Receiving gun from a soon-to-be felon, advice needed.


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essayons21
April 22, 2012, 11:39 AM
I recently have found myself in a sticky situation. I have a friend who recently plead guilty as part of a plea deal with the FBI and US attorney's office to a few counts of wire fraud and bank fraud. He basically lied on some federal forms in order to get millions in tax credits, which were then sold to corporations for millions of dollars. Part of his plea agreement is to become a cooperating witness for the feds against another person involved in the same scheme, who apparently the FBI wants to see in jail for a long time.

Obviously he will soon be a felon and lose his 2A rights. He has a massive gun collection. As part of the deal, he is allowed by the the FBI to give his collection away, and I am receiving about a third of it, although I am getting the most valuable pieces because he knows how much I appreciate fine guns. I also will be getting most of the ammunition, which he bought by the pallet. This arrangement is being supervised by the FBI, I am signing for each gun by serial no. and they may be contacting me to verify I which guns I have received so that they can account for all of his firearms.

Now that is the simple part. What I am concerned with is the civil forfeiture proceedings and his eventual bankruptcy hearings. Both the indictment for the man he is testifying against and his plea deal include civil forfeiture. My friend's deal only lists a certain number of properties which were bought with ill-gotten gains, and a few vehicles. The other guy's civil forfeiture includes pretty much everything he bought in the past 8 years, and specifically lists numerous firearms. Also, when the dust settles I am sure that my friend will be declaring bankruptcy and that court will be going after all of his assets.

So my main questions is, can I sell or trade away any of these guns? There are far too many for me to keep, I simply don't have the room. I am going to have to buy a new safe, which I will have to sell at least one gun in order to afford. I am worried though that the bankruptcy court might try to come after the guns and any proceeds from the guns, even though he was ordered to transfer them out of his possession as gifts by the FBI.

I am also worried about how a sentencing or bankruptcy judge might view him transferring tens of thousands of dollars worth of assets immediately before his conviction, again even though he was ordered to do so by the FBI.

Further complicating matters is the fact that I have a C&R FFL, and if I do start selling large amounts of firearms I don't want to look like I am in the business of selling them and lose my FFL.

I am going to be in contact with his lawyer, and may contact a lawyer that specializes in firearms law, but I wanted to get some opinions from THR first.

Thanks

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TurtlePhish
April 22, 2012, 11:47 AM
I'm pretty sure the ATF specifies that selling off all or part of a collection is NOT being in the business of selling firearms. Going by that, you could go ahead and sell all of them at once if you really wanted to.

bikemutt
April 22, 2012, 12:37 PM
If you are getting these guns for free then I'd figure out a way to keep them until the bankruptcy court concludes it's matters. Or, if you must sell the guns, "freeze" the assets in your own account.

I was involved in a corporate bankruptcy where the court ordered almost all the money paid out in the last few weeks to be returned, there were some mighty upset vendors but that's the way it goes, the court does not allow preferential treatment. Your concerns are well-founded.

Colonel
April 22, 2012, 12:43 PM
I'd lawyer up, that's for sure – and not just with his lawyer!

Art Eatman
April 22, 2012, 01:07 PM
Looks to me like the key is this: "My friend's deal only lists a certain number of properties which were bought with ill-gotten gains..."

If the guns weren't bought with ill-gotten gains and thus are not listed, you should have no problem--particularly since you are being "blessed" by the FBI.

Once the guns are gone from his possession, they are no longer part of whatever assets remain to him--and thus should not be of interest in any bankruptcy proceedings.

Whether you keep or sell, make sure you have a file of all pertinent information such as nomenclature and serial number, as well as prices realized from any sales.

brboyer
April 22, 2012, 01:15 PM
Makw sure to ask your lawyer about any tax implications that may result from these gifts.

stumpers
April 22, 2012, 01:36 PM
Sounds like you also need an expert in property/finance law.

