United States v. Cluck

143 F.3d 174 (5th Cir. 1998)

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Nature of the Case

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Facts

D was an attorney who specialized in the legal avoidance of income, estate, and gift taxes. A state court rendered judgment against him in the amount of $2.9 million. To appeal D was required to post a 10 percent supersedeas bond. D decided to declare bankruptcy. To this end, on March 26, 1990, D returned a note for $50,000 to its grantor, Perfect Union Lodge. Perfect Union was one of Cluck's clients, and the note had been originally tendered in payment of certain legal services. Three days later, on March 29, Cluck pawned three Jaguars, a 1983 Chevrolet truck, his airplane, a Lone Star boat, and a Winnebago camper shell to a used car dealer for $32,000, retaining for himself and his designee a right to reacquire at a set price within thirty to ninety days of the sale. On March 30, Cluck filed his petition for Chapter 7 liquidation. D filed a Schedule of Assets and a Statement of Financial Affairs. D made no mention of the assets recently pawned to the used car dealer or of his right to reacquire. He also did not disclose his return of the $50,000 note or the corresponding account receivable from Perfect Union Lodge. D failed to list a transfer of 351 acres of land in McMullen County, Texas, that he had made on June 21, 1989. D also neglected to include a further $150,000 in pre-petition accounts receivable from another of his clients, the O.D. Dooley Estate. On July 31, the bankruptcy court entered an order discharging him from all dischargeable debts. On November 9, D collected $ 48,000 from the O.D. Dooley Estate in partial payment. On November 16, the remaining $102,000 followed. About seven months later, on June 28, 1991, Cluck collected $35,000 from Perfect Union in settlement of its still-outstanding $50,000 account receivable. Of these funds, a portion was deposited into the account of First Capitol Mortgage, a Nevada corporation owned by D's wife, Kristine. By this time, First Capitol had also reacquired all of the assets that had been pawned to the used car dealer. Neither the receipt of the money nor the reacquisition of the assets was revealed to the bankruptcy trustee. The trustee initiated an adversary proceeding against D, his wife, First Capitol Mortgage, and the used car dealer, all pursuant to 11 U.S.C. § 548, alleging fraudulent concealment of assets and requesting that D's discharge be revoked. The court revoked D's discharge, and, on December 31, 1992, ordered him: (1) to turn over to the trustee the assets that had been pawned to the used car dealer; (2) to pay $ 195,000 to the trustee for the concealed accounts receivable; and (3) to pay an additional $13,000 to the trustee for a fourth Jaguar automobile that had been otherwise concealed and could no longer be located. D was charged with eight counts of bankruptcy fraud in violation of 18 U.S.C. § 152(1) & (3). A jury found D guilty. D was sentenced to concurrent terms of twenty-four months imprisonment on each count, and ordered to pay restitution in the amount of $185,000. D appealed.