What Is a Fraudulent Conveyance?
It is never fun to pony up for the debts you owe, but some ways of trying to get out of paying can be considered a crime. If you are hearing from debt collectors, you may be determining strategies for minimizing or avoiding what you have to pay. However, transferring property or assets to prevent them from being seized by debt collectors is considered a criminal fraudulent conveyance.
Criminal Fraudulent Conveyances Require Intent
For a California prosecutor to convict you of the crime of fraudulent conveyance, they must prove that you did all of the following:
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Transferred, sold, or gave away;
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Property or assets;
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That had monetary value;
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Intentionally;
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With the goal of keeping the property conveyed from being used to settle a debt.
You can be guilty of fraudulent conveyance even if a debt collector eventually is able to seize the property for repayment. So long as you intended to make it harder for or delay the creditor from getting their hands on your assets by transferring it, you would be guilty.
Transfers of a wide variety of property or assets can lead to fraudulent conveyance charges. You can commit the offense by transferring cars, jewelry, cash, stock, homes, or anything else of value.
Criminal Defenses To a Charge of Fraudulent Conveyance
The most critical part of fraudulent conveyance laws is that you intended to conceal the extent of your assets from your creditors. Therefore, you can still transfer property that could be used to settle your debts. If you did not intend to avoid the property counting towards the amount you owe, you would not be guilty.
For example, say you have a classic car in your garage. You’ve spent years working on it or tinkering with it. Though you know it has significant monetary value, you attach much more sentimental value to the car. For your son’s 25th birthday, you hand him the keys to the vehicle. Even if you are indebted, an experienced defense attorney can argue that you were not concealing the car from creditors. You had always intended to give your son this gift and were not even considering your debts.
Another defense to the fraudulent conveyance law is necessity. In this defense, you transferred an item to fulfill a specific need. For example, you may have sold a watch to pay for a sudden car repair bill. Because you needed the money to repair your car so you could continue getting to your job, selling the watch may be seen as a necessity and not a fraudulent conveyance.
Punishment for Fraudulent Conveyance
A charge of fraudulent conveyance is a misdemeanor in California, with penalties including:
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Up to one year in county jail; and,
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A maximum fine of $1,000.
However, if the property transferred was stock worth over $250, you can be charged with a felony. The punishments for concealing assets through stock trades are harsher and include:
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16 months, two years, or even three years in California state prison.
There are also possible federal legal ramifications if you are charged with fraudulent conveyance.
Due to the serious nature of fraudulent conveyance charges and the complicated criminal and civil legal outcomes, you will need an knowledgeable defense attorney who understands the nuances and complexities of fraudulent conveyance laws on your side. If you have been charged with a fraudulent conveyance offense in Santa Ana, California, contact the Chambers Law Firm today at 714-760-4088 or dchambers@clfca.com to schedule a free consultation with a member of our skilled legal team.