I don't know bankruptcy law, but I would think that gifts to another before filing would be protected as long as the gift wasn't to shelter assets from the government...in this case it is an attempt to make things right with the government.

dprice3844444
April 22, 2012, 01:51 PM
. As part of the deal, he is allowed by the the FBI to give his collection away, and I am receiving about a third of it

it's approved by the feds,keep copies of all the paperwork,prep them for long term storage,and put them in a safe.

mg.mikael
April 22, 2012, 11:34 PM
There are far too many for me to keep, I simply don't have the room.

I wish I had that problem. ;)

mljdeckard
April 22, 2012, 11:44 PM
My instincts go with Art and post #5, but what the heck do I know. I have no idea if an FBI blessing renders you immune from any civil action. I say do what you're doing, play it cool, talk to a lawyer, don't sell anything yet.

gbran
April 23, 2012, 01:20 AM
I have heard that bankruptcy trustees can go after pre-bankruptcy assets under certain circumstances.

Josh45
April 23, 2012, 01:22 AM
Had I been you?
Talk to his lawyer, And get your own lawyer like you said who specialize in that kinda of area. Keep copies of EVERYTHING and don't do anything with anything until the dust settles. Make sure to get to that lawyer just in case of anything and do what is best to keep you out of hot water. Ask every question you can to your lawyer and document what ever you have to. Leave no stone unturned.

bikemutt
April 23, 2012, 09:42 AM
Ask every question you can to your lawyer

Just remember that every question you ask a lawyer comes with a billing fee, won't take long to where you have to sell every gun to pay the lawyer :uhoh:

essayons21
April 23, 2012, 08:39 PM
There's the rub. I checked some fees for nearby lawyers who specialize in firearms. $300+ an hour. Anyone know a Virginia lawyer who wont charge me an arm and a leg to answer a few questions?

Thanks for all the replies and advice so far. Right now I am still receiving guns a carload at a time, and researching rough values.

My interpretation of federal law leads me to believe he can keep all of his antique arms? Anyone know if this is correct?

metalart
April 23, 2012, 08:57 PM
Perhaps he has a safe or 2 that he will no longer need that could go with the carloads of guns? could put off your having to sell any right away to buy one on your own....

Rmeju
April 23, 2012, 09:44 PM
You do NOT need a firearms lawyer. You need a lawer who specializes in "creditors remedies/secured transactions" and/or bankruptcy.

If he doesn't know the ins and outs of "article 9," go to another lawyer.

I'm about 2 weeks from graduating law school. I just took a semester on creditor's remedies & secured transactions. To say that this is way too complicated even for a "lay lawyer" is more than a little bit of an understatement.

FWIW, I would imagine that the transfer of these firearms to you would not be deemed a "sham" transaction by an adjudicating court (unless you are trying to turn his guns into money for him), but that hardly means that someone couldn't come after you for those guns regardless. It probably depends on when the people in the civil forfeiture action get liens against your friend's property (and maybe when/whether they perfect those liens). It might well depend on the civil forfeiture laws of your state, which could have a huge impact, or none at all, depending on what they say.

This is a problem you probably need a lawyer for. It sounds like a lot of guns, and therefore a lot of money, which probably means the piece of mind is worth it.

tazbigdog
April 23, 2012, 09:59 PM
Sorry to hear about your friend. Personally, I would get an attorney and do what you have to do. He gives them to you, you can do with as you wish. Good luck! Jeff

Sig Bill
April 23, 2012, 10:10 PM
I wonder if they'll slap you with a gift tax.

Jim K
April 23, 2012, 10:28 PM
You say "I am receiving..." Does that mean you have not yet taken possession of the guns?

IMHO, if you have not done so, don't. The deal is tempting, but IMHO it can turn into a can of worms you don't need to open. The FBI can make all the deals they want and then BATFE can arrest you for doing what the FBI said was OK, or a civil suit could be filed to take the guns and penalize you for conspiring to "hide" assets. Not to mention the tax issues (the guns are assets and therefore income). The whole thing is like a "tar baby", and I strongly recommend you don't get involved.

At best, the situtation is way beyond the expertise of most of us, and could turn into a very costly and time consuming legal mess.

