If another party holds a security interest in property you own, you are obligated to report the sale of that property and provide the proceeds to the secured party. Failing to do so would constitute fraudulent behavior. According to New York Penal Law § 185.05, you may be subject to prosecution for committing fraud related to a security interest in personal property if:
- You establish a security interest in personal property to secure a financial obligation, and according to the security agreement, you have both the authority to sell the property and the responsibility to account for the sale proceeds. Nevertheless, you sell or otherwise dispose of the property without providing an account of the proceeds to the secured party.
- You establish a security interest in personal property but do not have the legal right to sell it as per the security agreement. Nonetheless, you proceed to sell or dispose of the property in violation of the terms outlined in the security agreement.
Engaging in fraudulent activities related to a security interest is categorized as a class A misdemeanor. Conviction of this offense may result in a maximum jail term of one year. Additionally, you might face a probationary period of up to three years and be obligated to pay fines as part of your sentencing.
New York Penal Law § 185.05: Fraud Involving A Security Interest
An individual is deemed to commit fraud involving a security interest when, after entering into a security agreement that establishes a security interest in personal property to secure a monetary obligation owed to a secured party, they:
- Possess the authority, as specified in the security agreement, to sell or otherwise dispose of the property and have the responsibility to provide an account of the proceeds of disposition to the secured party, yet they sell or dispose of the property and fail to properly account for the proceeds to the secured party; or
- Lack the right, as defined in the security agreement, to sell or otherwise dispose of the property, but knowingly conceal, withhold, or dispose of such property in contravention of the terms outlined in the security agreement.
- Fraud in Insolvency: New York Penal Law § 185.00
- Fraudulent disposition of mortgaged property: New York Penal Law § 185.10
- Fraudulent disposition of property subject to a conditional sale: New York Penal Law § 185.15
Hiring A New York Lawyer For Fraud Involving A Security Interest Case
Hiring a New York lawyer for a fraud case involving a security interest is crucial for protecting your rights and navigating the complex legal landscape. New York’s robust legal system demands expertise, and an experienced attorney can provide the necessary guidance. They will assess the intricacies of your case, gather evidence, and develop a strong defense or pursue legal action on your behalf. These lawyers understand the nuances of securities law and can help you navigate regulatory hurdles. With their knowledge of New York’s legal framework, they can work to secure the best outcome, whether through negotiation, settlement, or litigation, ensuring your interests are safeguarded.