Home White Collar Crimes Fraudulent Transfer of Business Assets

Los Angeles Fraudulent Transfer of Business Assets Attorneys

These Cases Can Be Very Complicated

When a business is having difficulty paying its creditors, its owner may use illegitimate tactics to hide their assets. The business owner might fraudulently transfer assets to someone they know or just pretend to transfer assets to prevent creditors from getting paid.

The Uniform Fraudulent Transfer Act (UFTA) prevents businesses in California from “acting with intent to hinder, defraud, or delay” creditors that are attempting to collect on debts. These cases are very complex, and it’s not always clear what constitutes a fraudulent transfer.

If you’re facing charges for making a fraudulent transfer, it’s essential to find a criminal attorney who’s familiar with the nuances and legal precedents that apply. To learn more, contact the Los Angeles white-collar crime attorneys at Werksman Jackson & Quinn LLP.

Give us a call at (213) 688-0460 to schedule a consultation today.

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What Is a Fraudulent Transfer?

A fraudulent transfer is used to hide or transfer assets away from your balance sheet to make it appear as though you don’t have the necessary assets to pay creditors. Fraudulent transfers are often made before a business declares bankruptcy.

Let’s say Walter owes his creditors thousands of dollars, so he sells some real estate valued at a million dollars to his brother for $1, and then he buys it back for $2 after completing bankruptcy proceedings and settling with his creditors. That would be a clear case of a fraudulent transfer.

Red flags that may indicate fraudulent transfers include:

  • Transfers made to insiders, such as relatives, partners, or company officers and employees
  • Transfers made to companies that are secretly owned by the debtor
  • Transfers where the debtor did not receive fair market value
  • Transfers that are hidden from courts, creditors, or tax collectors
  • Transfer made by insolvent businesses
  • Transfers that plunge a business into bankruptcy

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Legal Ways to Prevent a Fraudulent Transfer

Assets required to pay creditors cannot be transferred once you have received a demand of payment from a creditor. But it’s not always clear which creditor should be paid first.

After the owner of a business files for bankruptcy, the debtor’s assets can be seized, and the court may declare certain transfers to be fraudulent. In these cases, a U.S. Trustee may void fraudulent transfers and order the transferee to return the assets.

If it’s legally determined that assets were fraudulently transferred for the purposes of avoiding one’s creditors, both debtor and the person who receives the transfer may be held liable for legal fees paid by the creditor.

Creditors may also attempt to recover money they are owed by:

  • Filing an injunction
  • Attaching a lien on the creditor’s assets
  • Foreclosing on an asset

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Have You Been Charged with Financial Fraud?

You may be facing state and federal charges filed by agencies with unlimited resources. The penalties in these cases can be severe.

Our award-winning trial attorneys at Werksman Jackson & Quinn LLP, are nationally recognized for the cases we’ve won. Call (213) 688-0460 to schedule a consultation today. At Werksman Jackson & Quinn LLP, we’re always fighting for our clients.

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Contact Werksman Jackson & Quinn LLP Today
Phone: (213) 688-0460
Fax: (213) 624-1942

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