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Prevalence of bankruptcy fraud charges

| Nov 22, 2017 | Criminal Defense |

Minnesota residents who have filed for bankruptcy need to understand many things about this type of action. One thing they should be aware of is what might lead to an accusation of bankruptcy fraud. The United States Department of Justice explains that if a person is suspected of using a bankruptcy as a way of concealing other fraudulent activity, that might contribute to allegations of bankruptcy fraud. Similarly, any falsification of information during a bankruptcy proceeding may be connected to these types of allegations.

The Internal Revenue Service Criminal Investigation Bankruptcy Fraud Program may get involved in pursuing alleged instances of bankruptcy fraud. Data from the Criminal Investigation Management System shows that the number of cases involving suspected fraud in bankruptcy in the U.S. has dropped significantly in 2015 and 2016 relative to 2014. So too has the percent of defendants sentenced to time in custody and the average length of stay in some form of incarceration.

In 2014, there were 44 total cases of suspected bankruptcy fraud investigated by the IRS. Of those who were convicted, 75 percent were actually incarcerated and that period of incarceration lasted an average of four years and five months. Incarceration may involve not only time in jail or prison but also home monitoring or stays in other monitored facilities.

Investigated cases dropped to 28 in 2015 with an incarceration rate of convicted defendants also dropping to 63.6 percent. Average time in custody is listed as 16 months. In 2016 the numbers were similar with 29 cases investigated and a convicted incarceration rate of 61.1 percent. Incarceration lasted an average of 17 months.