How illegal is it to help somebody hide assets in a bankruptcy?

[claycad82]

What is the name of your state (only U.S. law)? KY

A person I know has cashed large checks (up to $15,000) for a business owner who is planning on filing for bankruptcy a few months down the road. I'm not sure if they are getting paid to do this or what, but they have done it. They pretty much know the business owner is hiding the money, although I guess they could deny it if (rather when) they are questioned about it. Even then, if they claimed it was payment for something, they would at very least get in trouble for not reporting it on their taxes. This seems pretty idiotic on the part of both parties, and while I don't care what happens to the business owner, what kind of legal trouble could my friend get in?

 

[racer72]

Jail and huge fines to start. Plus the odds of hiding this from the bankruptcy court is slim and none and slim is on his way out of town. The business owners finances from the last 3 years will be analyzed and he will have to answer to things like this, especially large checks being cashed.

 

[LdiJ]

Jail and huge fines to start. Plus the odds of hiding this from the bankruptcy court is slim and none and slim is on his way out of town. The business owners finances from the last 3 years will be analyzed and he will have to answer to things like this, especially large checks being cashed.

I am not sure that I agree about the jail and huge fines part...at least upon the friend's part. The business owner can certainly get into some major issues with the bankruptcy court for hiding assets. The friend however could end up with major problems with taxes, and would certainly be at risk if questioned by the bankruptcy court and the friend lies.

However, the biggest risk is that the bankruptcy court will demand the return of the 15k (which they have the right to do if they determine that the payment was improper) and the friend is obviously not going to have it to return. That is where its all going to fall apart for the friend.

 

[Zigner]

Seems to me that this was a (very) short term loan. The business owner loaned $15,000 to the friend and the friend repaid it immediately.

 

[claycad82]

Seems to me that this was a (very) short term loan. The business owner loaned $15,000 to the friend and the friend repaid it immediately.

Yeah, I'm pretty sure there are a thousand scenarios where my friend could get out of it. I doubt the business owner will though. They'll still ask why the repaid loan was never deposited back into the account, and what he spent it on if it wasn't. The problem with this business owner, he'd give the shirt off his back to help somebody out, not out of kindness, but because he knows he'll need the favor returned one day. He's very charismatic and very manipulative. People like him and always feel like they owe him something and he definitely uses that to his advantage. He's put several people in the same position as my friend, I'm sure.

 

[latigo]

What is the name of your state (only U.S. law)? KY

A person I know has cashed large checks (up to $15,000) for a business owner who is planning on filing for bankruptcy a few months down the road. I'm not sure if they are getting paid to do this or what, but they have done it. They pretty much know the business owner is hiding the money, although I guess they could deny it if (rather when) they are questioned about it. Even then, if they claimed it was payment for something, they would at very least get in trouble for not reporting it on their taxes. This seems pretty idiotic on the part of both parties, and while I don't care what happens to the business owner, what kind of legal trouble could my friend get in?

If the concern here is limited to the "friend" being implicated conspiratorial wise in the concealment of assets and thus criminally culpable under 18 USC 152(1) and no bankruptcy proceedings were in existence at the times in question, I don't see it happening. Flagrantly stupid, but not necessarily criminally stupid.

Not under federal statutes related to a debtor in bankruptcy concealing assets from creditors.