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CRM 500-999

838. Bankruptcy Fraud

The criminal provisions relating to bankruptcy fraud were enacted to preserve honest administration in bankruptcy proceedings and to ensure the distribution to creditors of as large a portion of the bankrupt's estate as possible. These criminal sanctions are embodied in Title 18, United States Code, §§ 152 to 157. The provisions of 18 U.S.C. §§ 152 to 157 are applicable to any proceeding, arrangement or plan under the Bankruptcy Code, Title 11, United States Code.

CAVEAT: Although most criminal law principles remain the same, because the civil bankruptcy laws were changed considerably in 1978, some older bankruptcy fraud cases or parts of cases may no longer be good law when read in conjunction with the current Bankruptcy Code.

CAVEAT: On October 22, 1994 the Bankruptcy Reform Act of 1994 made revisions to 18 U.S.C. § 152, 153, 154, 155 and added sections 156 and 157. The references to Section 152 will indicate the present paragraph numbering. Before that change the Section 152 paragraphs were unnumbered. The old sections continue to apply to crimes completed before October 22, 1994 -- the effective date of the Bankruptcy Reform Act. The new provisions apply to all crimes continued or committed after the effective date.

Sample indictments follow the general discussion of each code section. Longer conspiracy and fraud indictments are not included because they are so fact specific. Examples of the longer indictments are available from the individuals listed below.

For additional information or assistance contact Maureen Tighe, Assistant United States Attorney (AUSA), United States Attorney's Office (USAO), Central District of California at ACAC01(MTIGHE) or 213-894-0703; Joan Safford, Deputy AUSA, USAO, Northern District of Illinois (N.D.Ill.) at AILN01(JSAFFORD) or 312-353-5300; Brian Netols, AUSA, USAO N.D.Ill. AILN01(BNETOLS) or 312-353-5300; Joe Brown, Special Assistant United States Trustee, Nashville, Tennessee, at JMD15(BROWNJOE) or 615-736-2746; TRIAL ATTORNEY Patrick Donley, Fraud Section, Criminal Division, at CRM02(DONLEY).

[cited in JM 9-41.001]