United States v. Peter G. Archibald

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
December 6, 2006
No. 06-11882 THOMAS K. KAHN
Non-Argument Calendar CLERK
________________________
D. C. Docket No. 05-00029-CR-1-2
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
PETER G. ARCHIBALD,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Georgia
_________________________
(December 6, 2006)
Before BIRCH, BLACK and BARKETT, Circuit Judges.
PER CURIAM:
Appellant Peter G. Archibald (“Archibald”) challenges his convictions for
knowingly and fraudulently concealing the assets of a bankruptcy estate, 18 U.S.C.
§ 152(1), and knowingly and fraudulently making a false oath in relation to a
bankruptcy case, 18 U.S.C. § 152(2). Archibald raises a number of issues on
appeal. First, he challenges the sufficiency of the criminal indictment pursuant to
which he was charged. Archibald also argues that the district court erred in
admitting certain evidence against him at trial and that the district court erred in
calculating the amount of the monetary loss for purposes of the Sentencing
Guidelines. Finally, he contends that the evidence presented at trial was
insufficient to sustain his convictions. We AFFIRM.
I. BACKGROUND
Archibald and his wife owned all of the stock in Rooster’s Barnyard, Inc.
(“Rooster’s”), a closely held corporation operating as an adult entertainment club
in Atlanta, Georgia. Although Rooster’s was a viable business, Archibald and his
wife had minimal involvement in the day-to-day management of the club. The
couple resided in St. Simon’s Island, Georgia and received regular income from the
club’s operations. In addition to his ownership interest in Rooster’s, Archibald
owned restaurants in St. Simon’s and Jekyll Island, Georgia, and commercial
property in Glynn County, Georgia.
Due to financial difficulties, in December 2003 Archibald and his wife
2
jointly filed a Voluntary Bankruptcy Petition with the United States Bankruptcy
Court for the Southern District of Georgia. The Archibalds sought protection
pursuant to Chapter 13 of the Bankruptcy Code (“the Code”).1 In connection with
Schedule B of their petition, the Archibalds were required to itemize all of their
assets, including the value of their interest in any shares of stock, and to provide
the market value for each asset listed. The Archibalds listed Rooster’s as an asset
on the Schedule and indicated that the current market value of their interest in the
company was $2,000.
Subsequent to the bankruptcy filing, Coastal Bank of Georgia (“Coastal
Bank”), one of the Archibalds’ secured creditors, filed with the bankruptcy court a
motion to dismiss the bankruptcy petition. Coastal Bank argued that the total
amount of the Archibalds’ debt exceeded the amount set forth in section 109(e) of
the Code, and that therefore the couple was ineligible for Chapter 13 protection.
Coastal Bank also argued that the Archibalds knew that a Chapter 13 filing was
inappropriate based on their circumstances, and that they had filed for bankruptcy
1
Chapter 13 of the Code creates a reorganization mechanism for individual debtors, and
permits them to repay their outstanding debts–either in full, or on a pro rata basis–over a period
of time. Unlike Chapter 7, in which the debtor’s property is subject to a complete liquidation,
Chapter 13 permits a debtor to repay either some or all of his debts based on the monthly
payment schedule approved by the bankruptcy court. To be eligible for Chapter 13 protection,
however, the individual’s debts listed on the bankruptcy petition must aggregate to less than a
certain dollar amount. See 11 U.S.C. § 109(e). If the individual’s debts exceed the dollar
amount set forth in § 109(e), the individual will not be eligible for reorganization under Chapter
13 and must seek another form of bankruptcy protection.
3
with bad faith. Accordingly, Coastal Bank asked that the petition be dismissed
with prejudice.
The bankruptcy court held a hearing on the motion in January 2004 and
Archibald testified in support of his petition. During cross-examination, Archibald
stated that he and his wife were the sole owners of 100% of the stock of Rooster’s.
He then stated that the company was worth about four million dollars. When
Archibald was asked why he listed the market value of Rooster’s as $2,000 on his
bankruptcy petition–when the company had zero debt and a value of around $4
million–Archibald first testified that $2,000 was the amount that he originally
invested in the business. When further queried by the court, Archibald stated that
he had listed the value at $2,000 because that was the value of “the last license”
that the club obtained in Dekalb County. Exh. 11 at 23. After again confirming on
cross-examination that the actual value of Rooster’s was closer to $4 million, the
court dismissed the Archibalds’ Chapter 13 petition. Finding that the Archibalds
had abused the bankruptcy process, the court dismissed the petition with prejudice.
