by Byrne Hobart
In the wake of the Madoff scandal, some people have discussed how “fraudulent conveyance” could be a major issue. The doctrine of fraudulent conveyance basically holds that after a fraud, someone who benefited should give up some (or all) of their benefits to those who were wronged, even if they had no idea what was going on. It’s a usful doctrine in a lot of cases — if Madoff, for example, had given his sons tens of millions of dollars but left others high and dry, it wouldn’t be a great plan to let them keep the money.
But what people don’t often mention is the big problem with fraudulent conveyance: it encourages people to look the other way… Read more…