Florida Doctor Gets Prison Time for Bankruptcy Fraud after Concealing Assets from Bankruptcy Trustee

On April 22, a formerly wealthy South Florida doctor and his wife were each sentenced to over a year in federal prison after pleading guilty to bankruptcy fraud for concealing assets from the trustee in a Chapter 7 bankruptcy they filed back in 2008. According to a local news article, the couple’s 2008 bankruptcy filing was ultimately rejected because the bankruptcy judge found that they were being dishonest when bankruptcy officials paid a surprise home visit and witnessed the doctor’s wife try and hide an expensive Rolex watch. The couple later admitted to concealing assets, and investigators were never able to find about $120,000 in jewelry that went missing during the bankruptcy filing.

behind-bars-76714-mAuthorities Take Bankruptcy Fraud Seriously

Although the couple’s request to discharge their debts was rejected by the bankruptcy court, and their creditors were able to force the sale of nearly all of their assets, federal prosecutors felt they needed to be further punished. The prosecutors and bankruptcy trustee wanted the couple to be criminally punished for their dishonesty, and they were charged with bankruptcy fraud.

Bankruptcy fraud usually takes one of four forms. As in the Florida case, an individual can be convicted of bankruptcy fraud when they knowingly or intentionally hide assets from the trustee or court after filing for bankruptcy in order to avoid forfeiting property. Other types of bankruptcy fraud occur when an individual files false or incomplete forms, files multiple times using false information, or files multiple times in different states. Based on their attempt to conceal assets, the Florida couple pleaded guilty to bankruptcy fraud in December 2014, and they were sentenced this month.

Debtors Can Keep Some Assets Without Committing Fraud

It is understandable why the Florida couple would want to have their debt discharged through a bankruptcy without losing all of their assets. If the couple had an experienced bankruptcy attorney on their side with whom they were completely honest, there is a good chance that they could have filed for a bankruptcy that would have allowed them to keep their property in exchange for monthly payments (Chapter 13), or that they could have exempted some of their assets from forfeiture legally within a Chapter 7 bankruptcy.

Instead, it appears the couple concealed their assets from everyone, including their attorney, and now they are headed to prison. The U.S. Bankruptcy Code is extremely long and complex, and it is important for debtors to seek competent counsel before proceeding with a bankruptcy plan. With careful planning and the right attorney, a bankruptcy can be a relatively comfortable process, and debtors can be sure they are in compliance with civil and criminal laws while they complete the process.

Should You Consider Bankruptcy?

If you or a loved one is starting to feel overwhelmed with debt, and it feels like there’s nowhere to turn, the Louisville and Southern Indiana bankruptcy attorneys at the Schwartz Bankruptcy Law Center can help you start your case and get you through a bankruptcy without giving up everything that you own. We advise clients on many debt relief options, including bankruptcy as well as alternatives to bankruptcy. Our attorneys know how to help our clients get back on their feet and stay in compliance with state and federal laws in the process. Call 866-366-3328 today to schedule a risk-free consultation or contact us through our website.

More Blog Posts:

Recent Case Discusses Student Loan Debt Discharge During Bankruptcy Filings, Kentucky Bankruptcy Lawyers Blog, published November 16, 2014.

Recently Released Analysis from Federal Reserve Research and Statistics Group Demonstrates The Pitfalls of Not Filing for Bankruptcy, Kentucky Bankruptcy Lawyers Blog, published March 14, 2015.

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