What is Concealment of assets?
The concealment of assets is a crime of a socioeconomic nature through which a debtor carries out certain actions to reduce or nullify his assets in order to prevent his creditors from collecting their debts.
They have been named as crimes of frustration of the execution since the reform of the Penal Code of 2015, these types of crimes are committed by debtors who seek, through artifices that may have a greater or lesser appearance of legality, that their creditors fail to collect their debts, due to the diminution or elimination of the debtor’s assets.
For example, when a debtor makes a ‘false’ sale of his estate, makes donations to relatives or friends, fictitiously divorces or hides his assets, with the intention of making it difficult to collect his debt, and therefore harms the creditor, commits a crime of concealment of assets.
This type of crime is regulated in the Civil and Criminal Code, in its articles:
Article 1911 of the Civil Code
A crime of concealment of assets occurs when a debtor carries out acts of disposition (free or onerous) or conceals the ownership of their assets in order to avoid paying the debts incurred and thus harming their creditors’ rights.
It is established in this way that the protected legal right is the right of the creditors to obtain the payment that corresponds to the debt contracted with them. The debtor, who is aware of his debts, performs actions to place himself in a situation of insolvency in order not to pay his creditor, is committing the crime of concealment of assets.
Article 257 of the Penal Code
The debtor has the obligation to pay his debts with all his present and future assets, as established by criminal liability in article 1911 of the Civil Code. For his part, the creditor has the right to go against the debtor’s assets in order to satisfy the debt incurred.
Requirements of the crime of concealment of assets
The requirements established by the Supreme Court as necessary to establish that a crime of concealment of assets has been committed are:
- The existence of a monetary obligation on the part of the debtor contracted prior to the actions of concealment or reduction of assets, both public and private.
- That there is a prior credit right in favor of the creditor, whether it is a natural person or a legal person.
- Concealment, reduction or elimination of assets carried out by the debtor to avoid collection of the debt by the creditor.
- Situation of total or partial insolvency of the creditor (real or fictitious), caused by the destruction of assets carried out and that hinders the collection of the debt from the creditor.
- Intention to harm the creditor. Whether or not the damage occurs to the creditor, the intention on the part of the debtor is enough to be considered a crime.
Types of the crime of concealment of assets
Depending on the type of conduct of the debtor, several types of asset seizure can be distinguished.
The concealment of basic assets occurs when the debtor is shown to be insolvent after concealing his assets in order not to comply with his responsibility. It is regulated in article 257.1.1º.
When the debtor carries out an act of patrimonial disposition or that generates obligations with the intention of delaying, hindering or preventing the initiation of an embargo or an enforcement procedure. This type of crime of concealment of property is regulated in article 257.1.2º.
Included in this modality are the actions of sale, donation or assignment of assets carried out by the debtor with the intention of avoiding the payment of civil responsibilities (damages and losses) derived from a crime.
The conduct of the debtor against a creditor that is a public legal entity as well as a debt or obligation of public law, such as debts with the Treasury or the Social Security. This behavior is regulated in article 257.3.
When and if the debtor rectifies and presents the list of assets with the correct data before being discovered by the judge or court, this conduct will not be punished.
Penalties of the crime and lifting of goods
As penalties for the crimes of concealment of assets, in its different types, the following have been established:
- Prison sentences from one to four years
- Twelve to twenty-four month fines
In the event that the active subject in the crime of concealment of assets is a legal person, public or private, the penalties for this crime will be:
- A fine of two to five years, if the crime committed by the individual has a prison sentence of more than five years.
- A fine of one to three years, if the crime committed by the individual has a prison sentence of more than two years not included in the previous paragraph.
- Fine of six months to two years, for the rest of the cases.