FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

In re: JAYSON REYNOSO, 

Debtor,

FRANKFORT DIGITAL SERVICES, LTD.;

HENRY IHEJIRIKA,

Appellants, No. 04-17190

v. BAP No.  NC-03-01262-BSP SARA L. KISTLER*, United States

Trustee, OPINION

Appellee,

and

EXECUTIVE OFFICE OF UNITED

STATES TRUSTEE,

Trustee. 

Appeal from the Ninth Circuit

Bankruptcy Appellate Panel

Perris, Smith, and Brandt, Bankruptcy Judges, Presiding

Argued and Submitted

September 14, 2006—San Francisco, California

Filed February 27, 2007

Before: Betty B. Fletcher and Marsha S. Berzon, Circuit

Judges, and David G. Trager**, District Judge.

*Sara L. Kistler is substituted for her predecessor as United States

Trustee. Fed. R. App. P. 43(c)(2). 

** The Honorable David G. Trager, Senior District Court Judge for the

Eastern District of New York, sitting by designation. 

2189
Opinion by Judge B. Fletcher

2190 IN RE REYNOSO
COUNSEL

M. Jonathan Hayes, Woodland Hills, California, for the

defendants-appellants.

Catherine Y. Hancock (argued) and I. Glenn Cohen, Appellate Staff, U.S. Dept. of Justice Civil Division, Washington,

D.C., for the plaintiff-appellee. 

OPINION

B. FLETCHER, Circuit Judge: 

This appeal arises from an adversary proceeding initiated

by the United States Trustee (“Trustee”), during the bank2192 IN RE REYNOSO
ruptcy proceeding of Debtor Jayson Reynoso, against Henry

Ihejirika, d/b/a Frankfort Digital Services, Ltd. and Ziinet.com (collectively, “Frankfort”). 

The United States Bankruptcy Court for the Northern District of California found that Frankfort, a seller of web-based

software that prepares bankruptcy petitions, acted as a “bankruptcy petition preparer” within the meaning of 11 U.S.C.

§ 110 (2002)1 and violated the requirements thereof. The

bankruptcy court concluded that Frankfort had committed

fraudulent, unfair, or deceptive conduct, and had engaged in

the unauthorized practice of law. 

The Bankruptcy Court’s decision, including the relief

granted, was affirmed by the Bankruptcy Appellate Panel

(“BAP”) of the Ninth Circuit. Frankfort Digital Servs., Ltd. v.

Neary (In re Reynoso), 315 B.R. 544 (9th Cir. BAP 2004)

(amended op.). The case now comes before this court on

appeal. We have jurisdiction pursuant to 28 U.S.C. § 158(d),

and we independently review the bankruptcy court’s decision

—reviewing any conclusions of law de novo, while reviewing

findings of fact for clear error. See Burnett v. Resurgent Capital Servs. (In re Burnett), 435 F.3d 971, 975 (9th Cir. 2006);

Scott v. U.S. Trustee (In re Doser), 412 F.3d 1056, 1061 (9th

Cir. 2005). 

I.

During the relevant time period, Frankfort did business

under a variety of names including Ziinet.com and

700law.com. The company is owned and operated by Henry

Ihejirika. Ihejirika is not an attorney. 

1This case arose prior to the enactment and effective date of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), Pub. L. No. 109-8, 119 Stat. 23, and BAPCPA’s amendments to the

Bankruptcy Code are not relevant to the issues before us. Accordingly, all

references herein are to the pre-BAPCPA Code in effect in October 2002

when the adversary proceeding against Frankfort was filed. 

IN RE REYNOSO 2193
Frankfort sold access to websites where customers could

access browser-based software for preparing bankruptcy petitions and schedules, as well as informational guides promising advice on various aspects of relevant bankruptcy law. 

On January 30, 2002, debtor Jayson Reynoso accessed one

of Frankfort’s web sites—the “Ziinet Bankruptcy Engine.”

