Most people probably don’t even know that bankruptcy fraud exists — but with the rise in coronavirus-related bankruptcies, these crimes are becoming even more commonplace in 2020. This type of fraud generally occurs when someone filing for bankruptcy attempts to hide or diminish their own assets in order to keep them once the bankruptcy is complete. Usually this means falsifying data on notarized or other legally binding agreements and documents.
The sheer number of people in the United States facing financial ruin because of coronavirus means that more are getting away with bankruptcy fraud. That’s a shame, because any business bankruptcy attorney worth their salt can protect those assets anyway. Many legal analysts are wondering which big company will get nailed for bankruptcy fraud this year or next — and whether or not those inevitable trials stand to become some of the biggest this century.
One of the more high-profile cases may have already been overlooked by most people because our eyes are so firmly glued to the presidential election. Former Uber engineer Anthony Levandowski told a federal bankruptcy court earlier this year that Uber should pay Google a whopping $179 million settlement instead of him.
The argument stems from the fact that Levandowski once worked for Google before joining Uber. He also worked as an engineer for Google, most notably on its self-driving endeavors. Levandowski had a self-driving startup named Otto, which Uber purchased for hundreds of millions. The goal of that purchase was to keep Levandowski as an Uber asset for a long time to come to keep him from Google. But of course that didn’t happen. He was pushed away from both companies during legal proceedings.
When Levandowski went over to Uber, Google sued the company because it believed that Levandowski had stolen much of what he worked on just before he left. During much of the trial that followed, Levandowski pleaded the fifth — because of course he had something to hide.
According to Uber, the company was lied to by Levandowski — who repeatedly told higher ups that he had not stolen a thing.
Uber’s subsequent legal filing read: “If Uber had known that Levandowski had deliberately downloaded Google confidential trade secrets to use those secrets while at Uber, then Uber would not have completed the Otto acquisition and would not have entered into the indemnification agreement.”
Levandowski says that Uber should pay the settlement, and Uber says that Levandowski should have to pay. What happens next could spill over into a bankruptcy fraud case if Levandowski loses all the money he made during these transactions and federal officials find that he lied. He filed for Chapter 11 bankruptcy because of the settlement, and has an estimated value of $50 to $100 million — which is a long way away from the $179 he was ordered to pay. He has additional liabilities totalling up to $500 million, complicating his bankruptcy case even further.