§3304 Transfer Fraudulent as to a Debt to the United States

Summary

If someone gives away property or takes on a debt, the move can be treated as a fraud against a debt owed to the United States in certain situations, except as section 3307 says. If the debt existed before the transfer, it is fraudulent when the person did not get fair value in return and was insolvent at the time or became insolvent because of the transfer. It is also fraudulent if the transfer was to an insider for a prior debt, the person was insolvent, and the insider had good reason to think they were insolvent. A transfer or new obligation is also fraudulent no matter when the debt arose if the person acted with real intent to hide, delay, or cheat a creditor, or if they got less than fair value and either were about to start a business with too few remaining assets or planned to take on debts they could not pay. To decide if there was bad intent, officials can look at factors like transfers to insiders, keeping control of the property, hiding the transfer, being sued or threatened with suit, moving almost all assets, fleeing or hiding assets, getting little value, insolvency around the time of the transfer, timing near large debts, or shifting key assets through a lienor to an insider.