Case: 10-31128 Document: 00511696759 Page: 1 Date Filed: 12/15/2011
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
December 15, 2011
No. 10-31128
Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
BRIAN SCOTT SPURLIN; DEBRA FOGLEMAN SPURLIN,
Defendants-Appellants.
Appeals from the United States District Court
for the Western District of Louisiana
Before SMITH, BARKSDALE, and BENAVIDES, Circuit Judges.
JERRY E. SMITH, Circuit Judge:
Brian and Debra Spurlin were convicted of concealment of bankruptcy
estate assets, 18 U.S.C. §152(1), for knowingly and fraudulently withholding
their interests in certain properties from their bankruptcy filings, and false
oaths and statements in bankruptcy, 18 U.S.C. §152(3), for a false answer they
gave on a bankruptcy questionnaire. Mr. Spurlin was also convicted of bank-
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No. 10-31128
ruptcy fraud, 18 U.S.C. §157(1), for filing for bankruptcy to effect and conceal a
fraudulent scheme whereby he took money he was supposedly holding in escrow
for a company with whom he was doing business.
Mr. Spurlin does not appeal his conviction of concealment, but the Spur-
lins appeal all other convictions. Because there was insufficient evidence to con-
vict Mr. Spurlin of false oaths and statements in bankruptcy, we reverse that
conviction but affirm the remainder of the judgment as to him and vacate the
sentence and remand for resentencing in light of the partial reversal. We affirm
as to Mrs. Spurlin.
I.
On September 5, 2005, Mr. and Mrs. Spurlin filed a joint petition for bank-
ruptcy, claiming assets of $3,364 that included only one company, Spurlin and
Associates, Inc., formed by the Spurlins with Mr. Spurlin as general manager.
That company declared bankruptcy the next day, because it owed a large debt
to a client. Despite not listing them on their bankruptcy forms, the Spurlins
were involved with several other companies and held other assets.
Golden Athletics, LLC (“Golden Athletics”), held title to the three cars that
the Spurlins drove: a 2002 H2 Hummer, a 2002 Cadillac Escalade ESV, and a
2001 Mercedes. Additionally, Mrs. Spurlin sold the Tennyson Oaks Property to
Golden Athletics, which then gave it to Mr. Spurlin, who sold it to Golden Choice
Financial (“Golden Choice”), another company the Spurlins had created and that
continued to own the property while the Spurlins lived there. Mr. Spurlin then
sold Golden Choice to Yvonne Fogleman, Mrs. Spurlin’s elderly mother, and sold
the Tennyson Oaks Property for the company. Another relevant company was
International Oil, Gas, and Mineral Management, Inc. (“International Oil”), an
oil brokerage firm. Mr. Spurlin wrote multiple checks from that company to
Mrs. Spurlin, which were then deposited into their undisclosed joint accounts.
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The Spurlins disclosed only one checking account, with Peoples State Bank,
containing $157, even though they had additional accounts.
Though the Spurlins did not claim ownership of any cars or properties,
they did claim a debt from James Hill for funds he allegedly had embezzled. The
major debt listed on the bankruptcy petition was $705,000 owed to South Michi-
gan Avenue, LLC (“SMA”), a company with which Mr. Spurlin had had a busi-
ness relationship. Mr. Spurlin contracted to help SMA obtain $200 million in
financing for real estate development in Chicago. SMA gave Mr. Spurlin money
to hold in escrow, because Mr. Spurlin said potential funding sources needed to
see that SMA had capital and equity in the project.
Mr. Spurlin never obtained the financing, and when SMA demanded the
money back, he told SMA it had been transferred to Hill, his corporate attorney.
SMA representatives never spoke to Hill; they traveled to Dallas but could not
find his office. During that trip, Spurlin called them and said he knew they were
there and that they should come see him, which they did. Two days after that
trip, Spurlin told SMA that he had secured the funds, but before he could realize
them, Hill had died. Spurlin claimed Hill had also taken $125,000 from Spurlin,
but died without insurance, so the money could not be found, and suing the
estate was too expensive.
