# § 31330. Penalties
**(a)**
**(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.
**(b)**
**(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.
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**Source Credit**: (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.)
| Revised section | Source section (U.S. Code) |
| --- | --- |
| 31330(a) | 46:941(b) (1st sentence) |
| 31330(b) | New |
| 31330(c) | 46:941(b) (1st sentence) |
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).
## Editorial Notes
### Amendments
2010—Subsec. (a)(1)(B). , inserted “or” after semicolon.
Subsec. (a)(1)(C). , substituted “Secretary.” for “Secretary; or”.
, struck out “of Transportation” after “Secretary”.
Subsec. (a)(1)(D). , struck out subpar. (D) which read as follows: “with intent to defraud, does not comply with .”
Subsec. (a)(2)(B) to (D). , inserted “or” at end of subpar. (B), substituted “faith.” for “faith; or” at end of subpar. (C), and struck out subpar. (D) which read as follows: “does not comply with .”
1996—Subsec. (b). struck out “31328 or” before “31329” in pars. (1) to (3).
## Statutory Notes and Related Subsidiaries
### Effective Date
Section effective , with certain exceptions and qualifications, see , set out as a note under .