After the hearing, the bankruptcy trustee referred the Archibalds’ case to the
Federal Bureau of Investigation (FBI), which began investigating the discrepancy
between the $2,000 valuation of Rooster’s on the Archibalds’ Chapter 13 filing and
Archibald’s subsequent testimony at the bankruptcy hearing. Pursuant to that
4
investigation, FBI agent Mark Alig interviewed Archibald and his wife. When
Agent Alig asked Archibald about the $2,000 valuation listed on the bankruptcy
petition, Archibald first claimed that he was instructed by a friend in Atlanta to
place that valuation on the business. Later in the interview Archibald stated that he
did not know why the $2,000 figure appeared in his bankruptcy filing, but that his
bankruptcy counsel had instructed him to attach that value to the club. Finally,
Archibald indicated that he valued Rooster’s at $2,000 because that was the
amount that he had initially invested in the company. Despite these differing
stories concerning the $2,000 valuation, Archibald reiterated to the federal agent
his belief that the actual “market value of the property was four million dollars.”
R5 at 61.
On 14 July 2005 a federal grand jury issued a two-count indictment against
Archibald and his wife, charging them with knowingly and fraudulently concealing
property belonging to the bankruptcy estate, 18 U.S.C. § 152(1), and knowingly
and fraudulently making a false oath in connection with a bankruptcy case, 18
U.S.C. § 152(2)–namely, the failure to disclose the true value of Rooster’s. A trial
by jury was held in November 2005. Because the evidence presented at trial
showed that Archibald’s wife had no involvement in either the preparation of the
Chapter 13 bankruptcy nor in the putative valuation of Rooster’s, Archibald’s wife
5
moved for a judgment of acquittal prior to jury deliberations, and her motion was
granted. The jury found Archibald guilty of both counts set forth in the indictment.
The probation officer prepared a pre-sentence investigation report (PSI),
recommending a base offense level of 6 because Archibald’s crime involved “fraud
and deceit.” See U.S.S.G. § 2B1.1. The PSI also stated that the loss intended by
Archibald’s offense had been $4,000,000, the value of the concealed asset.
Accordingly, the probation officer recommended an 18-level enhancement based
on the loss amount being greater than $2,500,000. See U.S.S.G. § 2B1.1(b)(1)(J).
The probation officer further recommended a two-level enhancement because the
offense involved fraudulent action during a bankruptcy proceeding, see U.S.S.G.
§ 2B1.1(b)(8)(B), and a two-level enhancement for obstruction of justice, see
U.S.S.G. § 3C1.1, resulting in a total offense level of 28.
At the sentencing hearing, the government modified its position concerning
the total amount of loss intended by Archibald’s conduct. Specifically, the
government lowered its estimate of the total monetary loss, agreeing that the
intended loss amount should be capped at the total debt that Archibald claimed on
his bankruptcy petition– in this case, between “1.6 and 1.9 million dollars.” R7 at
56. Accordingly, the government recommended that Archibald’s sentence be
enhanced by only 16 levels pursuant to U.S.S.G. § 2B1.1(b)(1)(I), rather than the
6
18-level enhancement originally indicated in the PSI based on U.S.S.G. §
2B1.1(b)(1)(J).
The district court agreed with the government’s revised sentencing
calculation. In light of a base level of 6, a 16-level enhancement based upon an
intended loss of more that $1,000,000, and the additional enhancements
recommended in the PSI, the court concluded that Archibald’s total offense level
was 26. Archibald’s new offense level, with a criminal history category of I,
resulted in a guidelines range of 63-78 months of imprisonment. The district court
sentenced Archibald to 60 months of imprisonment for Count One of the
indictment, and 18 months for Count Two, to be served concurrently, resulting in a
total prison sentence of 60 months. This appeal followed.
II. DISCUSSION
A. Sufficiency of the Indictment
Archibald’s first contention on appeal concerns the legal sufficiency of the
criminal indictment pursuant to which he was charged. Archibald argues that the
language of the indictment, on its face, fails to allege a criminal offense.
Archibald’s counsel first raised this issue in a motion to dismiss pursuant to Fed.