Mr. Spurlin met with attorney Laramie Henry to prepare for filing joint
bankruptcy with Mrs. Spurlin. Mrs. Spurlin never came to the office, but Mr.
Spurlin presented Henry with a power of attorney executed between the spouses.
Henry did not remember Mrs. Spurlin’s ever supplying information directly to
him or his staff or specifically talking to her on the phone. He testified that it
was his policy to call potential bankruptcy debtors when presented with a power
of attorney to make sure they knew about and agreed with what their spouse
was doing.
On November 8, 2005, Mr. and Mrs. Spurlin attended a section 341 credi-
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tors’ meeting, at which the trustee required them to complete an individual
questionnaire. That form, prepared by the trustee, said it was completed under
penalty of perjury. The form asked whether the debtors’ parents were living or
dead, and if dead, whether they had left any property. It also reminded debtors
that any inheritance within the next six months must be reported. Both Mr. and
Mrs. Spurlin signed that form; their answers acknowledged that Mrs. Spurlin’s
father, Cade Fogleman, had died, but the form indicated he had left no property.
To the contrary, however, Fogleman did leave property, just not to the
Spurlins. Mr. and Mrs. Fogleman bought the Mohon Property jointly in 2000
before Mr. Fogleman died, although the closing agent from the sale testified that
there may have been intrafamily transactions. The property was listed as Fogle-
man’s address at his death. Mrs. Spurlin also testified that her father had given
the Mohon Property to her mother in his will. The Mohon Property was eventu-
ally sold by Mr. Spurlin on behalf of Mrs. Fogleman for $149,000, leaving
$57,697.59 after the mortgage was satisfied. Mrs. Spurlin did not sign any docu-
ments relating to that sale.
Mrs. Fogleman also owned another assetSSthe Elliot Street Property. Mr.
Spurlin sold it on her behalf in September 2005 for $47,000, resulting in a
$756.59 profit. The government’s witness could not remember whether the
Elliot Street Property was listed in the succession when Mr. Fogleman died, and
Mrs. Spurlin insisted it was not owned by her parents at her father’s death.
At the creditors’ meeting, the Spurlins were informed that in joint debtor
filings, an answer given by one joint debtor is assumed to be given for both
unless the other person objects. Mr. Spurlin did most of the talking. The trustee
asked whether they had read the bankruptcy information sheet, petition, and
schedules and whether everything was true, correct, and included all their
assets. All those questions were answered in the affirmative; if either party had
said “no” to the mandatory questions, the trustee would have stopped the
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proceeding.
But many assets were not in the filings. At the time, the Spurlins were
living in the Tennyson Oaks Property, which was initially purchased by Mrs.
Spurlin for $229,167. She sold it to Golden Athletics for $38,167, which distrib-
uted the house to Mr. Spurlin, who sold it to Golden Choice for $200,000 after
taking out a $200,000 loan on the property. Golden Choice was sold to Mrs.
Fogleman for $125,000, and the property was then sold for $330,000, most of
which went to pay off the loan. Both Mr. and Mrs. Spurlin signed the act-of-
cash-sale agreement for the property on October 5, 2005. The proceeds from the
sale of the Tennyson Oaks Property were split between paying off a loan at Red
River Bank for Golden Athletics, a check to Hilltop Productions, LLC, a check
payable to the Spurlin children’s school, and a check to International Oil. The
Spurlins also drove three cars titled to Golden Athletics, over which they had
exclusive use and control.
Finally, although the Spurlins disclosed only their bank account at Peoples
State Bank, they had accounts at Landmark Bank, Union Bank, and Red River
Bank. Multiple checks were written by Mr. Spurlin to Mrs. Spurlin from Inter-
national Oil and deposited into the Spurlins’ joint checking account at Landmark
Bank. Additionally, though proceeds from the sale of the Mohon Property were
initially deposited in Mrs. Fogleman’s account, that account was later closed and
most of the money transferred to the Spurlin’s joint Landmark Bank account.