The site represented to potential customers, like Reynoso, that

its software system offered expertise in bankruptcy law:

Ziinet is an expert system and knows the law. Unlike

most bankruptcy programs which are little more than

customized word processors the Ziinet engine is an

expert system. It knows bankruptcy laws right down

to those applicable to the state in which you live.

Now you no longer need to spend weeks studying

bankruptcy laws.

It explained that its program would select bankruptcy exemptions for the debtor and would eliminate the debtor’s “need to

choose which schedule to use for each piece of information.”

The site also offered customers access to the “Bankruptcy

Vault”—a repository of information regarding “loopholes”

and “stealth techniques.” For example, according to the site,

the Vault would explain how to hide a bankruptcy from credit

bureaus and how to retain various types of property. 

Reynoso paid $219 for a license to access the Ziinet

Engine, including the Vault, for 60 days. The online software

prompted Reynoso to enter his personal information, debts,

income, assets, and other data into dialog boxes. The program

then used the data to generate a complete set of bankruptcy

forms. 

As promised by the site, the software selected particular

schedules and exemptions for Reynoso. For example, Reynoso’s Schedule C (“Property Claimed as Exempt”) specified

2194 IN RE REYNOSO
that he claimed an exemption under § 703.140(B)(5) of the

California Code of Civil Procedure. However, Reynoso testified that he did not type in this section number, and the bankruptcy court found that Reynoso “did not choose the

exemptions that showed up on this schedule.” 

Where the bankruptcy forms provided a space for the signature and social security number of any non-attorney petition

preparer, the software generated the response: “Not Applicable.” Question #9 on the Statement of Financial Affairs

required the debtor to “[l]ist all payments made [by] . . .

debtor to any persons, including attorneys, for consultation

concerning debt consolidation, relief under the bankruptcy

law or preparation of a petition in bankruptcy within one year

immediately preceding the commencement of this case.” The

software generated the following response:

Realizing that this document is signed under penalty

of perjury, I declare that I prepared my own bankruptcy by myself using a computer and that I was not

assisted by an attorney, paralegal or bankruptcy preparer. I downloaded the software into my computer’s

browser as a web page, typed in my bankruptcy

information and printed my bankruptcy documents

on my printer in the privacy of my home without any

human intervention other than mine. The software

printed the official Federal bankruptcy forms with

the information I typed in within a few seconds of

my pressing the print button and no one other than

myself inputted, edited or reviewed my bankruptcy

information or handled my bankruptcy documents at

any point in the process. The contents of my documents are based entirely on my own research and no

one gave me legal advice or told me to include or

omit any information from my documents. 

The paragraph makes no mention of the fee that Reynoso paid

to access Frankfort’s software. 

IN RE REYNOSO 2195
Reynoso printed the forms and filed his chapter 7 bankruptcy petition on February 28, 2002. During the first meeting

with creditors, the chapter 7 trustee noticed errors in the petition and, upon questioning Reynoso, learned that he had paid

for the assistance of an “online bankruptcy engine.” Following further investigation, the Trustee commenced the instant

adversary proceeding against Frankfort in October 2002. This

was one of numerous adversary proceedings against Frankfort

for violations of 11 U.S.C. § 110.2

On April 11, 2003, the bankruptcy court held that Frankfort

was collaterally estopped from challenging its status as a

bankruptcy petition preparer engaged in the unauthorized

practice of law. Alternatively, the court considered the merits

and found that Frankfort qualified as a bankruptcy petition

preparer, had violated the requirements placed on such preparers by § 110, had committed fraudulent, unfair, or deceptive conduct, and had engaged in the unauthorized practice of

law. The court found that Frankfort committed a total of nine

violations of 11 U.S.C. § 110(b), (c), and (f) in “each bankruptcy case filed by a Northern District of California debtor

who was [Frankfort’s] customer” and assessed fines accordingly. The court also ordered disgorgement of the entire fee

received from any debtor-customer in the Northern District of

California in the preceding twelve months, and permanently

enjoined Frankfort from acting as a bankruptcy petition preparer in the Northern District of California. Finally, the court

certified the fact of Frankfort’s fraudulent, unfair or deceptive

conduct to the district court for a determination of damages

under 11 U.S.C. § 110(i).

