In the spring of 2016 eight defendants were charged with the crime of bankruptcy fraud. These eight defendants were altogether concealing over $3 million in hidden assets. The trials were prosecuted by assistant U.S. attorneys Daniel Cervantes, Jonathan K. Osborne, and Jonathan D. Stratton. The defendants are as follows: Kathleen Cutuli, Gregory Cutuli, Rolando Garcia, Aileen Crespo, Rebecca Solemani-Appelbaum, Walter Alexander Lista, Yechezkel Nissenbaum, and Tamar Nissenbaum. An indictment does not prove guilt, and all of the defendants are assumed innocent until proven guilty by a court of law.
All of the defendants are additionally being charged with making false oaths and accounts in relation to a case under Title 11. Bankruptcy fraud is a crime that has a few standard components. Firstly, all of the defendants are being accused of having concealed assets in order to avoid having to give them up. Secondly, all of the defendants are accused of intentionally falsifying documents for the purpose of concealment of hidden assets. Bankruptcy fraud is a serious crime as it allows people to take advantage of a system put in place to assist persons in need. As such, bankruptcy fraud is considered a criminal, not civil, action and is prosecuted as such. In order for bankruptcy fraud to exist the defendant must have knowingly falsified and concealed assets. Bankruptcy fraud carries a penalty of up to five years in prison as well as up to a $250,000 fine. Legitimate persons filing for bankruptcy should take care in order to disclose all assets to avoid being accused of bankruptcy fraud.
Legitimate bankruptcy filings are intended to help people struggling with debt to repay or reconcile the debt using their assets. Businesses, townships, cities, municipalities, and more may all file for bankruptcy provided that they meet the minimum requirements as outlined by law. Even some individuals with higher-than-average income may qualify for chapter 7 bankruptcy provided that they meet certain requirements pertaining to the amount of debt owed and whether or not you have enough "disposable income" to repay the amount owed. These rules are in place in order to ensure that people who do not need assistance are not able to qualify for bankruptcy, and vice versa.
Bankruptcy should always be considered a last resort. There are numerous long-lasting legal and monetary ramifications to filing for bankruptcy, and it can take upwards of 10 years to fully recover after filing. Bankruptcy is a useful tool that needs to be protected from fraudulent abuse and misuse by people who would seek to take advantage of the system.