NCJ Number
66068
Journal
ECONOMIC CRIME DIGEST Volume: 6 Issue: 1 Dated: (OCTOBER 1979 - JANUARY 1980) Pages: 4-8
Date Published
1980
Length
5 pages
Annotation
TYPES AND INDICATIONS OF FRAUDULENT TRANSFER OF ASSETS ARE IDENTIFIED, AND METHODS FOR INVESTIGATING SUCH TRANSFERS ARE DESCRIBED.
Abstract
A FRAUDULENT TRANSFER OF ASSETS OCCURS WHEN THE SUPPOSED TRANSFEROR RETAINS OWNERSHIP OR CONTROL OF THE ASSETS IN QUESTION, SUCH THAT THE TRANSFER IS A SHAM. WHILE THE ILLUSIONARY TRANSFER DOES NOT IN ITSELF CREATE A FRAUD, IT IS GENERALLY PART OF A FRAUDULENT SCHEME. INDICATIONS OF A FRAUDULENT TRANSFER ARE THE CONVEYANCE OF AN ASSET FOR SUBTANTIALLY LESS THAN ADEQUATE CONSIDERATIONS OR THE TRANSFER OF AN ASSET TO A RELATIVE, FRIEND, OR CLOSELY-HELD CORPORATION. OTHER INDICATIONS ARE ENCUMBERING OR LOANING AGAINST AN ASSET SHORTLY BEFORE BANKRUPTCY OR FIRE LOSS; ENCUMBERING OF AN ASSET BY A FRIEND, RELATIVE, OR CLOSELY-HELD CORPORATION, AND TRANSFERING AN ASSET FROM ONE CORPORATION TO ANOTHER THAT IS RELATED THROUGH STOCK OWNERSHIP, OFFICERS, OR AN INTERLOCKING DIRECTORATE. SOURCES OF INFORMATION ABOUT ACTUAL ASSETS ARE VALUABLE IN DETECTING FRAUDULENT TRANSFER OF ASSETS. IMPORTANT SOURCES OF INFORMATION ARE GENERALLY FOUND AT COUNTY CLERKS' OFFICES AND FEDERAL AND COUNTY COURTHOUSES. THEY INCLUDE CHATTEL MORTGAGES, GRANTEE-GRANTOR REAL PROPERTY RECORDS, JUDGEMENTS, BANKRUPTCY FILES, AND WILLS AND PROBATE. SPREAD SHEETS ARE HELPFUL IN PORTRAYING THE OVERALL ACTIVITY WHEN ASSET TRANSFERS ARE REPETITIVE OVER A PERIOD OF TIME. SUCH SHEETS PROVIDE COLUMNS WHERE DATES, NAMES, PLACES, AMOUNTS, AND EVENTS ARE 'SPREAD' FOR EASE OF ANALYSIS. FEDERAL STATUTES MAKE IT A FELONY TO CONCEAL ASSETS, MAKE A FALSE ACCOUNT, PRESENT A FALSE PROOF OF CLAIM, FRAUDULENTLY RECEIVE PROPERTY, OR TRANSFER ASSETS IN ORDER TO DEFEAT BANKRUPTCY LAWS. MOST STATES HAVE SIMILAR PROVISIONS. (RCB)