2Other cases include In re Pillot, 286 B.R. 157 (Bankr. C.D. Cal. 2002);

In re Briand, 02-21922 (Bankr. E.D. Pa. 2002); Vergos v. ZiiNet.com (In

re Liljeblad), 02-5377 (Bankr. W.D. Tenn. 2002); In re Tyler, 02-00889

(Bankr. S.D. Iowa 2003); In re Renaud, 02-04923 (Bankr. S.D. Iowa

2003); and Fokkena v. Ziinet.com (In re Shugart), 02-33427 (Bankr. D.

Minn. 2003). With the exception of Pillot, Frankfort failed to appear to

defend itself in these cases, resulting in default judgments. 

2196 IN RE REYNOSO
II.

In In re Pillot, 286 B.R. 157 (Bankr. C.D. Cal. 2002), the

bankruptcy court for the Central District of California held

that Frankfort, with its Ziinet Engine, was a bankruptcy petition preparer. Id. at 162. In addition, Frankfort admitted, and

the court found, that it had engaged in the unauthorized practice of law. Id. at 160-62. 

In the instant case, the bankruptcy court found that the doctrine of issue preclusion barred Frankfort from challenging

these conclusions, and the BAP agreed. Reynoso, 315 B.R. at

550-51. 

[1] Issue preclusion, or collateral estoppel, refers to “the

preclusive effect of a judgment in foreclosing relitigation of

issues that have been actually and necessarily decided in earlier litigation.” Frank v. United Airlines, Inc., 216 F.3d 845,

850 n.4 (9th Cir. 2000). Issue preclusion bars relitigation of

issues adjudicated in an earlier proceeding if three requirements are met:

(1) the issue necessarily decided at the previous

proceeding is identical to the one which is

sought to be relitigated; 

(2) the first proceeding ended with a final judgment on the merits; and 

(3) the party against whom [issue preclusion] is

asserted was a party or in privity with a party

at the first proceeding. 

Reyn’s Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746

(9th Cir. 2006); see Berr v. Fed. Deposit Ins. Corp. (In re

Berr), 172 B.R. 299, 305-06 (9th Cir. BAP 1994). Frankfort

does not dispute that it was a party to the action in Pillot and

that the disposition there was a final judgment on the merits.

IN RE REYNOSO 2197
The sole question is whether the issues decided in Pillot are

identical to those appealed here. 

Frankfort argues that the website accessed by Pillot differed

substantially from the website accessed by subsequent customers, such as Reynoso, because the Vault and other information “relating to bankruptcy in general” had been removed.3

The record, however, indicates that the Vault was advertised

to Reynoso, and the district court found that he, like Pillot,

accessed it. The evidence also shows that the process of using

Frankfort’s software and its output were the same as between

Reynoso and Pillot. Cf. Pillot, 286 B.R. at 159. 

[2] Although there is substantial support for a finding of

issue preclusion, we note that the record does not include a

complete print-out of the website as accessed by Pillot that

can be compared with the website as accessed by Reynoso.

Because there remains some possibility that, as Frankfort contends, the website changed significantly after Pillot accessed

it, we decline to hold that issue preclusion applies and instead

affirm the bankruptcy court’s and BAP’s decisions on the

grounds discussed infra. Cf. Berr, 172 B.R. at 306 (noting that

“[a]ny reasonable doubt as to what was decided by a prior

judgment should be resolved against giving it collateral estoppel effect”).

III.

A.

