2007 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

9-21-2007

USA v. Chang

Precedential or Non-Precedential: Non-Precedential

Docket No. 06-3630

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Recommended Citation

"USA v. Chang" (2007). 2007 Decisions. Paper 399.

http://digitalcommons.law.villanova.edu/thirdcircuit_2007/399
NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

__________

No. 06-3630

__________

JOYCE P. CHANG, ELAINE Y. CHANG 

a/k/a ELAINE Y. DARER, MICHAEL T. CHANG, 

and CHERYL A. CHERNE,

 Defendants - Appellants,

vs.

UNITED STATES OF AMERICA,

Plaintiff - Appellee.

__________

On Appeal from the United States District Court 

for the District of New Jersey

(D.C. Civ. No. 02-4834)

District Judge: Honorable Garrett E. Brown, Jr.

__________

Submitted Under Third Circuit L.A.R. 34.1(a)

September 20, 2007

Before: SLOVITER, SMITH, and GARTH, Circuit Judges.

(Opinion Filed: September 21, 2007)

 __________

OPINION

__________
-1-

Re: GARTH, Circuit Judge

This appeal essentially involved a fraudulent transfer of monies where no

consideration was paid by the recipients. The facts, which are somewhat convoluted, are

taken primarily from the District Court’s opinion, inasmuch as the briefs of the parties

were not helpful in this respect. However, inasmuch as we write only for the parties, we

will not describe the facts in detail but only in summary fashion.

The defendant, David Chang, the father of the three Chang children, and a close

friend, Cheryl Cherne, received a total of $525,000 from David Chang through his two

alter ego corporations, “Saska Corporation” and “Dakota Management, Inc.” 

The defendant, David Chang, through his alter ego company, “River Road Realty

Development Corp.,” had generated over $17 million from the sale of a property. After

the payment of various costs, liens and expenses, the defendant, David Chang, paid

$441,750 into “Dakota”and $1,630,832.99 into “Saska.” Thereafter, “Saska” sent

$150,000 to Joyce Chang and $120,000 to Michael Chang. Later “Saska” paid $120,000

to Elaine Chang and “Dakota” paid $75,000 to Cheryl Cherne. “Dakota” also paid

$60,000 to Elaine Chang. No consideration was given for any of these transfers which

total the sum of $525,000 noted above. At the time of the transfers, David Chang was

insolvent.
-2-

The Small Business Administration holds two judgments against the defendant,

David Chang. One in the amount of 2.1 million dollars and the second in the aggregate

amount of approximately $995,000. The government, on behalf of the Small Business

Administration to whom David Chang owed monies, sought to recover the $525,000 as

fraudulent transfers under New Jersey law. Various defenses were raised by the

defendants, largely centered on the fact that David Chang was not the alter ego of his

entities; that David Chang’s payments were to satisfy financial obligations to his

children; that David Chang had a debt obligation to Cheryl Cherne, that David Chang

was not insolvent; etc., etc. 

In a reasoned and well crafted opinion the District Court rejected all of David

Chang’s defenses and granted summary judgment in favor of the United States. In our

review, we applied the same plenary standard that the District Court applied. Having

independently examined the record and the briefs, we are satisfied that the District

Court’s opinion and Judgment should be affirmed substantially for the reasons stated in

the District Court’s opinion. 

The Order granting summary judgment in favor of the United States will be

affirmed.