Some transfers from Mrs. Fogleman’s account also went to International Oil’s
accounts. Even though some of these transfers went to International Oil, and
Mrs. Spurlin wrote on one check that she was employed there, International Oil
was not listed anywhere in the bankruptcy filings.
II.
Mr. and Mrs. Spurlin were indicted for (1) concealment of bankruptcy
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estate assets, 18 U.S.C. §152(1), for not listing an interest in the Tennyson Oaks
Property and the proceeds from its sale, the cars they drove, or Golden Choice
or Golden Athletics; and (2) false oaths and statements in bankruptcy, 18 U.S.C.
§152(3), for answering Question 5 on the individual questionnaire at the credi-
tors’ meeting that Fogleman had left no property, despite knowing he had done
so. Mr. Spurlin was also indicted for bankruptcy fraud, 18 U.S.C. §157(1), for
receiving $705,000 from SMA pursuant to escrow agreements, never completing
the deal he had agreed to perform, not returning the money despite promising
to, and then filing for bankruptcy, after SMA had sued him, to effect and conceal
his scheme.
III.
Mrs. Spurlin argues that she cannot be convicted of concealment of bank-
ruptcy assets, because the joint bankruptcy petition was filed on her behalf using
a general power of attorney and because she did not supply any information for
the petition. When considering the sufficiency of the evidence, we ask whether,
viewing the evidence in the light most favorable to the verdict, a reasonable trier
of fact could have found each element established beyond a reasonable doubt.
United States v. Daniels, 247 F.3d 598, 600 (5th Cir. 2001). Questions of law are
reviewed de novo. Hartford Underwriters Ins. Co. v. Found. Health Servs., Inc.,
524 F.3d 588, 592 (5th Cir. 2008).
Mrs. Spurlin is not free of criminal liability just because her husband
applied for the joint bankruptcy on her behalf using a general power of attorney.
There is a split in the caselaw regarding when a general power of attorney can
be used to file for bankruptcy on behalf of another person. On one hand, In re
Raymond, 12 B.R. 906 (Bankr. E.D. Va. July 29, 1981), declared bankruptcy to
be a highly personal privilege, similar to divorce or enlistment in the armed
forces, that could not be effected by a power of attorney. The court feared misuse
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of the power. Id. at 908. Other precedent, such as In re Sullivan, No.
82-04323G, 30 B.R. 781 (Bankr. E.D. Pa. June 23, 1983) (citing Raymond with
approval), provides an exception to that holding, determining that a power of
attorney can be used to file for bankruptcy on another’s behalf if the power of
attorney specifically authorizes the holder to file for bankruptcy.
The other side is presented by In re Ballard, No. I-87-00718, 1987 WL
191320 (Bankr. N.D. Cal. Apr. 30, 1987), in which a wife was permitted to sign
a joint bankruptcy filing for her husband, who was serving in the military,
pursuant to a general power of attorney. Ballard disagrees with Raymond’s
analogy between bankruptcy and divorce or enlistment, arguing that bankruptcy
is far less personal. Rather, Ballard considers bankruptcy to be primarily about
preservation of one’s property, which is not “so personal that it cannot ever be
done by proxy.” Id. at *1. Ballard requires that when a general power of
attorney is used to file for bankruptcy, the person on whose behalf the power is
used must be notified. If that person says that he does not authorize the filing,
the bankruptcy proceedings are dismissed.
The decision in In re Brown, No. 93-04473, 163 B.R. 596 (Bankr. N.D. Fla.
Oct. 27, 1993), further supports the Ballard position. In Brown, a debtor’s wife
signed a bankruptcy filing for her husband using a power of attorney; the hus-
band died six days later. The court declared the petition a legal nullity because
the signature was forged, the power of attorney did not specifically authorize
bankruptcy filings, and, as a result of his death, there was no opportunity for the
debtor to ratify the filing. Id. at 598. The specific mention that there was no
opportunity for ratification after the court noted that the power of attorney was
general suggests that Brown recognizes that a party’s ratification can validate
a bankruptcy filed under a general power of attorney.