Jim

DammitBoy
April 23, 2012, 10:28 PM
I'm willing to do my part and take five of the firearms you won't have room for in your collection. Since you'll be gifting them to me - no problems with your C&R!

jrdolall
April 23, 2012, 10:30 PM
If the FBI is involved then you definitely need an attorney. My main concern would be a gift tax if these guns are as valuable as you say. I assure you that the people looking to get their money back will go after every asset this guy has ever owned, including the guns that are gifted to you. that does not mean they have any legal claim on this property but it will be worth it to hire a lawyer. If you need to sell some guns to pay legal fees then I would gusee that that would be okay as long as you keep close records and sell the guns at something close to the actual value.

As much as I hate dealing with attorneys this case screams for legal advice.

bikemutt
April 23, 2012, 11:08 PM
The FBI can make all the deals they want and then BATFE can arrest you for doing what the FBI said was OK

Nonsense, cite an example please?

il_10
April 23, 2012, 11:16 PM
If you're a member of the VCDL, there are a couple lawyers that offer reduced rates.

http://www.vcdl.org/static/discounts.html

edit: if you're not a member, it's a good organization that's done quite a bit for VA gun rights, and since most of the attorneys are offering free initial consultation and heavily discounted rates for members, it's probably a pretty good place to start.

justice06rr
April 23, 2012, 11:21 PM
That seems like a good problem to have. Just have your own legal counsel and keep meticulous records of every firearm that is "gifted" to you by your friend. I would wait for a bit to sell them; maybe sell some of your personal firearms to fund a couple of large storage safes.

IMO if the FBI already cleared you to receive them and you have all your paperwork, you should be ok. But your own lawyer would be the best person to research this for you.

hermannr
April 24, 2012, 01:32 AM
I think the rule is if the asset was given specifically to hide the asset from the court. In your case, this would not be true as the government is forcing him to dispose of (gift) these assets.

In any case, you may or may not need an legal help. It would be a good idea to at least retain a lawyer that is knowledgeable about bankruptcy procedings.

Sheepdog1968
April 24, 2012, 03:47 AM
Sounds like it may be a problem worth avoiding. Do you really want, need these firearms? I know it's not a popular answer. Just a thought.

baylorattorney
April 24, 2012, 05:03 AM
I don't see how he kept his weapons prior to the plea deal. Once charged, he should have become a prohibited person. What is the deal?

Bubbles
April 24, 2012, 09:15 AM
I think the rule is if the asset was given specifically to hide the asset from the court. In your case, this would not be true as the government is forcing him to dispose of (gift) these assets.
The problem is he's dealing with two different court systems, and one may not give a rat's patoot what the other says. The federal criminal court is saying "get rid of the guns, you're now a prohibited person" while the VA state civil court may say "You gave away valuable assets just before filing BK? Do over!"

IANA lawyer but it seems to me the wisest course of action for the OP's friend to take would be to find a local FFL and sell or consign the guns through him, and use the cash to pay off his debts. That way he would have a paper trail so he could show the feds where the guns ended up, and he could show the BK court that he wasn't trying to hide anything and received fair market value for his guns - as long as he can show that cash was used to pay down debts or listed as part of his BK stuff.

rajb123
April 24, 2012, 10:53 AM
Typiicallly, gifts or sales made 3 months or less before a bankruptcy are presumed to be fraudulent transfers of assets and the debtors and courts usually pursue these; right?

FIVETWOSEVEN
April 24, 2012, 01:13 PM
I don't see how he kept his weapons prior to the plea deal. Once charged, he should have become a prohibited person. What is the deal?

I thought you only lost your rights through conviction regarding criminal acts, not just simply being charged.

baylorattorney
April 24, 2012, 06:56 PM
Wrong, federal law is if you are charged (indicted) with a crime and face the possibility of a year in prison, you are prohibited from transferring those guns. Its a catch 22 kinda and still a bit unclear This prior to any determination of guilt or innocence.
See:
4. The federal gun ban includes some people who are only under indictment! Anyone who is "under indictment for a crime punishable by imprisonment for a term exceeding one year" is not allowed "to ship or transport . . . any firearm or ammunition or receive any such firearm or ammunition." 18 U.S.C. § 922(n).

