U.S. v. Arthur
| Decision Date | 17 September 2009 |
| Docket Number | No. 07-1267.,No. 07-1052.,07-1052.,07-1267. |
| Citation | 582 F.3d 713 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. Ronald A. ARTHUR and Mary K. Arthur, Defendants-Appellants. |
| Court | U.S. Court of Appeals — Seventh Circuit |
v.
Ronald A. ARTHUR and Mary K. Arthur, Defendants-Appellants.
[582 F.3d 714]
Michelle L. Jacobs, Gordon P. Giampietro (submitted), Office of the United States Attorney, Milwaukee, WI, for Plaintiff-Appellee.
Stephen E. Kravit, Kravit, Hovel, Krawczyk & Leverson, Milwaukee, WI,
[582 F.3d 715]
Theodore J. Perlick-Molinari, Birdsall Law Office, Milwaukee, WI, Eric E. Walker (submitted), Perkins Coie, Chicago, IL, for Defendants-Appellants.
Before EASTERBROOK, Chief Judge, and BAUER and POSNER, Circuit Judges.
BAUER, Circuit Judge.
Ronald Arthur ("Ronald") filed a Chapter 7 bankruptcy petition to discharge various debts incurred over a period of time. Ronald claimed to have few assets to satisfy the various claims. The fact was, however, he had transferred, prior to the proceeding, assets not listed in the petition to his wife Mary Arthur ("Mary"). More assets were transferred to Mary after the petition had been filed. The matters were presented to a grand jury, which charged both Ronald and Mary with various counts of bankruptcy fraud and money laundering. After a bench trial, the district court found that the couple conspired to conceal Ronald's assets from both the trustee and the bankruptcy's creditors, in an attempt to have all of his debt discharged while retaining the money.
Ronald attacks all aspects of his convictions and sentence, claiming constitutional violations and various district court trial errors. Mary challenges the sufficiency of the evidence as to her convictions. We affirm.
After Barbara Doyle obtained a judgment for $125,000 against Ronald based on damages to her property by loggers affiliated with Ronald, he filed a Chapter 7 bankruptcy petition and accompanying schedules to discharge the debt in the United States Bankruptcy Court for the Eastern District of Virginia. The proceedings were later transferred to the Eastern District of Wisconsin.
In the course of these proceedings, it became apparent to the trustee that Ronald had more assets than he had disclosed in his petition; that he had transferred virtually all of his income and assets to his wife Mary through various marital property agreements. And several of his entities, such as the Xtant Foundation, had received considerable earnings that had not been disclosed in his petition. (Mary served as a director of Xtant, a business that purportedly sold recycled paper.)
Mary, with the help of her husband, filed a claim for $650,000 against Ronald's bankruptcy estate. This claim was filed as a stipulation, signed by Ronald and Mary, acknowledging that Ronald was indeed indebted to Mary for her various managerial, charitable and legal services.
The bankruptcy trustee, suspicious of the couple's transfers, filed an adversary action against Ronald. Ultimately, Ronald agreed to waive the discharge of Doyle's judgment and settled the trustee's action for $25,000. This, in the couple's view, put the matter to rest.
The circumstances of the bankruptcy proceeding, however, had not gone unnoticed. A grand jury indicted Ronald on 26 counts of bankruptcy fraud and money laundering conspiracies, as well as various substantive fraud and money laundering offenses based on his and Mary's efforts to conceal his assets from the bankruptcy trustee and his creditors; Mary was charged on eleven of these counts. Ronald and Mary each agreed to waive their right to a jury trial.
During the trial, the couple mounted a joint defense, claiming that the transfers of the assets were legitimate and not an effort to hide assets. According to the couple, Ronald transferred his interests in most individually and jointly owned assets, as well as after-acquired assets and income, to Mary pursuant to a marital
agreement executed on January 2, 1995, and subsequent agreements executed on August 1, 1995, and January 2, 1997.
The district court, in a 48-page "Findings of Fact and Verdict" order, found that Ronald had utilized the bankruptcy system in an attempt to discharge the Doyle judgment and foil other creditors. The court found that, with the assistance of his wife Mary, Ronald created and used "phony" entities, as well as "sham[ ]" marital agreements, to hide his assets and income from the trustee, Doyle, and his other creditors, and repeatedly lied during the course of the bankruptcy proceeding. The court found that the couple had deposited funds, which should have been disclosed in the bankruptcy petition, into the bank accounts of the corporations; deposited assets into Mary's personal accounts; used the entities, such as Xtant, to conceal assets; and engaged in other unusual financial moves in an effort to conceal assets. Also, the court found that Mary inflated Ronald's liabilities by filing a false claim.
