Mascolo, In re, No. 74-1069

• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)
• Writing for the Court: Before COFFIN, Chief Judge, and McENTEE and CAMPBELL; LEVIN H. CAMPBELL
• Citation: 505 F.2d 274
• Parties: In the Matter of Gerald A. MASCOLO, Bankrupt, Appellant. . Heard
• Docket Number: No. 74-1069
• Decision Date: 08 May 1974

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505 F.2d 274 In the Matter of Gerald A. MASCOLO, Bankrupt, Appellant. No. 74-1069. United States Court of Appeals, First Circuit. Heard May 8, 1974.
Decided May 23, 1974.

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Frederick T. Golder, Boston, Mass., with whom Goldberg & Golder, Boston, Mass., was on brief, for appellant.

Herbert D. Friedman, Boston, Mass., with whom Morris M. Goldings, and Mahoney, Atwood & Goldings, Boston, Mass., was on brief, for appellee.

Before COFFIN, Chief Judge, and McENTEE and CAMPBELL, Circuit Judges.

LEVIN H. CAMPBELL, Circuit Judge.

Mascolo appeals from an order of the district court affirming the referee's revocation of his discharge in bankruptcy. ¹ Mascolo filed a voluntary petition on October 26, 1970, and was granted a discharge on January 26, 1971. Within one year thereafter creditor Rita Girl, Inc. applied to revoke the discharge asserting

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that it had been obtained by fraud and that the bankrupt had committed an offense punishable by imprisonment under 18 U.S.C. 152. ² Rita Girl claimed that Mascolo knowingly and fraudulently swore that he had maintained no bank accounts within the two years immediately preceding his filing, but that in fact he had maintained an account with the First National Bank of Boston. The referee later permitted the creditor to amend the application to include accounts at two additional banks.

The referee, after a hearing, adjudged and decreed that 'the discharge was obtained by the bankrupt, through fraud . . ..' In his Findings of Fact, Conclusions of Law and Order, the referee found that Mascolo had maintained bank accounts at the First National Bank of Boston, the National Shawmut Bank, and the Capitol Bank and Trust within the relevant period. He also found:

'In the Statement of Affairs which accompanied the voluntary petition, and which the bankrupt signed stating that 'I' Gerard A. Mascolo, the person who subscribed to the foregoing statement of affairs, do hereby make solemn oath that the answers therein contained are true and complete as to the best of my knowledge, information, and belief,' as to question number 4. Bank Account and safe deposit boxes-- a. What bank account have you maintained, alone or together with any other person, and in your own or any other name, within the two years immediately preceding the filing of the original petition herein? (Give the name and address of the bank or other depository, the name in which each box or other depository was kept, the name of every person who had the right of access thereto, a brief description of the contents thereof, and, if surrendered, when surrendered, or, if transferred, when transferred and the name and address of the transferee). the bankrupt answered 'none'.'

Mascolo argues on appeal that the creditor did not sustain its burden of proof that fraud, rather than mere error, was involved. According to Mascolo, a false oath must contain all the elements involved in common law perjury--'intentional untruth in a matter material to an issue which is itself material.' Troeder v. Lorsch, 150 F. 710, 713 (1st Cir. 1906). But even under this standard, ³ the creditor may prove his case by a fair preponderance of the evidence; despite the analogy to criminal perjury, he need not meet the higher criminal burden. And once it reasonably appears that the oath is false, the burden falls upon the bankrupt to come forward with evidence that he has not committed the offense charged. Shanberg v. Saltzman, 69 F.2d 262 (1st Cir. 1934). See also American National Bank v. rainguet, 323 F.2d 881 (10th Cir. 1963). The trier of fact may rely upon reasonable inferences as well as direct evidence. Thus, the trier may infer fraudulent intent from an unexplained false statement. See In the Matter of Kaufhold, 256 F.2d 181 (3d Cir. 1958); 1A J. Moore & J. Mulder, Collier On Bankruptcy P14.25, at 1336 (King ed. 1974).

Asserting that fraud should not be inferred when there are extenuating circumstances, Mascolo claims in his brief that the omission of 'the two bank accounts was through inadvertence of the bankrupt's counsel', and that when he learned he had written 'none' on the statement 'he was stunned'. Mascoloalso

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states that the 'bankrupt prepared the various schedules . . . with his attorney.' We agree that an explanation by a bankrupt that he had acted upon advice of counsel who in turn was fully aware of all the relevant facts generally rebuts an inference of fraud. ⁴ See In re Topper,229 F.2d 691 (3d Cir. 1956); Jones v. Gertz, 121 F.2d 782 (10th Cir. 1941); In re Stone, 52 F.2d 639 (D.N.H.1931). But we cannot find that Mascolo or his attorney ever offered such an explanation in proceedings before the referee. Mascolo himself, when asked whether he had...