Overview of 18 U.S.C. § 152 Violations
18 U.S.C. § 152 "attempts to cover all the possible
by which a bankrupt or any other person may attempt to defeat the
Bankruptcy Act through an effort to keep assets from being equitably
among creditors." Stegeman v. United States, 425 F.2d 984, 986 (9th
Cir.), cert. denied, 400 U.S. 837 (1970)(citation omitted; emphasis
original). Moreover, "18 U.S.C. § 152 was enacted to serve the
interests of government, not merely to protect individuals who might be
by the prohibited conduct." Id.|
The nine paragraphs of the section prohibit the following
- the concealment of property belonging to the estate of a
- the making of false oaths or accounts in relation to any case under
- the making of a false declaration, certificate, verification or
under penalty of perjury as permitted under Section 1746 of Title 28 or in
relation to any case under Title 11;
- the making of false claims against the estate of a debtor;
- the fraudulent receipt of property from a debtor;
- Bribery and extortion in connection with a case under Title 11;
- transfer or concealment of property in contemplation of a case under
- the concealment or destruction of documents relating to the property or
affairs of a debtor; and
- the withholding of documents from the administrators of a case under
The separate paragraphs of Section 152 create separate crimes, the
violation of which may be indicted separately. United States v.
379 F.2d 788, 790 (2d Cir.), cert. denied, 389 U.S. 927 (1967);
States v. Arge, 418 F.2d 721 (10th Cir. 1969). Separate violations of
separate paragraphs of § 152 constitute multiple counts, because each
requires proof of a different set of facts. United States v.
F.2d 767 (9th Cir. 1985); United States v. Kaldenberg, 429 F.2d 161
Cir.), cert. denied, 400 U.S. 929 (1970); United States v.
Christner, 66 F.3d 922, 928 (8th Cir. 1995).
However, it is not appropriate to allege two offenses and impose
convictions as a result of the same set of facts. See United
v. Ambrosiani, 610 F.2d 65 (1st Cir. 1979), cert. denied, 445
(1980). In United States v. Graham, 60 F.3d 463 (8th Cir. 1995) the
charging of three separate counts of making false statements was not
even though the debtor told the same false statement to three different
at three successive meetings of creditors because the repetition of the
statement did not add to the harm sustained by the bankruptcy estate.
KNOWINGLY AND FRAUDULENTLY: All the crimes described in the
various paragraphs of Section 152 require that the criminal act be done
"knowingly" and "fraudulently." An inadvertent error does not support a
violation of Section 152 because the statute proscribes only false
that are made "knowingly and fraudulently." United States v. Ellis,
F.3d 419, 426 (7th Cir.), cert. denied, 116 S. Ct. 143 (1995).
The term "fraudulently" means that the act was done with the intent
deceive. United States v. Diorio, 451 F.2d 21, 23 (2d Cir. 1971),
cert. denied, 405 U.S. 955 (1972). Fraudulent intent may be proven
circumstantially. United States v. Goodstein, 883 F.2d 1362, 1370
Cir. 1989), cert. denied, 494 U.S. 1007 (1990); United States v.
Weichert, 783 F.2d 23 (2d Cir.), cert. denied, 479 U.S. 831
(1986)(fraudulent intent inferred from the hurried formation of a new
after the debtor company has filed Chapter 11 and from the diversion of
before a trustee is appointed); and United States v. Catabran, 836
453, 459 (9th Cir. 1988)(removal of the carpeting which belonged to the
was admissible to show intent to start new business with old business'
even though carpeting was not an asset of the estate.
The statutory requirement that the underlying acts be performed
knowingly requires only that the acts be voluntary and intentional; the
government does not have to show that the defendant knew that he or she was
breaking the law. United States v. Zehrbach, 47 F.3d 1252 (en
Cir. 1995), cert. denied, 115 S. Ct. 1699 (1995).
A jury instruction that "an act is done 'knowingly' when that act
done voluntarily and intentionally, not because of mistake or accident" does
need to be qualified by the phrase "or other innocent reason" where the jury
otherwise instructed on a good faith reliance defense. United States v.
Smithson, 49 F.3d 138, 142 (5th Cir. 1995).
IN CONTEMPLATION OF BANKRUPTCY: Failure of the government
show that the defendant was contemplating a bankruptcy or intended to defeat
bankruptcy laws can result in a reversal of a conviction for transferring
property in contemplation of bankruptcy. See United States v.
Tashjian, 660 F.2d 829, 842 (1st Cir.), cert. denied, 454 U.S.
(1981). However, the jury is entitled to "put two and two together" to
how far back defendant actually contemplated bankruptcy. For example, in
United States v. Haymes, 610 F.2d 309 (5th Cir. 1980) the jury found
contemplation of bankruptcy at the time defendant started trying to generate
greater cash flow.
Circumstantial evidence of pre-petition activity such as secret
among officers and the weak financial condition of a company can be used to
that the defendant's acts were in contemplation of bankruptcy. United
v. Martin, 408 F.2d 949, 954 (7th Cir.), cert. denied, 396 U.S.
(1969); United States v. Ayotte, 385 F.2d 988, 991 (6th Cir. 1967),
vacated on other grounds sub nom Giordano v. United States,
U.S. 310 (1969)(defendant's renting warehouse space before bankruptcy,
emptying store inventory into warehouse and failing to pay debts were in
contemplation of bankruptcy); United States v. Butler, 704 F. Supp
1347 (E.D.Va. 1989), aff'd w/o op., 905 F.2d 1532 (4th Cir.) cert.
denied, 498 U.S. 900 (1990) (defendant's awareness of debtor's cash flow
problems and defendant's efforts to get payment from debtor for his legal
prior to declaration of bankruptcy showed that defendant's acts were in
contemplation of the debtor's bankruptcy); United States v. Willey,
F.3d 1374, 1380 (5th Cir.), cert. denied, 116 S. Ct. 675
(1995)(defendant's statement that he was forced to "consider relief through
Federal Bankruptcy Court" in an affidavit in a divorce proceeding four years
before he actually filed bankruptcy followed by transfer of assets out of
name showed that defendant's acts were in contemplation of bankruptcy).
PRACTICE TIP: The district within which the actual concealment of
assets takes place is immaterial. Venue is proper in the district in which
bankruptcy proceeding is located, United States v. Schireson, 116
881, 884 (3d Cir. 1940); United States v. Brimberry, 779 F.2d 1339,
(8th Cir. 1985); United States v. Martin, 408 F.2d 949, 953 (7th
cert. denied, 396 U.S. 824 (1969), or the district which is the situs
the trustee. United States v. Gordon, 379 F.2d 788, 791 (2d Cir.),
cert. denied, 389 U.S. 927 (1967); United States v. Zimmerman,
F.2d 559 (7th Cir. 1946).
[cited in USAM 9-41.001]