CALIFORNIA PENAL CODE 531 PC – PARTICIPATING IN A FRAUDULENT CONVEYANCE

California Penal Code Section 154 PC and California Penal Code Section 155 PC make it unlawful for a debtor to fraudulently transfer or convey property to avoid settling a debt or a judgment. Nevertheless, the responsibility for this type of offense does not lie solely with the debtor. According to California Penal Code Section 531 PC, anyone who takes part in a fraudulent conveyance can face criminal charges as well. Under California law, a fraudulent conveyance occurs when an individual transfers or gives away property with the intention of evading the obligation to use that property for either repaying a debt to another person or satisfying damages owed due to a legal judgment. According to PC 531, an individual becomes involved in a fraudulent conveyance if they are a party to the transfer or receipt of the property, knowingly defend the conveyance as not being fraudulent, and/or dispose of the property that had previously been fraudulently conveyed.

The language of the code section 531 PC states that: 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. Source: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=PEN&sectionNum=531.

ELEMENTS

For a defendant to be held liable for this offense, the prosecutor typically needs to demonstrate intent. This involves proving that

1. The defendant either intended to deceive others while participating in the fraudulent conveyance.
2. or aimed to hinder creditors from receiving their payments or damages.

The term “defraud” refers to the use of falsehoods or deception to obtain something of value from another person, usually money.

EXAMPLE

“Lisa, a business owner facing multiple lawsuits from creditors, transfers a significant portion of her business assets to her friend Tom with the intention of avoiding paying her debts. Lisa does not receive fair consideration in return for the transfer, and her primary purpose is to shield the assets from her creditors. Subsequently, the creditors discover the transfer and file a legal action against Lisa for fraudulent conveyance under California Penal Code 531, alleging that she participated in the fraudulent transfer of assets to avoid paying her debts.”

PENALTIES, PUNISHMENT, AND SENTENCING

If convicted of participating in a fraudulent conveyance under Penal Code 531, it is considered a misdemeanor offense. The potential penalties for this offense include a maximum of six months in a county jail, a fine not exceeding $1,000, and the possibility of informal summary probation. However, if the fraudulent conveyance involves stock in trade with a total value exceeding $250, it can be charged as a felony crime. In such cases, the punishment may include a prison sentence of up to three years in a California state prison. It is essential to note that instead of jail time, a judge has the discretion to order the defendant to undergo misdemeanor probation, which is also known as summary or informal probation.

DEFENSES

When facing an accusation under PC 531, a person has the opportunity to challenge the charges by asserting a legal defense. It is crucial to enlist the assistance of an attorney to ensure the most effective defense strategy. There are three common defenses used in cases involving PC 531:

1. No intent to defraud: Since PC 531 requires the intent to defraud others in a fraudulent conveyance, a solid defense would involve demonstrating that the accused did not possess this required intent. For instance, it could be argued that the transfer of property was intended to assist someone in need rather than hiding it from a creditor.
2. No intent to delay or defeat: Similar to the defense in 2.1, it is necessary for the prosecutor to prove that the accused acted with the intent to delay or defeat payment to a creditor. An effective defense can be made by demonstrating that the accused did not have this intent. For example, the accused may have participated in a property transfer without knowledge of it being for the purpose of delaying payment.
3. Unlawful search and seizure: The Fourth Amendment protects individuals from unreasonable searches and seizures conducted by law enforcement. If evidence is obtained through an unlawful search and seizure, it can be excluded from the criminal case, potentially resulting in reduced or dismissed charges. Police generally require a valid search warrant from a judge or must fall within one of the recognized exceptions to the warrant requirement.

Remember, seeking the guidance of an attorney is crucial to ensure a strong defense and safeguard your rights in a PC 531 case.

IMMIGRATION CONSEQUENCES

An individual charged with California Penal Code 531 PC – Participating in a Fraudulent Conveyance may face immigration consequences if convicted. Specifically, a conviction for this offense may be considered a crime involving moral turpitude (CIMT) by immigration authorities, which can have serious immigration consequences. Participating in a fraudulent conveyance is considered a CIMT because it involves actions taken with the intent to defraud others. This can make an individual inadmissible to the United States, deportable, or ineligible for relief from removal, such as cancellation of removal. Additionally, even if an individual is not convicted of this offense, the fact that they were charged with it may still have negative immigration consequences. Charges alone can raise questions about the individual’s character and intentions. Therefore, it is crucial to seek legal assistance in defending against a charge of participating in a fraudulent conveyance, especially if you are a non-citizen. An experienced immigration attorney can help assess the potential immigration consequences of a criminal charge and provide guidance on how to avoid them. If you do not have or know of an immigration lawyer, the Tabibnia Law Firm can refer you to one.

CAN A DEFENDANT GET A CONVICTION EXPUNGED?

In California, a defendant may be eligible to get a conviction expunged for charges under California Penal Code 531 PC. The process and eligibility for expungement can vary, so it’s important to consult with a qualified attorney who can provide personalized guidance based on the specific circumstances.

RELATED CRIMES

• Fraudulent conveyance by a debtor – California Penal Code 154 PC
• Fraudulent conveyance by a judgment debtor – California Penal Code 531 PC
• Wire fraud – California Penal Code 530.5
• Receiving Stolen Property – California Penal Code Section 496(a) PC
• Fraudulent Conveyance by a Judgment Debtor – Penal Code 155

SPEAK WITH CRIMINAL DEFENSE LAWYER FROM TABIBNIA LAW FIRM

If you have been charged with participating in a fraudulent conveyance, a serious white-collar offense that carries significant penalties, it is important to seek the assistance of an experienced criminal defense attorney. Cyrus Tabibnia, from the Tabibnia Law Firm, is a skilled defense attorney who specializes in white-collar offenses. He is dedicated to protecting the rights of his clients and providing them with a strong defense. To schedule a free consultation, you can call 866-713-2159.