The National Rifle Association (NRA) filed for bankruptcy in January of this year, but that organization is now facing accusations of bankruptcy fraud. Why? U.S. Senate Majority Leader Chuck Schumer claims that the gun rights group asked for bankruptcy protection when it was still financially stable.
In May, a bankruptcy judge refused the case, stating that the nonprofit had not acted in good faith. The judge stated in his dismissal of the bankruptcy case that the filing seemed “less like a traditional bankruptcy case…and more like cases in which courts have found bankruptcy was filed to gain an unfair advantage in litigation or to avoid a regulatory scheme.”
Bankruptcy during a strong financial period
The leaders of the organization stated that they wanted to seek bankruptcy protection to change the state of incorporation for the organization from New York to Texas. Interestingly, the NRA leaders had conflicting statements.
They said the organization was in its “strongest financial condition in years” when it filed for bankruptcy, even though the filing claimed that the organization had gone bankrupt. The NRA was spending millions of dollars on lobbying and ads at the same time it was claiming bankruptcy. Sen. Schumer has asked that the U.S. Department of Justice investigate the organization for bankruptcy fraud because of this discrepancy.
Bankruptcy fraud is a serious accusation. This white-collar crime may include fraudulent claims or declarations. Criminal prosecution is possible at the federal level, and bankruptcy fraud cases are investigated by the U.S. Department of Justice. Defending against these charges may be difficult, but with help, you may minimize the risk of prosecution or conviction.