[3] Pursuant to 11 U.S.C. § 110(a)(1), a bankruptcy petition

preparer is “a person, other than an attorney or an employee

of an attorney, who prepares for compensation a document for

filing.” 11 U.S.C. § 110(a)(1).4

3Frankfort does not specify when this occurred but indicates that it was

sometime after October 2001 but “long before” October 2002. 

4A document for filing is “a petition or any other document prepared for

filing by a debtor in a United States bankruptcy court or a United States

district court in connection with a case under this title.” 11 U.S.C.

§ 110(a)(2). 

2198 IN RE REYNOSO
[4] Frankfort argues that the creation and ownership of a

software program used by a licensee to prepare his or her

bankruptcy forms is not preparation of a document for filing

under the statute. Whether a software-provider may qualify as

a bankruptcy petition preparer under 11 U.S.C. § 110(a)(1) is

a question of first impression in the Ninth Circuit. We hold

that the software at issue in this case qualifies as such. 

Frankfort charged fees to permit customers to access webbased software. Frankfort’s software solicited information

from the customers. Critically, it then translated that information into responses to questions on the bankruptcy forms, and

prepared the bankruptcy forms for filing using those

responses. As the BAP noted, “The software did not simply

place the debtors’ answers, unedited and unmediated, into

official forms where the debtors had typed them on a screen;

rather, it took debtors’ responses to questions, restated them,

and determined where to place the revised text into official

forms.’ ” Reynoso, 315 B.R. at 552. 

[5] In sum, for a fee, Frankfort provided customers with

completed bankruptcy petitions. Customers merely provided

the data requested by the software and printed the finished

forms. This is materially indistinguishable from other cases in

which individuals or corporations5 have been deemed bankruptcy petition preparers. See, e.g., Doser, 412 F.3d at 1059-

60. It goes without saying that the customer must provide data

to the preparer, and the customer’s role in printing or otherwise reproducing the forms before filing does not alter the

role of the preparer. Moreover, § 110 does not require that

bankruptcy petition preparers have in-person interactions with

5The term “person” in the Bankruptcy Code includes corporations. See

11 U.S.C. § 101(41) (“ ‘[P]erson’ includes individual, partnership, and

corporation . . . . .”); see also Consumer Seven Corp. v. U.S. Trustee (In

re Fraga), 210 B.R. 812, 817 (9th Cir. BAP 1997) (holding that a corporation engaged in the preparation of bankruptcy petitions is not exempt from

the definition of a bankruptcy petition preparer even though it is solely

owned and operated by an attorney). 

IN RE REYNOSO 2199
their customers. Cf. Ferm v. U.S. Trustee (In re Crowe), 243

B.R. 43, 49-50 (9th Cir. BAP 2000) (holding that the author

of an instructional book on bankruptcy petitions who guaranteed buyers of the book that he would complete their forms

for free if they were unable to do so themselves was, in fact,

presenting himself as a bankruptcy petition preparer as

defined by § 110(a)(1)), aff’d, 246 F.3d 673 (9th Cir. 2000)

(unpublished table decision); In re Doser, 281 B.R. 292, 303-

04 (Bankr. D. Idaho 2002) (reasoning that a franchisor who

receives information that was solicited in a face-to-face interaction between the franchisee and the customer and uses that

information to prepare bankruptcy documents, but never

meets with the customer directly, is a bankruptcy petition preparer), aff’d, 412 F.3d 1056. The bankruptcy court and BAP

did not err in concluding that Frankfort was a bankruptcy petition preparer. 

B.

Having affirmed the determination that Frankfort was a

bankruptcy petition preparer under 11 U.S.C. § 110, we now

consider the propriety of the fines and other sanctions

imposed by the bankruptcy court under the statute. 