We conclude, agreeing with Ballard, that a general power of attorney may
be used to file for bankruptcy on another’s behalf. General powers of attorney
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allow someone to manage another person’s affairs. Although certain matters are
too personal to be entrusted to another, bankruptcy is primarily for property pro-
tection and is not as profoundly personal as divorce or enlistment. Declaring vol-
untary bankruptcy is about saving a person’s assets where all else fails, and
entrusting management of one’s property to that someone includes giving him
the tools to protect as much as he can if the worst happens. Ballard allows the
holder of the power of attorney to declare bankruptcy but prevents abuse by
requiring the debtor to be informed and dismissing if the debtor feels bankruptcy
is improper. This gives the holder of the power of attorney flexibility to protect
and manage that person’s assets, while including a failsafe to prevent abuse.
Under the Ballard rule, Mrs. Spurlin’s bankruptcy petition is valid,
because there is enough evidence for a jury to infer ratification. Henry testified
that it was his practice to call the potential debtor whenever he was presented
with a power of attorney, to make sure the debtor knows what his agent is doing.
Though he could not remember having made the call to Mrs. Spurlin, the jury
could have determined that he called her in accordance with his regular business
practice. Additionally, she came to the creditors’ meeting with the trustee, never
objecting to the bankruptcy’s going forward. The trustee testified that she did
not appear angry at that meeting, in contradiction to her argument that she was
dragged there reluctantly. Thus, under the Ballard approach, Mrs. Spurlin can
be liable for the bankruptcy filing.
In light of that, there is sufficient evidence to convict Mrs. Spurlin of con-
cealment of bankruptcy assets. Under §152(1), there are four elements to the
crime of concealing property in connection with a bankruptcy case: (1) There is
a bankruptcy hearing; (2) certain property or assets belonged to the estate of the
debtor; (3) defendant concealed that property from creditors, custodians, trus-
tees, or someone else charged with control of its custody; and (4) defendant did
so knowingly and fraudulently. 5TH CIR. PATTERN CRIMINAL JURY INSTRUCTIONS
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§ 2.10 (West 2001). For that crime, “conceal” means “to secrete, falsify, mutilate,
fraudulently transfer, withhold information or knowledge required by law to be
made known, or to take any action preventing discovery.” Id. Concealment is
a continuing offense, so acts of concealment can commence after the bankruptcy
proceedings have begun. Id. Because no one disputes the first element, only the
other three need to be examined.
The property at issue includes the Spurlins’ interest in two corporations.
First is Golden Choice, including its main asset: the Tennyson Oaks Property at
which the Spurlins resided. Second is their interest in Golden Athletics, which
holds as its assets the three cars used by the couple. None of the bankruptcy
forms listed the Spurlins as having any interest in Golden Choice or Golden
Athletics or as owning any cars or properties. When the Spurlins attended the
creditors’ meeting, Mrs. Spurlin did not object to any of the answers Mr. Spurlin
gave, nor did she reveal the inaccuracies in the filings. Additionally, their multi-
ple savings and checking accounts were not disclosed. Only one account was
disclosed in the bankruptcy filings, despite that the Spurlins drew on, and depos-
ited into, many others.
Mrs. Spurlin’s first argumentSSthat she cannot have concealed information
without providing information used in the bankruptcy petitionSSis unavailing.
Even if she never supplied false information for the filings, withholding informa-
tion constitutes concealment, and as a continuing violation, concealment can
begin after the bankruptcy proceedings have started. Mrs. Spurlin attended the
creditors’ meeting, where the trustee asked Mr. and Mrs. Spurlin whether they
had read all the documents in their bankruptcy filing and whether all the sched-
ules and the statement of financial affairs were accurate. If either of them had
answered “no,” the trustee would have stopped the meeting; he explained at the
beginning that in a joint bankruptcy, unless one of the parties says otherwise,
any answers given are assumed to be from both parties.
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Such an assumption creates an obligation on the parties to speak out when
they know some of the information is false. That is reasonable, eliminating the
inefficiency from forcing each party to answer each question individually. There-
fore, the jury reasonably could find that Mrs. Spurlin concealed assets by not
informing the trustee that the documents were incomplete, even if she did not
supply information to create the bankruptcy paperwork.
