U.S. v. Cluck

• Decision Date: 03 June 1998
• Docket Number: No. 96-50444,96-50444
• Citation: 143 F.3d 174
• Parties: Bankr. L. Rep. P 77,706, 12 Tex.Bankr.Ct.Rep. 302 UNITED STATES of America, Plaintiff-Appellee, v. Elwood CLUCK, also known as Jack Cluck, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 174

143 F.3d 174

Bankr. L. Rep. P 77,706, 12 Tex.Bankr.Ct.Rep. 302

UNITED STATES of America, Plaintiff-Appellee, v. Elwood CLUCK, also known as Jack Cluck, Defendant-Appellant.

No. 96-50444.

United States Court of Appeals Fifth Circuit.

June 3, 1998.

Ellen A. Lockwood, Richard L. Durbin, Jr., Asst. U.S. Atty., Office of the U.S. Atty., San Antonio, TX, for Plaintiff-Appellee.

Ingram Blair McLeod, Jr., San Antonio, TX, for Defendant-Appellant.

Appeal from the United States District Court for the Western District of Texas.

Before WISDOM, JOLLY,and HIGGINBOTHAM, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

Elwood "Jack" Cluck appeals his conviction and sentence for committing bankruptcy fraud in violation of 18 U.S.C. § 152(1) & (3). Finding no merit in any of Cluck's multitudinous and niggling points of error, we affirm.

I

A

Before the events in this case, Cluck was an attorney who specialized, by his own admission, in the legal avoidance of income, estate, and gift taxes. ¹ His practice was, by all accounts, quite successful, allowing Cluck to enjoy many of the finer things in life. In his case, the finer things ranged from an assortment of properties located throughout the state of Texas, to his own Beechcraft Bonanza airplane, to a collection of classic Jaguar automobiles.

Smooth travel sometimes comes to an abrupt halt, however, and so it was in the case of Cluck. In October 1989, the road ahead worsened considerably when a state court rendered judgment against him in the staggering amount of $2.9 million. ² Although Cluck had high hopes that an appellate detour would shortly return him to his golden highway, ³ he soon found that the detour itself would require a steep toll of 10 percent in the form of the supersedeas bond necessary to forestall execution. Short of funds and in need of a cul de sac in which to safely park his troubled vehicle for a while, Cluck turned to the refuge of the bankruptcy court, as many a similarly threatened sojourner had done before him.

Unlike these other voyagers, however, Cluck apparently concluded that his resources would need more protection than the bankruptcy court could provide until his appellate travels had reached their final destination. Thus, before invoking the power of Title 11, he perceived that it might be useful to keep some Jaguars in reserve, some money within easy access, and, maybe, just for good measure, a few of his favorite things beyond the reach of his creditors and the bankruptcy court. To this end, on March 26, 1990, Cluck 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 ("the Jaguars, etc.") to a used car dealer for $32,000, ⁴ retaining for himself and his designee a right to reacquire at a set price ⁵ within thirty to ninety days of the sale.

B

His affairs now in preliminary order, on March 30, Cluck filed his petition for Chapter 7 liquidation in the United States Bankruptcy Court for the Western District of Texas. As part of the standard Chapter 7 procedure, Cluck was required to file a Schedule of Assets and a Statement of Financial Affairs. These documents required, among other things, disclosure of all accounts receivable, rights of acquisition, and asset transfers during the prior year. On his forms, Cluck 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. In addition, Cluck failed to list a transfer of 351 acres of land in McMullen County, Texas, that he had made on June 21, 1989. Finally, and significantly for this appeal, Cluck 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, Cluck's bankruptcy came to its first purported close, and the bankruptcy court entered an order discharging him from all dischargeable debts. Thinking his plan to have succeeded, on November 9, Cluck collected $48,000 from the O.D. Dooley Estate in partial payment of that client's aforementioned pre-petition account receivable. 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 Cluck's wife, Kristine. By this time, First Capitol had also reacquired all of the assets that had been pawned to the used car dealer. As might be suspected, neither the receipt of the money nor the reacquisition of the assets was revealed to the bankruptcy trustee.

