U.S. v. Ward

• Decision Date: 08 December 1999
• Docket Number: No. 98-2881,98-2881
• Citation: 197 F.3d 1076
• Parties: (11th Cir. 1999) UNITED STATES of America, Plaintiff-Appellant, v. Kristopher Douglas WARD, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1076

197 F.3d 1076 (11th Cir. 1999)

UNITED STATES of America, Plaintiff-Appellant, v. Kristopher Douglas WARD, Defendant-Appellee.

No. 98-2881.

United States Court of Appeals Eleventh Circuit.

Dec. 8, 1999.

Rehearing Denied Feb. 8, 2000.

[Copyrighted Material Omitted] Appeal from the United States District Court for the Northern District of Florida.(No. 4:97-cr-79-RH), Robert L. Hinkle, Judge.

Before BLACK and WILSON, Circuit Judges, and RONEY, Senior Circuit Judge.

WILSON, Circuit Judge:

The United States appeals a judgment of acquittal granted on three counts of a six-count indictment charging Kristopher Douglas Ward with bankruptcy fraud and money laundering, after a jury found him guilty on all six counts. For the reasons discussed below, we affirm Ward's acquittal on two of the bankruptcy fraud counts and reverse his acquittal on the money laundering count. We remand this case for sentencing on that count.

I. BACKGROUND

Appellant Kristopher Douglas Ward was engaged in the logging business. He owned Action Industry, a sole proprietorship which provided hydraulics and supplies and performed hydraulic repairs for other loggers. After financial setbacks, Ward formed a corporation, Action Industry Trust, Inc., that would take over the sole proprietorship. Ward executed a bill of sale transferring the assets of the sole proprietorship to the new corporation. He then filed a personal petition for bankruptcy under Chapter 7 of the Bankruptcy Code. The government indicted Ward and charged him with four counts of bankruptcy fraud for making false statements under oath on his bankruptcy petition, one count of concealing assets and one count of money laundering in connection with certain concealed assets.

A jury found Ward guilty on all six counts charged in the indictment, including the one count of concealment of assets in violation of 18 U.S.C. 152, four counts of making a false oath in a bankruptcy proceeding in violation of 18 U.S.C. 152, and one count of money laundering in violation of 18 U.S.C. 1956. Ward moved for a judgment of acquittal pursuant to Federal Rule of Criminal Procedure 29(c). The district court denied the motion as to the false oath charges in Counts I, II, and III of the Indictment¹ and granted the motion as to Counts IV, V and VI. In Count IV of the Indictment, the government alleged that Ward knowingly and fraudulently made a false oath that he sold Action Industry in 1992. Count V alleged that Ward knowingly and fraudulently made a false oath that his gross income for 1991 and 1992 was $15,000. Count VI alleged that Ward knowingly and willfully conducted or attempted to conduct monetary withdrawals involving proceeds of a specified unlawful activity with the intent to conceal and disguise the location, source, ownership and control of these proceeds. The government appealed the district court's grant of Ward's motion for judgment of acquittal on Counts IV, V and VI.

II. DISCUSSION

A. STANDARD OF REVIEW

This Court has jurisdiction to review a final decision of a district court. See 28 U.S.C. 1291. In considering a motion for the entry of judgment of acquittal under Federal Rule of Criminal Procedure 29(c), a district court should apply the same standard used in reviewing the sufficiency of the evidence to sustain a conviction. See United States v. Sellers, 871 F.2d 1019, 1020 (11th Cir.1989). The district court must view the evidence in the light most favorable to the government. See id. (citing Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 86 L.Ed. 680 (1942), superceded by rule on other grounds, Bourjaily v. United States, 483 U.S. 171, 107 S.Ct. 2775, 97 L.Ed.2d 144 (1987)). The court must resolve any conflicts in the evidence in favor of the government, see United States v. Taylor, 972 F.2d 1247, 1250 (11th Cir.1992), and must accept all reasonable inferences that tend to support the government's case. See United States v. Burns, 597 F.2d 939, 941 (5th Cir.1979).² The court must ascertain whether a reasonable jury could have found the defendant guilty beyond a reasonable doubt. See Sellers, 871 F.2d at 1021 (citing United States v. O'Keefe, 825 F.2d 314, 319 (11th Cir.1987)). " 'It is not necessary for the evidence to exclude every reasonable hypothesis of innocence or be wholly inconsistent with every conclusion except that of guilt, provided a reasonable trier of fact could find that the evidence establishes guilt beyond a reasonable doubt.' " Sellers, 871 F.2d at 1021 (quoting United States v. Bell, 678 F.2d 547, 549 (5th Cir. Unit B 1982) (en banc ), aff'd on other grounds, 462 U.S. 356, 103 S.Ct. 2398, 76 L.Ed.2d 638 (1983)). A jury is free to choose among reasonable constructions of the evidence. See Sellers, 871 F.2d at 1021. The court must accept all of the jury's "reasonable inferences and credibility determinations." See id. (citing United States v. Sanchez, 722 F.2d 1501, 1505 (11th Cir.1984)).

