Earlier this month, the manager for a synthetic marijuana company was convicted of hiding over $1 million in cash while filing for bankruptcy. According to a report by one news source, the former manager was convicted and must now serve one year in jail and then spend several years on probation for the offense. He must also pay $323,000 in restitution to approximately 10 creditors.
Evidently, back in 2009, the former manager opened up a shell company with his son. The mailing address for the company was listed as a mailbox at a UPS store. When asked about his income, he reported about $5,000 a month. However, there was also a secret account with about $1 million in it that was not reported. Apparently, the former manager would transfer a portion of his salary into the account each month. The deposits ranged from $2,500 to $54,000.
The man was charged with bankruptcy fraud and several other counts of making false declarations. He faced up to five years in prison but was only sentenced to one year.
Filing for Bankruptcy in Kentucky
Bankruptcy protection helps hundreds of thousands of people each year get out from under their month-to-month debts and obtain the financial freedom they’ve been looking for. It’s like a financial reset button.
However, there are rules to filing for bankruptcy. One such rule is that a filer cannot hide assets or intentionally misrepresent his or her financial situation. If a filer does misrepresent his or her situation, he or she is likely to face criminal prosecution as a result. It is therefore important to be honest and upfront about your financial situation when applying for bankruptcy. It is also important to have an experienced attorney help you through the process to clarify any confusion and ensure that all rules, regulations, and deadlines are followed.
The man in the report above seemingly intentionally hid assets from the government during his bankruptcy proceeding. However, there have been instances where an unintentional oversight or failure to comply with a rule or regulation brings a filer out of compliance. While this won’t likely result in a criminal prosecution, it can delay the proceeding significantly and end up costing the filer more money in the long run.
Are You Considering Filing for Bankruptcy?
If you are thinking about filing for bankruptcy in either Kentucky or Indiana, make sure to consult with a dedicated bankruptcy attorney before doing so. Not only can an attorney help you navigate what is a confusing and complicated process, but he or she can help you ensure that you follow all federal and state rules and regulations. At the Schwartz Bankruptcy Law Center, we have years of experience practicing bankruptcy law and have seen all the issues that can come up. We have helped hundreds of people obtain the financial freedom they are seeking. To benefit from our experience, give us a call at 866-366-3328 to set up a free initial consultation.
More Blog Posts:
Bankruptcy Judge Allows Debtor To Recover Attorney’s Fees After Creditor Violated Automatic Stay, Kentucky Bankruptcy Lawyers Blog, published October 6, 2014.
Bankruptcy Court Allows Malpractice Plaintiff to Sue Surgeon in Bankruptcy, Kentucky Bankruptcy Lawyers Blog, published November 2, 2014.