Notice "possession" isn't listed in the above, but transport and ship are not defined and merely possessing them could be a violation.

baylorattorney
April 24, 2012, 06:59 PM
Perhaps in this case the man wasn't yet indicted and plead on an "information" alone. This is the only way he could possibly posses weapons and transfer them, but he'd have to transfer them prior to the plea. I think I read here that part of the plea deal was to circumvent this federal law, but I don't believe prosecutors have authority to circumvent federal law. Idk

baylorattorney
April 24, 2012, 07:16 PM
"Part of his plea agreement is to become a cooperating witness for the feds against another person involved in the same scheme, who apparently the FBI wants to see in jail for a long time.<br />
<br />
Obviously he will soon be a felon and lose his 2A rights. He has a massive gun collection. As part of the deal, he is allowed by the the FBI to give his collection away, and I am receiving about a third of it, although"

So if he already pled guilty, he is already a prohibited person for possession AND transfer of guns and ammo. The Attorney General Eric Holder is the only one who could approve this circumvention of the law to allow these transfers to occur post conviction. So if Eric Holder is involved, it could quite likely be the absolute truth as stated. Lol

Jim K
April 24, 2012, 07:35 PM
Bikemutt,

It has happened. When an LEO is asked if it is OK to so such and such and says "we have no problem", what he means is that the action is not illegal under the laws he is charged with enforcing. As to the laws someone else, or some other agency, is charged with enforcing, that is someone else's problem.

Jim

Telekinesis
April 24, 2012, 07:47 PM
So if he already pled guilty, he is already a prohibited person for possession AND transfer of guns and ammo.

He might have made the agreement with the feds and just not have been brought before the court to plead yet. That would keep him from being a felon in possession, but idk about the transport. Maybe he is having a friend or family member actually transport the weapons? That seems like it would satisfy the law.

He is not prohibited from transferring the firearm, only receiving or transporting the firearm (in interstate/foreign commerce).

18 USC 922 (n)
It shall be unlawful for any person who is under indictment for a crime punishable by imprisonment for a term exceeding one year to ship or transport in interstate or foreign commerce any firearm or ammunition or receive any firearm or ammunition which has been shipped or transported in interstate or foreign commerce.

To the OP: if possible, try and see if your friend can stall/put off declaring bankruptcy for as long as possible. I believe (though am not positive) that there is a limit to how far back a bankruptcy court can go to reverse transactions. I don't think the court would be able to go after the guns, but you never know. Definitely get a lawyer knowledgeable in this field.

essayons21
April 24, 2012, 09:15 PM
Ok I will try to answer some questions.

I have already received about a third of the guns I am going to get. The next loads will occur over the next few weekends, as I have to work and he lives pretty far away.

My "friend" is my future father-in-law. Sentencing will be about the time of the wedding... hell of a present for his daughter. So that complicates simply refusing the firearms. Many have family or sentimental attachments.

He has plead guilty and is no longer in possession of the firearms. The remainder that I will get are being temporarily kept by a person who lives nearby and is also receiving guns.

He can't sell them to a FFL for a variety of reasons that some have mentioned.

I'm pretty comfortable at this point that there are no violations of criminal law. His personal bankruptcy will probably also not occur for more than 90 days, at the very least I won't do anything with the guns until that occurs. This certainly isn't an attempt to shelter his assets as no money is going back to him. I have been in contact with an attorney in the family (the non-felon side :D) who specializes in tax law, and there are no issues with gift taxes.

I should be in contact with an agent working the case tomorrow so hopefully I can get some more answers.