In reviewing the district court's determination, this Court also applies the foregoing standards. Our evaluation is comparable to a review for the sufficiency of the evidence to sustain a conviction. See United States v. Barfield, 999 F.2d 1520, 1522 (11th Cir.1993) (citation omitted). We do not afford any deference to the district court's decision. See id.; see also United States v. Greer, 850 F.2d 1447, 1450 (11th Cir.1988) (district court's decision that the evidence was insufficient to support the jury's verdict is a legal issue entitled to no deference on appeal).

B. CONCEALMENT OF ASSETS AND FALSE OATHS

A person can violate 18 U.S.C. 152 if he "knowingly and fraudulently conceals from a custodian, trustee, marshal, or other officer of the court charged with the control or custody of property, or, in connection with a case under title 11, from creditors or the United States Trustee, any property belonging to the estate of a debtor" or if he "knowingly and fraudulently makes a false oath or account in or in relation to any case under title 11."³ See 18 U.S.C. 152(1), (2). The false oath must pertain to a material matter. See United States v. Key, 859 F.2d 1257, 1261 (7th Cir.1988) (citations omitted). The government proved beyond a reasonable doubt that Ward concealed assets and made false oaths regarding material matters as charged in Counts I, II and III of the Indictment, and the jury so found.

Count I of the Indictment alleged that Ward knowingly and fraudulently failed to disclose to the bankruptcy court trustee the existence of certain bank accounts that were part of the bankruptcy estate. The record reflects that as of January 29, 1993, the date he filed his petition for bankruptcy, Ward had open and active accounts in his name at Lafayette County State Bank and Citizens Bank that contained some money. He concealed these accounts from the trustee by failing to disclose them.

Count II alleged that Ward knowingly and fraudulently made a false statement under oath at a meeting with creditors on March 2, 1993 that he had no connection with Action Industry except that his wife purchased it. Ward operated Action Industry, the sole proprietorship, as well as Action Industry Trust, Inc., the new corporation that acquired the sole proprietorship's assets. He was substantially involved in running their day to day affairs with his wife, including paying debts, signing invoices and checks, and deriving income from both entities. He had a significant connection with Action Industry and Action Industry Trust, Inc., which was a perpetuation of the sole proprietorship. Thus, his statement that he had no connection with Action Industry was false.

Count III alleged that Ward made a false statement under oath on bankruptcy Schedule B that he had no checking, savings or other financial accounts nor any accounts receivable or any inventory. Yet, there is evidence that Ward had open and active accounts at Lafayette County State Bank and Citizens Bank containing almost $200 as well as over $14,000 in accounts receivable. Ward collected a relatively small portion of the accounts receivable but used the accounts as collateral to run the new corporation. The funds in these accounts were not enormous and were collateralized. However, according to expert testimony, Ward was still obligated to disclose them to the bankruptcy court. This count is the "specified unlawful activity" upon which the money laundering count is premised.

The district court was correct in concluding that sufficient evidence supported the jury's guilty verdict on Counts I, II and III and therefore denying Ward's motion for judgment of acquittal on those counts.

Count IV alleges that Ward made a false oath on Schedule I of his bankruptcy form by stating that he sold Action Industry in 1992. The district court granted Ward's motion for acquittal on this charge. We determine that it was correct in so doing. The record contains insufficient evidence upon which a reasonable jury could rely to find Ward guilty beyond a reasonable doubt. The government's theory of Count IV is that the sale of Action Industry was a sham; it did not occur. In support of this theory, the government contends that Ward made inconsistent statements on several occasions about the alleged sale. He stated that he sold it to his wife for $8,000 and he also stated that he sold it to his brother for $8,000. The government further contends that Ward's bank accounts and tax returns contained no evidence of the $8,000 sale. The government failed to prove that the sale did not occur. On December 23, 1992, before he filed his bankruptcy petition, Ward executed a bill of sale wherein he conveyed the assets of Action Industry for $8,000 to Action Industry Trust, a valid Florida corporation.⁴ The $8,000 was paid to Citizen's Bank, the lienholder on the assets and inventory. The district court correctly granted Ward's motion for judgment of acquittal on Count IV.

Count V alleges that Ward knowingly and fraudulently made a false...