Congress centralized computer crimes under one statute in 1984 with the passage of the “Counterfeit Access Device and Computer Fraud and Abuse Act.” The intention was to have a tool to prosecute computer-related crimes under the rubric of one statute.
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The classification of claims and interests in a Chapter 11 bankruptcy case is governed by Section 1122 of the Bankruptcy Code. The ability of a plan proponent to group certain claims in certain categories is a powerful tool in the confirmation process, since it can have a direct effect on the voting and objection process. Continue reading
In 1952, Congress passed the McCarran-Walter Act, the so-called “Immigration and Nationality Act” (INA), which has been codified into law under 8 U.S.C. §1101 to 1503. There are many other immigration-related statutory provisions (and more likely on the way soon), but modern immigration legislation derives in large part from the legislative work that was done in the 1950s. When discussing immigration crimes, there is a clear distinction between what happens at the state level and what happens at the federal level. At the state level, enforcement efforts often focus on criminal complaints or indictments against undocumented immigrants for crimes associated with unlawful residence: forgery, identity theft, fraudulent use of credit devices, and other related state-level crimes.
At the federal level, different crimes are often the focus of prosecutorial efforts. Smuggling, transporting, or harboring aliens are distinct federal crimes, and will be discussed separately. Under 8 U.S.C. §1324(a), it is unlawful for anyone to:
(a) bring an alien into the United States,
(b) transport or harbor an alien,
(c ) encourage an alien to enter the United States, or
(d) to conspire to commit any of the preceding offenses.
Illegal entry is governed by 8 U.S.C. §1325. Under §1325(a), any alien who:
(1) enters or attempts to enter the United States at any time or place other than as designated by immigration officers, or
(2) eludes examination or inspection by immigration officers, or
(3) attempts to enter or obtains entry to the United States by a willfully false or misleading representation or the willful concealment of a material fact;
shall, for the first commission of any such offense, be fined under title 18 or imprisoned not more than 6 months, or both, and, for a subsequent commission of any such offense, be fined under title 18, or imprisoned not more than 2 years, or both.
Under 8 U.S.C. §1324(b), civil penalties can be assessed for violations of immigration provisions:
Any alien who is apprehended while entering (or attempting to enter) the United States at a time or place other than as designated by immigration officers shall be subject to a civil penalty of—
(1) at least $50 and not more than $250 for each such entry (or attempted entry); or
(2) twice the amount specified in paragraph (1) in the case of an alien who has been previously subject to a civil penalty under this subsection.
Civil penalties under this subsection are in addition to, and not in lieu of, any criminal or other civil penalties that may be imposed.
Under §1325(c ), “marriage fraud” is criminalized; it is defined as “knowingly” entering into a marriage for the purpose of evading any provision of the immigration laws. And §1325(d) criminalizes “immigration-related entrepreneurship fraud”, which is defined as “knowingly” establishing a commercial enterprise for the purpose of evading the immigration laws.
Smuggling. Smuggling is defined as knowingly bringing or attempting to bring an alien into the United States at a non-designated place of entry. Even if a person has received “prior official authorization” to come to the United States, a crime may be alleged if the person is brought in at a non-designated place of entry.
Transporting. Anyone who “transports, or moves or attempts to transport or move…[an] alien within the United States by means of transportation or otherwise, furtherance of such violation of law” may be in violation of 8 U.S.C. §1324(a)(1). The key consideration in a transportation offense is the “reason” behind the transportation. U.S. v. Moreno, 561 F.2d 1321, 1323 (9th Cir. 1977). Courts have held, for example, that it is not a crime to transport known illegal aliens between job sites in the ordinary and required course of the defendant’s employment, or to transport aliens for job searches in another state. U.S. v. Moreno-Duque, 718 F.Supp. 254 (D. Vt. 1989); U.S. v. 1982 Ford Pick-Up, 873 F.2d 947 (6th Cir. 1989). However, some courts have held that transportation for work or employment reasons is not a defense to the crime of transportation of undocumented aliens. U.S. v. Shaddix, 693 F.2d 1135, 1138 (5th Cir. 1982).
Harboring. Harboring an alien is covered under §1324(a)(1)(A)(iii). It basically criminalizes any attempt to shield or protect an unlawful alien from detection from the authorities.
