Statute of Limitations18 U.S.C. § 3284
Title 18 U.S.C. § 3284 contains a special statute of limitations which applies to concealment of assets cases:
Where the debtor either receives a discharge or is denied a discharge by court order, the application of § 3284 is easy. The five year period begins with the date of the discharge or denial of the discharge. However, when a debtor receives neither a discharge nor a denial of the discharge, determining the statute of limitations is substantially more complex.
The concealment of assets of a debtor in a case under title 11 shall be deemed to be a continuing offense until the debtor shall have been finally discharged or a discharge denied, and the period of limitations shall not begin to run until such final discharge or denial of discharge.
Currently there is no provision in the Bankruptcy Code for a corporate debtor to receive a discharge--i.e., a corporation is not granted a discharge from its debts. In addition, an individual debtor's bankruptcy case can be dismissed without a discharge being either granted or denied. QUERY: In a concealment of assets case where the debtor receives neither a discharge nor a denial of the discharge when, if ever, does the statute of limitations begin to run?
These issues have not been directly addressed by the courts in any recent cases. A literal reading of 18 U.S.C. § 3284 would mean that the statute would never run in the examples cited above since a discharge was neither granted nor denied. The District Courts in United States v. Newman, 63 F. Supp. 269 (S.D.N.Y. 1945); United States v. Ganaposki, 72 F. Supp. 982 (M.D. Pa. 1947); and United States v. Nazzaro, 65 F. Supp. 456, (S.D.N.Y. 1946) all held that under the statute prior to 18 U.S. C. § 3284 (which provided that the statute of limitation did not begin to run until the debtor received a discharge), the failure of the defendant to secure a discharge meant there was no statute of limitation. They held that this was the clear language Congress used, and, whether it was wise or not, it was well within Congress' power.
The District Court in United States v. Fraidin, 63 F. Supp. 271 (Md. 1945), concerned about the possibility of no statute of limitation under the old law, held that Congress really meant that the statute of limitations would also begin to run from the time the debtor was denied a discharge, even though Congress did not say it at the time. In 1948, Congress changed the statute to include the present "denial of discharge" language.
The Ninth Circuit, using the present 18 U.S. C. § 3284 language, in an individual bankruptcy case, reached the result that failure of the debtor to either receive a discharge or be denied a discharge resulted in no statute of limitation. Winslow v. United States, 216 F.2d 912, (9th Cir. 1954), cert. denied, 349 U.S. 922 (1955) (Winslow had full control to either receive a discharge, or if that was not possible, to secure an order denying a discharge. Since he did neither the statute of limitation did not begin to run.); see also, Rudin v. United States, 254 F.2d 45 (6th Cir.), cert. denied, 357 U.S. 930 (1958)(because a corporation could apply for a discharge within six months after its adjudication of bankruptcy, the statute of limitations did not begin to run for the corporate officer who concealed assets until six months after the corporation was adjudicated a bankrupt). NOTE: Under present law there is no provision for a corporation to apply for, or receive a discharge.
The District Court in United States v. Zisblatt Furniture Co., 78 F. Supp. 9 (S.D.N.Y. 1948), appeal dismissed, 172 F.2d 740, (2d Cir. 1949), appeal by U.S. dismissed at request of Solicitor General, 336 U.S. 934, (1949), disagreed with all the previous District Courts and held that statutes of limitations are favored by the law and should be liberally construed in favor of the defendant. Since the corporation in Zisblatt had not applied for a discharge, the general statute of limitations began the date the individual defendant, who was an officer of the company, concealed the company assets.
Thus a debtor who receives neither a discharge nor a denial of the discharge and who commits the crime of concealment of assets could have the statute of limitations begin to run on the date of dismissal or on the last day a discharge could have been granted or may have no statute of limitations at all.
PRACTICE TIP: Although a false statement or declaration may also constitute a "concealment," Burchinal v. United States, 342 F.2d 982, 985 (10th Cir.), cert. denied, 382 U.S. 843 (1965), only the crime of concealment of assets receives the benefit of the extended statute of limitations provided by 18 U.S.C. § 3284. False statements, even for the purpose of concealing assets, are not covered by 18 U.S.C. § 3284. United States v. Knoll, 16 F.3d 1313, 1318 (2d Cir.), cert. denied sub nom. Gleave v. United States, 115 S. Ct. 574 (1994), reh'g denied, 115 S. Ct. 925 (1995).
[cited in Criminal Resource Manual 858; USAM 9-41.001]