Federal prosecutors filed bankruptcy fraud charges against a reality television star in October 2015, alleging that she attempted to conceal income from the court during a bankruptcy proceeding. United States v. Miller, No. 2:15-cr-00212, indictment (M.D. Pa., Oct. 13, 2015). The indictment lists a total of 20 counts: two counts of bankruptcy fraud, five counts of concealing assets, and 13 counts of false declarations. The investigation reportedly began when a bankruptcy judge familiar with the defendant’s case saw her television show and began to doubt her claims. In the age of social media, and the associated climate of over-sharing details of our lives, full disclosure in bankruptcy cases and other legal proceedings takes on an ever greater importance.
When an individual or married couple files for bankruptcy, they must provide the bankruptcy court with a detailed accounting of their assets, debts, and income. The debtor presents this information on “schedules,” using forms provided by the court. Federal criminal law prohibits debtors from concealing assets from the court or the trustee, intentionally or knowingly failing to disclose material information to the court or trustee, making false statements, and a wide range of other fraudulent or deceptive acts. 18 U.S.C. § 152. A debtor who makes a false statement in the course of a bankruptcy proceeding may also be subject to prosecution for bankruptcy fraud. 18 U.S.C. § 157. A conviction under either statute can result in imprisonment for up to five years.