Hiring. It is unlawful to recruit or hire someone who is an alien. §1324(a)(1)(A). The burden of compliance is placed squarely on the shoulders of an employer. Failure to comply with the eligibility verification process is itself a crime. Evidence of violations of these provisions can be found, according to §1324, as follows. The applicable section reads:
In determining whether a violation of subsection (a) of this section has occurred, any of the following shall be prima facie evidence that an alien involved in the alleged violation had not received prior official authorization to come to, enter, or reside in the United States or that such alien had come to, entered, or remained in the United States in violation of law:
(A) Records of any judicial or administrative proceeding in which that alien’s status was an issue and in which it was determined that the alien had not received prior official authorization to come to, enter, or reside in the United States or that such alien had come to, entered, or remained in the United States in violation of law.
(B) Official records of the Service or of the Department of State showing that the alien had not received prior official authorization to come to, enter, or reside in the United States or that such alien had come to, entered, or remained in the United States in violation of law.
(C) Testimony, by an immigration officer having personal knowledge of the facts concerning that alien’s status, that the alien had not received prior official authorization to come to, enter, or reside in the United States or that such alien had come to, entered, or remained in the United States in violation of law.
Due to some dispute between state and federal authorities over who has the enforcement authority in these matters, a provision was inserted in Section 1324 specifying who has the authority to make arrests: “No officer or person shall have authority to make any arrests for a violation of any provision of this section except officers and employees of the Service designated by the Attorney General, either individually or as a member of a class, and all other officers whose duty it is to enforce criminal laws.”
Forfeiture provisions round out Section 1324, making it clear that asset forfeiture can come into play when violations of these provisions are found. As Congress continues to amend, modify, and add to the complex rules surrounding immigration, it is not unreasonable to expect significant changes in immigration crimes and enforcement in the years ahead.
Read More: Identity Theft And Identity Fraud Crimes In Kansas And Missouri
Adversary proceedings can be used to dispute, remove, or contest liens. The validity of a lien can be disputed by a trustee or a Chapter 11 debtor in possession under several of the various “avoidance” sections of chapter 5 of the Bankruptcy Code. For example:
There are some situations in which the validity of a lien can be contested indirectly. For example, a secured creditor filing a proof of claim may claim a security interest. The trustee or debtor in possession can object to the claim under F.R. Bankr. P. 3007. If the creditor cannot verify its secured status, the claim may be disallowed as a secured claim.
Sometimes valuation of the collateral in question is an important issue. This issue can come up in adversary proceedings that attempt to strip away the second or third mortgage that is claimed to be wholly unsecured. In Re Mansaray-Ruffin, 530 F.3d 230 (3d Cir. 2008).
Here, the real issue is to what “extent” the secured creditor is secured. If there is no equity in the property to which a lien can attach, then the lien is said to be unsecured.
For example, suppose a house has a fair market value of $150,000. The first mortgage secured against the property is in the amount of $165,000. There is no equity left in the property for any second mortgage to attach to, since the mortgage is larger than the fair market value. Under Section 506(a) of the Code, secured claims are to be valued and allowed as secured to the extent of the value of the collateral, and unsecured for the excess over such value.
This provision is implemented by F.R. Bankr. 3012. Under Rule 3012, the court can determine the value of a claim secured by a lien on property on motion of any party in interest. If a debtor attempts to “strip off” or “strip down” a lien based on valuation, the majority view is that no adversary proceeding is required. Harmon v. U.S., 101 F.3d 574 (8th Cir. 1996); In Re King, 290 B.R. 641, 647 (Bankr. C.D. Ill. 2003); In Re Marsh, 475 B.R. 892, 896 (N.D. Ill. 2012). Local rules and procedures here will provide the best guidance on whether a lien can be removed by motion or by adversary proceeding.
Despite the case law supporting the idea that unsecured mortgages can be removed by motion, in practice most courts prefer that this by done by adversary proceeding, due to the nature of the rights of the creditor that are being affected.In the 8th Circuit, there is case law holding that a debtor can strip off a junior lien of a wholly unsecured claim on a debtor’s principal residence by confirmation of a Chapter 13 plan. In Re Fisette, 455 B.R. 177 (8th Cir. BAP 2011).
If a trustee is in doubt as to the priority of a lien in estate property, an adversary may be appropriate. For example, if the trustee is authorized to sell estate property under Section 363(b) of the Code “free and clear” of other interests, then an adversary might need to be used.A trustee could use Rule 7022 to do this, which permits him to interplead any competing claimants and obtain a determination of the rights of all the various claimants. An adversary proceeding can also be used under Rule 7001 to determine “other interests in property.”
