What is asset stripping?
Concealment of assets is an economic crime that occurs when a person, in order to avoid paying debts to creditors, fraudulently conceals, sells, transfers or dilutes his or her assets. This crime seeks to prevent the debtor from meeting his economic obligations, depriving creditors of legitimate access to assets that could be liquidated to settle such debts. Spanish legislation establishes penalties for those who engage in this type of practice, with legal consequences that may involve financial fines and prison sentences.
In this context, the concealment of assets is contemplated in article 257 of the Criminal Code, and can be applied to individuals as well as to businessmen and commercial companies. It is important to note that not only direct debtors may incur in this crime, but also third parties who collaborate or facilitate the concealment or diversion of assets in order to avoid seizure or liquidation.
When is it considered asset stripping?
Asset stripping occurs when the debtor, aware that he has outstanding obligations to his creditors, takes actions aimed at making it difficult or impossible to enforce a judgment or collect a debt. Some typical examples of asset stripping include:
- Sale of real estate to relatives or friends at below-market prices: The objective is to prevent creditors from gaining access to the property as a form of payment.
- Donation or assignment of assets to third parties: By donating assets without financial consideration, the debtor seeks to reduce his assets to prevent his creditors from seizing those assets.
- Transfer of funds to foreign accounts or opaque companies: This is a strategy to make it more difficult for creditors to trace assets.
- Dilution of assets through the creation of fictitious companies or front men: In some cases, the debtor creates companies that are managed by trusted persons in order to maintain control of the assets, but without them appearing in his name.
- Simulation of insolvency: The debtor may pretend to be in a situation of economic insolvency, hiding assets or diverting income, in order to avoid seizure.
Legal consequences of asset stripping
The crime of asset stripping has serious legal consequences for the offender. Depending on the seriousness of the case and the value of the damage caused to creditors, the penalties can range from one to four years of imprisonment, in addition to significant financial fines. In addition, if the offense is committed in the context of an insolvency proceeding or involves the concealment of assets intended to satisfy a public debt, the penalties may be increased.
It is important to note that concealment of assets does not only affect debtors, but also individuals or entities that collaborate in the execution of the fraud. Any individual or company that participates in the concealment of assets with the objective of evading the debtor's legal obligations could be considered an accomplice and face the same criminal penalties.
The defense in an asset forfeiture case
At Soler Martín Abogados we have a team specialized in economic crimes, including asset stripping. Our work as defense lawyers is to offer a solid legal strategy that allows us to reduce the consequences for our clients as much as possible, either by negotiating with creditors or by presenting evidence that proves the non-existence of fraud in the transactions carried out.
In some cases, it is possible to argue that the sale or transfer of assets was made in good faith and not with the intention of harming creditors. In addition, if the case involves an insolvency proceeding, we can work to restructure the debt and reach an agreement that is beneficial to both parties, preventing the client from facing criminal penalties.
Conclusion
If you are facing an accusation of asset forfeiture, it is essential to have the advice of a lawyer specialized in economic crimes. At Soler Martín Abogados, we offer you a professional and discreet service, with the objective of protecting your rights and minimizing the damages that a process of this type can generate. Do not hesitate to contact us for a personalized consultation and explore the best options for your defense.