R. Crim. P. 12(b)(3), but the district court denied that motion. Archibald’s counsel
again challenged the indictment at the conclusion of the direct examination of the
7
prosecution’s first witness, this time via an oral motion for a judgment of acquittal,
which the district court also denied. Archibald now appeals the district court’s
denial of those motions, and argues that the indictment is legally insufficient. The
question of “whether an indictment sufficiently alleges a statutorily proscribed
offense is a question of law.” Rodriguez v. Ritchey, 556 F.2d 1185, 1191 n. 22
(5th Cir. 1977), cert. denied, 434 U.S. 1047, 98 S. Ct. 894 (1978). We review
questions of law de novo. United States v. Shenberg, 89 F.3d 1461, 1478 (11th
Cir. 1996) (citations omitted).
The purpose of a criminal indictment is two-fold. First, the indictment “puts
the defendant on notice of the nature and cause of the accusation as required by the
Sixth Amendment of the Constitution.” United States v. Fern, 155 F.3d 1318,
1325 (11th Cir. 1998) (citation and internal quotations omitted). “Second, it
fulfills the Fifth Amendment’s indictment requirement, ensuring that a grand jury
only return an indictment when it finds probable cause to support all the necessary
elements of the crime.” Id. (citation and internal quotations omitted). “An
indictment is sufficient if it: (1) presents the essential elements of the charged
offense, (2) notifies the accused of the charges to be defended against, and (3)
enables the accused to rely upon a judgment under the indictment as a bar against
double jeopardy for any subsequent prosecution for the same offense.” United
8
States v. Steele, 147 F.3d 1316, 1320 (11th Cir. 1998) (en banc) (citation and
internal quotations omitted). We have also stated that “practical, rather than
technical, considerations govern the validity of an indictment.” United States v.
Hooshmand, 931 F.2d 725, 735 (11th Cir. 1991) (citation omitted). That is,
“[m]inor deficiencies that do not prejudice the defendant will not prompt this Court
to reverse a conviction.” United States v. Chilcote, 724 F.2d 1498, 1505 (11th Cir.
1984) (citations omitted).
The indictment issued in Archibald’s case contains two counts. Count One
alleges that Archibald and his wife
in connection with the aforementioned Bankruptcy Petition, did
knowingly and fraudulently conceal from creditors or the
United States Trustee, property belonging to the estate of the
[Defendants] . . . that being the assets of Rooster[’]s Barnyard,
Inc. . . . in violation of [18 U.S.C. § 152(1)].
R1-1 at 1. Count Two similarly alleges that Archibald and his wife
in connection with the aforementioned Bankruptcy Petition
under Title 11, did knowingly and fraudulently make a false
oath or account by substantially undervaluing the assets of
Rooster[’]s Barnyard, Inc. . . . in violation of [18 U.S.C. §
152(2)].
Id. at 2. Archibald’s counsel correctly notes that in order for Archibald to have
violated 18 U.S.C. § 152, he would have had to have knowingly concealed
“property belonging to the [bankruptcy estate]” from either his creditors or the
9
trustee in bankruptcy. See 18 U.S.C. § 152(1). “Property” is defined in the Code
as including “all legal or equitable interests of the debtor.” 11 U.S.C. § 541(a)(1).
Archibald’s appeal hinges on the latter language of Counts One and
Two–specifically the allegation that Archibald’s bankruptcy petition concealed
“the assets of Rooster[’]s Barnyard, Inc.” R1-1 at 1, 2 (emphasis added). As
Archibald’s counsel points out, a shareholder in a corporation would be required to
disclose his interest in a corporation (represented by the shares that he owned) in a
bankruptcy petition, but he would not be required to disclose “the assets” of that
corporation, such as, in the case of Rooster’s, the tables, chairs, and musical
equipment owned by the club. Id. In other words, Archibald contends that while
he was required to disclose the value of his ownership interest in Rooster’s, he was
not required to disclose the “assets of that corporation.” R4 at 7-8. Accordingly,
Archibald asserts that the indictment fails to allege a criminal offense, since he
could admit to concealing the “assets” of Rooster’s on his bankruptcy petition and
still not be guilty of a crime. In support of this argument, Archibald relies on the
definition of “property” set forth in the Code, as well as the Seventh Circuit’s
opinion in Fowler v. Shadel, where the court made clear that a debtor’s stock in a
corporation is viewed as “property” for purposes of the bankruptcy estate, but that
the separate assets of the corporation are not. 400 F.3d 1016, 1019 (7th Cir. 2005).