Adversary proceedings have a wide range of uses. They can be used by a Chapter 11 debtor in possession, a debtor in a Chapter 7 or Chapter 13 case, by a trustee, or by a creditor. Besides providing a way to object to the discharge of certain debts, they are commonly used to determine property rights, valuations of secured collateral, extent of security interests, and determinations of ownership priority in collateral.
Read More: Bankruptcy Adversary Proceedings Under Section 523: Seeking To Prevent Discharge of Certain Debts
Internet-based prosecutions for child pornography have skyrocketed since 1997. Simply stated, internet obscenity cases have skyrocketed. From 1997 to 2004, there was a 422% increase in federal cases of this type. The numbers have grown steadily since then. In 2011, prosecutions were up by 40% since 2006, with an increasing number of more than 9,000 active cases.
Similar numbers have been observed for state-level cases. We will discuss the background, nature, and defense of computer-based child pornography cases to better understand this expanding and serious area of federal and state prosecution. Law enforcement agencies have adopted the latest state-of-the art technologies in devoting resources to this area, and deploy their resources accordingly.
Continue readingIn extreme cases of alleged violations of federal bankruptcy laws, criminal accusations can arise. Bankruptcy crimes are quite rare in practice. There is a strong presumption that issues arising in bankruptcy cases are best handled by bankruptcy judges and trustees as civil matters. In rare situations, criminal investigations and accusations do happen, and we will here discuss some of the possible criminal charges that have historically been used by federal prosecutors. Bankruptcy crimes typically fall within one or more of the following types: knowingly or fraudulently concealing property, making false oaths or accounts, fraudulently doctoring evidence, or withholding documents. We will conclude this article with a general discussion of successful defenses to accusations of a bankruptcy crime.
Fraudulent Concealment Or Transfers. Bankruptcy crimes are described in the subparts of 18 U.S.C.A. §152. Fraudulent concealment or transfer of assets is therefore criminally governed by 18 U.S.C.A. §152. The requisite mental state here is one of “specific intent”: it is necessary to prove that the action was taken “knowingly” and “fraudulently.” This is often difficult to prove. “Fraudulently” means making a false representation of a material fact, with knowledge of its falsity and with the intent to deceive. U.S. v. Berry, 678 F.2d 856, 866 (10th Cir. 1982). Intent to deceive is different from intent to defraud. “Knowingly” means with knowledge, and not due to some mistake or accident. Such knowledge can be inferred, in some situations, from the surrounding circumstances. U.S. v. West, 22 F.3d 586 (5th Cir. 1994).
Debtors have a duty to disclose all property in their case, including “all legal and equitable interests.” Concealment does not require physical “hiding” of the asset. Concealment can be found when someone deliberately prevents discovery of an asset, or withholds knowledge of it. U.S. v. Weinstein, 834 F.2d 1454, 1426 (9th Cir. 1987). Concealment can also be the transfer of title coupled with the benefits of ownership. In Re Bradley, 501 F.3d 421, 434 (5th Cir. 2007). Section 152(1) of the 18 U.S.C.A. deals with concealing property from the bankruptcy trustee, while Section 152(7) involves deliberate concealment before a case is filed. The act of concealment may continue for the entire period of concealment to avoid the bar of the statute of limitations. U.S. v. Stein, 233 F.3d 6 (1st Cir., 2000). In the Stein case just cited, for example, the bankruptcy was filed in 1990, but the federal indictment was not handed down until 1998.
Not all retaining of assets involves improper concealment. There is a very important distinction between a transfer that relinquishes one of all interest in property, and a transfer that does not. In Re Olivier, 819 F.2d 550, 553 (5th Cir. 1987). If the transfer is absolute, it may not be an act of concealment, even if the creditors have been defrauded. This distinction is important, as it bears directly on the statutes of limitations for the criminal prosecution of a transfer offense.
False Oaths. A false oath is basically a false statement or omission in the debtor’s schedules, or a false statement made by a defendant under oath in any part of the bankruptcy proceedings. The false oath must be made on a material issue. In other words, a false statement on a minor issue will not suffice. Section 152(4) of 18 U.S.C.A. deals with false claims. A false claim is willfully and knowingly participating in the filing of a false claim for the purpose of defrauding the bankruptcy court and the other creditors in the case.