The evidence is also sufficient to support that Mrs. Spurlin knew assets
were being concealed. First, she was involved in an unusual pattern of trans-
actions pertaining to the Tennyson Oaks Property. She bought the house for
$229,167, then shortly afterward sold it to Golden Athletics for $38,167, far less
than its worth. Golden Athletics then distributed the house to Mr. Spurlin, who
sold it to Golden Choice for $200,000 after taking out a $200,000 loan on the
property. Golden Choice was sold to Mrs. Fogleman for $125,000, and the prop-
erty was then sold for $330,000, most of which went to pay off the loan. Mrs.
Spurlin signed the act-of-cash-sale agreement on October 5, 2005, which effected
sale of the Tennyson Oaks Property for $330,000. Though she did not hold title
to the property at the time, having previously sold it to Golden Athletics, this
shows Mrs. Spurlin was aware of the final sale before the creditors’ meeting.
The proceeds from the sale of the Tennyson Oaks Property were split into
four parts: The sum of $26,228.09 was used to pay off a loan at Red River Bank
for Golden Athletics. Mr. Spurlin used another $40,000 for a check payable to
Hilltop Productions, LLC. Another $9,215 was used to buy a check payable to
Redemptorist High School (“RHS”) for $9,215. Finally, $19,108.82 was used to
buy a check payable to Golden Choice, which was changed later into a check for
$19,108.82 payable to International Oil.
The evidence could allow a reasonable jury to infer Mrs. Spurlin’s knowl-
edge that she was benefiting from the proceeds of the sale of the Tennyson Oaks
Property. As explained above, she was aware, before the creditors’ meeting, that
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the property had been sold. Agent McCarthy testified to checks she had written,
even after bankruptcy was filed, payable to RHS, where her children went to
school. One check includes “For International Oil” on the memo line. Other
checks were written to her from International Oil’s accounts by Mr. Spurlin,
which were then deposited into their joint account at Landmark BankSSan
account they maintained and that was not reported during the bankruptcy.
Mrs. Spurlin also later endorsed a check to buy groceries, listing her
employer as International Oil. Her participation in the purchase and sale of the
property, knowledge of its eventual sale, and involvement in both spending
funds from, and claiming employment by, International Oil (where a significant
amount of the profit from the sale of the Tennyson Oaks Property was depos-
ited), along with the fact that one of the checks paying for her children’s school
came from the profits from the property’s sale, suggest she knew she was bene-
fiting from the sale of the property. Thus, not disclosing that to the trustee was
knowing and fraudulent concealment.
Mrs. Spurlin’s knowledge that she had benefited from the sale of the
Mohon Property is more easily demonstrated. The proceeds were initially depos-
ited into Mrs. Fogleman’s account, then transferred mostly to Mr. and Mrs.
Spurlin’s undisclosed joint checking account with Landmark Bank. The signa-
ture card for the account contained the signatures of both defendants. Multiple
checks payable to Mrs. Spurlin were also deposited into this account. Her
knowledge and use of the Landmark Bank account shows the jury could reasona-
bly infer she noticed over $43,000 being added to the account. No evidence con-
tradicted her knowledge and use of this account.
Additionally, there is enough information in the record for the jury to infer
Mrs. Spurlin had knowledge of their undisclosed interest in the cars she and Mr.
Spurlin drove and in Golden Athletics. First, the trustee directly asked, during
the creditors’ meeting, whether they had a vehicle, and Mr. Spurlin answered
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that they had one that was loaned to them to take care of Mrs. Spurlin’s mother.
Mrs. Spurlin knew at the time that they had three cars they controlled and had
exclusive use of.
Furthermore, Mrs. Spurlin knew of her husband’s interest in Golden Ath-
letics. She had sold the Tennyson Oaks Property to Golden Athletics, repre-
sented by Mr. Spurlin, and when she signed the paperwork for the sale, Mr.
