## Facts

- Elwood “Jack” Cluck, a Texas attorney, maintained valuable assets and interests, including multiple properties, an airplane, and classic automobiles.
- A Texas state court entered a $2.9 million civil judgment against Cluck, prompting him to seek bankruptcy protection while needing to avoid collection efforts.
- Days before filing Chapter 7, Cluck returned to a client a $50,000 promissory note he had received for legal services and pawned multiple high-value items (including three Jaguars and an airplane) for $32,000 while retaining a right (for himself or a designee) to reacquire them within a set period at a set price.
- Cluck filed a Chapter 7 petition in the Western District of Texas and was required to submit schedules of assets and a statement of financial affairs.
- He omitted from required filings the pawned assets and certain accounts receivable, including interests tied to the returned note.
- After discharge, Cluck received roughly $150,000 on previously undisclosed receivables, and his wife’s company reacquired the pawned items; these transactions were not disclosed to the trustee.
- Cluck was indicted for bankruptcy fraud under 18 U.S.C. § 152(1) (concealment of estate property) and § 152(3) (false statements in bankruptcy filings), convicted by a jury, sentenced to imprisonment, and ordered to pay restitution.

## Issues

1. Whether the evidence was sufficient for a rational jury to find Cluck “knowingly and fraudulently” concealed property of the bankruptcy estate and made false statements in bankruptcy filings under 18 U.S.C. § 152(1) and (3).
2. Whether Cluck’s pre-petition transactions and omissions could constitute criminal concealment where he claimed to believe the assets or interests were lawfully outside the bankruptcy estate.
3. Whether asserted trial, evidentiary, instructional, and sentencing errors required reversal or resentencing.

## Decision

- The Fifth Circuit affirmed the conviction and sentence in all respects.
- The court held the evidence permitted a rational jury to find that Cluck knowingly and fraudulently concealed estate property and made materially false statements/omissions in required bankruptcy disclosures.
- The court rejected Cluck’s arguments that his pre-petition transactions removed the interests from the estate or negated criminal intent.
- The court found no reversible error in jury instructions, evidentiary rulings, loss calculation, or restitution.

## Legal Principles

- Under 18 U.S.C. § 152(1), concealment includes placing assets or interests beyond the trustee’s or creditors’ reach while retaining a secret or beneficial interest.
- Under 18 U.S.C. § 152(3), knowingly and fraudulently making false statements or declarations in bankruptcy schedules or related filings is criminal.
- “Property of the estate” includes contingent, beneficial, and contractual interests existing at filing, including rights to reacquire transferred property and undisclosed accounts receivable.
- A Chapter 7 debtor has a broad duty of full and accurate disclosure; intentional omissions can establish concealment and false statements.
- Fraudulent intent may be inferred from circumstantial evidence, including timing of transfers, retention of benefits, post-discharge recovery of assets, nondisclosure to the trustee, and the debtor’s sophistication and knowledge of bankruptcy obligations.

## Conclusion

The Fifth Circuit upheld Cluck’s bankruptcy-fraud conviction and sentence, concluding that his pre-petition transactions and nondisclosures—paired with retained reacquisition rights and later recovery of value—supported findings that he knowingly and fraudulently concealed estate property and made false statements in violation of 18 U.S.C. § 152(1) and (3).


United States v. Cluck, 143 F.3d 174 (5th Cir. 1998)