In re Bogan
| Decision Date | 18 December 2003 |
| Docket Number | Motion No. B&W-5.,Docket No. 175.,Bankruptcy No. 99-11181. |
| Citation | 302 B.R. 517 |
| Parties | In re Deborah L. BOGAN, Debtor. Sheldon Gantt, Inc., Movant, v. Deborah L. Bogan and William Pineo, Chapter 7 Trustee, Respondents. |
| Court | U.S. Bankruptcy Court — Western District of Pennsylvania |
William Pineo, Esq., Meadville, PA, trustee.
Thomas A. Dill, Esq., Chester B. Scholl, Sharon, PA, for Deborah L. Bogan.
P. Raymond Bartholomew, Esq., Hermitage, PA, Brian B. Dutton, Gary J. Gaertner, Sheri L. Geis, Kimberly J. Hong, Grenen & Birsic, P.C., Pittsburgh, PA, William G. McConnell, Jr., Sharon, PA, James P. Valecko, Pittsburgh, PA, Michael E. Wish, Hermitage, PA, for creditors.
Deborah L. Bogan ("Debtor") filed a voluntary Petition under Chapter 13 of the Bankruptcy Code on July 27, 1999 ("Filing Date"). The case was converted from Chapter 13 to Chapter 7 on July 5, 2001. William Pineo, Esq. ("Trustee") serves as Chapter 7 Trustee. Before the Court is the Trustee's Motion for Summary Judgment on the Motion of Sheldon Gantt, Inc. ("Sheldon Gantt") for Turnover of Funds Being Held by Chapter 7 Trustee.
Debtor filed a proposed Chapter 13 plan dated September 23, 1999. The Plan ("Plan") contemplated monthly payments of $1,600 by the Debtor to the Chapter 13 Trustee and also required the Debtor to devote the proceeds of a personal injury claim and funds that Debtor was to receive from her father's decedent's estate to the Plan. Debtor commenced making $1,600 per month plan payments to the Chapter 13 Trustee on November, 1999. The Plan was confirmed on an interim basis as a form of adequate protection to allow the Chapter 13 Trustee to begin distributions to secured creditors pending Debtor's submission and confirmation of a further amended plan.
The Chapter 13 Trustee's records reflect the following monthly plan payments:
11-23-1999 1,600.00
12-06-1999 1,600.00
01-10-2000 1,600.00
02-07-2000 1,600.00
03-21-2000 1,600.00
05-04-2000 1,600.00
06-02-2000 1,600.00
07-07-2000 1,600.00
07-14-2000 3,916.12
08-15-2000 1,600.00
09-11-2000 1,600.00
10-10-2000 1,600.00
11-09-2000 1,600.00
12-13-2000 1,600.00
The Trustee's records further indicate that the source of the July 14, 2000 payment of $3,916.12 was a tax refund. All of the payments received by the Chapter 13 Trustee between November 23, 1999 and December 13, 2000 were distributed to secured creditors in accordance with the interim confirmation order.
Late in the year 2000, Debtor received $15,750.40 from the settlement of a personal injury action and an inheritance of $7,750 from her father's decedent's estate. Those proceeds were remitted to the Chapter 13 Trustee in January, 2001.
Debtor proceeded to file Amended Schedules and an Amended Plan on January 18, 2001. By Order dated February 2, 2001, Debtor was directed to file a further Amended Plan by February 12, 2001 and a hearing to consider confirmation of the plan was fixed for March 16, 2001. Despite the many delays and Debtor's inept attempts at presentation of a confirmable plan, it finally began to appear that the Chapter 13 case might actually be feasible and reach the confirmation stage.
The true nature of Debtor's deceptive and fraudulent activities would soon come to the Court's attention. On February 8, 2001, Sheldon Gantt filed an Emergency Motion for Relief from Stay. Sheldon Gantt averred that Debtor had embezzled the sum of $414,841.42 while employed as its bookkeeper between October 28, 1999 and September 28, 2000. Sheldon Gantt had only recently learned of the bankruptcy and sought relief from the automatic stay to pursue a pending equity proceeding in the Court of Common Pleas of Mercer County, PA (the "State Court"). Before it learned of the Debtor's bankruptcy case, Sheldon Gantt had already obtained a State Court Order freezing Debtor's accounts and further requests for an accounting and judgment were pending.
By Order dated February 21, 2001, Sheldon Gantt was granted partial relief from the automatic stay "in order to proceed with actions in the Court of Common Pleas to trace or enjoin transfers of assets owned or controlled by Debtor, or to otherwise prevent the disappearance of assets." A further hearing on Sheldon Gantt's motion was continued until after the date that the Debtor was to appear for an examination before the Chapter 13 Trustee pursuant to Fed.R.Bankr.P.2004 (the "Rule 2004 Examination"). At the Rule 2004 examination, Debtor testified that she had entered a guilty plea for bank fraud in violation of Title 18, United States Code, Section 1344 (18 U.S.C. § 1344) under the first count of the indictment brought against her in the United States District Court for the Northern District of Ohio. As part of the plea, Debtor signed a Plea Agreement dated April 19, 2001 in which Debtor agrees that "she is, in fact, guilty of said offense." In paragraph 8 of the Plea Agreement, Debtor further acknowledges her "conduct and role in the offense" as follows:
A. Between on or about October 28, 1999, and on or about September 28, 2000, in the Northern District of Ohio, Eastern Division, and elsewhere, the defendant, DEBORAH TODA-BOGAN, did knowingly execute and attempt to execute a scheme and artifice to defraud National City Bank, a federally-insured financial institution, and to obtain money funds, credits, assets, securities and other property belonging to Sheldon Gantt, Inc., and which were under the custody and control of National City Bank, by means of false and fraudulent pretenses, representations and promises.
