Does Your Fraud Litigation Attorney Assure Fraud Recovery?

Feb 1, 2018 | Criminal Law, Litigation Support

fraud litigation attorney

One of the most important goals of a fraud litigation attorney is making sure assets fraudulently taken get returned to their rightful owners.

fraud litigation attorney

A good fraud litigation attorney provides the best chance of obtaining any recovery of money or other assets from someone who committed fraud. But is a fraud recovery always possible? No, but having an attorney is the first major step in making a recovery possible.

What Is Fraud?

Fraud occurs when someone commits an intentional act to cause another person to suffer a loss. Classic examples include someone selling a broken product, but claiming it works just fine, or a scammer calling a victim pretending to be from the IRS and demanding payment over the phone for a nonexistent tax debt.

These are just two small examples of commonly found fraud. Another area where fraud can occur is when a debtor tries to hide property when they have creditors trying to collect a debt. This situation goes a legal term: fraudulent conveyance.

Fraudulent Conveyances

What exactly goes on during a fraudulent conveyance? Basically, a debtor is trying to prevent a creditor from collecting a debt by hiding something of value form the creditor. We can use an example to illustrate.

Mike loves to go shopping, but he usually wants to buy more than he can afford. So to keep up his shopping habit, he uses credit cards to purchase products and makes only minimum payments on the credit cards each month. But eventually, he buys so much on the credit cards that he can no longer afford to make the minimum payments.

Mike sees the writing on the wall and realizes it’s only a matter of time before debt collection proceedings begin. Mike could stop the debt collection if he paid his debts, but the only things of value he has are a fully restored antique jukebox and some old gold coins he bought as an investment years ago.

These items are worth more than enough to pay off his credit card debts, but he would rather declare bankruptcy. Then in 10 years, he would use the money from the assets to start a brand new shopping spree.

So Mike develops the plan of selling the jukebox and gold coins to an antique dealer for cash, then hiding the cash in his backyard before declaring bankruptcy. He hopes that his debts will mostly go away because he is too “poor” to ever fully pay them back.

Why Mike doesn’t know is that there are special laws that allow the courts to discover these transactions and recovery the property. Federal bankruptcy law has special “clawback” provisions that would allow the bankruptcy trustee take back the gold coins and jukebox from the antique dealer.

In non-bankruptcy cases, but for which there are similar attempts to hide assets from creditors, special state laws would apply. One such law is Georgia’s Uniform Fraudulent Conveyance Act.

Obtaining a Fraud Recovery

There’s a bit of detective work that goes on in making a fraud recovery because wrongdoers, like the hypothetical Mike, try really hard to hide property from creditors. Luckily, there are special laws in place to prevent these schemes from working and enabling attorneys to recover property or money lost as the result of fraud.

Find out what you need to know about what a fraud litigation attorney can do by calling the Wilbanks Law Firm, P.C. at (706) 335-2355.