## Facts

- Sun Stereo, Inc. (SSI), a multi-state retail stereo business, faced severe financial distress and entered federal bankruptcy proceedings.
- Michael Sannes, SSI’s data-processing manager and a former employee of Robert A. Murray, introduced Murray to SSI management to help secure capital.
- SSI agreed to borrow $100,000 from Susan Watson (Murray’s stepdaughter and business associate), to be repaid in 13 weekly installments and secured by a pledge of 80% of SSI’s voting stock.
- SSI also agreed to lease a computer from Watson’s company and to pay Murray and Watson $21,000 in stereo equipment as three months’ rent.
- The government alleged Murray, James A. Moore, and Watson used these arrangements and related transactions to transfer and conceal SSI assets from the bankruptcy trustee and creditors.
- A grand jury charged: conspiracy to conceal bankruptcy assets (all defendants); substantive bankruptcy fraud counts and related document-destruction and obstruction counts (primarily Murray).
- The obstruction charges relied heavily on recorded conversations in which Murray told Sannes not to cooperate with investigators or testify and threatened to harm him if he did not comply.
- A jury convicted Murray on all charged counts; Moore on conspiracy and one substantive bankruptcy-fraud count; and Watson on conspiracy.

## Issues

1. Whether evidence seized from Murray’s residence should have been suppressed under the Fourth Amendment.
2. Whether the district court abused its discretion by permitting impeachment of Murray with a prior felony conviction under Federal Rule of Evidence 609.
3. Whether the district court erred in denying disclosure of earlier grand-jury transcripts absent a particularized need.
4. Whether the evidence was sufficient to support convictions for bankruptcy fraud, document destruction in bankruptcy, and obstruction-related offenses (including whether obstruction requires actual success).
5. Whether Moore received ineffective assistance of counsel under the Strickland standard.
6. Whether the evidence was sufficient to support the conspiracy conviction as to all defendants.

## Decision

- The Ninth Circuit affirmed all convictions.
- The court upheld denial of Murray’s suppression motion, finding no reversible Fourth Amendment error.
- The court found no abuse of discretion in allowing impeachment with Murray’s prior felony conviction under Rule 609.
- The court upheld denial of grand-jury transcripts because Murray failed to show a particularized need sufficient to overcome grand-jury secrecy.
- The court held the evidence was sufficient for the bankruptcy-fraud counts, including proof of knowing and fraudulent concealment/transfer of estate property and related document destruction.
- The court held the evidence was sufficient for obstruction counts based on Murray’s recorded instructions and threats toward Sannes; the statutes penalize endeavors to obstruct and do not require proof of actual obstruction.
- The court rejected Moore’s ineffective-assistance claim for failure to show deficient performance and prejudice.
- The court held circumstantial evidence permitted a rational jury to find an agreement to conceal assets and knowing participation by Murray, Moore, and Watson.

## Legal Principles

- Appellate sufficiency review asks whether, viewing the evidence in the government’s favor, any rational trier of fact could find the essential elements beyond a reasonable doubt.
- Disclosure of grand-jury materials requires a particularized need; speculative claims do not justify piercing grand-jury secrecy.
- Under Federal Rule of Evidence 609, impeachment by prior conviction is reviewed for abuse of discretion and depends on probative value versus unfair prejudice and limiting safeguards.
- Bankruptcy fraud under 18 U.S.C. § 152 requires proof of knowing and fraudulent concealment/transfer of bankruptcy estate property (and related acts such as destruction of bankruptcy-related records) with intent to defeat bankruptcy administration or defraud creditors/trustee.
- Obstruction statutes that criminalize an “endeavor” to interfere with testimony, cooperation, or an investigation do not require the government to prove the effort succeeded; attempts and efforts directed toward obstruction can complete the offense.

## Conclusion

The Ninth Circuit sustained convictions arising from a scheme to remove and conceal bankruptcy estate assets and from later efforts to impede investigation and testimony, holding that grand-jury secrecy was not overcome, evidentiary and suppression rulings were within discretion, and obstruction offenses were proved by an endeavor to interfere without requiring actual obstruction.


United States v. Murray, 751 F.2d 1528 (9th Cir. 1985)