ETA: A bankruptcy court going after guns as assets seems incredibly complicated. If a investor gets a lein against the guns, who supervises that transfer? How do you transfer guns to a corporation? Who determines that they are not a prohibited person? Not to say that it couldn't happen, it just seems crazy.

baylorattorney
April 25, 2012, 12:30 AM
You are learning that Gun laws, federal, are murky waters to say the least. Perilous even. Like most things federal, they mean what they want them to mean when they want them to mean it and for whom as well. With such vagueness and ambiguity, NTM discriminatory application, they don't pass real constitutional muster.

Rmeju
April 27, 2012, 07:28 PM
ETA: A bankruptcy court going after guns as assets seems incredibly complicated. If a investor gets a lein against the guns, who supervises that transfer?

If they get a lien, but your father-in-law has not filed bankruptcy, the investors could simply have the local sheriff levy via a "writ of execution" which authorizes the sheriff to seize the named assets, which would presumably be the guns. If multiple parties have such liens, then it gets very sticky about which party can actually levy.

If he has already filed for BR protection, then it gets more complicated. State authorities, such as the local sheriff, cannot come after those assets via a writ of execution. The guns' fate would be decided by the BR court.

If the creditors have a perfected security agreement with your father-in-law (or the relevant business he was in charge of) that covers the guns, then the creditors are probably more likely to spend time tracking them down, especially if they have the most senior lien(s), because that will mean that they get paid the full value of those guns when they are sold, instead of only getting a tiny, pro-rata share of their value that "unsecured creditors" get (like 5%).

This all assumes that those creditors even have a legal claim on the guns, which they very well may not. And, it's just a tiny fraction of the whole story. This could get very complicated for you. You might consider talking to a bankruptcy lawyer, or a creditors remedies & secured transactions lawyer.

DammitBoy
April 27, 2012, 07:36 PM
I'd be surprised if any bankruptcy court wouldn't look at your "transaction" with your future father-in-law as collusion to hide assets.

It's possible that this thing could land you in very hot water.

Frank Ettin
April 27, 2012, 08:54 PM
Here's another one I, as a lawyer wouldn't begin to try to sort out over the Internet.

[1] In these sorts of deals, the details matter; and we don't have all the details. If I were working on this professionally, I'd want to read all the documents involved and talk with the prosecutor about how this has all been set up and what's on the horizon as far as the civil forfeiture proceedings.

[2] Depending on how this is all set up, and the timing of everything, if the friend files bankruptcy, his creditors might try to set aside the gifts of his gun collection as a preferential distribution. I don't have enough information to begin to assess whether or not they might have a decent case, but if enough money is involved, and the creditors are coming up too short, they might take a run at it. If they do, the OP will find himself in some litigation in the bankruptcy court if he wants to keep the guns.

[3] There may well be income tax issues for the OP. Gifts are income.

[4] Then there are the usual problems with asking for advice about real life, personal legal problems from a bunch of anonymous strangers. They may or may not know what they are talking about, and this is a public place. These matters need to be discussed with one's own lawyer in private -- where it's all confidential.

[5] Yes, lawyers are expensive. How much are the guns worth? And in general, paying a lawyer to help keep you out of trouble is a lot less expensive than paying a lawyer to try to get yourself out of trouble.

Byrd666
April 27, 2012, 09:01 PM
I'm no lawyer, but, seeing as how the Feds themselves ok'd the transfer of property from him to you, it is just that. Your property. Not his.

They can sue your friend for every thing he has, not what he doesn't.

Ask a real attorney to be dead certain of the civil and criminal laws and codes.

Frank Ettin
April 27, 2012, 09:11 PM
I'm no lawyer, but, seeing as how the Feds themselves ok'd the transfer of property from him to you, it is just that. Your property. Not his....I am a lawyer, and I wouldn't dream of saying anything like that based on the limited information we have.

gym
April 27, 2012, 11:13 PM
I was appointed custodian for a manager of mine who went to federal prison, for a 1 yr sentence, about another business involving "realestate sales", His attorney drafted a letter and I took posesion of his Barretta. After he got out, he asked if he could have me sell the gun and they agreed, I then just gave him the check, all legal. It was locked up in the safe in my business, and he had his job waiting for him when he got out.
The actual bosses he worked for never got any time.
He did all of this prior to his sentencing or verdict, they basically told him what he could expect if he pleaded guilty.

coolluke01
April 27, 2012, 11:22 PM
I would at least buy them for a dollar. A gift can be retracted passing money from one to another is a binding deal.

