Social Media Evidence in Bankruptcy Proceedings

Elle EvansBlog0 Comments

Social Media Evidence in Bankruptcy Proceedings - Exotic car parked curbside.

Recently, a bankruptcy judge ordered rapper 50 Cent, whose real name is Curtis James Jackson III, back to court over several of his Instagram pictures.

The pictures show the rapper with bundles of cash, one showing piles in his refrigerator, another with bundles spelling out the word “broke,” and another showed him cuddling money in bed. He’s also used his Instagram account to brag about buying a home in Africa. His social media posts have raised questions about whether or not the rapper was truthful about his financial situation since it appears that he may have more assets than he initially reported. If the investigation shows that Mr. Jackson committed fraud by misrepresenting his assets, it will likely have a significant effect on his case.

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This highlights the importance of checking social media sites for evidence of fraud on a bankruptcy petition. On a bankruptcy application the petitioner must list all income, assets, and debts. Disclosing this type of information is particularly important in Chapter 7 and Chapter 13 personal bankruptcies. In a Chapter 7 bankruptcy, all eligible debts are discharged, whereas in a Chapter 13 bankruptcy the petitioner is on a payment plan, based on his income, where he will repay some or all of his debts. If a petitioner commits fraud, some of the debts may no longer be dischargeable, the case may be dismissed, and he may also be charged with perjury, a federal crime for lying to a court that may involve large fines or even jail time.

As previous posts discuss, social media evidence is admissible in court, even if the account is private. In the bankruptcy process, creditors and bankruptcy trustees, lawyers, insurance companies, and investigators may all discover evidence from social media sites illustrating that the petitioner lied or omitted information about his financial state. Pictures of fancy dinners, vacations, or posing with piles of money may create doubt about the petitioner’s honesty and true financial situation. Similarly, a LinkedIn account may also show that the petitioner has a second job or additional source of income that was not originally disclosed. This evidence may then be used to seek an order to have petitioner’s case dismissed or altered depending on the type of bankruptcy. Since social media use has become so widespread, this investigatory practice has become a routine and necessary part of the bankruptcy process to unearth any potential fraud.

For example, a petitioner who has a significant amount of debt may file for bankruptcy as a way of alleviating his debt. However, this petitioner may actually have several assets that could be used to pay off his debts, but he may have hidden those assets on his petition in order to shield them from the bankruptcy process. An investigation into his social media presence may reveal indications of fraud, like additional vehicles, vacation homes, signs of a lavish lifestyle, or even piles of cash. Discovering this fraud will ensure that the petitioner will be required to pay back any and all debts that he can afford, rather than having them discharged unnecessarily.

Since Mr. Jackson was ordered back to court, he has continued to post more pictures with money in the background. He’s responded that the money in these pictures is merely “prop money,” used to perpetuate the “public persona of ‘50 Cent,’” and that his lawyers and creditors have reached an agreement. While it remains to be seen if these pictures will have an effect on Mr. Jackson’s case, it is important for attorneys, trustees, insurance companies, and investigators alike to diligently search petitioners’ social media accounts for any signs of fraud and take action.

If you’re currently a part of the bankruptcy process, SMI can assist you in discovering and preserving evidence of fraud. If you let us know you’re looking to use social media evidence for a bankruptcy case, our analysts will locate the subject’s social media accounts and investigate the user’s posted photos, comments and other content to identify extensive travel, expensive purchases and other signs of extravagant lifestyle that could contradict the subject’s bankruptcy claims.


Featured image taken by Andrew Pons via Unsplash