§ 31330. Penalties

648 words·~3 min read·/usc/title-46/section-31330

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(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.

(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.

(Pub. L. 100–710, title I, § 102(c), Nov. 23, 1988, 102 Stat. 4747; Pub. L. 104–324, title XI, § 1113(b)(2), Oct. 19, 1996, 110 Stat. 3970; Pub. L. 111–281, title IX, § 913(a)(1), (d), Oct. 15, 2010, 124 Stat. 3017.)

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 sections 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 statement

Subsection

(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).

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