United States v. Spurlin (2011)

United States v. Spurlin, 664 F.3d 954 (5th Cir. 2011), is a federal appellate decision on bankruptcy crimes. The case came from Louisiana, and the government's lawyers on appeal were based in Shreveport.^[1][2][3] CourtListener shows it cited by 20 opinions.^[3][4]

Background

Brian and Debra Spurlin were convicted of concealing bankruptcy-estate assets under 18 U.S.C. § 152(1), by knowingly and fraudulently leaving interests in certain properties out of their filings, and of making false oaths and statements under § 152(3), based on an answer on a bankruptcy questionnaire.^[1] Brian Spurlin was also convicted of bankruptcy fraud under § 157(1). That charge alleged he filed for bankruptcy to carry out and hide a scheme in which he took money he was supposed to be holding in escrow for a business associate.^[1] The couple had filed a joint petition on September 5, 2005.^[1]

Holding

In an opinion by Judge Jerry E. Smith, the court found the evidence insufficient to convict Brian Spurlin of the false-oath count, so it reversed that conviction. The questionnaire asked whether a dead parent had left "any property," and the court held that his reading of it as asking what the parent had left to the debtor was reasonable. It affirmed his concealment and bankruptcy-fraud convictions, vacated his sentence and remanded for resentencing. It affirmed all of Debra Spurlin's convictions.^[1]

The opinion decided several legal questions along the way:^[1]

• Filing by power of attorney. The joint petition had been filed for Debra Spurlin under a general power of attorney. Courts had split on whether that is allowed. The Fifth Circuit sided with In re Ballard (Bankr. N.D. Cal. 1987): a general power of attorney may be used to file for bankruptcy on another person's behalf, provided the person is told and can object. Because the jury could infer that she ratified the filing, she could be liable for concealment.
• Concealment by silence. At a joint creditors' meeting, an answer from one spouse is taken as the answer of both unless the other objects. The court held that this puts each joint debtor under a duty to speak up when they know the filings are incomplete.
• "Homemade" forms. The court rejected the argument that a false answer did not count because it appeared on a trustee's "homemade" questionnaire rather than an official bankruptcy form. The statute draws no such distinction, and the form was completed under penalty of perjury.
• Bankruptcy fraud. Applying the plain meaning of "concealing" in § 157(1), the court held that filing for bankruptcy to discharge a debt, so that the creditor would stop investigating, could conceal a fraud scheme. It declined to follow the narrower reading in United States v. Lee (E.D. Pa. 2000).

Later proceedings

Brian Spurlin petitioned the U.S. Supreme Court for certiorari (No. 11-9389). The docket shows that the Court asked the government for a response, and the United States filed a brief in opposition in June 2012. The Court denied the petition on October 1, 2012.^[5][6] In a later appeal (No. 12-30318), Brian Spurlin challenged a cumulative sentence of 72 months: 60 months on the concealment count, which was the statutory maximum, and a consecutive 12 months on the bankruptcy-fraud count. In an unpublished per curiam opinion filed February 15, 2013, a Fifth Circuit panel of Judges Higginbotham, Owen and Southwick affirmed the sentence. It rejected his argument that the fraud guideline overstates the seriousness of non-violent fraud.^[7][8] GovInfo, which publishes U.S. court opinions, has files for both Fifth Circuit dockets.^[9][7]