THE MICHIGAN PENAL CODE (EXCERPT) Act 328 of 1931

750.219 Financial condition; false statements. Sec. 219.

Any person is guilty of a misdemeanor punishable by imprisonment for not more than 1 year or a fine of not more than $1,000.00, who, either individually or in a representative capacity, does 1 or more of the following: (a) Knowingly makes a false statement in writing to any person, firm or corporation engaged in banking or other business respecting his or her own financial condition or the financial condition of any firm or corporation with which he or she is connected as a member, director, officer, employee, or agent, for the purpose of procuring a loan or credit in any form or an extension of credit from the person, firm or corporation to whom the false statement is made, either for his or her own use or for the use of the firm or corporation with which he or she is connected as aforesaid. (b) Having previously made, or having knowledge that another has previously made a statement in writing to any person, firm, or corporation engaged in banking or other business respecting his or her own financial condition or the financial condition of any firm or corporation with which he or she is connected as aforesaid, shall afterwards procure on faith of such statement from the person, firm, or corporation to whom the previous statement has been made, either for his or her own use or for the use of the firm or corporation with which he or she is so connected, a loan or credit in any form, or an extension of credit, knowing at the time of the procuring that the previously made statement is in any material particular false with respect to the present financial condition of himself or herself or of the firm or corporation with which he or she is so connected. (c) Delivers to any note broker or other agent for the sale or negotiation of commercial paper, any statement in writing, knowing it to be false, respecting his or her own financial condition or the financial condition of any firm or corporation with which he or she is connected as aforesaid, for the purpose of having the statement used in furtherance of the sale, pledge, or negotiation of any note, bill, or other instrument for the payment of money made or endorsed or accepted or owned in whole or in part by him or her individually or by the firm or corporation with which he or she is so connected. (d) Having previously delivered or having knowledge that another has previously delivered to any note broker or other agent for the sale or negotiation of commercial paper a statement in writing respecting his or her own financial condition or the financial condition of any firm or corporation with which he or she is connected as aforesaid, shall afterwards deliver to the note broker or other agent for the purpose of sale, pledge, or negotiation on faith of the statement, any note, bill, or other instrument for the payment of money made or endorsed or accepted or owned in whole or in part by himself or herself individually or by the firm or corporation with which he or she is so connected, knowing at the time that such previously delivered statement is in any material particular false as to the present financial condition of himself or herself or of such firm or corporation.

History: 1931, Act 328, Eff. Sept. 18, 1931 ;-- CL 1948, 750.219 ;-- Am. 2002, Act 672, Eff. Mar. 31, 2003 Former Law: See section 1 of Act 25 of 1909, being CL 1915, § 15342; and CL 1929, § 16992.

The Basic Understanding of Michigan's Law on False Financial Statements

This article provides an easy-to-understand explanation of Act 328 of the Michigan Penal Code of 1931, specifically focusing on Section 219. This section deals with the crime of making false statements about one's financial condition.

What's the Big Deal About False Financial Statements?

According to Michigan law, if you intentionally give wrong information about your financial situation or the financial state of a company you're associated with, you could be committing a crime. This includes situations where you're trying to get a loan or credit extension, or if you're trying to sell or negotiate commercial papers (like promissory notes, bills of exchange, etc.). If you're found guilty, you could face up to a year in prison or a fine of up to $1,000.

Case One: False Statements for Loans or Credit

If you knowingly lie about your finances or the financial health of a company you're involved with - say, as a member, director, officer, employee, or agent - to get a loan or credit, you're in violation of the law. The same goes for getting any form of credit extension on the basis of such false statements.

Case Two: Procuring Loan or Credit Based on False Statements

If you're aware that a false statement about your finances, or that of a company you're associated with, has been given to a bank or business, and you still get a loan or credit based on this statement, you're violating the law. The same applies if you get an extension of credit knowing that the financial statement is false in any significant way.

Case Three: False Statements for Commercial Paper Negotiation

If you provide false financial statements about yourself or a company you're involved with to someone dealing with commercial papers, like a note broker, you're breaking the law. This is particularly applicable if the false statement is used to sell, pledge, or negotiate any form of commercial paper.

Case Four: Dealing Commercial Paper Based on False Statements

If you know that a false financial statement about you or your associated company has been given to someone dealing in commercial papers, and you still deal in any form of commercial paper (sell, pledge, or negotiate) based on that statement, you're on the wrong side of the law.

In essence, honesty about your financial condition, or that of a company you're associated with, is not just a moral duty but also a legal requirement in Michigan, especially when seeking loans, credit extensions, or dealing in commercial papers.

An Ongoing Legal Framework

The mentioned legal framework, enacted in 1931, has undergone amendments, the most recent one in 2002. Its crucial to note that law is ever-evolving, reflecting the changing needs of society and the economy. This article provides a basic understanding, but professional legal advice should be sought for specific cases.

Disclaimer: This article doesn't replace professional legal advice. In case of any legal issues, seek advice from a legal professional.