Frank Ettin
April 28, 2012, 02:37 AM
...passing money from one to another is a binding deal. Not necessarily, especially in bankruptcy court.

mgkdrgn
April 28, 2012, 11:11 AM
To the OP

Bottom line, you are being dropped into the middle of a krapstorm. And there is no krapstorm like a family krapstorm.

Best of luck to you.

DMF
April 28, 2012, 03:59 PM
Something is missing from the original story.

. . . he is allowed by the the FBI to give his collection away . . . even though he was ordered to transfer them out of his possession as gifts by the FBI.He can also be allowed to make arrangements to sell the collection. The FBI cannot force him to "gift" his property to anyone. IF there was a civil or judicial forfeiture order from a federal court that process would be enforced by the USMS not the FBI. I find it extremely odd that someone facing severe financial hardship, which may include restitution and fines, would choose to "give away" tens of thousands of dollars in assets, rather than sell those assets to pay his looming debt.

Jumping Frog
April 28, 2012, 07:40 PM
Several have mentioned "gift tax".

The person that pays the gift tax is the person who made the gift, not the person who receives the gift. It is not income to the gift recipient.

Conversely, if a relative "loans" you money with interest owned, and then you default on the loan where the relative forgives the loan, then it is a tax loss to the lender and the forgiven loan is now income to the recipient.

Frank Ettin
April 28, 2012, 07:51 PM
...The person that pays the gift tax is the person who made the gift, not the person who receives the gift. It is not income to the gift recipient...Gifts of cash are not taxable as income to the recipient. But if the gift is an appreciated asset, like perhaps a valuable gun which has increased in value, the gain might be taxable were the recipient to sell it. Of course that might create issues determining that proper basis.

armoredman
April 28, 2012, 08:05 PM
What an interesting kettle of fish! When it's all over, how about raffling off some of them you don't want and donating the proceedings to your local firearms rights outfits?
Like you said, hell of a wedding present...wow...

MachIVshooter
April 29, 2012, 12:56 AM
Once the guns are gone from his possession, they are no longer part of whatever assets remain to him--and thus should not be of interest in any bankruptcy proceedings.

Oh, they might well be if the BR court knows about them.

It is my interpretation that the trustee, should he find out about the transfer and determines it was an attempt to hide assets, will either deny the case or come up with a sum that the debtor must pay based on the reasonable market value of the guns to make a quick sale. For example, the BR attorney may ask how much one could make selling the guns quickly, not what they're really worth. Basically, if a person were to liquidate their guns (most likely sell to FFL), they'd probably only get 40-50% of their book/shelf value. Most likely you're friend would have to pay that sum.

If your friend no longer has the firearms, the BR court will likely do something similar, assuming they know about them. Of course, they're probably not privvy to the FBI's information on the transfer, and because your friend is truly not trying to hide them but is actually forced to give them away, he would not be committing purjury to state that he did not own any guns, was not trying to hide assets or engage in preferential distribution.

All that said, it sounds like his future bankruptcy would be a whole lot more complicated than a typical single/married chapter 7 or 13.

Honestly, if I were you, I'd hang onto all of them until his BR case if final and debt is discharged. Even if they did discover the guns were transferred, I don't think anything could happen to you, only to your friend. But I'm not an attorney, and you also won't have plausible deniability regarding knowledge of is bankruptcy, given your status in the family. Consult a lawyer.

bushmaster1313
April 29, 2012, 02:27 AM
I think the Bankruptcy Court can go after cash that the debtor paid within a certain period of declaring bankruptcy. The idea is that those creditors paid just before the bancruptcy should be in the same boat as the creditors after the bankruptcy.

See a lawyer before you sell any of the guns you get from your friend.

