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NCJRS Abstract

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NCJ Number: 99608 Find in a Library
Title: Abuse of Dutch Private Compaines (BVs) - An Empirical Study
Author(s): A C Berghuis; G Paulides
Corporate Author: Netherlands Ministry of Justice
Research and Documentation Centre
Date Published: 1985
Page Count: 37
Sponsoring Agency: National Institute of Justice/
Rockville, MD 20849
NCJRS Photocopy Services
Rockville, MD 20849-6000
Netherlands Ministry of Justice
2500 Eh the Hague, Netherlands
Sale Source: National Institute of Justice/
NCJRS paper reproduction
Box 6000, Dept F
Rockville, MD 20849
United States of America

NCJRS Photocopy Services
Box 6000
Rockville, MD 20849-6000
United States of America
Document: PDF
Type: Report (Study/Research)
Language: English
Country: Netherlands
Annotation: This Dutch study examined the incidence of abuse of legal entity status and fraud among a sample of 991 private, limited liability businesses against whom bankruptcy proceedings were concluded in 1980 in The Netherlands
Abstract: Data were collected from bankruptcy files, tax authorities, industrial insurance boards, and the Dutch ministry of justice. In about a third of the cases, no evidence of abuse or fraud was found. In a similar proportion of cases, there was some evidence of negligent conduct with respect to creditors' interests, including undercapitalization, insufficient expertise, incompetent management, and bad bookkeeping. In the remaining 37 percent of companies, there were indications of deliberate abuse or fraud. Two major types of abuses were distinguished: asset stripping (found in 22 percent of the total sample) and social security and tax evasion (in 15 percent of the total sample). The former -- usually involving embezzlement, swindling, and fraudulent trading -- refers to the practice of removing goods and money from the company, thereby leaving creditors with no means of redress. The second type of fraud involves the use of a nonfunctional company in conjunction with other companies to escape paying income and turn-over taxes and social security either through labor brokerage or unscrupulous subcontracting. A further examination of actions taken against abusing companies shows that personal sanctions against individuals were rare, cases were frequently dropped for lack of evidence, and only 4 to 5 percent of fraudulent operators received even a short, custodial sentence. Tabular data and footnotes are provided. (Author summary modified)
Index Term(s): Bankruptcy fraud; Corporate criminal liability; Crime patterns; Crime rate studies; Crimes against businesses; Criminal justice research; Embezzlement; Fraud; Netherlands; Professional misconduct; Tax evasion
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