This column discusses an interesting proposal that involves using the law of fraudulent conveyance to discourage people from carrying out terrorist attacks. This law could theoretically be used to prevent terrorists from taking out loans and then dispersing them to their family members with no intention of paying them back. The doctrine of fraudulent conveyance is designed to protect the integrity of the lending process by preventing a borrow from taking out a loan and then transferring it with no intention of ever paying that loan back. “As we now know, the San Bernardino shooters took out a loan of $28,000 from the peer-to-peer marketplace Prosper, evidently without any intention of paying it back.” This article makes a number of interesting points about how this law can be used to help take away an incentive to carry out terrorist attacks.
See Stephen L. Carter, One Way to Discourage Terror Attacks: Sue, Bloomberg, December 11, 2015.