Frank Ettin
April 29, 2012, 02:40 AM
I think the Bankruptcy Court can go after cash that the debtor paid within a certain period of declaring bankruptcy....Either cash or property.

bushmaster1313
April 29, 2012, 03:11 AM
This was on the internet:


If you are planning to file for bankruptcy in the near future, it is important to consider the gifts you have given to family members in the recent past. Giving large gifts or transfers that are under fair market value to an “insider” within two years of filing for bankruptcy can trigger the finding of a fraudulent transfer under federal law. An insider is someone who is related to or close to the individual or business, like a family member, another member of the business entity or other affiliate of the individual or business. Further, while federal law only looks back two years, many state bankruptcy laws include their own version of the fraudulent transfer time period. In some states, the court may look back for a period of up to seven years before the debtor filed for bankruptcy to determine if there were any fraudulent transfers.

How Courts Uncover Fraudulent Transfers
While there are several ways a court may find a fraudulent transfer, it is important to note that a fraudulent transfer can be voluntary or involuntary, as well as intentional or in good faith. A court will find a fraudulent transfer when a debtor transfers his assets to an insider for the purpose of protecting his property from future bankruptcy proceedings. A court may also find a fraudulent transfer when the debtor gives a large gift to a family member, with no intention of trying to shield the asset from his creditors.

Unfair Preference Fraudulent Transfers
Another type of fraudulent transfer is an unfair preference. This means that when an individual or a business favors a creditor or pays off one particular creditor too soon after filing for bankruptcy, this unfair preference can trigger the finding of a fraudulent transfer. While many people would prefer to pay back family members before other creditors, this can cause problems down the line. Under federal law, a large payment to an insider is an unfair preference when made within one year of filing for bankruptcy. A large payment to a creditor is an unfair preference when made within three years of filing for bankruptcy.

Consequences of Fraudulent Transfers
When a fraudulent transfer is found, the court will recover the property or the value of the property and consider it an asset for bankruptcy purposes. Further, if the court finds that the fraudulent transfer was done to intentionally shield the asset from bankruptcy, the court will not allow the debtor to go through with the bankruptcy.

Getting Help
Fraudulent transfer in bankruptcy law does not mean that you are barred from giving any gifts to family members. Small customary gifts, generally under $200 in price, will not give rise to a presumption of fraudulent transfer. However, before you give any gifts or transfer any assets, you should consult with a bankruptcy attorney to prevent creating problems for yourself down the line.

rust collector
April 29, 2012, 11:14 PM
Bushmaster has actually done some legwork rather than opining on how the system ought to work. You will be dealing with the FBI, US Courts, state laws and licensing, ATF, and US Bankruptcy court. These folks are from the government and they're here to help :D

I have no bone to pick with any of these agencies, but things don't necessarily work the way you think they will or they should. Bankruptcy trustees have an obligation to recover assets for the benefit of creditors, and debts incurred through fraud or criminal activity might not be discharged. If you are reluctant to pay a good attorney to help steer you through this, your free gift may be costlier than expected.

baylorattorney
April 30, 2012, 08:00 AM
Rustcollector, surely you are aware of the first rule regarding the Internet? Dont believe it. Anybody can post anything on the www.

j1
April 30, 2012, 08:38 AM
I only have one thing to add. If you are a member of the NRA consult them on the question. If you are not join and then consult them.

Art Eatman
April 30, 2012, 11:51 AM
Since the loss of the firearms is coming about due to law and court action, it looks to me that their value would not be an issue at some future time when a bankruptcy is considered. It is a different situation than an attempt at evasion of asset-values.

Forced disposal, not a voluntary disposal.

Frank Ettin
April 30, 2012, 01:03 PM
Since the loss of the firearms is coming about due to law and court action, it looks to me that their value would not be an issue at some future time when a bankruptcy is considered. It is a different situation than an attempt at evasion of asset-values...That's possible and seems reasonable, but when dealing with legal matters, especially bankruptcy, that doesn't necessarily mean anything. Personally, I don't know as I sit here. I'd want to do some research if I needed to answer that question in the course of my practice.