Spurlin signed on behalf of Golden Athletics as the sole member. The jury could
have considered that ownership in light of the suspiciously low price for which
Mrs. Spurlin sold the Tennyson Oaks Property to Golden Athletics and recog-
nized that the Spurlins had used that company as a means of hiding assets.
This is bolstered by the fact that Mrs. Fogleman bought Golden Choice, the
other shell company in the transaction, for $125,000 when no benefit inured to
her from the purchase. It instead is a reasonable inference that the action was
done, through a power of attorney for Mrs. Fogleman in favor of Mr. Spurlin, as
part of a scheme to hide assets. Altogether, this leaves the jury reasonably able
to infer that Mrs. Spurlin knew of an interest in the cars and in Golden Athletics
that should have been disclosed and that she failed to disclose. Thus, there was
enough evidence for a reasonable juror to find Mrs. Spurlin guilty on count one.
IV.
Mr. and Mrs. Spurlin appeal their convictions under count 2, false state-
ment under penalty of perjury, arguing that there is insufficient evidence. The
government must show that (1) there was a bankruptcy proceeding; (2) defen-
dant made a declaration or statement under penalty of perjury in relation to the
proceeding; (3) the declaration concerned a material fact; (4) the declaration was
false; and (5) defendant made the declaration knowingly and fraudulently.
The declaration at issue is the answer to Question 5 on the trustee’s ques-
tionnaire. That question (with Questions 4 and 6 included for context) reads as
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follows:
4. Are your parents living? Father _______ Mother _______
Are your spouses’ parents living? Father _______ Mother ____
5. If not, was any property left by your parent(s) at the time of death?
_________
6. Do you understand that should you inherit anything during the next
6 months it will be necessary for you to advise me (your Trustee) in
writing within 10 days? ______
The Spurlins answered that Mrs. Spurlin’s father was dead, and they put “no”
for Question 5. Because the form includes a statement that the answers are
given under penalty of perjury, element two is satisfied.1 What assets are avail-
able or potentially accessible to the estate is certainly important in a bankruptcy
proceeding, so the declaration regarding whether the dead parents left property
is material.2
Mr. and Mrs. Spurlin argue that under their interpretation of Question 5,
this answer is true. They argue that the question asks whether the parents left
any property to the debtor. Because Mr. Fogleman did not leave any property to
Mr. or Mrs. Spurlin, they argue the answer was correct. The government argues
that this reasoning is unreasonable, because the question does not say “to you.”
Either interpretation, however, is reasonable in this case. The trustee
explained that the purpose of the question is to find out about any interest the
debtor may have, even if he has not chosen to exercise it, because the trustee
1
Mrs. Spurlin repeatedly mentions that this is a “homemade” form, not an official
bankruptcy form. But the statute makes no distinction between official and unofficial forms.
The form was completed in the course of the bankruptcy proceedings, and it plainly stated it
is completed under penalty of perjury.
2
The court described a material fact as one that “has a natural tendency to influence
or is capable of influencing the decision of the decision maker to whom it was addressed.” The
assets available in bankruptcy will influence how the trustee handles the bankruptcy, because
bankruptcy is about distributing the available assets.
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would be in the debtor’s shoes to attack whatever happened to the assets. The
trustee, however, testified that “the real thrust of if [the parents] are deceased
is Question 5, which is: If they are not alive, did they leave you anything?”
Additionally, the context supports the Spurlins’ reading. Question 6 explains
that if you “inherit” something in the next six months, you must advise the trus-
tee. The same reasoning about the trustee’s wanting to attack improper disposi-
tions of assets from a deceased parent would apply if the parent died, irrespec-
tive of whether he left anything specifically to the debtor.
Thus, if the questions strive to make the trustee aware of all possible
assets over which he can exercise an interest, even by attacking possibly
improper succession, one would expect Question 6 to require informing the trus-
tee merely upon the death of a parent. Finally, if the interpretation were as the
government claims, almost no one would answer “no.” Very few people die with
absolutely no property. That would result in Question 5’s providing meaningful
information in few situations.
