How Stupid Can They Get? Plenty Stupid! (A discussion of fraudulent conveyances)
It was inevitable – massive fraud in the government’s bailout program from 2008. The U.S. Troubled Assets Relief Program (or “TARP”) had it’s first major arrest. Charles Antonucci, former head of New York’s Park Avenue Bank, was indicted for fraud, embezzlement and misappropriation. What did he do? The feds say he attempted to take $11 million of bailout monies meant for the bank and spend it on himself.
Theft and fraud investigations are nothing new. But what noteworthy is Antonucci’s actions after the federal investigation began. Knowing that he may be prosecuted and sued civilly for damages, Antonucci is alleged to have transferred his $348,000 home to his wife. On the same day he also “sold” his condo in Tampa to his son for $100. These transactions are what are commonly called “fraudulent conveyances” or “fraudulent transfers.”
Fraudsters frequently transfer assets – bank accounts, expensive cars and real property – into someone else’s name thinking that they can protect that property from seizure or a civil judgment. Unfortunately, that tactic often works.
Obtaining a judgment against a fraudster is usually quite easy. Often they will not answer complaints or comply with discovery demands for fear of incriminating themselves in a future criminal case. The bigger trick becomes collecting the judgment.
All states in the U.S. have adopted some type of fraudulent conveyance law. Those laws allow creditors (judgment holders) to pursue property transferred for less than proper consideration. Sadly, few lawyers have experience pursuing fraudulent conveyances. Billions of dollars of judgments go uncollected each year even though a properly trained lawyer could unwind these transfers and collect for victims.
In this case the transfers were so obvious that the courts will likely “unwind” the transfers to Antonucci’s wife and son and order the property to be sold and the proceeds used to pay any creditors. In many other cases, however, these transfers to family and friends go unchallenged. The victim has a worthless judgment while the criminal still has his fancy yacht – that is, now his girlfriend’s yacht.
What is a Fraudulent Conveyance?
Fraudulent conveyance is the illegal or unfair transfer of property to another party with the intent to defraud creditors. There are generally two types of fraudulent conveyance.
The first is a transfer meant to defer, hinder, or defraud creditors, or to put such property out of the reach of a creditor. It is often done in an anticipation of a bankruptcy or lawsuit. This type of fraudulent conveyance often involves transferring an asset to a spouse, relative, business partner, or friend and often for an insignificant amount of money.
The other type of fraudulent conveyance, “constructive fraud,” occurs when creditors receive less than they have a right to under the law.
Update on Charles Antonucci: On December 21, 2011 the court ordered Antonucci’s property forfeited. He was also ordered to pay $54 million in restitution. After pleading guilty to defrauding the FDIC, he was sentenced to 30 months in prison in 2015.
Antonucci’s co-defendant, Wilbur Huff, was sentenced to 12 years in prison. In announcing the sentence, Manhattan’s U.S. Attorney said, “Anthony Huff and his co-conspirators stole millions of dollars from taxpayers and engaged in extensive frauds, all in the pursuit of additional property, luxury cars, and the like. His crimes have earned him 12 years in prison.”
Mahany Law is a full service, national boutique concentrating in fraud recovery and lender liability actions. We have participated in fraud cases throughout the United States and in the Middle East, Central America, the Caribbean and Europe. Wherever a criminal may attempt to hide your money, our lawyers and former government special agents will do everything possible to get back your money.
With attorneys in four states and a nationwide network, we are ready to help wherever the judgment debtor may reside or wherever the property is located. To learn more, contact us online, by email at or by phone at 202-800-9791. All inquiries protected by the attorney – client privilege and kept confidential. We will answer your questions and give you a realistic assessment of getting back your hard-earned money.