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Keywords

defendantattorneyappealtrialbankruptcychapter 11 bankruptcyjury trial

defendantattorneyappealtrialbankruptcy

Related Cases

U.S. v. Gellene, 182 F.3d 578, 52 Fed. R. Evid. Serv. 741

Facts

John G. Gellene, an attorney at Milbank Tweed Hadley & McCloy, represented the Bucyrus–Erie Company in its Chapter 11 bankruptcy. He filed sworn declarations that failed to disclose significant connections between his firm and the debtor's creditors, including South Street Funds, which was a major secured creditor. Despite being aware of potential conflicts of interest, Gellene did not disclose these relationships in his applications for employment as counsel for the debtor. After a jury trial, he was convicted on three counts related to bankruptcy fraud and perjury.

Mr. Gellene was charged with two counts of knowingly and fraudulently making a false material declaration in the Bucyrus bankruptcy case, in violation of 18 U.S.C. § 152 , and one count of using a document while under oath, knowing that it contained a false material declaration, in violation of 18 U.S.C. § 1623 .

Issue

Did Gellene knowingly and fraudulently make false material declarations in violation of 18 U.S.C. § 152 and use a document under oath that contained false statements in violation of 18 U.S.C. § 1623?

The Court of Appeals, Ripple , Circuit Judge, held that: (1) to establish “fraudulently” element of offense of knowingly and fraudulently making false material declaration in bankruptcy case, government need only prove that defendant acted with intent to deceive;

Rule

To establish the 'fraudulently' element of the offense, the government must prove that the defendant acted with intent to deceive. Misstatements in bankruptcy declarations are considered material if they impede the bankruptcy court's responsibilities.

misstatement in attorney's application for order of employment with respect to attorney's other affiliations with parties connected to debtor's bankruptcy proceedings qualifies as material misstatement for purposes of offense of knowingly and fraudulently making false material declaration in bankruptcy case;

Analysis

The court applied the rule by examining the evidence presented at trial, which demonstrated that Gellene was aware of his duty to disclose all relevant connections and intentionally omitted significant affiliations. The jury was instructed that a statement is fraudulent if known to be untrue and made with intent to deceive, which the court found was adequately supported by the evidence of Gellene's actions and omissions.

Conclusion

The Court of Appeals affirmed Gellene's conviction, concluding that the evidence was sufficient to support the jury's finding of guilt on all counts.

Affirmed.

Who won?

The United States prevailed in the case, as the court found that Gellene's actions constituted bankruptcy fraud and perjury, supported by sufficient evidence of his intent to deceive.

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