Bankruptcy Fraud and Perjury in Bankruptcy Court

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In the press in late November 2010, CNNMoney.com reported that the feds escalated their insider-trading crackdown by arresting an employee of an "expert-networking" firm who allegedly leaked information to hedge funds.  Don Chin Trang Chu, known as Don Chu, 56, of Somerset, N.J, arranged for insiders at publicly traded companies to provide information to hedge funds "for the purpose of executing profitable securities transactions," according to a federal complaint unsealed in a Manhattan court.

Chu worked for an alleged "expert networking" firm based in Mountain View, California as the company's Taiwan liason for about 7 years. The company recently severed its relationship with Chu.

There is no telling how Chu’s legal problems will play out, but people should learn from these insider trading investigations that wrongdoing does not pay.  It changes people forever even if they are able to settle out of a situation and move on with life.  Even if they survive the tragedy they face, having committed fraud or dishonesty in life will haunt a person forever even when the mark is in the past.

Bankruptcy Court Hearing

In filing bankruptcy, a debtor appears for at least one court proceeding.  The debtor needs to make sure that whatever he puts in a bankruptcy filing is true.  If he has an attorney help him with the petitions and schedules, he should make sure to review them before they are filed with the court.  An attorney who does not get approval from a client before filing documents with the court may be in violations of professional responsibilities or cause for a malpractice action.

Perjury in Bankruptcy Court

The debtor will be questioned on what is in a bankruptcy petition at a hearing with creditors and the trustee.  This is the 341 hearing. At this meeting, the trustee questions the debtor under oath about assets, liabilities, transfers, and income.  Creditors may be present and question the debtor about circumstances under which s/he incurred debts. If a debtor commits fraud, the debts will not get discharged, and the debtor may get into civil or criminal problems for perjury.

Though fraud is tempting because sometimes a debtor has attachment to his assets, it never pays to commit fraud.  No asset is worth keeping if someone must lose freedoms by spending time in jail, or integrity with civil lawsuits. 

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