False Treatment Of Documents. False treatment of documents is dealt with under 18 U.S.C.A. §152(8). This would arise in cases where an individual falsifies or makes a false entry related to a document related to the affairs of a debtor. Significantly, a court has held that false statements in disclosure statements and plans of reorganization are not considered knowing and fraudulent false entries under §152(8). This is so because disclosure statements and plans of reorganization do not relate to a debtor’s financial recordkeeping. U.S. v. McDaniel, 2006 WL 839095 (W.D. Mich. 2006). Section 152(9) deals with situations where an individual fraudulently withholds documents from the trustee or the court after the filing of a bankruptcy case.
Defenses To Accusations Of Bankruptcy Crimes. Most (but not all) defenses to bankruptcy crimes in general relate to (1) lack of materiality; (2) good faith; (3) mistake of law or fact; or (4) entrapment by estoppel. This list is not exhaustive. A defendant has the full range of defenses available to him under common law or case law, provided the judge allows it to be included in jury instructions. “Lack of materiality” boils down to stating that even though a false statement was made, it was pertaining to an immaterial issue. “Good faith” is the assertion that a defendant was acting without any culpable mental state, or may have been relying on advice from a spouse or governmental agency. Mistake defenses are similar to the “entrapment by estoppel” defense. In entrapment by estoppel, a defendant asserts that he or she was relying on the advice of some governmental agency, whose advice turned out to be incorrect.
Criminal charges involving bankruptcy crimes are rare, and are reserved for unusual or extreme situations. However, if such an accusation is made, it is critical to have legal counsel who is experienced in both bankruptcy law and federal criminal defense. At Phillips & Thomas LLC, we are uniquely placed in this regard. Our practice focuses solely on these two areas of law. When an issues arises that involves both the Bankruptcy Code and the federal criminal statutes, we are able to bring our more than thirty years of collective experience in these two complex areas of law to deal with the problem decisively and successfully.
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Overland Park Criminal Attorney
In the United States, the modern laws related to criminal conspiracy began to take shape in the late nineteenth century. In the most basic definition, conspiracy is an agreement between two or more persons formed for the purpose of committing a crime. The purpose behind criminalizing conspiracy was twofold: to exercise some control over “inchoate” (i.e., unripe or incomplete) activities, and to punish group behavior that had crime as its object.
The crime of conspiracy is the illegitimate agreement. Although simple to define, the offense presents many difficult problems in further analysis. What is an “agreement”? At what point does it begin? What happens if there are multiple agreements over time, or if a person withdraws from the agreement?
It sometimes happens that accusations of crimes happen when one or more parties are under the influence of drugs or alcohol. Sometimes this intoxication is voluntary (i.e., a person knowingly and deliberately consumed intoxicants) and sometimes it is involuntary (i.e., a person was given intoxicants without his or her knowledge).
Suppose, for example, a person attends a party and drinks punch that has been “spiked.” He then commits a crime at the party. When is intoxication (voluntary or involuntary) a defense to a criminal charge? What are the rules? The answers can get complicated, depending on a variety of factors. We discuss the basic outlines here.
Chapter 11 cases are filed for many reasons. One reason is a for an individual or business reorganization. Another possible reason is for a business liquidation. Why would a Chapter 11 case be used for a liquidation, when Chapter 7 already is available for that purpose? The reasons are many. In most situations, more value will be gained when the business is “wound down” by the owner gradually over time, rather than sold at “firesale” prices by a Chapter 7 trustee.
It occasionally happens in bankruptcy cases that a debtor will forget to list a creditor on his or her bankruptcy forms and schedules. The Bankruptcy Code permits a debtor to amend his schedules to include the missed creditor, even long after a case is closed or discharged. It also (much more rarely) happens that assets will be identified or recovered long after a bankruptcy has been closed. But how long is too long?
Or is there any time limit beyond which a creditor cannot be added? Is there any time limit beyond which a late-discovered asset with tangible value is irrelevant? Apparently not, one court has ruled. The case is In Re Dunning Brothers Co., 410 B.R. 877 (Bankr. E.D. Cal. 2009). In this case, a bankruptcy court ruled that a case that had been closed over seventy years earlier could be reopened to include some assets that had not been listed in the case.
Kansas City Bankruptcy And Criminal Case Defense Information 
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