Sent from my iPad using Tapatalk HD

Art Eatman
April 30, 2012, 10:48 PM
If you lose an asset due to a court decision, how can a later court claim that there was any effort at evasion?

bushmaster1313
April 30, 2012, 11:12 PM
If you lose an asset due to a court decision, how can a later court claim that there was any effort at evasion?

Does there have to be effort at evasion?

Frank Ettin
May 1, 2012, 01:19 AM
If you lose an asset due to a court decision, how can a later court claim that there was any effort at evasion?

The court didn't take the asset. The OP's future father-in-law became ineligible to physically possess the asset. But he continued to have some limited control and choices concerning the disposition of the asset.

For example, he must have known he was deeply in debt. He could have sold the asset, or had it sold, to create a fund to help pay down the debt.

The availability of options can be significant in a bankruptcy preceding. As I recall, it's considered an equitable action, and one who seeks the protection of bankruptcy must have clean hands.

leadcounsel
May 1, 2012, 03:08 AM
This is such a complicated situation involving federal and state law that you really need to hire an attorney experienced in bankruptcy, criminal and firearms laws.

You are right to suspect that a bankruptcy judge may not allow the divestiture of his assets for 'free' prior to him declaring bankruptcy. That is possibly illegal and could implicate you, the recipient, in a fraud on the court if there's an attempt to conceal assets. This might be avoided if you pay into his estate fair market value.

With regard to the transfer itself, absent these other issues, no reason to think that a soon-to-be felon can't transfer lawfully acquired guns. However, were they lawfully acquired or from the product of dirty money?

Hire a lawyer, and don't take possession until you have a answer that protects you.

Jpnorcal
May 1, 2012, 03:19 AM
Yea, this is like seeing you mother-in-law drive off a cliff in your new range rover. Complicated...

Sav .250
May 1, 2012, 11:02 AM
"The arrangement is being supervised by the FBI." I`d say your on pretty solid ground.

Kleanbore
May 1, 2012, 12:01 PM
I think that when we consider this from Frank Ettin:

Here's another one I, as a lawyer wouldn't begin to try to sort out over the Internet.

[1] In these sorts of deals, the details matter; and we don't have all the details. If I were working on this professionally, I'd want to read all the documents involved and talk with the prosecutor about how this has all been set up and what's on the horizon as far as the civil forfeiture proceedings.

[2] Depending on how this is all set up, and the timing of everything, if the friend files bankruptcy, his creditors might try to set aside the gifts of his gun collection as a preferential distribution. I don't have enough information to begin to assess whether or not they might have a decent case, but if enough money is involved, and the creditors are coming up too short, they might take a run at it. If they do, the OP will find himself in some litigation in the bankruptcy court if he wants to keep the guns.

[3] There may well be income tax issues for the OP. Gifts are income.

[4] Then there are the usual problems with asking for advice about real life, personal legal problems from a bunch of anonymous strangers. They may or may not know what they are talking about, and this is a public place. These matters need to be discussed with one's own lawyer in private -- where it's all confidential.

[5] Yes, lawyers are expensive. How much are the guns worth? And in general, paying a lawyer to help keep you out of trouble is a lot less expensive than paying a lawyer to try to get yourself out of trouble.

....we can close this with this from leadcounsel:

This is such a complicated situation involving federal and state law that you really need to hire an attorney experienced in bankruptcy, criminal and firearms laws.

You are right to suspect that a bankruptcy judge may not allow the divestiture of his assets for 'free' prior to him declaring bankruptcy. That is possibly illegal and could implicate you, the recipient, in a fraud on the court if there's an attempt to conceal assets. This might be avoided if you pay into his estate fair market value.

With regard to the transfer itself, absent these other issues, no reason to think that a soon-to-be felon can't transfer lawfully acquired guns. However, were they lawfully acquired or from the product of dirty money?

Hire a lawyer, and don't take possession until you have a answer that protects you.

Emphasis Added

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