People will sometimes make an attempt to get out of paying a debt by fraudulently transferring their property, which is unlawful and a crime known as Penal Code 154 fraudulent conveyance.
Anyone who helps them with this unlawful conduct can be charged with participating in a fraudulent conveyance which is described under California Penal Code Section 531.
This means it not just the debtor who can be changed and punished, but anyone who participates in a fraudulent conveyance can be held criminally liable.
In basic terms, a fraudulent conveyance is type of white collar crime when somebody transfers, or gives away their property to avoid having to use of the property to pay a debt to someone, or pay damages owed from a lawsuit.
Example of participating in a fraudulent conveyance
An example on Penal Code 531 participating in a fraudulent conveyance includes a situation where a man is ordered to spousal and child support to his ex-wife.
After years of paying support, he decides to just stop paying, but knows the courts will attempt to enforce the order by garnishing his bank account or even seizing his property.
In order to avoid this action, his friend makes an agreement to place the bank accounts and property titles in his name.
The man avoiding child support payments could face charges of Penal Code 154 fraudulent conveyance, and his friend could face charges of Penal Code 531 participating in the fraudulent conveyance, because they were a knowing party to the scheme.
Another example includes situation where someone was sued and has a judgment issued against them.
They transfer titles in their name to a friend to avoid losing their property, but keeps all the property. Again, both parties in this scheme could face the same criminal charges as above.
To give readers more useful information, our California criminal defense lawyers are providing an overview below.
Definition of Participating in a Fraudulent Conveyance
California Penal Code 531 defines in part the crime of participating in a fraudulent conveyance as:
- Anyone who is a party to a fraudulent conveyance of lands, tenements, or goods, or any interest issuing any bond, suit, judgment, or execution, or contract, made, or contrived with intent to deceive others, or to defeat, hinder, or delay creditors their just debts, damages, or demands.
As stated above, a PC 531 fraudulent conveyance is when anyone transfers, or gives away property to avoid having the property used for:
- Paying pay back a debt owed to someone,
- Paying damages owed from a lawsuit.
Penal Code 531 goes a step further and holds others criminally liable for participating in the fraudulent conveyance if they:
- Are a party to the conveyance, such as the person whom the property is given to,
- Give away or sell the property that was already fraudulently conveyed.
In order for someone to be held criminal liable for Penal Code 531, the prosecutor must be able to prove the critical element of the crime – intent. They have to prove you:
- Had intent to defraud others while helping in the fraudulent conveyance,
- Had intent to defeat or delay creditors in receiving their debts/damages.
It should be noted that the term “defraud” is an act of using lies or tricks in an effort to gain anything of value from someone else.
Penalties for Penal Code 531
If you are convicted of Penal Code 531 participating in a fraudulent conveyance, it's a misdemeanor crime that carries a penalty of up to six months in a county jail, a fine up to $1,000, and informal summary probation.
If the PC 531 fraudulent conveyance involves stock in trade that has a total value above $250, it could be charged as a felony crime that carries time in a California state prison for up to three years.
Related California Offenses for Penal Code 531
- Penal Code 154 - Fraudulent Conveyance by a Debtor
- Penal Code 155 - Fraudulent Conveyance by a Judgment Debtor
- Penal Code 496(a) – Receiving Stolen Property
It should be noted that Penal Code 155 applies to a defendant who has lost a court case and then attempts to conceal, transfer property, or to their property to another location in an attempt to avoid paying the damages they owe from the lawsuit.
This typically applies to a situation when someone transfers property after they were ordered to pay damages in a court case.
However, they could also violate PC 155 if they transfer their property while the lawsuit is pending, meaning before the court has ordered them to pay damages.
Fighting Participating in a Fraudulent Conveyance Case
Our Los Angeles criminal defense law firm will review all the details of your case in order to prepare a strategy for best possible outcome.
Every case will have unique circumstance and will need to be closely examined.
We may be able to get your charges reduced to a lesser offense or even dismissed. Common defenses against Penal Code 531 participating in a fraudulent conveyance charges include:
No Intent to Participate
We might be able to make a reasonable argument you were not even aware you were a party to a fraudulent conveyance. Perhaps you believed obtaining the property was a legitimately transaction and you were not knowingly participating in a scheme to help a debtor avoid a judgment.
If we can cast doubt that you were not a willing participant, you should not be held criminal liable for participation. It should be noted in this type of defense, the details matter and the prosecutor will closely examine all transactions. If you obtained their property far below the actual value, then this would certainly create suspicion.
No Intent to Defraud
If you go back to the elements of the crimes above, you can only be found guilty of PC 531 if you assist in a fraudulent conveyance with the intent to defraud someone. We might be able to make a reasonable argument you never had this legally required intent. Perhaps you believed you were just helping a friend, and there was never an actual intent to defraud their creditor.
If you have been accused of on Penal Code 531, participating in a fraudulent conveyance, contact the Los Angeles criminal defense attorneys at Eisner Gorin LLP.
We will review the details of the case and legal options. Our law firm serves clients throughout Southern California, including the greater Los Angeles County area.
We are located at 1875 Century Park E #705, Los Angeles, CA 90067, and 14401 Sylvan St #112 Van Nuys, CA 91401.
Call us for a consultation at 310-328-3776.