The Expert Podcast

this question comes up a lot for potential clients at the creditor or even the debtor is what is the consequence for hiding assets or hiding financial transfers. and it's more of a legal question then an investigative questions so remember not attorneys we're not giving legal advice but we can tell you what we've seen in the many cases that we work with as an investigator. the big caveat to this is when you're asking about hiding assets in it is it a liability or the consequences the first question is who are you hiding it from. if you're hiding assets from the general public as long as you're not doing anything illegal there's usually not any consequence for hiding an asset. the trouble comes in when you're hiding an asset from a creditor or the governments or bankruptcy or spouse in a divorce. there is a legal term called fraudulent conveyance. so if you are involved with any dissolution of marriage partnership lawsuit loan contract and the assets are pledged or belong to another party and you start moving assets around and selling them to people or quit claiming houses the other party can come forward and say that you've committed what's called a fraudulent conveyance. meaning that you've taken an asset that somebody had a legal right to either as collateral for a loan or as community property in a marriage or as security for a debt or a partnership and you've now transfer that asset to a third party. and that transfer was fraudulent because you didn't have the rights to transfer that asset. now the asset doesn't necessarily have to be physically documented with a loan contract against it. there are many statutory contracts are statutory ownership or claims that exist. for example when a person dies if a relative sells off some of their assets we get this a lot on their vehicle titling side somebody's grandfather dies and they had an old car in the barn and they took that car and they sold it to a third party. well the problem comes in technically when somebody dies unless there's a will in a probate the assets first have to go to pay any debts. So if their grandfather had three thousand owed on a credit card before any of the assets go anywhere that credit card's got to get paid. if you start swirling away assets or or transferring them that can be considered fraudulent conveyance remember not attorneys you have to check this with a qualified attorney. most people do this really unintentionally. but you have to be aware of what the rules are. in addition a lot of times there's not gonna be any consequence because that credit card companies not gonna ever check what happened with the car. where it comes into a problem is if there is some event and that creates a trigger for an asset search. for example if somebody files bankruptcy and the bankruptcy trustee runs an asset check on the person. if they find a lot of assets were transferred right before it that might be a problem. in a divorce it's good practice to run an asset search on the other party. and find out not only what assets they have but which ones were were transferred recently. Look if a spouse in a divorce sells off a company six months before the divorce happens there could be a claim that that asset has to be brought back in or the or the the value for the asset has to be brought back in. so hiding assets by itself usually is not a criminal or problematic event it's the reason you're hiding becomes a problem. if the court tells you you have to preserve assets if you have a claim of litigation or lawsuit and the court says while this lawsuit is pending you need to you know hold all the asset freeze all your assets. and you start switching stuff around that could be considered something against the court they can hold you in contempt they can even file criminal charges. another example is when you have you know you have a loan against something you sell it. whether it be a vehicle whether it be a equipment on a UCC. we have a case a few weeks ago there was a large piece of construction equipment drilling rig that was sold by a party out of state to somebody else in this is hundred thousand dollar piece of equipment well the person who purchased it was trying to get documentation a title for this equipment. and it in doing some research we found that the seller had all kind of judgments tax liens financing against their business and the finance contract it was a blanket contract said it it covers all equipment owned by the business. It was a blanket lien against all equipment. now it wasn't filed specifically against each serial number a piece of equipment but it covered everything. so when the seller was looking to generate some cash because they were a little short on money they started selling off equipment that this loan had funded with capital. so if you're thinking about is this going to be illegal or have consequences about hiding an asset it probably is because the reason you're asking about is probably because of the the purpose you want to hide the asset. and the most important thing is to get good legal advice from an attorney don't take advice from internet chat group you know your buddy on Facebook a private investigator like us. get some ideas but don't take any action until you get good qualified legal advice because you know your scenario might be perfectly fine to move an asset but on the other hand it might not be fine so you don't wanna get caught in the middle with having done something the inadvertently get you into trouble. leave some comments below let us know what you think or what other questions might be worth talking about.