PRIA, Government Policy, Made Personal

Summary

People who give mortgages on vessels and try to hide debts or make wrongful mortgage filings can face criminal and civil penalties. Mortgagor — the person who gives a mortgage on a vessel. If a mortgagor, intending to defraud, fails to disclose a required obligation under section 31323(a), takes on a forbidden contractual obligation under section 31323(b), or files a mortgage to hinder or defraud a creditor or lienor, they can be fined under Title 18, jailed up to 2 years, or both, and may owe the U.S. up to $10,000. If someone knowingly breaks section 31329, they can be fined under Title 18, jailed up to 3 years, owe up to $25,000, and the vessel and its equipment can be seized and forfeited to the Government. If a company breaks these rules, the company’s president or chief executive can also be punished.

Title 46, §31330

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(a)(1)A mortgagor shall be fined under title 18, imprisoned for not more than 2 years, or both, if the mortgagor—

(A)with intent to defraud, does not disclose an obligation on a vessel as required by section 31323(a) of this title;

(B)with intent to defraud, incurs a contractual obligation in violation of section 31323(b) of this title; or

(C)with intent to hinder or defraud an existing or future creditor of the mortgagor or a lienor of the vessel, files a mortgage with the Secretary.

(2)A mortgagor is liable to the United States Government for a civil penalty of not more than $10,000 if the mortgagor—

(A)does not disclose an obligation on a vessel as required by section 31323(a) of this title;

(B)incurs a contractual obligation in violation of section 31323(b) of this title; or

(C)files with the Secretary a mortgage made not in good faith.

(b)(1)A person that knowingly violates section 31329 of this title shall be fined under title 18, imprisoned for not more than 3 years, or both.

(2)A person violating section 31329 of this title is liable to the Government for a civil penalty of not more than $25,000.

(3)A vessel involved in a violation under section 31329 of this title and its equipment may be seized by, and forfeited to, the Government.

(c)If a person not an individual violates this section, the president or chief executive of the person also is subject to any penalty provided under this section.

Notes & Related Subsidiaries

Historical and Revision Notes

Revised sectionSource section (U.S. Code) 31330(a)46:941(b) (1st sentence) 31330(b)New 31330(c)46:941(b) (1st sentence) section 31330(a) provides for criminal penalties for not disclosing obligations, incurring contractual obligations in violation of section 31323(b), and filing a mortgage made not in good faith. This subsection makes a substantive change to law by adding civil penalties and by making it a crime to record with the Secretary of Transportation a mortgage made not in good faith with the intent to hinder an existing or future creditor of the mortgagor or a lienor of the vessel. This is done since the affidavit of good faith has been eliminated from the elements of a preferred mortgage. section 31330(b) adds criminal and civil penalties for violating the sale and trust requirements under section 31328 and 31329. It also makes a vessel and its equipment involved in those violations subject to seizure by the Government. section 31330(c) makes the president or chief executive officer of a corporation or association liable as a mortgagor for the penalties under this section. house floor statementSubsection (a) of this section adds criminal and civil penalties for a preferred mortgagor’s failure to carry out certain requirements under chapter 313 of title 46 (as enacted by this Act).

Editorial Notes

Amendments

2010—Subsec. (a)(1)(B). Pub. L. 111–281, § 913(d)(1)(A), inserted “or” after semicolon. Subsec. (a)(1)(C). Pub. L. 111–281, § 913(d)(1)(B), substituted “Secretary.” for “Secretary; or”. Pub. L. 111–281, § 913(a)(1), struck out “of Transportation” after “Secretary”. Subsec. (a)(1)(D). Pub. L. 111–281, § 913(d)(1)(C), struck out subpar. (D) which read as follows: “with intent to defraud, does not comply with section 31321(h) of this title.” Subsec. (a)(2)(B) to (D). Pub. L. 111–281, § 913(d)(2), inserted “or” at end of subpar. (B), substituted “faith.” for “faith; or” at end of subpar. (C), and struck out subpar. (D) which read as follows: “does not comply with section 31321(h) of this title.” 1996—Subsec. (b). Pub. L. 104–324 struck out “31328 or” before “31329” in pars. (1) to (3).

Statutory Notes and Related Subsidiaries

Effective Date

Section effective Jan. 1, 1989, with certain exceptions and qualifications, see section 107 of Pub. L. 100–710, set out as a note under section 31301 of this title.

§31330 Penalties