10
Archibald’s argument is creative, but unpersuasive nevertheless. The
indictment alleges both the elements of the applicable offenses and the crimes with
which Archibald was being charged. See Steele, 147 F.3d at 1320 (reiterating the
requirements for an indictment to be legally sufficient). In fact, the indictment
clearly states that Archibald did “knowingly and fraudulently conceal from
creditors . . . property belonging to the estate” in violation of 18 U.S.C. § 152(1),
and that he did “knowingly and fraudulently make a false oath or account” in
connection with his bankruptcy, in violation of 18 U.S.C. § 152(2). R1-1 at 1, 2.
While the indictment goes on to state, perhaps inartfully, that the property
concealed from the bankruptcy petition consisted of the “assets” of Rooster’s, and
while it would have been preferable to identify the concealed property as
Archibald’s interest in Rooster’s rather than as Rooster’s assets, we cannot
conclude that the indictment failed to give Archibald adequate notice of the
charges that were pending against him.
Notably, Archibald does not contend that the indictment failed to notify him
of the charges against him; nor could he so claim, as the indictment specifically
and expressly refers to the statutory provisions on which the charges were based.
See Fern, 155 F.3d at 1325. Rather, Archibald’s argument is essentially that the
indictment is inaccurate because Archibald did not own the “property” that was
11
allegedly obscured; his closely-held corporation did. But an indictment simply
must allege “enough factual detail to apprise [the defendant] of the conduct for
which he would be . . . tried.” United States v. Gray, 260 F.3d 1267, 1283 (11th
Cir. 2001). The indictment in this case satisfies that threshold; it not only
specifically references Archibald’s 30 December 2003 bankruptcy filing, but it also
clearly sets forth the allegations that the Archibalds concealed “property belonging
to the [bankruptcy] estate” from that petition and that they “ma[de] a false oath” in
connection with that petition. R1-1 at 1, 2. The subsequent reference in the
indictment, to the “assets” of the corporation, while somewhat careless, is not
enough to invalidate the indictment, where the rest of the document is quite
specific and expressly sets out the charges alleged against Archibald. See Fern,
155 F.3d 1326 n. 12 (pointing out “the tension between [the defendant]’s
suggestion that the absence of some explicit language in the indictment is fatal,
while the presence of other explicit language is of no moment”). As the district
court noted, the indictment might have lacked the precise “terminology” later
argued for by Archibald, but, nevertheless, “the essence of it [was] there.” Id.This conclusion was proper, especially given our repeated admonition that
“practical, rather than technical, considerations govern the validity of an
12
indictment.” Hooshmand, 931 F.2d at 735 (citation omitted).2 Archibald’s motion
to dismiss pursuant to Fed. R. Crim. P. 12(b)(3) was properly denied.
B. Prior Act Evidence Admitted Under Federal Rule of Evidence 404(b)
Archibald argues that the court erred in permitting the government to admit
into evidence the facts surrounding one of Archibald’s earlier bankruptcy filings.
At trial, the bulk of Archibald’s defense was that he was unfamiliar with
bankruptcy law in general and the process of filing out a bankruptcy petition in
particular, and, as a result, his erroneous valuation of Rooster’s on his 2003
petition was a simple mistake. During the prosecution’s cross-examination of
Archibald, the government sought to challenge Archibald’s claims of naivete´ by
introducing the facts surrounding his earlier 1991 bankruptcy filing, in which it
had been alleged by a creditor that Archibald intentionally had failed to list the
value of Rooster’s. At trial the court overruled Archibald’s objection to the
admission of this evidence. Archibald now argues that the admission of this
evidence violated Rule 404(b) of the Federal Rules of Evidence, which permits the
2
As a final matter, we note that Archibald’s counsel could have moved for a bill of
particulars to clarify the allegations set forth in the indictment, if he believed such a clarification
was necessary to prepare his defense. See, e.g., United States v. Sharpe, 438 F.3d 1257, 1263 n.
3 (11th Cir. 2006) (“To the extent the defendants suggest that more detail was required in the
indictment, we disagree. It is not necessary for an indictment . . . to allege in detail the factual
proof that will be relied upon to support the charges. That information, if essential to the
defense, can be obtained by a motion for a bill of particulars . . .”) (citation and internal
quotations omitted). No such clarification was ever sought; rather, Archibald’s counsel aimed
simply to dismiss the indictment based on a minor semantic shortcoming.
