Concealment of Property18 U.S.C. § 152(1)
The concealment of property can be charged under either 18 U.S.C.
152(1) or § 152(7). One of the important differences between these two
paragraphs is that under Subsection (1) the property which was concealed
property of the bankruptcy estate.|
Subsection (1) of Section 152 provides that:
A person who . . . knowingly and fraudulently conceals from a
custodian, trustee, marshal, or other officer of the court charged with the
control or custody of property, or, in connection with a case under title
from creditors or the United States Trustee, any property belonging to the
of a debtor;. . .shall be fined. . ., imprisoned. . ., or both.
The elements of the offense of concealment under 18 U.S.C. §
that the government must prove are:
- the bankruptcy proceeding was in existence;
- the defendant fraudulently concealed the property from the
- the property belonged to the bankruptcy estate.
Devitt, Blackmar & O'Malley, 2 Federal Jury Practice and
Instructions, § 24.03 (4th ed. 1990); United States v.
644 F.2d 85, 87 (2d Cir. 1981); United States v. Beery, 678 F.2d 856
Cir. 1982), cert. denied, 471 U.S. 1066 (1985).
Although § 152, itself, does not provide a definition, the
"property belonging to the estate of the debtor" has been construed broadly
include "any legal, equitable, or beneficial interest of the debtor in
on the date the bankruptcy petition was filed or that [the debtor] may have
acquired after the commencement of the case other than earnings from
services or loan proceeds." United States v. Moody, 923 F.2d 341,
(5th Cir.), cert. denied, 502 U.S. 821 (1991) (approving instruction
quoted language); United States v. Cardall, 885 F.2d 656, 677 (reh'g
denied)(10th Cir. 1989)(11 U.S.C. § 541 is to be broadly construed to
all property interests wherever located and by whomever held). This
all-encompassing definition requires the debtor to disclose information
property that might be part of the bankruptcy estate.
It is a reasonable reading of 18 U.S.C. § 152 to conclude
the statute requires a bankrupt to disclose the existence of assets whose
immediate status is uncertain. Even if the asset is not ultimately
to be property of the estate under the technical rules of the Federal
Code, Section 152 properly imposes sanctions on those who pre-empt a court's
determination by failing to report the asset.
United States v. Cherek, 734 F.2d 1248, 1254 (7th Cir. 1984),
denied, 471 U.S. 1014 (1985).
A defendant may not conceal equitable interests in property of the
bankruptcy estate. The fact that legal title to an asset is not held by the
bankruptcy estate does not relieve a defendant of the duty to disclose the
estate's equitable interest in such an asset. United States v.
834 F.2d 1454, 1461 (9th Cir. 1987), post conviction relief denied,
F.2d 899 (1991); United States v. Moynagh, 566 F.2d 799, 803 (1st
1977), cert. denied, 435 U.S. 917 (1978); United States v.
Schireson, 116 F.2d 881, 883 (3d Cir. 1941). Even property which is
ultimately determined not to be the property of a bankruptcy estate can be
considered concealed for purposes of prosecution. United States v.
Martin, 408 F.2d 949, 953 (7th Cir.), cert. denied, 396 U.S. 824
PRACTICE TIP: It is a question of fact for the jury to determine
whether assets are property of the debtor and belong to the bankruptcy
United States v. Weinstein, 834 F.2d 1454 (9th Cir. 1987), post
conviction relief denied, 931 F.2d 899 (1991); United States v.
Robbins, 997 F.2d 390, 392 (8th Cir.), cert. denied, 114 S. Ct.
CAVEAT: Where the law is uncertain as to whether the debtor really
would be receiving the property, such uncertainty may be relevant in
whether the defendant had a knowing and fraudulent intent in not disclosing
potential asset. United States v. Collins, 424 F. Supp. 465 (E.D.Ky.
1977)(suspended member of police department did not disclose that he could
receive back wages if he was reinstated; evidence held insufficient to show
fraudulent intent since law was uncertain as to whether defendant could
such back wages for the period he was suspended).
