FRAUDULENT TRANSFERS OF PROPERTY

Penal Code § 154 states:

Every debtor who fraudulently removes their property out of California, or fraudulently sells, or conceals their property with intent to defraud, hinder or delay creditors their rights, could be sentenced to county jail for up to one year, a fine up to $1,000, or both.

Penal Code § 155 states:

(a) Every person against whom an action is pending, or against whom a judgment has been rendered for the recovery of any personal property, who fraudulently conceals, sells, or disposes of that property, with intent to hinder, delay, or defraud the person bringing the action or recovering the judgment, or with such intent removes that property beyond the limits of the county in which it may be at the time of the commencement of the action or the rendering of the judgment, is punishable by imprisonment in a county jail not exceeding one year, or by fine not exceeding one thousand dollars ($1,000), or by both that fine and imprisonment.

(b) Where the property so concealed, sold, disposed of, or removed consists of a stock in trade, or a part thereof, of a value exceeding two hundred fifty dollars ($250), the offenses shall be a felony and punishable as such.

Penal Code § 531 states:

Every person who is a party to any fraudulent conveyance of any lands, tenements, or hereditaments, goods or chattels, or any right or interest issuing out of the same, or to any bond, suit, judgment, or execution, contract or conveyance, had, made, or contrived with intent to deceive and defraud others, or to defeat, hinder, or delay creditors or others of their just debts, damages, or demands; or who, being a party as aforesaid, at any time wittingly and willingly puts in, uses, avows, maintains, justifies, or defends the same, or any of them, as true, and done, had, or made in good faith, or upon good consideration, or aliens, assigns, or sells any of the lands, tenements, hereditaments, goods, chattels, or other things before mentioned, to him or them conveyed as aforesaid, or any part thereof, is guilty of a misdemeanor.

UNIFORM FRAUDULENT TRANSFER ACT - CRIMINAL LIABILTY

Debtors who knowingly conceal assets from creditors may also be criminally liable under Penal Code §§ 154-155. Such crime is a misdemeanor punishable by jail time up to one year and fines. Individuals who assist debtors in fraudulent transfers may be liable under a theory of criminal conspiracy as well. A recent 9th Circuit decision even endorsed the idea that there might be relief for creditors under ‘RICO” – the Racketeering Influenced Corrupt Organizations Act – to pursue a cause of action against person assisting a debtor in fraudulently concealing assets. Smagin v Yegiazaryan, 37 F.4th 562 (2022).