B. Between April 1999 and October 12, 2000, the defendant, DEBORAH TODA-BOGAN, was employed as an accountant and bookkeeper at Sheldon Gantt, Inc., a general construction business located in Niles, Ohio. During the same time period, Sheldon Gantt, Inc. maintained a corporate bank account at National City Bank, a federally-insured financial institution.
C. The defendant's duties and responsibilities included operation of the Sheldon Gantt, Inc. computer system, preparing checks to pay employees, suppliers and subcontractors, as well as reconciling the monthly bank statements and preparing the corporation's general ledger.
D. It was part of the scheme and artifice that when the defendant, DEBORAH TODA-BOGAN, prepared corporate payroll and other checks at various times between October 28, 1999, and September 28, 2000, she prepared thirteen (13) additional Sheldon Gantt, Inc. checks totaling $414,841.62 (in individual amounts ranging from $15,256.00 to $46,555.72), payable to General Service Contractors, an Ohio corporation affiliated with Sheldon Gantt, Inc., which the defendant included in stacks of payroll and other checks routinely given to an officer of Sheldon Gantt, Inc. for signature.
E. After the checks payable to General Service Contractors were signed, the defendant fraudulently added the words "Deborah Toda-Bogan d/b/a" to the front the thirteen checks in question, directly above the payee designation so as to make the checks appear to have been written to "Deborah Toda-Bogan d/b/a General Service Contractors." Subsequently, the defendant endorsed the forged and fraudulent checks and deposited them into a bank account the defendant maintained at First National Bank of Pennsylvania.
F. In an attempt to conceal her fraudulent activities, the defendant removed and destroyed the original forged canceled checks from the monthly National City Bank statements received by Sheldon Gantt, Inc.
G. The defendant, DEBORAH TODA-BOGAN, was interviewed by FBI agents on October 12, 2000, concerning the subject matter of this investigation. At that time, the FBI was aware of only 7 of the 13 checks in question, totaling approximately $220,000.00. During the interview, the defendant prepared a handwritten statement and orally stated to the agents that the seven checks presented for her review, constituted all of the fraudulent checks she prepared and negotiated while working at Sheldon Gantt, Inc. Subsequently, on October 25, 2000, a representative of the victim, Sheldon Gantt, Inc., contacted the FBI, and informed the case agent that 6 additional fraudulent checks had been uncovered, each appearing to have been prepared, forged and negotiated by the defendant, DEBORAH TODA-BOGAN, in the same manner as the first 7 checks.
H. As a result of the conduct of the defendant, DEBORAH TODA-BOGAN, Sheldon Gantt, Inc. has suffered losses in the approximate amount of $414,841.62.
Debtor's embezzlement scheme involved 13 different checks drawn on Sheldon Gantt's business account and deposited into an account held by Debtor at the First National Bank of Pennsylvania.
The tabulation of the embezzled checks is as follows:
Date deposited
Check No. Amount Issue Date at FNB/PA
13146 24,875.85 10/28/99 11/10/99
13446 39,081.50 11/26/99 11/29/99
14014 23,139.00 1-21-00 1/31/00
14458 30,452.00 3/14/00 3/15/00
14665 15,356.00 4/6/00 4/7/00
14846 18,000.00 5/5/00 5/9/00
14975 37,483.00 5/25/00 5/30/00
15047 31,187.00 6/15/00 6/19/00
15165 39,629.25 6/26/00 6/29/00
15268 36,000.00 7/10/00 7/12/00
15331 42,846.10 7/27/00 7/31/00
15632 30,236.00 8/29/00 9/1/00
15938 46,555.72 9/28/00 9/29/00
__________
414,841.42
After Sheldon Gantt learned of the Plea Agreement, it filed a Motion for Supplemental Relief from Stay. A hearing on Motion for Supplemental Relief was held on June 22, 2001 following which the Court, by Order dated June 27, 2001, directed that the Chapter 13 Trustee shall not make any distribution from the cash held until further order of Court and, by Order dated July 5, 2001, converted the...
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In re Premium Motor Cars, Inc.
...possibility of the imposition of a trust on the converted funds because they cannot be sufficiently traced. See, e.g., In re Bogan, 302 B.R. 517, 523 (Bankr.W.D.Pa. 2003). The Court makes no finding on that issue at this time. However, assuming this scenario to exist, the Court could nevert......