As the dog days of summer 1991 wore on, the bankruptcy trustee finally got scent of Cluck's machinations. After gathering his evidence, on October 9, the trustee initiated an adversary proceeding against Cluck, 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 Cluck's discharge be revoked. After a one-day trial, the bankruptcy court agreed, finding that Cluck had engaged in the pattern of fraudulent concealment and deception outlined above, and that First Capitol Mortgage was his alter ego. The court revoked Cluck'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 ⁶ 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.

II

The bankruptcy court's finding of intentional concealment apparently aroused the interest of the U.S. Attorney, and on March 27, 1995, Cluck was charged with eight counts of bankruptcy fraud in violation of 18 U.S.C. § 152(1) & (3). The counts were essentially as follows:

Count One: Making a false statement in violation of § 152(3) for failing to include the Perfect Union and O.D. Dooley accounts receivable on his Statement of Financial Affairs.

Count Two: Fraudulent concealment in violation of § 152(1) for failing to reveal the return of the $50,000 Perfect Union note, the sale of 351 acres of land in McMullen County, Texas, and the pawning of the Jaguars, etc., all of which were transfers that occurred within one year of his bankruptcy petition.

Count Three: Fraudulent concealment in violation of § 152(1) for failing to reveal his post-petition receipt of the $35,000 payment from Perfect Union Lodge on a pre-petition account receivable.

Count Four: Making a false statement in violation of § 152(3) for failing to include the return of the $50,000 Perfect Union note, the sale of 351 acres of land in McMullen County, Texas, and the pawning of the Jaguars, etc., on his Statement of Financial Affairs.

Count Five: Fraudulent concealment in violation of § 152(1) for failing to reveal his post-petition receipt of the $102,000 payment from the O.D. Dooley Estate on a pre-petition account receivable.

Count Six: Fraudulent concealment in violation of § 152(1) for failing to reveal his post-petition receipt of the $48,000 payment from the O.D. Dooley Estate on a pre-petition account receivable.

Count Seven: Fraudulent concealment in violation of § 152(1) for failing to reveal his right to reacquire the Jaguars, etc.

Count Eight: Making a false statement in violation of § 152(3) for failing to include his right to reacquire the Jaguars, etc. on his Statement of Financial Affairs.

On January 16, 1997, a jury found Cluck guilty on counts one, three, four, five, six, seven, and eight, and not guilty on count two. On May 22, 1997, Cluck was sentenced to concurrent terms of twenty-four months imprisonment on each count, and ordered to pay restitution in the amount of $185,000. Cluck appeals his conviction, sentence, and restitution order on multiple grounds.

III

Cluck makes four distinct arguments on appeal, none of which has merit.

A

First, Cluck argues that his original indictment was insufficient for purposes of the Sixth Amendment, in that it did not specifically allege that the property concealed was property of the bankruptcy estate, or that the concealment and false statements arose in connection with a case under Title 11, both of which he contends are essential elements of § 152(1) and/or (3).

We review the sufficiency of an indictment de novo. United States v. Asibor, 109 F.3d 1023, 1037 (5th Cir.1997). "To be sufficient, an indictment needs only to allege each essential element of the offense charged so as to enable the accused to prepare his defense and to allow the accused to invoke the double jeopardy clause in any subsequent proceeding." United States v. Webb, 747 F.2d 278, 284 (5th Cir.1984). The test of the validity of an indictment is "not whether the indictment could have been framed in a more satisfactory manner, but whether it conforms to minimal constitutional standards." Id. Under this liberal review, we look to a practical, non-technical reading of the indictment as a whole, and an indictment will be held sufficient unless "no reasonable construction of the indictment would charge the offense for which the defendant has been convicted." McKay v. Collins, 12 F.3d 66, 69 (5th Cir.1994).

With respect to Cluck's first complaint, we note that § 152(1) only requires that the property concealed "belong[ ] to the estate of the debtor," not to the "bankruptcy estate." Cf. United States v. Arge, 418 F.2d 721, 724 (10th Cir.1969) (referencing "bankruptcy estate" under a prior version of the statute). Unsurprisingly, our...