[6] First, we find that the fines imposed for violations of 11

U.S.C. § 110(b), (c), and (f) were proper. Evidence of record

shows that bankruptcy petitions prepared by Frankfort did not

include the signature, name, address, or social security of the

preparer as required by § 110(b) and (c). Print-outs of the

website accessed by Reynoso also show that the words “law”

or “legal” were used in violation of § 110(f). Thus, the bankruptcy court did not err in imposing fines under these subsections. 

[7] Second, we reject Frankfort’s contention that the bankruptcy court’s holdings under § 110(i) and (h) were erroneous.

Section 110(i) permits a bankruptcy court, upon a finding that

a bankruptcy petition preparer has engaged in a fraudulent,

2200 IN RE REYNOSO
unfair, or deceptive act, to certify that fact to the district court

for a determination of damages. Section 110(j)(2)(B) authorizes a bankruptcy court to enjoin a person from acting as a

bankruptcy petition preparer upon a finding that she has continually engaged in, inter alia, violations of § 110 or any other

fraudulent, unfair, or deceptive conduct. 

[8] The bankruptcy court found that Frankfort made false

statements to the court and intentionally concealed its role as

a preparer. Reynoso, 315 B.R. at 553. Notably, the court

found that Frankfort repeatedly and intentionally failed to disclose its identity as a bankruptcy petition preparer on the filings it prepared and failed to disclose the compensation it

received for preparing the petitions as required by § 110(h).

The bankruptcy court and BAP deemed these ongoing acts, as

well as various representations by Frankfort (such as Frankfort’s claim that it could show debtors how to “[f]ile bankruptcy and keep it off your credit report!” or to “keep 3, 4, or

even 5 cars”), deceptive. Id.; cf. In re Kaitangian, 218 B.R.

102, 117 (Bankr. S.D. Cal. 1998) (holding that a bankruptcy

petition preparer’s failure to disclose all fees constituted an

unfair and deceptive act). We conclude that this finding was

supported by sufficient evidence and was proper. Correspondingly, we affirm the bankruptcy court’s certification to the

district court and issuance of an injunction.6

6Frankfort also seeks to challenge the bankruptcy court’s order of

accounting and disgorgement of excessive fees. The court found that the

value of Frankfort’s services was negligible, and therefore ordered disgorgement “to each Northern District of California debtor who was Defendants’ customer all fees received.” Frankfort did not challenge the

bankruptcy court’s finding that its services were—in essence—valueless,

when it appealed to the BAP, Reynoso, 315 B.R. at 553, or to this court.

Frankfort has therefore waived its opportunity to do so, and we have no

basis on which to reconsider the court’s factual finding. 

IN RE REYNOSO 2201
IV.

[9] Since “bankruptcy petition preparers” are—by

definition—not attorneys, they are prohibited from practicing

law. Cf., e.g., In re Bernales, 345 B.R. 206, 216 (Bankr. C.D.

Cal. 2006) (“The law is clear: ‘[T]he services of bankruptcy

petition preparers are strictly limited to typing bankruptcy

forms.’ ” (quoting Kaitangian, 218 B.R. at 113)); H.R. Rep.

No. 103-835, at 56 (1994), as reprinted in 1994 U.S.C.C.A.N.

3340, 3365 (“While it is permissible for a petition preparer to

provide services solely limited to typing, far too many of

them also attempt to provide legal advice and legal services

to debtors.”). 

[10] We look to state law for guidance in determining

whether Frankfort has engaged in the unauthorized practice of

law. See Taub v. Weber, 366 F.3d 966, 968-69 (9th Cir. 2004).7

The parties agree that California law applies. 

[11] California courts have long accepted that, in a general

sense, “the practice of law . . . includes legal advice and counsel and the preparation of legal instruments and contracts.”

Baron v. City of L.A., 469 P.2d 353, 357 (Cal. 1970) (noting

that this definition was adopted as early as 1922). But they

have recognized too that “ascertaining whether a particular

activity falls within this general definition may be a formidable endeavor.” Id. at 358; see People v. Landlords Prof’l

Servs., 215 Cal. App. 3d 1599, 1605 (1989) (observing that

“whether any given activity is an unauthorized practice of law

depends upon the context and situation involved”). 

