2d 1509, 1512 (7th
Cir.), cert. denied, 494 U.S. 1027
(1990)</a>; <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=8…
States v. McClellan, 868 F.2d 210 (7th Cir.
1989)</a>; <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=4…
States v. Kaldenberg, 429 F.2d 161 (9th Cir.),

cert. denied, 400 U.S. 929 (1970)</a>.
Transfers to defeat the provisions of Title 11 that occurred more than one year
before the bankruptcy filing may be prosecuted. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=2…
States v. West, 22 F.3d 586, 590 (5th Cir.), cert.
denied, 513 U.S. 1020 (1994)</a>.

<h3>Fraudulent Post-petition Transfers</h3>

Post-petition
transfers to defeat the provisions of Title 11 are also prosecutable under the
text of §152(7). When the concealment of assets belonging to the debtor
occurs after the filing of the petition and the appointment of a trustee,
"each separate act of concealment is a separate violation of the statute
[citation omitted]. In each such instance there is a separate act, taken at a
discrete time, accompanied by the requisite intent." <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=5…
States v. Moss, 562 F.2d 155, 159 (2d Cir.), cert.
denied, 435 U.S. 914 (1978)</a>; <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=7…
States v. Melton, 763 F.2d 401, 402 (11th Cir.
1985)</a>; <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=6…
States v. Montilla Ambrosiani, 610 F.2d 65, 69
(1st Cir.), cert. denied, 445 U.S. 930
(1980)</a>.

<h3>Defenses Commonly Raised to Concealment Charges</h3>

Assets acquired post-petition. When the
concealed-asset charge involves assets acquired after the filing of the
bankruptcy petition, the government must prove that the assets were property of
the bankruptcy estate. Cf. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
States v. Messner, 107 F.3d 1448, 1453 (10th
Cir. 1997)</a>; <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=9…
States v. Robbins, 997 F.2d 390, 393 (8th
Cir.), cert. denied, 510 U.S. 948 (1993)</a>.

Assets
were abandoned by the trustee. Abandonment
of the asset by the trustee in the course of the civil administration of the
estate does not bar a later prosecution for the concealment of the asset. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=9…
States v. Grant, 971 F.2d 799, 806 (1st Cir.
1992)</a>.

Assets were exempt property. It is irrelevant that
the concealed asset, had it been disclosed, would have been claimed as exempt
property by the debtor. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=2…
States v. West, 22 F.3d 586 (5th Cir.),
cert. denied, 513 U.S. 1020 (1994)</a>.

Assets
were returned to the estate. It is no
defense that the concealed asset or the proceeds of the concealed asset were
returned to the bankruptcy estate. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=4…
States v. Klupt, 475 F.2d 1015, 1018 (2d Cir.
1973)</a>.

Assets
were used to pay creditors. It is no
defense that the concealed assets or the proceeds of the concealed assets were
ultimately used to pay the creditors. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=4…
States v. Klupt, 475 F.2d 1015, 1018-1019 (2d
Cir. 1973)</a>.

Defendant
did not benefit from the concealment. It is
no defense that the defendant was ultimately unsuccessful in attempts to
conceal assets of the bankruptcy estate which were ultimately recovered. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=3…
States v. Mathies, 350 F.2d 963 (3d Cir. 1965)</a>.

Defendant's hard-luck story. It is not a defense that
the defendant suffered some hard luck or financial reverses that required him
to file bankruptcy, such as an IRS lien was placed on all of his bank accounts
and residence, or a secured creditor would not cooperate with him on the use of
mortgaged or secured property. Also, it is not a defense to assert that the
defendant did not realize the fruits of his fraudulent acts. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=8…
States v. Key, 859 F.2d 1257, 1260 (7th Cir.
1988)</a>.

Creditors
know about concealed assets. It is no
defense that the creditors have actual knowledge of the location of the assets
that were concealed by the debtor. <a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=1…
States v. Zimmerman, 158 F.2d 559, 560 (7th
Cir. 1946)</a>.

Creditors
were not injured by the concealment. This
defense is similar to the defense that the concealed asset is exempt property.
It is not a defense that the concealment did not injure the creditors.

<a href="http://www.westlaw.com/find/default.wl?rs=CLWD3.0&vr=2.0&cite=5…
States v. O'Donnell, 539 F.2d 1233, 1237
(9th Cir.), cert. denied, 429 U.S. 960
(1976)</a>.

Reliance
on advice of counsel. Defendants will
frequently assert that their actions in failing to disclose or concealing
certain assets were undertaken in "good faith" upon the advice of
counsel. If this defense is raised, the government may call the bankruptcy
attorney as a witness at trial, due to waiver of the attorney-client privilege
by the defendant. A debtor cannot blame the attorney for alleged illegal
conduct and then prevent the attorney from testifying to clear his or her good
name.

<h3>Conclusion</h3>

In
short, it is foolish for a person to try to conceal assets from a bankruptcy
estate. First, the chances are that someone associated with the bankruptcy has
knowledge of the asset and the information will eventually be disclosed.
Second, the bankruptcy laws are written so broadly that any attempt to do so
will undoubtedly be a federal crime. And third, the defenses to such conduct
are rather minimal.

<hr>
<h3>Footnotes</h3>

<a name="1">1</a> J.D. (1989) Washington University;
M.A. (1986 - sociology) and B.A. (1984 - journalism) Eastern Illinois
University; former Chair of South Dakota Bankruptcy Fraud Task Force
(1992-2001); former law clerk to the late Hon. Frank W. Koger, U.S. Bankruptcy
Judge, W.D. Mo. (1989-91). <a href="#1a">Return to article</a>

<a name="2">2</a> The views expressed in this article
are solely those of the author and should not be attributed to the U.S. Department of Justice, the U.S. Attorney for the Southern District of Iowa, or any other person or entity associated with him. This work incorporates research done by various government attorneys with expertise in bankruptcy fraud, whose assistance and dedication is hereby acknowledged. <a href="#2a">Return to article</a>

Journal Authors

Craig Peyton Gaumer

Journal Date

Thursday, May 1, 2003 - 12:00

Bankruptcy Rule

2003