fraud

[savemart55]

What is the name of your state? Texas. An old friend of mine works for a small retailer who is in financial trouble. It is a subchapter S corporation. His boss has asked him to file for a DBA in his name so that assets can be hidden from creditors at a new location. He trusts my friend who is a manager to still consider these assets as belonging to the boss and give them back at a future date. His boss is concerned about a landlord lockout and seizure since he is about three months behind on rent. My friend is actually considering doing this. I advised him to get another job and not sign anything because it looks like fraud to me. Is there a particular law that applies to this that I could have my friend read?

 

[HomeGuru]

What is the name of your state? Texas. An old friend of mine works for a small retailer who is in financial trouble. It is a subchapter S corporation. His boss has asked him to file for a DBA in his name so that assets can be hidden from creditors at a new location. He trusts my friend who is a manager to still consider these assets as belonging to the boss and give them back at a future date. His boss is concerned about a landlord lockout and seizure since he is about three months behind on rent. My friend is actually considering doing this. I advised him to get another job and not sign anything because it looks like fraud to me. Is there a particular law that applies to this that I could have my friend read?

**A: how about the law of common sense?

 

[JETX]

"Is there a particular law that applies to this that I could have my friend read?"
*** Yes. What you describe would be fraud and it would be fairly easy to catch. First thing that a smart creditor would do when noticed that the assets have been transferred to a 'new party' would be to start investigating the transfer, requesting documents (bill of sale, payments, etc.). As soon as these are not available, the 'house of cards' will quickly tumble, catching your friend in the middle of it.
On top of his now PERSONAL liability, the courts could simply 'undo' the transfers as a 'fraudulent conveyance'.

Here is a link to the Texas statute that defines the conduct:
http://www.capitol.state.tx.us/statutes/bc/bc0002400toc.html
and here is where HE will be liable:
http://www.capitol.state.tx.us/statutes/bc/bc0002700.html#bc001.27.01

 

[savemart55]

Thank you both for your quick responses. Both of you have been very helpful to a lot of people over the years. I will give your information to my friend.

 

[HomeGuru]

No problem.