“Crestwood,” an Example of when Bad Asset Protection Planning Can Land you in Jail – Los Angeles Income Tax Planning and Asset Protection Plan Attorney Bruce Givner

by Bruce Givner on November 20, 2013

Making a plan to protect your assets is legal and smart. However, using asset protection planning to defraud others, i.e. through Ponzi-like scams, can land you in jail.

Example 1: Aaron Hymas, with a partner, decided to flip homes. Essentially, the two men would get bank loans to buy or build houses then pay the loans off when the houses sold. However, to get at least one loan, Aaron had his wife falsify information on the loan application. When the housing market went south, the partners were left with hundreds of homes they could not sell and bank loans they could not pay back.

To protect themselves against creditors, the two partners set up nine Nevada companies. Aaron and his wife then transferred their house and almost all of their assets into these companies. When a bank then sued the two men for over $1 million, Aaron moved another $300 thousand from his personal bank account to the Nevada companies. However, a month later Aaron and his wife took a $60 thousand “loan” from one of the Nevada companies. A month after that Aaron and his wife filed bankruptcy. The next month the bank received a judgment against the men.

The bankruptcy court found the Hymas’ bankruptcy petition was full of errors and omissions. Further, the fraudulent bank loan obtained by Hymas’ wife, as well as other bank loans falsified by other Hymas family members, was found. The bankruptcy court held that the Nevada companies were created to transfer assets away from known creditors and denied discharging almost $70 million in debt for the Aaron and his wife.

Criminal indictments were made against Aaron, his wife, and eleven other Hymas family members for bank fraud, wire fraud, and making false statements. To date, Aaron’s wife and his father have been sentenced to from 60 days up to 3 years in jail.

“Courts are hip to the asset protection planning schemes people use to avoid paying their creditors. Consulting an experienced and reputable asset protection plan professional is essential,” said Bruce Givner, founding partner of Givner and Kaye.

Givner & Kaye focuses on sophisticated income tax planning and compliance, tax litigation and procedure, estate planning, and asset protection plans for individuals and businesses in Beverly Hills, Calabasas, West Los Angeles, Hollywood, and other areas of Los Angeles, Orange, Ventura, San Bernardino, Riverside and Santa Barbara Counties. Call Los Angeles Estate Planning and Asset Protection Plan Attorneys Givner & Kaye at (310) 207-8008 today.

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