Specifically, the court found Mary guilty of bankruptcy fraud—receiving debtor property illegally and filing a false claim. This finding was based on: (1) Mary's deposit of a check, issued by a Thompson Consulting Ltd. to Ronald for work previously rendered, into their firm's business account titled "Arthur & Arthur"; (2) the purchase of a SEA DOO, a personal watercraft, for personal use with a Xtant check; and (3) Mary's deposit of a check, representing the proceeds of Ronald's interest in another business, G & K Investment, into her own bank account.
The money laundering convictions were based on the transfer of Ronald's assets and the proceeds of the bankruptcy fraud into the bank accounts of the "dummy corporations", and Mary's personal accounts, to hide Ronald's income.
The district court found Ronald guilty of 23 of the 26 counts, and sentenced him to 54 months' imprisonment. As part of this sentence, the district court applied several enhancements; one enhancement was a ten-base offense level increase under U.S.S.G. § 2B1.1(b)(1)(F) based on Ronald's attempt to discharge the $125,000 Doyle judgment.
The court found Mary guilty of nine counts of the eleven charged and sentenced her to twelve months and one-day of imprisonment.
The district court then ordered Ronald and Mary to forfeit the assets listed in the indictment, as well as a personal money judgment in an amount equal to the total of the laundered funds. The judgment against Ronald totaled $87,395.93; Mary's judgment totaled $40,806.49.
The Arthurs appealed.
Ronald and Mary each raise issues distinct to their own appeal. Mary argues that the evidence presented to the district court was insufficient to convict her of conspiracy to commit money laundering, money laundering, receipt of debtor property and filing a false claim in the bankruptcy proceeding. Ronald argues that a variety of constitutional, trial, and sentencing errors were committed by the district court. The appeals have been consolidated, and we begin with Mary's appeal.
A. Mary Arthur
Mary faces a "nearly insurmountable hurdle" in challenging the sufficiency of the evidence to sustain her convictions. United States v. Woods, 556 F.3d 616, 621 (7th Cir.2009) (citation omitted). We must be convinced that even "after viewing the evidence in the light most favorable to the prosecution, no rational trier of fact could have found [her] guilty beyond a reasonable doubt." Id. "[W]e will overturn a
conviction based on insufficient evidence only if the record is devoid of evidence from which a reasonable [trier of fact] could find guilt beyond a reasonable doubt." United States v. Severson, 569 F.3d 683, 688 (7th Cir.2009) (citation omitted). In this inquiry, we do not reassess the weight of the evidence or second-guess the trier of fact's credibility determinations. Id.
Anent Mary's bankruptcy fraud convictions, she argues that the evidence against her as to the receipt of debtor property lacked sufficiency. The indictment charged Mary with five counts of receipt of debtor property, all in violation of 18 U.S.C. § 152(5). The district court found her guilty on three of these counts, relating to: (1) her deposit of a Thompson Consulting check (representing an account receivable for work previously rendered by Ronald) into the bank account of Arthur & Arthur; (2) the purchase of a SEA DOO with a check from the Arthurs' foundation Xtant; and (3) her deposit of the...
To continue reading
Request your trial
-
United States v. Jones
...of the unlawful activity, or were designed to conceal or disguise the proceeds of the unlawful activity." United States v. Arthur , 582 F.3d 713, 718 (7th Cir. 2009). Jones contends that the record does not support the verdict because there is no evidence that he used drug proceeds to purch......
-
U.S. v. Peel
...part of the defendant's intention to hurt them. Intended losses are intended losses, not bookkeeping entries. See United States v. Arthur, 582 F.3d 713, 720-21 (7th Cir.2009); United States v. Bussell, 504 F.3d 956, 960-63 (9th Cir. 2007); United States v. Holthaus, 486 F.3d 451, 455 (8th C......
-
United States v. Yurek
...measurement of the intended loss based on the amount that the defendant sought to discharge in bankruptcy. See United States v. Arthur , 582 F.3d 713, 720–21 (7th Cir. 2009) ; United States v. Mutuc , 349 F.3d 930, 936–37 (7th Cir. 2003) ; United States v. Holland , 160 F.3d 377, 381 (7th C......
-
United States v. Castro-Aguirre
...2013), and that the defendant "knew the proceeds used to further the scheme were derived from illegal activity," United States v. Arthur , 582 F.3d 713, 718 (7th Cir. 2009). Proof of the underlying offense of money laundering requires "that a rational trier of fact could have concluded from......