Bankruptcy laws were put
in place to protect businesses and individuals from losing
everything they owned in the event of financial failure. But who
protects us from those who use this system to defraud their
creditors and actually get rich through bankruptcy? Some people
duped the bankruptcy courts with fabricated petitions and testimony
resulting in unpaid debts and money in their pockets. Bankruptcy
fraud costs businesses and taxpayers billions every year.
A wider acceptance of
bankruptcy in this country, as well as a changing economic climate,
has led to a 500 percent rise in bankruptcy filings since 1973.
About 10 percent of all bankruptcies involve fraud.
So in 1995 alone, almost 250 fraudulent bankruptcies were
filed every day. Bankruptcy
fraud schemes include the hiding of assets, false statements,
multiple filings, forged petitions and petition mills that crank out
phony information. Two-thirds
of all bankruptcy fraud involves hidden assets.
The FBI
has launched a counter-offensive against these frauds with major
efforts, like Remington Raider and Total Disclosure.
Twenty-five FBI field officers participated in the undercover
operation Total Disclosure. Their efforts resulted in the arrest of 110 bankruptcy fraud
subjects in February 1996. Backed
by these and other successes, the fight goes on.