13
admission of prior bad acts only under certain narrow circumstances.
We review a district court’s admission of prior bad acts under Rule 404(b) of
the Federal Rules of Evidence for abuse of discretion. United States v. Ramirez,
426 F.3d 1344, 1354 (11th Cir. 2005) (per curiam) (citation omitted). Rule 404(b)
of the Federal Rules of Evidence provides that
[e]vidence of other crimes, wrongs, or acts is not admissible to
prove the character of a person in order to show action in
conformity therewith. It may, however, be admissible for other
purposes, such as proof of motive, opportunity, intent,
preparation, plan, knowledge, identity, or absence of mistake or
accident . . .
Fed R. Ev. 404(b). We have indicated that, in order for such prior act evidence to
be properly admitted under Rule 404(b), three steps are needed. “First, the
evidence must be relevant to an issue other than the defendant’s character. Second,
there must be sufficient proof that the defendant committed the extrinsic act.
Third, the evidence must survive the balancing test of prescribed by Federal Rule
of Evidence 403.” United States v. Mills, 138 F.3d 928, 935 (11th Cir. 1998).
That is, the district court must find that the probative value of the evidence is not
outweighed by the danger of unfair prejudice, confusion of the issues, or
misleading the jury. See Fed. R. Ev. 403.
In this case, the government sought to introduce evidence of Archibald’s
1991 bankruptcy filing to refute Archibald’s assertion that he was unfamiliar with
14
bankruptcy law and the proper preparation of a bankruptcy petition. The evidence
introduced at trial not only showed that Archibald had filed for bankruptcy
previously, but it also revealed that the 1991 petition was converted from a Chapter
13 filing to a Chapter 7 filing, due to Archibald’s apparent failure to disclose the
value of Rooster’s on his 1991 petition. Such evidence, although a prior bad act,
was admissible under Rule 404(b) to show Archibald’s “intent” to conceal his
interest in Rooster’s on his 2003 petition. The evidence surrounding the 1991
petition was not introduced to show Archibald’s character or action in conformity
therewith, but, rather, to show that Archibald was capable of formulating the intent
to knowingly and purposefully conceal assets in pursuing bankruptcy
protection–and to refute Archibald’s claims to the contrary.
Archibald further objects to the lack of notice afforded to him prior to the
introduction of the prior act evidence.3 Rule 404(b) imposes a notice requirement
on the admission of prior act evidence in the context of a criminal trial; the rule
states that, before admitting such evidence, the prosecution is required to “provide
reasonable notice in advance of trial, or during trial if the court excuses pretrial
3
We reject the government’s contention that Archibald’s counsel failed to adequately
preserve this objection at trial. On the contrary, the record makes clear that Archibald’s
counsel’s objection was based on the lack of advanced notice that is required under Fed R. Ev.
404(b). Archibald’s attorney repeatedly stated at trial that he had never seen the evidence
concerning the earlier 1991 petition before. R5 at 199, 205. His protestations before the court
sufficiently preserved a Rule 404(b) objection for purposes of this appeal.
15
notice on good cause shown.” Fed. R. Ev. 404(b). Archibald argues on appeal that
the government’s failure to provide advanced notice before admitting the 1991
petition had a prejudicial effect on his case, and that the court therefore should
have excluded it. In previous cases we have held that the admission of prior act
evidence in a criminal trial, without any advanced notice on the part of the
prosecution, can be so prejudicial to a defendant’s case that it warrants a reversal
of his conviction. See, e.g., United States v. Carrasco, 381 F.3d 1237, 1241 (11th
Cir. 2004) (per curiam) (finding that the failure to give “the required Rule 404(b)
notice” to a defendant before admitting evidence of his prior drug dealings
“prejudiced [the defendant]’s ability to defend himself” and thus warranted a
reversal of his conviction).
Rule 404(b), however, expressly permits the admission of prior act evidence,
without advanced notice, “if the court excuses pretrial notice on good cause
shown.” See Fed. R. Ev. 404(b). Although we have not fully defined the contours
of the good cause exception to Rule 404(b)’s notice requirement, our sister circuits
have held that the good cause threshold is satisfied under the Federal Rules of
Evidence when the evidence is not discovered by the prosecution until immediately
before or during the trial. See, e.g., United States v. Lopez-Gutierrez, 83 F.3d
1235, 1241 (10th Cir. 1996) (stating that “because the evidence was not made
16
available to the government until the night before trial . . . there was good cause to
excuse the pretrial notice requirement”). See also United States v. Scholl, 166 F.3d
964, 976 (9th Cir. 1999) (stating that where the government mistakenly believed
that an incident occurred in 1990, but discovered during trial that the incident
occurred in 1986, prior to the defendant’s criminal acts, the good cause threshold
was met, despite the absence of any notice to the defendant).
