United States v. Seidling

Summarized by David Treacy , U.S. Bankruptcy Court, Eastern District of Kentucky
12 hours 55 min ago

Case Type:

Consumer

Case Status:

Affirmed

Citation:

25-2138 (7th Circuit, Mar 16,2026) Not Published

Tag(s):

Ruling:

The U.S. Court of Appeals for the Seventh Circuit affirmed the appellant/individual debtor's convictions and sentence for bankruptcy fraud and criminal contempt (for violating a preliminary injunction). The circuit court rejected the debtor's challenges to alleged trial errors based on the admission of video evidence played before the jury.

Procedural context:

The Seventh Circuit reviewed the district court's decision to admit videos of the appellant/debtor engaging in conduct for an abuse of discretion. The appellant argued the videos were irrelevant (invoking Fed. R. Evid. 401) and should have been excluded as (invoking Fed. R. Evid. 403) the probative value of the videos was substantially outweighed by (1) unfair prejudice, (2) being cumulative, and (3) confusing the issues for the jury.

Facts:

Bernard Seidling, a real estate investor, filed a chapter 11 bankruptcy petition in 2022 in the U.S. Bankruptcy Court for the Western District of Wisconsin, thereby staying a pending state court garnishment action against him. Seidling declared minimal assets on his schedules, including no real estate or business interests and a small bank balance. After the bankruptcy court converted his case to chapter 7, a trustee obtained a temporary restraining order (which became a preliminary injunction) to preserve the estate and prevent Seidling from transferring assets owned or held by 37 entities associated with him. Pre-conversion, Seidling asserted severe physical and mental health issues precluded him from complying with briefing deadlines and other obligations in his bankruptcy case. Then, post-conversion and after injunctive relief had been granted, Seidling transferred significant funds through several banks and withdrew a large amount of cash, putting it "under [his] lake house." A grand jury indicted Seidling on three bankruptcy-related counts: "Count 1 alleged that Seidling knowingly made materially false declarations about his assets on his bankruptcy schedules, violating 18 U.S.C. § 152(3); Count 2 alleged that between December 19, 2022, and April 25, 2023, Seidling lied about his health to delay the bankruptcy proceedings in his efforts to defraud the bankruptcy court, violating 18 U.S.C. § 157(3); and Count 3 alleged that Seidling transferred funds and real property belonging to the estate, violating the preliminary injunction and 18 U.S.C. § 401(3). Seidling pleaded not guilty." Before the criminal trial, the government notified the U.S. District Court for the Western District of Wisconsin of its intent to use video evidence of Seidling's activities, contending they were relevant to the truth of Seidling's representations about his health, among other matters. Following his conviction on all counts and the issuance of his 84-month sentence, Seidling appealed the district court’s decision to admit the videos to the Seventh Circuit.

Judge(s):

Pryor, Kolar, and Maldonado

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