Mark Calvert v. George Kooshian , 690 F. App'x 1011 ( 2017 )

FILED
NOT FOR PUBLICATION
MAY 17 2017
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
MARK CALVERT, as Liquidating Trustee No. 15-35465
of the Meridian Investors Trust,
D.C. No. 2:12-cv-01594-RAJ
Plaintiff-Appellee,
v. MEMORANDUM*
GEORGE STEVEN KOOSHIAN, AKA
George Steven Kooshian,
Defendant-Appellant.
Appeal from the United States District Court
for the Western District of Washington
Richard A. Jones, District Judge, Presiding
Submitted May 15, 2017**
Seattle, Washington
Before: HAWKINS, GOULD, and PAEZ, Circuit Judges.
Defendant-Appellant George Kooshian (“Kooshian”) appeals the district court’s
order, following a bench trial, awarding bankruptcy trustee Mark Calvert (“Trustee”)
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
$781,798.66 as a voidable transfer of profit Kooshian received from debtor Darren
Berg’s Ponzi scheme.1 We review the district court’s findings of fact for clear error,
FTC v. BurnLounge, Inc., 753 F.3d 878, 883 (9th Cir. 2014), its evidentiary rulings
for an abuse of discretion, Valdivia v. Schwarzenegger, 599 F.3d 984, 988 (9th Cir.
2010), and we affirm.
There was substantial evidence to support the district court’s conclusion that
Berg was operating a Ponzi scheme, including Berg’s own plea agreement. A transfer
made “with actual intent to hinder, delay, or defraud” any creditor of the debtor may
be avoided by the trustee, 11 U.S.C. § 548(a)(1)(A), and the “mere existence of a
Ponzi scheme is sufficient to establish actual intent” to defraud. Donell v. Kowell, 533
F.3d 762, 770 (9th Cir. 2008) (internal quotation marks omitted). In his plea
agreement, Berg acknowledged creating and operating a series of investment funds
purportedly for the purpose of investing in seller-financed real estate contracts, short
term loans, real estate, and management fees. He admitted, however, that he actually
used the funds for other business ventures and for his personal benefit, and then used
1
A Ponzi scheme is a “financial fraud that induces investment by promising
extremely high, risk-free returns, usually in a short time period, from an allegedly
legitimate business venture. The fraud consists of funneling proceeds received from
new investors to previous investors in the guise of profits from the alleged business
venture, thereby cultivating an illusion that a legitimate profit-making business
opportunity exists and inducing further investment.” Donell v. Kowell, 533 F.3d 767
n.2 (9th Cir. 2008) (internal quotation marks omitted).
2
other investors’ funds “to pay off the loans of earlier investors in order to conceal his
false statements and continue his scheme to defraud,” the quintessential hallmark of
a Ponzi scheme. See id. at 767 n.2; see also In re Slatkin, 525 F.3d 805, 814 (9th Cir.
2008) (debtor’s admissions in guilty plea and plea agreement that he operated a Ponzi
scheme conclusively established his fraudulent intent). “[O]nce the existence of a
Ponzi scheme is established, payments received by investors as purported profits–i.e.,
funds transferred to the investor that exceed that investor’s initial ‘investment’–are
deemed to be fraudulent transfers as a matter of law.” In re Slatkin, 525 F.3d at 814.
Kooshian contends that Berg’s plea agreement is vague as to when the
fraudulent scheme began, and argues that it thus “does not necessarily encompass the
dates that Dr. Kooshian received transfers.” The plea agreement notes the fraudulent
scheme began “at an exact time unknown, but sometime within the last ten years, and
continuing until in or around August 2010.” However, the Trustee and a forensic
financial expert both testified based on their review of the Debtor’s financial records
that the scheme began as early as 2001 with the first investments to Meridian Fund I,
and thus the scheme already existed by the time Kooshian made his first investment
in 2004, and when he later received the return of his investment plus profit. The court
did not abuse its discretion by admitting the testimony of the Trustee as a percipient
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witness with personal knowledge of the Debtor’s bank records,2 nor did it abuse its
discretion by admitting the opinion of financial expert Randy Sugarman, a certified
fraud examiner. Fed. R. Evid. 702, 703.
AFFIRMED.
2
Upon appointment, the bankruptcy trustee steps into the shoes of the debtor
and becomes the custodian of the debtor’s books, documents, records, etc. See 11
U.S.C. §§ 521(a)(4), 1108; In re Benny, 29 B.R. 754, 761 (N.D. Cal. 1983).
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