In this case, the prosecution stated that it had not received the evidence
concerning Archibald’s 1991 bankruptcy until the night before Archibald was
scheduled to testify. Such circumstances constitute “good cause” to excuse Rule
404(b)’s pretrial notice requirement. Accordingly, the district court did not err in
admitting the evidence concerning the 1991 bankruptcy petition under Rule
404(b).4
C. Amount of Loss for Sentencing Purposes
Archibald argues that the district court erred in calculating the amount of
intended loss for purposes of calculating his sentence under U.S.S.G. § 2B1.1.
4
Even if we were to find that the evidence concerning the 1991 bankruptcy petition
should not have been admitted without advanced notice to Archibald, we would nevertheless
conclude that the admission of the evidence constituted harmless error, especially because the
direct evidence presented against Archibald was overwhelming, even without evidence of the
1991 petition. See Chilcote, 724 F.2d at 1502 (“Although we found error in the admission of the
evidence under [Rule 404(b)], we conclude that it is harmless because other substantial evidence
supports [the] conviction. . . . Direct evidence . . . is sufficient to sustain the conviction without
consideration of the extrinsic act evidence.”).
17
Archibald contends that there is no evidence, either direct or circumstantial, to
show that he intended to cause a loss to his creditors by concealing the true value
of Rooster’s on his bankruptcy petition. In addition, he argues that he intended to
pay his creditors in full, regardless of what value he ultimately placed on
Rooster’s, and that, therefore, it was impossible for his actions to have inflicted a
loss upon his creditors. Thus he claims that no intended loss can be shown for
purposes of the Sentencing Guidelines.
“We review the district court’s determination of the amount of loss [under
the Sentencing Guidelines] for clear error.” United States v. Hernandez, 160 F.3d
661, 666-67 (11th Cir. 1998). Under U.S.S.G. § 2B1.1(b)(1), the defendant’s
offense level is subject to enhancement if the loss exceeded $5,000. The extent of
the enhancement is determined by the total amount of the loss. U.S.S.G.
§ 2B1.1(b)(1). While gauging the amount of monetary loss sometimes can be
easy–such as in simple theft cases–determining the loss in bankruptcy fraud
proceedings can be difficult. For purposes of the Sentencing Guidelines, the term
“loss” refers to either (1) the actual loss or (2) the intended loss, whichever number
is greater. See U.S.S.G. § 2B1.1(b)(1) cmt. 3(A). Here, it is undisputed that there
was no “actual loss” upon Archibald’s creditors; the discharge that Archibald
sought in Chapter 13 proceedings was never granted, and the bankruptcy court
18
dismissed his petition at the outset. The issue, therefore, is the proper calculation
of the intended loss. The intended loss is defined in the Sentencing Guidelines as
the “pecuniary harm that was intended to result from the offense,” including the
“intended harm that would have been impossible or unlikely to occur.” Id. cmt.
3(A)(ii). The amount of intended loss need not be exact, so long as it is a
“reasonable estimate . . . given the available information.” United States v. Dolan,
120 F.3d 856, 870 (8th Cir. 1997) (citations omitted).
Although we have not so explicitly held, other federal courts in calculating
the loss in the context of bankruptcy fraud have concluded that the intended loss is
determined by using “either the value of the assets concealed or the value of the
debtor’s liabilities, whichever is less.” Id. (emphasis added). See also United
States v. Edgar, 971 F.2d 89, 95-96 (8th Cir. 1992) (stating that when the value of
the asset concealed exceeds the total amount of the debt, the intended loss should
be limited to the total amount of the debt); cf. United States v. Mutuc, 349 F.3d
930, 936 (7th Cir. 2003) (citation omitted) (stating that under § 2B1.1 “the proper
[intended] loss calculation in bankruptcy fraud cases is the amount of the debt that
the defendant sought to discharge in bankruptcy”). In this case, the district court
followed the approach of the Eighth Circuit in Dolan and concluded that the loss
intended by Archibald should be capped at the total amount of the debt that
19
Archibald sought to discharge in bankruptcy (between $1.6 and $1.9 million),
since that amount was less than the asset concealed (the $4 million nightclub). The
government agreed to this loss calculation for purposes of Archibald’s sentencing,
and in so doing the government reduced the severity of the sentencing
recommendation that had been set forth in Archibald’s PSI. Accordingly, the
district court imposed a 16-level enhancement based on an intended loss of more
than $1,000,000, pursuant to U.S.S.G. 2B1.1(b)(1)(I). We cannot conclude that
this calculation constituted clear error.
