Florida Bankruptcy Fraud Charges And Penalties + Statute Of Limitations

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When someone files for bankruptcy, they do so because they need a true reset in their financial life. It helps them to erase certain debts, giving them a new start at life. Filing for bankruptcy is a complicated process that includes completing a lot of paperwork. Sometimes, mistakes are made when this paperwork is completed. When this is done deliberately, however, a bankruptcy fraud case may be filed.

Bankruptcy fraud in Florida is classed as a intent to devise, with or without acting on that, an artifice or scheme to defraud. This is a very serious accusation for which legal counsel is required. There are different acts that can be seen as bankruptcy fraud. These include:

• Concealment of assets – when someone fraudulently, and hence knowingly, makes accounts on their assets, for instance by claiming they do not have any.
• Multiple filings – when someone files multiple cases of bankruptcy, as a minimum period of time has to be upheld between two filings for bankruptcy.
• Petition mills – when a third party is the counselor or financial adviser for someone, charging them fees to rob them of their money rather than actually helping them resolve their financial situation.

Laws and Penalties

The penalties for bankruptcy fraud vary depending on the type of fraud that was committed. What also matters is whether the defendant is facing federal or state charges. In the worst case scenario, which is a federal conviction, a defendant could face up to five years in a federal prison, as well as a maximum fine of $250,000.

Bankruptcy Fraud Defenses

Bankruptcy fraud is a complicated and serious offense. The IRS investigates it fully, and the U.S. Department of Justice prosecutes it. Fines and prison time are likely, and the defendant’s financial life will be affected permanently. This is why a good defense is so important.

The prosecution has the burden of proof, and it can be difficult to prove fraud beyond reasonable doubt. This is what defense attorneys will generally focus on the most, employing their own forensic experts to find that doubt.

Additionally, intent is an important factor. Hence, a defense attorney will try to demonstrate that there was no intent to defraud on the part of the defendant.

Another argument often used is mistaken identify. Even in eye witness identification, people can be the victim of mistaken identity. Hence, although a defendant may appear to be a perpetrator, it is actually not him or her. This can lead to false accusations, often by the people who have actually committed the crime. Entrapment may be an issue as well.

• Defense attorneys will usually ask a number of questions to build their case, including:
• Whether there was intent to steal, defraud or lie.
• Whether there is evidence of a crime having been committed on purpose.
• What the context of both the crime and the arrest are. The larger the extent of the fraud, and the more people who got hurt through it, the worse the sentence is going to be.

An additional difficulty is faced by those who had a knowing partner in committing the fraud. In this case, any other criminal activity this person was involved in will also be taken into consideration, as the other will then be seen as collaborating with a criminal act.

Statute of Limitations

The statute of limitations on a case of bankruptcy fraud doesn’t start until the discharge of the debtor. At that point, creditors are given 341 days to file adversary action, which is topped up with a further 60 days if they suspect fraud. However, it is generally the responsibility of the creditor to be vigilant.

Bankruptcy Fraud Cases

Amana Couple Convicted of Bankruptcy Fraud in Florida – After a six day trial, Gerald and Fay Schuerer, a couple from Amana, were found guilty of defrauding more than $350,000 from bankruptcy creditors. The federal government is likely to seek restitution.
Eleventh Circuit Reverses Fraudulent Transfer Ruling in TOUSA Bankruptcy Case – This was a case in relation to the now bankrupt TOUSA, Inc. Various court decisions, first by the Florida Bankruptcy Court, then by the District Court, then by the Circuit Court, were all overturned.
Florida Man Arrested, Charged with Bankruptcy Fraud – It has been announced by U.S. Attorney Paul J. Fishman that Bryan Young concealed several hundred thousand dollars from his bankruptcy petition in November 2008.
Bankruptcy trustee Marika Tolz charged with fraud – Marika Tolz, court appointed bankruptcy trustee and receiver, has been accused of defrauding at least $16 million in the various cases she worked on.
Rothstein investors expect to get all their money back – This is said to be one of the largest fraud, bankruptcy and bankruptcy fraud cases in the history of South Florida, if not the country. The case has many different facets and layers upon layers that have to be unraveled.


  • http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=Ch0726/titl0726.htm&StatuteYear=2008&Title=-%3E2008-%3EChapter%20726
  • http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=Ch0726/titl0726.htm
  • http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=Ch0726/SEC108.HTM&Title=-%3E2008-%3ECh0726-%3ESection%20108#0726.108
  • http://www.leg.state.fl.us/statutes/index.cfm?mode=View%20Statutes&SubMenu=1&App_mode=Display_Statute&Search_String=56.29&URL=0000-0099/0056/Sections/0056.29.html
Geoffrey Nathan, Esq.

About Geoffrey Nathan, Esq.

Geoffrey G Nathan is a top federal crimes lawyer and Chief Editor of FederalCharges.com. He is a licensed attorney in the Commonwealth of Massachusetts since 1988, admitted to practice in both Federal and State courts. If you have questions about your federal case he can help by calling 877.472.5775.