A fraudulent conveyance, or fraudulent transfer, is the transfer of property to another party to prevent, hinder, or delay the collection of a debt owed by the party making the transfer, sometimes by rendering that party insolvent. It is generally treated as a civil cause of action in debtor and creditor relations, typically pursued by creditors or bankruptcy trustees against insolvent debtors, though some jurisdictions allow criminal prosecution.
Facts
Classification CodeIn the United Kingdom, fraudulent conveyance was originally addressed by the Fraudulent Conveyances Act 1571, since repealed by the Law of Property Act 1925, and is now primarily addressed by section 423 of the Insolvency Act 1986. 1 Typical PenaltyFraudulent conveyance is chiefly remedied through civil action, letting a creditor or bankruptcy trustee recover the transferred property or its value from the transferee, though some jurisdictions also allow criminal prosecution of the debtor. 1 Elements of OffenseA conveyance or transfer of property is fraudulent when made with actual intent to hinder, delay or defraud a creditor, or, under the constructive fraud doctrine, when made for less than reasonably equivalent value while the debtor was in a distressed financial condition. 1 Notable ExampleThe doctrine traces to the sixteenth century English Twyne's Case, in which a farmer sold his sheep to a man named Twyne to defeat his creditors but kept possession of the flock, continuing to mark and shear the animals, conduct the court treated as a badge of fraud. 1 Jurisdiction VariationAustralia allows courts to set aside a company transaction made to defeat, delay or interfere with creditors at any point in the ten years before the liquidation's relation-back day, a materially longer look-back window than the shorter limitation periods used under the United States' Uniform Fraudulent Transfer Act and Federal Bankruptcy Code. 1 Classification
Offense GradeSerious or Indictable Offense 1 Connections
Associated With
Source Fraudulent Conveyance (Wikipedia)
Has Offense Grade
Entity-backed identity for the offense-grade enum value this offense already carries, resolved to a crime concept by an explicit value-to-entity map (phase 3 bucket conversion, docs\design_entity_backed_browse_buckets_20260928.md). The offense-grade fact itself stays on the offense unchanged.
In the Other Atlases
Sources
1. Fraudulent Conveyance (Wikipedia)
WikipediaWikipedia, Overview section, first sentence
A transfer will be fraudulent if made with actual intent to hinder, delay, or defraud any creditor.
United Kingdom section, statute list
Insolvency Act 1986 section 423
Overview section, first sentence
A transfer will be fraudulent if made with actual intent to hinder, delay, or defraud any creditor.
Lead paragraph, civil/criminal sentence
It is generally treated as a civil cause of action that arises in debtor/creditor relations, typically brought by creditors or by bankruptcy trustees against insolvent debtors, but in some jurisdictions there is potential for criminal prosecution.
United States section, Twyne's Case sentence
In Anglo-American law, the doctrine of Fraudulent Conveyance traces its origins back to Twyne's Case, in which an English farmer attempted to defraud his creditors by selling his sheep to a man named Twyne, while remaining in possession of the sheep, marking and shearing them.
Australia section
Under Australian law, if a transaction is entered into by a company which subsequently goes into liquidation, and the transaction was entered into by the company for the purpose of defeating, delaying or interfering with the rights of creditors during the 10 years prior to the relation back day, the courts may set it aside.
Associated With: White Collar Crime, Overview section, modern application sentence
Although fraudulent transfer law originally evolved in the context of a relatively simple agrarian economy, it is now widely used to challenge complex modern financial transactions such as leveraged buyouts.
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