United States v. Michael Turner ( 2013 )

Case: 12-14354 Date Filed: 02/12/2013 Page: 1 of 6
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 12-14354
Non-Argument Calendar
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D.C. Docket No. 1:10-cr-00171-CG-N-1
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
MICHAEL TURNER,
Defendant - Appellant.
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Appeal from the United States District Court
for the Southern District of Alabama
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(February 12, 2013)
Before TJOFLAT, WILSON and PRYOR, Circuit Judges.
PER CURIAM:
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Michael Turner appeals his 27-month sentence following his convictions for
one count of bankruptcy fraud and three counts of falsification of records 1 in a
bankruptcy proceeding. On appeal, Turner argues that the district court improperly
calculated the amount of loss for his crimes under the sentencing guidelines. After
a thorough review of the record and briefs, we affirm.
On January 13, 2007, a fire destroyed one of Turner’s rental properties in
Prichard, Alabama. Turner and Baldwin Mutual Insurance Company (“Baldwin”),
the property’s insurer, settled the claim for $40,000. On January 31, 2007,
Baldwin issued a check to Turner and Commonwealth National Bank
(“Commonwealth”), which held a mortgage on the property.
On February 2, 2007, Turner filed a voluntary petition for Chapter 13
bankruptcy. Commonwealth was one of Turner’s creditors. Three days later,
Turner presented the $40,000 check to Commonwealth’s branch manager. Turner
used $11,500 of the insurance proceeds to pay off the $11,500 mortgage on the
rental property, and deposited the remaining balance of $28,500 into his sole
proprietor checking account.
1
In May 2012, we vacated one of Turner’s four original convictions for falsification of
records in a bankruptcy proceeding, and remanded the case to the district court for resentencing.
See United States v. Turner, 477 F. App’x 598 (11th Cir. 2012) (per curiam). On remand, the
district court’s judgment incorrectly stated that Turner was convicted on two counts of
bankruptcy fraud and two counts of falsification of records. We therefore instruct the district
court to correct the judgment to reflect Turner’s convictions for one count of bankruptcy fraud
and three counts of falsification of records in a bankruptcy. See United States v. Wimbush, 103
F.3d 968, 970 (11th Cir. 1997) (per curiam) (remanding a case for the sole purpose of correcting
a scrivener’s error in the judgment).
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On April 3, 2007, Turner filed his bankruptcy schedules and Statement of
Financial Affairs (“Statement”). These forms require the debtor to list personal
property, real estate, bank accounts, income from the past two years, payments
made to creditors, and debts. In total, Turner’s filings indicated that he owed
approximately $471,788 in debt. In both filings, Turner failed to disclose the
$40,000 in insurance proceeds he had received in January. He also indicated that
the mortgage on the property was $50,000, when in fact it had been $11,500 before
he paid it off on February 2. On account of these inaccuracies, in November 2007
the bankruptcy trustee filed a motion to convert Turner’s Chapter 13 bankruptcy
into a Chapter 7 bankruptcy, which the bankruptcy court granted.2
In 2010, a grand jury returned a six-count indictment against Turner: Count
1 charged him with knowingly and fraudulently concealing the $40,000 check in a
bankruptcy proceeding, in violation of 18 U.S.C. § 152(1); Counts 2–6 charged
Turner with knowingly making false entries in his schedules and Statement of
Financial Affairs, in violation of 18 U.S.C. § 1519. As noted above, Turner was
eventually convicted on one count of bankruptcy fraud and three counts of
falsification of records in a bankruptcy proceeding. With the amount of loss
2
Under Chapter 7, the bankruptcy trustee discharges prepetition debts following the
liquidation of the debtor’s assets. See Marrama v. Citizens Bank of Mass., 549 U.S. 365, 367,
127 S. Ct. 1105, 1107 (2007). The debtor’s nonexempt assets are controlled by the bankruptcy
trustee. See id. Under Chapter 13, by contrast, an individual sets up a payment plan approved by
the bankruptcy court, and the debtor retains possession of his property. See id.3
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calculated at $40,000, Turner’s sentencing guidelines advisory range was 27 to 33
months. Turner received a 27-month sentence. The sole issue on this appeal is
whether the district court committed clear error when it calculated the amount of
loss at $40,000.
We review for clear error the district court’s determination of the amount of
loss in calculating sentencing guidelines, United States v. Barrington, 648 F.3d
1178, 1197 (11th Cir. 2011), cert. denied 132 S. Ct. 1066 (2012), and we review de
novo the district court’s interpretation of the sentencing guidelines. United States
v. Jordi, 418 F.3d 1212, 1214 (11th Cir. 2005). The sentencing guidelines do not
require a precise determination of the loss, but instead only a reasonable estimate.
Barrington, 648 F.3d at 1197.
The guidelines provide that “loss is the greater of actual loss or intended
loss.” U.S.S.G. § 2B1.1 cmt. n.3(A). “Intended loss” is the pecuniary harm that
was intended to result from the offense. Id. at cmt. n.3(A)(ii). Turner argues that
the amount of loss for his sentencing purposes should be reduced from $40,000 to
$28,500 because he returned $11,500 to Commonwealth, one of his creditors,
before the crime was detected. In support of this argument, Turner relies on the
commentary to § 2B1.1:
(E) Credits Against Loss.—Loss shall be reduced by the following:
(i) The money returned, and the fair market value of the property
returned and the services rendered, by the defendant or other persons
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acting jointly with the defendant, to the victim before the offense was
detected. The time of detection of the offense is the earlier of (I) the
time the offense was discovered by a victim or government agency; or
(II) the time the defendant knew or reasonably should have known
that the offense was detected or about to be detected by a victim or
government agency.
Id. at cmt. n.(3)(E) (the “credits-against-loss provision”). We disagree.
The credits-against-loss provision does not grant a debtor in bankruptcy
license to distribute his non-exempt property among creditors according to his own
whim. That responsibility falls to the bankruptcy trustee. Unlike the case where a
thief returns stolen chattel before his crime’s detection, the actus reus in this case
was the concealment of assets, rather than the larceny of property. If Turner
sincerely sought the refuge of the credit-against-loss provision, he ought to have
exposed what he previously hid. In other words, to receive credit against loss, the
entire $40,000 should have been disclosed to the trustee for the benefit of Turner’s
unsecured creditors. Turner did not do so.
The Bankruptcy Code offers a “fresh start” to the “honest but unfortunate
debtor.” Grogan v. Garner, 498 U.S. 279, 286–87, 111 S. Ct. 654, 659 (1991)
(emphasis added) (internal quotation marks omitted). Turner’s dishonest mortgage
payment does not fall within the scope of the credit-against-loss provision. In sum,
we find no clear error in the district court’s estimate of the loss in this case,
because Turner concealed $40,000 in insurance proceeds from the bankruptcy
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estate. See Barrington, 648 F.3d at 1197 (requiring only a reasonable estimate of
the loss).
The 27-month sentence imposed by the district court is affirmed. The case
is remanded to the district court for the sole purpose of correcting the judgment,
which should reflect that Turner was convicted of one count of bankruptcy fraud,
in violation of 18 U.S.C. § 152(1), and three counts of falsification of records in
violation of 18 U.S.C. §1519.
AFFIRMED IN PART AND REMANDED WITH DIRECTIONS.
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