In her trial testimony, Mrs. Spurlin conceded that the answer on the form
was false,3 relying on the defense that she did not fill it out. Yet, she signed the
3
She and the government’s attorney had the following exchange:
Q. And the question did not ask whether or not you owned any property follow-
ing your parents’ death, did it?
A. No.
Q. It simply asked: Was there any property left by your parents at the time of
death?
A. Correct.
Q. And the answer given here is no?
A. Correct.
Q. And that wasn’t accurate, was it?
(continued...)
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statement under penalty of perjury at the creditors’ meeting and did not object
when the trustee asked whether everything was correct. As we have said, she
was responsible for objecting to information she knew was untrue. Thus,
whether she did fill out the form is irrelevant.
Additionally, Mrs. Spurlin admitted the answer was wrong without con-
testing that she interpreted the question differently, explaining her knowledge
of her father’s will. Even though in her reply brief she attempts to adopt all the
arguments Mr. Spurlin makes, she cannot succeed on his argument, because her
admission on the stand allows a reasonable jury to conclude that she understood
the question the way the trustee intended it, while keeping the false answer.
Considering that Mr. Spurlin’s interpretation of Question 5 comports with
what the trustee noted was the real thrust of the question, best fits the context,
and leads to a more useful result, no reasonable jury could have found beyond
a reasonable doubt that he knowingly and fraudulently made a false statement
when answering “no” to Question 5. Because, however, Mrs. Spurlin admitted
that the answer was wrong without ever contesting the interpretation of that
question advanced by the prosecutor, a reasonable jury could have determined
that she knew the answer was false when given. Thus, there is sufficient evi-
dence to affirm her conviction but not sufficient evidence to affirm her hus-
band’s.
V.
Mr. Spurlin was convicted of bankruptcy fraud, which occurs where a
person “having devised or intending to devise a scheme or artifice to defraud and
for the purpose of executing or concealing such a scheme or artifice or attempt-
ing to do so . . . files a petition under title 11 . . . .” 18 U.S.C. § 157(1). Thus, the
3
(...continued)
A. No. I did not fill this out, ma’am.
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elements are (1) a specific intent to defraud; (2) a scheme to defraud; and
(3) filing a bankruptcy petition to conceal or execute that scheme.
Mr. Spurlin was convicted of fraud as a result of his dealings with SMA.
He agreed to find, for SMA, financing for a real estate venture. Pursuant to
those agreements, SMA gave him $705,000 to hold in escrow. When he failed to
obtain funding, SMA asked him to return the money, but he never did; instead,
he said it had been stolen by Hill, whom SMA had never heard about. SMA sent
people to Dallas, where Hill’s office was supposedly located, but could not find
him. Then, shortly after telling SMA about Hill, Spurlin called to tell them that
Hill had died. Combined, the facts that (1) as soon as SMA asked Spurlin to
return the money in escrow, his previously unheard-of corporate attorney sud-
denly absconds with the funds; (2) the attorney and his office cannot be found in
the city where they were supposedly located; and (3) the attorney then dies
shortly after his introduction and disappearance, allowed the jury reasonably to
infer that the financing arrangement was in truth a scheme by Spurlin to
defraud SMA.
Mr. Spurlin argues that even if he did defraud SMA, he did not execute or
conceal that fraud through filing for bankruptcy, because it was already com-
pleted by then. In so arguing, he seeks the restrictive reading of the statute
from United States v. Lee, 82 F. Supp. 2d 384 (E.D. Pa. 2000). There, the alleged
scheme was that after a bankruptcy court had limited how much compensation
the defendant could receive from certain activities, he had his partner hire his
wife as a consultant on those activities and pay her substantial sums. Id. at 386-
87. Allegedly, these were to avoid the compensation cap. Three months after her
consultations stopped, he filed for bankruptcy, and the court determined that the
filing could not have effected the scheme, because she already had the money.
Id. at 388. The court also determined that his failure to disclose that he was
receiving additional compensation through his wife was not enough to charge
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No. 10-31128
him with filing for the purpose of concealment. Id. Finally, the court refused to
read the scope of §157 as analogous to the mail fraud statute. Id. at 388-89.
