WHITE-COLLAR CRIME
Operation Targets Bankruptcy
Fraud
10/18/06
|
Joining
the FBI's Chip Burrus, center, during
a press conference on bankruptcy fraud
are Deputy Attorney General Paul J. McNulty,
right, and Clifford White, acting director
of the Executive Office of U.S. Trustees. |
As
part of an ongoing effort to maintain the
continued integrity of the U.S. bankruptcy
system, the FBI and other federal agencies
announced on Wednesday that 78 defendants
had been named in bankruptcy fraud cases across
the nation in the past two months.
"Our
bankruptcy system relies on good faith, it
depends on the integrity of the debtor and
the idea that there exists a reasonable expectation
that those who loan money should be repaid,"
said James "Chip" Burrus., FBI assistant
director for the Criminal Investigative Division.
"The
abuse of this system by an individual debtor
or a professional within the system undermines
not only the rehabilitation aspect, but the
integrity of the system as a whole,"
Burrus said.
Since
August 1, the FBI has charged 48 subjects
and arrested 11 individuals through "Operation
Truth or Consequences." The operation
was a joint effort with the U.S. Attorney's
Offices, the U.S. Trustee Program, and numerous
other federal agencies, and was announced
at a press
conference on Wednesday.
The
public can now submit tips on suspected bankruptcy
fraud through a new
page on the website of the U.S. Trustee
Program. A component of the Department of
Justice, the U.S. Trustee Program oversees
the administration of bankruptcy cases and
private trustees.
Bankruptcy
fraud takes four general shapes:
-
When
a debtor conceals assets to avoid forfeiting
them.
-
When
individuals file false or incomplete forms.
-
When
an individual files numerous times, either
by using real information in several states
or by using false information.
-
When
a court-appointed trustee is bribed.
In
addition, bankruptcy fraud often involves
other serious crimes such as mortgage fraud,
identity theft, money laundering, and public
corruption.
"Bankruptcy
fraud is often the tip of the criminal iceberg,
and that makes these prosecutions so important,"
said Deputy Attorney General Paul J. McNulty.
Bankruptcy
relief has become more widely accepted in
the past decade, as the stigma attached with
filing for the protection has diminished.
The increase in filings, however, has led
to more cases of suspected fraud.
The
FBI has initiated a three-prong strategy to
reduce the number of fraudulent filings.
-
Targeting
individuals and business that conceal assets;
-
Targeting
individuals who make fraudulent multiple
interstate bankruptcy filings; and
-
Targeting
bankruptcy fraud where it is associated
with another criminal enterprise.
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