- Case Type:
- Case Status:
- No. 17-1400 (7th Circuit, Nov 01,2017) Not Published
- The district court’s refusal to allow the defendant’s theory-of-defense jury instruction did not deny him a fair trial where the proposed instruction restated the court’s charge to the jury in part, and otherwise misstated the law by stating that the defendant’s carelessness in following the bankruptcy rules was inconsistent with an intent to deceive.
- Procedural context:
- A grand jury returned a three-count indictment against Fadden for his failure to report assets and for his statements made during a meeting with a paralegal at the U.S. Trustee’s office. Count I charged him with violating 18 U.S.C. § 152(1) by concealing assets in bankruptcy. Count II charged him with violating 18 U.S.C. §152(3) by making false declarations on his bankruptcy schedules and statement of financial affairs. Count III charged him with violating 18 U.S.C. §1001(a)(2) by making false statements during the investigation of his bankruptcy. The first two counts required the government to show that Fadden acted with an intent to deceive. At trial, Fadden argued that the government had not shown that he acted with such intent. Fadden proposed a theory-of-defense jury instruction, and the Seventh Circuit focused on two issues in affirming the district court’s refusal of the instruction. First, it repeated the court’s charge to the jury (“if you find that Fadden’s omissions as charged in counts 1 and 2 were not made with an intent to deceive you must find him not guilty of those counts.”) The Seventh Circuit ruled that the court had already informed the jury of this, and the defendant is not entitled to the logical equivalent of an instruction the court provides. Second, the instruction stated that Fadden’s “omissions were part of his continued failures to abide by the particulars demanded in the bankruptcy filings and his course of conduct throughout the bankruptcy, which is inconsistent with an intent to deceive.” The Seventh Circuit ruled that this was a misstatement of the law, as finding that Fadden was careless and that he acted with an intent to deceive would have been entirely consistent with the statute. Accordingly, the Seventh Circuit affirmed the lower court’s decision, and held that the refusal to allow the theory-of-defense jury instruction did not deny the defendant a fair trial.
- Leon Fadden (“Fadden”) earned over $100,000 in annual income from 2005-2013, but failed to submit tax returns. After an audit, the IRS imposed a lien for back taxes and began garnishing Fadden’s wages. Shortly thereafter, Fadden filed for bankruptcy. In his scheduled, Fadden claimed that he had no legal, equitable, or future interest in any real property. He also claimed that he did not have an interest in any decedent’s life insurance policy. However, at the time he filed his petition, Fadden was aware that he would receive proceeds from the sale of his mother’s home (listed by the executor for over $500,000) and that he would receive thousands of dollars from two of his mother’s life insurance policies. After filing his schedules and prior to meeting with the bankruptcy trustee, Fadden met with a paralegal at the U.S. Trustee’s Office. At that time, Fadden mentioned that he was entitled to an inheritance and asked to postpone his bankruptcy. However, when he finally met with the trustee, he denied having spoken to the paralegal and confirmed that his schedules were accurate.
- Easterbrook, Kanne, and Williams
In re Barbara Wigley
Summarizing by Bradley Pearce
Publicly Traded Firms Paid Dividends, Bought Their Own Stock after Receiving PPP loans to Pay Employees
3145 in the system
1 Being Processed