The first step in statutory interpretation—and the only step needed here—
is to look at the plain meaning of the statutory language. The relevant provision
describes a crime when someone, “having devised . . . a scheme . . . to defraud . . .
and for the purpose of . . . concealing such a scheme . . . or attempting to do so
. . . files a petition under title 11 . . . .” 18 U.S.C. § 157(1). Mr. Spurlin devised
a scheme, and there is no need to resort to legislative history when the ordinary
meaning of concealment is sufficient here.
“Concealing” something means to hide or keep it from notice.4 The jury
heard testimony regarding how thoroughly SMA was investigating Mr. Spurlin’s
claims to retrieve the money he took. If SMA kept looking, sooner or later it
could have discovered that the money had not been stolen and hidden by a law-
yer who suddenly disappeared and died. But if the debt were discharged, there
would be no need to keep investigating Mr. Spurlin, because he would not be lia-
ble for the money. Pouring extra effort into investigating him would just waste
SMA’s resources, so SMA would likely cut its losses. Waiting around for SMA
to catch him would not work, so he attempted to conceal everything by using
bankruptcy and blaming Hill.
Mr. Spurlin’s argument that the bankruptcy just gave SMA a forum to
claim fraud as a defense to discharge, and thus could not be concealment, is
unavailing. SMA already thought he had fraudulently taken the money. If he
succeeded in discharging the debt, that would conceal the scheme, because SMA
would stop investigating him, and the scheme would not be fully uncovered. Just
because he failed does not mean he did not try.
4
Conceal, OXFORD ENGLISH DICTIONARY, http://www.oed.com (last visited Sept. 26,
2011).
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No. 10-31128
VI.
Mrs. Spurlin argues that convicting her of both concealment of bankruptcy
estate assets and false oaths and statements in bankruptcy is multiplicitous.
Even though multiplicity issues usually get de novo review, here the issue was
not raised at trial, but was instead first mentioned in Mrs. Spurlin’s motion not
to be incarcerated pending appeal, so plain-error review is appropriate. See
United States v. Pok Seong Kwong, 237 F. App’x 966, 968 (5th Cir. 2007). In
United States v. Cluck, 143 F.3d 174 (5th Cir. 1998), this court addressed
whether charging the same conduct under both § 152(1) and §152(3) was multi-
plicitous. The standard for determining whether two charges render an indict-
ment multiplicitous is whether each charge requires proof of an element that the
other does not. United States v. Nguyen, 28 F.3d 477, 482 (5th Cir. 1994). In
Cluck, 143 F.3d at 179, we determined that the words of the statute make it
plain that the two provisions require different elements: Section 152(1) requires
that property be concealed from creditors, whereas § 152(3) does not, and
§ 152(3) requires a false declaration, certificate, or statement under penalty of
perjury, whereas § 152(1) does not.
This case is more straightforward than Cluck, because different conduct
by Mrs. Spurlin is alleged under each provision. For § 152(3), she is charged
with her admittedly false answer to Question 5. For § 152(1), she is charged
with concealing the various assets not reported in the bankruptcy filings,
because she was informed that because she was a joint debtor, her answers
would be assumed the same as her husband’s unless she objected. The trustee
explained that if she protested at any time, the the proceeding would stop, but
she did not, including to questions about whether she had read the filed mate-
rials and whether they were accurate. The omissions from bankruptcy filings
and the false answer to the trustee’s questionnaire under penalty of perjury are
different events, each of which is a violation of its respective provision of the
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No. 10-31128
statute. Therefore, because each claim requires different elements, and Mrs.
Spurlin was convicted using different facts, there was no error, plain or other-
wise, in convicting her of both.
In summary, we AFFIRM the conviction of Mrs. Spurlin on all counts. We
AFFIRM Mr. Spurlin’s convictions of concealment of bankruptcy estate assets
and of bankruptcy fraud and REVERSE, for insufficient evidence, his conviction
of false oaths and statements in bankruptcy. In light of the partial reversal, we
VACATE his sentence and REMAND for resentencing.
19