A.R.S. § 13-2206: Fraud in Insolvency

Bankruptcy fraud, known as fraud in insolvency under Arizona Statute § 13-2206, occurs after an individual has already started bankruptcy proceedings. During bankruptcy proceedings, the filing individual must disclose and describe all assets, whether it be cash, bank accounts, property, or other assets, that he or she possesses.

Bankruptcy fraud can take various forms but will generally be classified as one of the following:

1. Hiding, transferring, or destroying an owned asset to avoid giving it up or to reduce its worth;
2. Purposefully filing false or incomplete forms required during bankruptcy;
3. Filing bankruptcy forms, with false or real information, in several states to take advantage of exemptions; or
4. Bribing the bankruptcy trustee in order to keep or withhold property.

As seen, bankruptcy fraud can be committed in different ways. One example of this is not disclosing a property you have in another state in order to avoid losing it in bankruptcy. Also, “gifting” or transferring the property to a family member or friend so that it is in their name but you intend to keep it for yourself after bankruptcy proceedings finish can also be punished. Intentionally withholding property, either by not listing it on the physical bankruptcy form or trying to change title or ownership of the property to avoid forfeiture, are the most common forms of bankruptcy fraud and will be charged under this statute.

When bankruptcy fraud charges are brought, it is also common for the state to charge the individual with bankruptcy fraud scheme. Fraud schemes, found under Arizona Statute § 13-2310, is a broad charge that requires three things: (1) knowingly obtaining any benefit (2) by false or fraudulent pretenses, promises, or material omissions (3) pursuant to a scheme or artifice to defraud. A “scheme or artifice” is defined as some plan, device, or trick to perpetrate a fraud. So, when an individual plans or prepares a way to defraud a person or system by false or incorrect information and receives any benefit, whether financial, physical, or any other kind, they will be charged with fraud scheme. This is particularly concerning because while bankruptcy fraud is a class five felony, fraud scheme is a class two felony, which carries harsher penalties. Additionally, if an individual defrauded more than $100,000 through the scheme, they may be charged with super fraud scheme with even more severe penalties.

An important element of these charges require an individual to “knowingly” commit the fraud or fraud scheme. An experienced attorney will be able to help you understand the charges against you and what evidence the State will use to try to prosecute you. At Tempe Criminal Lawyer, the criminal law team will navigate the legal system with you and help you present the best defense for your case.

Hiring an Experienced Criminal Attorney

Hiring a experienced and locally based criminal attorney is an important step in the criminal process. A Tempe criminal lawyer should be hired within the week following an arrest. A skilled criminal attorney should have specialized knowledge and access to the resources necessary to competently defend you and successfully fight your criminal charges.

The criminal defense attorneys at Tempe Criminal Lawyer are dedicated to providing the highest-quality defense available to our clients. It all starts with your free case review, where you can get a better idea of the legal road ahead. Contact us today to schedule your complimentary and private consultation with our superior criminal lawyers.