Spongetech Delivery Systems Inc (fka SPNGQ)

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Bankruptcy Fraud
Bankruptcy, by definition, is when a debtor is declared - either by creditors or his own account - legally insolvent. His property is liquidated and divided among his creditors to pay his debts. But when a debtor falsely claims bankruptcy, attempts to conceal his assets, launches petition mills or files multiple claims, he is committing bankruptcy fraud - a federal offense.

Types of Bankruptcy Fraud
Concealment of assets, petition mills, and multiple filings are the most common types of bankruptcy fraud.

Concealment of Assets
Concealment of assets accounts for nearly 70 percent of all fraudulent bankruptcy cases filed by individuals. This type of fraud occurs when a person purposely fails to list every one of his assets on his bankruptcy claim, knowing that creditors cannot liquidate valuables of which they are not aware. Similarly, business owners frequently conceal assets when filing for bankruptcy - they transfer money or properties to their relatives’ or associates’ names so that the assets cannot be confiscated.




Bankruptcy Fraud Punishments
Bankruptcy fraud, a felony, carries a sentence of a fine of up to $250,000 and/or five years in prison. Defendants will be booked according to standard criminal procedure and will have the opportunity to retain a criminal law attorney.