Penal Code 154 PC | Fraudulent Conveyance by a Debtor

Penal Code 154 PC | Fraudulent Conveyance by a Debtor

Fraudulent conveyance laws in California make it illegal for debtors to transfer assets or property to avoid paying back debts or satisfying judgments. Penal Code 154 PC specifically covers fraudulent conveyance by a debtor, while Penal Code 155 PC deals with fraudulent conveyance by a judgment debtor.

These laws are intended to prevent people from hiding assets when they owe money. For example, someone might transfer a house or car to a relative to prevent creditors from seizing it. Or they might move property out of state. Basically, any attempt to conceal assets to avoid paying debts can be considered fraudulent conveyance.

What is Fraudulent Conveyance Under Penal Code 154 PC?

California Penal Code 154 PC 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.

So in simple terms, it’s illegal in California to:

  • Sell your property
  • Give your property away
  • Hide or conceal your property
  • Move your property out of state

If you do any of these things specifically to avoid paying back a creditor, it’s considered fraudulent conveyance under PC 154.

Examples of Fraudulent Conveyance

Here are some examples of situations that could lead to charges under Penal Code 154 PC:

  • John owes $10,000 to a credit card company. He transfers ownership of his car, worth $8,000, to his brother for free to prevent the credit card company from seizing it.
  • Mary defaulted on business loans totaling $50,000. She moves all her jewelry and other valuables to a storage unit in another state to conceal them from creditors.
  • Bob lost a civil lawsuit and the court ordered him to pay the plaintiff $20,000 in damages. He sold his boat for $15,000 but gave the money to his girlfriend instead of the plaintiff.

In each case, the person is selling, giving away, hiding, or moving property to avoid paying legitimate debts. This makes their actions potential violations of PC 154 fraudulent conveyance laws.

Penalties for Fraudulent Conveyance in California

If convicted under Penal Code 154 PC, possible penalties include:

  • Up to 1 year in county jail
  • A fine up to $1,000
  • Both jail time and a fine

Fraudulent conveyance becomes a felony offense if it involves transferring “stock in trade” worth more than $250. Stock in trade refers to property or inventory that is part of a debtor’s business. Felony fraudulent conveyance can be punished by up to 3 years in state prison.

Defenses to Fraudulent Conveyance Charges

Some potential defenses to Penal Code 154 PC charges include:

  • Lack of intent – The prosecution must prove you specifically intended to avoid paying debts. If you had other legitimate reasons for transferring assets, you may not have criminal intent.
  • No valuable property – The assets must be valuable enough that concealing them would actually impact a creditor’s ability to collect. Hiding insignificant items may not qualify as fraudulent conveyance.
  • No debt existed – If you dispute that any valid debt is owed, then you may argue you had no duty to preserve assets for creditors.

An experienced criminal defense attorney can help assert these defenses and fight the charges against you. Having skilled legal representation can be crucial for obtaining the best possible result in your case.

Related Offenses

In addition to Penal Code 154 PC, other related laws include:

  • PC 155 – Fraudulent conveyance by a judgment debtor
  • PC 531 – Participating in a fraudulent conveyance
  • Federal bankruptcy fraud laws – Concealing assets during bankruptcy

An attorney can advise if you are at risk of additional charges based on the specifics of your case.

Get Legal Help Today

Facing allegations of fraudulent conveyance can have severe consequences. An experienced California criminal defense lawyer can help protect your rights. They will carefully examine the details of your case and build the strongest defense to have charges reduced or dismissed. Don’t wait to get legal help fighting back against Penal Code 154 PC allegations.