We have written on numerous occasions about Massachusetts Bankruptcy Court cases in which a bankruptcy discharge is not awarded by the Court because the Massachusetts debtor failed to include assets on his or her Petition and Schedules. We remind all of our clients to put in all assets, including, for example, real estate in another country, tools of the trade, and, of course, bank accounts.
In a recent case filed in the Bankruptcy Court in New Jersey, Mr. Bryan Young filed for Chapter 7 bankruptcy protection. Upon evaluation of his Petition and Schedules, however, the Bankruptcy Trustee found huge discrepancies between his sworn statements and the documents uncovered in the Trustee’s investigation. In fact, the investigation allegedly showed that there was a missing $200,000 in disclosures. For example the Petition neglected to mention approximately $174,865 in bank or financial accounts and a 2003 truck valued at $10,000 at the time of the 2008 Petition.
In all, the federal investigation, which was conducted by the United States Attorney in Newark “Economic Crimes Unit,” determined that Mr. Young hid $1,000,000 in assets. This included $250,000 in income via eBay between 2007 and 2008. Further, documents revealed that he had transferred $248,000 from himself to an undisclosed account, and, $250,000 to his son. In addition, his Petition said he had no stocks or bonds, however, it was later revealed that he had over $100,000 in stock and bond mutual funds immediately prior to filing for bankruptcy protection.
Following the investigation by the bankruptcy trustee the United States Attorney filed criminal charges. The case was then investigated by the interagency federal Financial Fraud Enforcement Task Force, established by President Obama. The task force incorporates a host of federal agencies, federal regulatory entities and works with state and local law enforcement to investigate and prosecute financial crimes. The goal, of course, is to punish those perpetrate financial crimes.
In this case, Mr. Young faces up to five (5) years in prison for each fraud charge.
Why do we write about a New Jersey case? And what does Mr. Young have to do with our clients? We want to remind our Massachusetts bankruptcy clients to tell the truth. The whole truth. And nothing but the truth. We can help you with bankruptcy planning, and in most cases folks with so assets and some planning can still file for personal bankruptcy in Massachusetts. For example, if you have a home with significant equity, a properly drafted and filed homestead with the Registry of Deeds, you can protect your home in bankruptcy. Another example, if you have too much cash, you may be able to make a deposit into an IRA, Roth IRA or other protected vehicle.
As a Boston bankruptcy lawyer in Boston for over 25 years, I have learned how to work with clients to effectively file bankruptcy in Massachusetts and to provide the federal bankruptcy trustees with the proper documentation so that our Massachusetts bankruptcy clients get discharges on a timely basis, and without undue stress. Call us at 617-227-7423 for a free consultation.