7As in Taub, when the present case was decided by the bankruptcy

court, § 110 did not specifically prohibit the unauthorized practice of law.

It stated only, “Nothing in this section shall be construed to permit activities that are otherwise prohibited by law, including rules and laws that prohibit the unauthorized practice of law.” 11 U.S.C. § 110(k) (2002). In

2005, § 110 was amended to bar bankruptcy petition preparers from providing legal advice. 11 U.S.C. § 110(e)(2). 

2202 IN RE REYNOSO
Determining whether particular assistance rendered in the

preparation of legal forms constitutes the unauthorized practice is often especially challenging. Cf. Landlords Prof’l

Servs., 215 Cal. App. 3d at 1605-09 (observing, after reviewing prior cases, that merely clerical preparation services do

not constitute the practice of law, and that impersonal instruction on form completion—such as may appear in a detailed

manual—may also be permissible). 

Several features of Frankfort’s business, taken together,

lead us to conclude that it engaged in the unauthorized practice of law. To begin, Frankfort held itself out as offering

legal expertise. Its websites offered customers extensive

advice on how to take advantage of so-called loopholes in the

bankruptcy code,8 promised services comparable to those of

a “top-notch bankruptcy lawyer,” and described its software

as “an expert system” that would do more than function as a

“customized word processor[ ].” 

The software did, indeed, go far beyond providing clerical

services. It determined where (particularly, in which schedule) to place information provided by the debtor, selected

exemptions for the debtor and supplied relevant legal citations. Providing such personalized guidance has been held to

constitute the practice of law. See, e.g., Kaitangian, 218 B.R.

at 110 (“[A]dvising of available exemptions from which to

choose, or actually choosing an exemption for the debtor with

no explanation, requires the exercise of legal judgment

beyond the capacity and knowledge of lay persons.”); In re

Anderson, 79 B.R. 482, 484-85 (Bankr. S.D. Cal. 1987) (finding that a non-lawyer had rendered legal services when he

advised customer as to the consequences of filing for bankruptcy, solicited information from her and prepared the bank8Frankfort’s Bankruptcy Vault claimed to show customers how to structure bankruptcy “so that it is . . . invisible to Experian, Trans Union, and

Equifax, etc.”, to “reestablish good credit in 3 months instead of 3 years,”

and other such feats. 

IN RE REYNOSO 2203
ruptcy forms, and selected her exemptions); see also Hastings

v. U.S. Trustee (In re Agyekum), 225 B.R. 695, 701 (9th Cir.

BAP 1998) (noting that bankruptcy petition preparers are prohibited from advising debtors as to the selection of exemptions under the Bankruptcy Petition Preparer Guidelines for

the Northern District of California); People v. Sipper, 142

P.2d 960, 962 (Cal. App. Dep’t Super. Ct. 1943) (holding that

the “clerical service” of filling out forms is not the practice of

law, but that a defendant who goes further and makes determinations about the type of document appropriate engages in

legal practice), disapproved on other grounds by Murguia v.

Mun. Court, 540 P.2d 44 (Cal. 1975). 

[12] Frankfort’s system touted its offering of legal advice

and projected an aura of expertise concerning bankruptcy

petitions; and, in that context, it offered personalized—albeit

automated—counsel. Cf. Landlords Prof’l Servs., 215 Cal.

App. 3d at 1609. We find that because this was the conduct

of a non-attorney, it constituted the unauthorized practice of

law.9

The judgment of the Bankruptcy Appellate Panel of the

Ninth Circuit is AFFIRMED. 

9Since we are asked only to consider the facts of the case presented (i.e.,

Frankfort’s system), we express no view as to whether software alone, or

other types of programs, would constitute the practice of law. 

2204 IN RE REYNOSO