On appeal, Archibald argues that he had no intent to inflict any loss on his
creditors, and that, in fact, he intended to pay all of his creditors in full. When
confronted with the damaging fact that Archibald’s Chapter 13 petition was a pro
rata plan–such that his creditors’ outstanding debts might not have been repaid in
full–Archibald falls back on the argument that he did not truly understand the
significance of the petition that he was filing. Consequently, he argues that there is
no evidence that he “subjectively intended to inflict any loss upon his creditors.”
Br. of Appellant at 23.
Despite these arguments, the evidence presented at trial makes clear that
Archibald’s conduct could have resulted in a loss to his creditors; the fact that no
such loss actually ensued is immaterial. See Hernandez, 160 F.3d at 667. As the
20
trustee in bankruptcy testified during trial, “[i]f an asset isn’t included in the
Bankruptcy Petition, that then means that the asset isn’t counted in figuring out
how much creditors can be repaid, which means that creditors are repaid less than
they should be repaid.” R4 at 54. This evidence was sufficient to undermine
Archibald’s argument that he intended to repay his creditors in full. Furthermore,
we reject Archibald’s claim that he did not understand the significance of his
actions in filing a pro rata Chapter 13 petition, and that therefore he did not
subjectively intend a loss upon anyone. A sentencing judge “is not bound to accept
[a defendant]’s self-serving assertions at sentencing that he intended no loss to his
creditors.” Dolan, 120 F.3d at 871 (citation omitted).
Moreover, courts have made clear that, for purposes of determining intended
loss under U.S.S.G. § 2B1.1, a defendant’s intent can be inferred from his conduct
in concealing or undervaluing large assets from a bankruptcy estate. See, e.g.,
Feldman v. United States, 338 F.3d 212, 223 (3d Cir. 2003); United States v.
Holthaus, 437 F. Supp. 2d 932, 937 (N.D. Iowa 2006). In Feldman, a defendant
was accused of understating his income in a bankruptcy petition and was charged
with violating 18 U.S.C. § 152. 338 F.3d at 221. The defendant argued on appeal
that he did not subjectively intend to inflict a loss, since “he thought the creditors
would be unaffected by the concealment” and he believed that the excluded assets
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were exempt from the bankruptcy petition. Id. The court rejected the claim that
the defendant lacked intent, concluding, on the contrary, that the defendant’s intent
to inflict a loss could be inferred from the simple fact that he concealed a large
amount of property from his bankruptcy petition. Id. at 223. See also Holthaus,
932 F. Supp. 2d at 937 (stating that the fact that a defendant concealed assets was
evidence that he intended to defraud his creditors).
Similarly, in Archibald’s case a jury could clearly infer from his conduct–in
vastly understating the value of Rooster’s on his bankruptcy petition and then
being unable to explain the discrepancy–that he subjectively “intended that the
estate be decreased by the amount that he was failing to disclose.” See Feldman,
338 F.3d at 223. The district court did not act improperly in inferring that
Archibald had intended to cause a loss to his creditors. Nor did it err in finding
that Archibald’s intended loss equaled the total amount of the debt he sought to
discharge in bankruptcy–a sum in excess of $1,000,000–thereby warranting a 16-
level enhancement to his base offense level. In summary, we discern no clear error
in the district court’s calculation of the monetary loss for sentencing purposes.
D. Sufficiency of the Evidence
Finally, Archibald argues that the district court erred in denying his motion
for judgment for acquittal, since the evidence presented at trial was insufficient to
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prove his guilt on either count of the indictment beyond a reasonable doubt.
Specifically, Archibald argues that there was insufficient evidence to show his
intent to either conceal assets or to make a false oath in connection with his
bankruptcy. We review the denial of a defendant’s motion for acquittal de novo.
