We have been discussing the case of Idaho State Rep. Phil Hart-R, who filed for Chapter 13 bankruptcy in May and has been accused of fraudulent transactions in court documents by prosecutors.
Hart owes more than $500,000 in federal income taxes and more than $53,000 in state income taxes, according to his bankruptcy filing. He has also gotten into hot water over his home, which faces foreclosure because of his tax debts. According to Idaho’s Spokesman-Review:
Hart’s Athol, Idaho home, which the federal government is seeking to foreclose on in a separate federal lawsuit to pay his IRS debt, is owned by a trust in his daughter’s name. But he still lives there. Federal authorities called the transfer of the home to the trust a “fraudulent” transaction with a “sham entity.”
The paper also reported that, “Hart claimed in his bankruptcy filing that the only vehicle he owns is a 1990 Toyota pickup with 310,000 miles on it that “needs work.” But he is a 50-50 partner in a firm called “White Snow LLC” that owns the 2000 Audi he drives regularly and keeps at his Athol home.”
When you file for bankruptcy, it’s important to be as upfront about your assets as possible; otherwise you could face charges of bankruptcy fraud. It’s unclear whether Hart is fraudulently omitting assets from his case, but government attorneys seem to indicate so.
A fraudulent transaction occurs when a debtor transfers property to someone with the intent to hinder, delay or defraud creditors. In bankruptcy cases, this can occur when properties are transferred to a family member or a family-run entity such as a business. A fraudulent transaction can also occur when someone sells property below its actual value.
If you own property and are thinking about filing for bankruptcy, it’s important to speak to an attorney. The potential for prosecution is not worth the value of your assets if you’re thinking about concealing them. Last week we told you about a popular Maryland minister who was sentenced to 27 months in prison for bankruptcy fraud because he attempted to conceal assets during his bankruptcy case.
If you have questions regarding bankruptcy, talk to our attorney. If your financial situation is a problem, contact our Washington DC and Maryland bankruptcy lawyer now for a free consultation.
Law Firm of Kevin D. Judd