"Conceal" does not mean merely to secrete or hide away. In fact
defendant does not have to physically hide the property at all. "Conceal"
means to prevent the discovery of the asset or to withhold knowledge of the
asset. United States v. Schireson, 116 F.2d 881, 884 (3d Cir. 1941);
Burchinal v. United States, 342 F.2d 982, 985 (10th Cir.), cert.
denied, 382 U.S. 843 (1965). Therefore, since the debtor has an
obligation to list all estate property in the debtor's schedules, failure to
an asset on the bankruptcy schedules can constitute concealment under the
statute. Coghlan v. United States, 147 F.2d 233 (8th Cir. 1945),
denied, 325 U.S. 888 (1945); United States v. Grant, 971 F.2d
(en banc)(1st Cir. 1992).
PRACTICE TIP: A bankruptcy judge's testimony that property is an
of the estate is inadmissible to prove that the assets in question belong to
bankruptcy estate. A judge's findings may be admitted only on the question
notice, and the jury must be given a limiting instruction. United States
Robbins, supra, at 393.
PRACTICE TIP: The abandonment of the asset by the trustee in the
course of the civil administration of the estate does not bar a later
for the concealment of the asset. United States v. Grant, 971 F.2d
806 (en banc)(1st Cir. 1992).
The concealment of property belonging to a bankruptcy estate can
place before (pre-petition) as well as after (post-petition) the bankruptcy
filed. Sultan v. United States, 249 F.2d 385 (5th Cir. 1957). This
not mean, however, that the initial act of concealing must occur after the
of the petition, it merely means that the property must remain concealed
the commencement of the bankruptcy proceeding. In addition, there must be a
concealment from one of the persons enumerated in the first paragraph of 18
U.S.C. § 152. If there is a concealment from more than one of the
mentioned, it is a separate and independent offense as to each person. An
indictment charging concealment from one person will not bar a subsequent
indictment charging concealment from another. United States v.
F. Supp. 911 (S.D.N.Y. 1955).
When multiple assets are concealed prior to the filing of a
petition, there is only a single offense since there is only a single duty
disclose the existence of all assets. United States v. Moss, 562
155, 159 (2d Cir. 1977), cert. denied, 435 U.S. 914 (1978).
Pre-petition concealment charges can be combined into one count to avoid
convictions based on a violation of the single statute of bankruptcy fraud.
United States v. White, 879 F.2d 1509, 1512 (7th Cir.), cert.
denied, 494 U.S. 1027 (1989); United States v. McClellan, 868
(7th Cir. 1989); United States v. Kaldenberg, 429 F.2d 161 (9th
cert. denied, 400 U.S. 929 (1970).
Each asset concealed after the filing of the petition constitutes a
separate offense. United States v. Moss, 562 F.2d 155, 159 (2d Cir.
1977), cert. denied, 435 U.S. 914 (1978). Post-petition concealment
assets or property represents individual counts for each act of concealment,
because each concealment represents a separate act with intent. United
v. Melton, 763 F.2d 401 (11th Cir. 1985); United States v. Montilla
Ambrosiani, 610 F.2d 65, 69 (1st Cir. 1979), cert. denied, 445
PRACTICE TIP: Where the concealed asset charge involves assets
acquired after the filing of the bankruptcy petition, the government must
that the assets were acquired with pre-petition assets or proceeds from
pre-petition property. United States v. Robbins, 997 F.2d 390, 393
Cir.), cert. denied, 114 S. Ct. 391 (1993).
PRACTICE TIP: An indictment must describe the concealed property
adequately, United States v. Schireson, 116 F.2d 881 (3d Cir. 1940);
Beitel v. United States, 306 F.2d 665 (5th Cir. 1962), including the
and place of the concealment, United States v. Arge, 418 F.2d 721,
(10th Cir. 1969), and from whom the property was concealed, United States
Yacht, 135 F. Supp. 911 (S.D.N.Y. 1955).
NOTE: The concealment of the assets of a debtor is a continuing
offense. The statute of limitations does not begin to run until the debtor
granted or denied a discharge. See this Manual at
969, Statute of Limitations: 18 U.S.C. § 3284.
[cited in USAM 9-41.001]