United States v. Perez-Tosta, 36 F.3d 1552, 1556 (11th Cir. 1994) (citations
omitted). “In considering the sufficiency of the evidence we draw all reasonable
inferences in the [g]overnment’s favor.” Id. (citations omitted). We “cannot
reverse a conviction for insufficiency of the evidence unless after reviewing the
evidence in the light most favorable to the government, we conclude that no
reasonable jury could find proof beyond a reasonable doubt.” United States v.
Jones, 913 F.2d 1552, 1557 (11th Cir. 1990) (citation omitted). Put another way,
“[i]t is not necessary that the evidence exclude every reasonable hypothesis of
innocence or be wholly inconsistent with every conclusion except that of guilt,
provided that a reasonable trier of fact could find that the evidence established guilt
beyond a reasonable doubt.” United States v. Harris, 20 F.3d 445, 452 (11th Cir.
1994) (citations omitted).
In order to convict Archibald of Counts One and Two of the indictment, the
jury was obligated to find, beyond a reasonable doubt, that he did “knowingly and
fraudulently conceal . . . property belonging to the [bankruptcy] estate” and that he
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did “knowingly and fraudulently make a false oath or account” in connection with
his bankruptcy. 18 U.S.C. § 152(1) and (2). We find that the evidence presented is
such that a reasonable jury could conclude that each of these charges was proven
beyond a reasonable doubt. The government presented ample evidence concerning
Archibald’s undervaluation of his interest in Rooster’s on his bankruptcy petition,
as well as his unconvincing attempt to explain the discrepancy between the stated
valuation and the actual valuation.
First, the government presented evidence at trial that Archibald knew that
Rooster’s Barnyard was worth well more than $2,000, by presenting various loan
applications Archibald completed, prior to his bankruptcy filing, in which he
repeatedly indicated that the total value of the club was between $3 and $5 million.
Second, the government presented damaging evidence concerning Archibald’s
contradictory justifications, after the fact, as to why he valued the company at
$2,000 on his bankruptcy petition. His explanations were woefully inconsistent on
that point; at various times the jury heard evidence that $2,000 was the amount that
Archibald originally invested in the business; that $2,000 was the value of the
license the club had paid to operate in Dekalb County; that Archibald’s friend
advised him to put $2,000 on his petition; that his bankruptcy counsel instructed
him to place that valuation on the company; that his bankruptcy counsel failed to
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give him any advice about how to value the company; and that his bankruptcy
counsel’s paralegal told him to place that number on the petition.
If viewed in a vacuum, each of these scenarios might plausibly be defended
against with an innocent explanation. See Harris, 20 F.3d at 453. Taken has a
whole, however, they provide sufficient evidence for a reasonable juror to
conclude that the prosecution proved beyond a reasonable doubt that Archibald had
the requisite intent under 18 U.S.C. § 152. See id. This is especially so since the
“[s]ubsequent conduct [of a defendant] may be considered if it supports a
reasonable inference as to [the defendant’s] prior intent.” See United States v.
McCarrick, 294 F.3d 1286, 1291 (11th Cir. 2002). While Archibald presented
some evidence to support his defense of innocent mistake rather than intentional
misrepresentation, we cannot find that “no reasonable jury could find proof beyond
a reasonable doubt.” See Jones, 913 F.2d at 1557. The jury in Archibald’s case
was “free to choose among the constructions of the evidence,” see Harris, 20 F.3d
at 452 (citations omitted), and it concluded that the evidence supported a finding of
guilt beyond a reasonable doubt. His motion for judgment of acquittal was
properly denied.
III. CONCLUSION
Archibald has appealed his convictions for knowingly and fraudulently
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concealing an asset of the bankruptcy estate from creditors or the trustee in
bankruptcy, 18 U.S.C. § 152(1), and knowingly and fraudulently making a false
oath in connection with his bankruptcy proceeding, 18 U.S.C. § 152(2). He has
argued that the indictment under which he was charged was insufficient; that
evidence was improperly admitted against him at trial; that the district court erred
in calculating his sentence; and that the evidence presented at trial was insufficient
to prove his guilt beyond a reasonable doubt. Having carefully reviewed the record
and the briefs of the parties, we discern no error in connection with Archibald’s
indictment, his trial, or his subsequent sentence. Accordingly, Archibald’s
convictions are AFFIRMED.
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