United States Court of Appeals

For the Seventh Circuit

Chicago, Illinois 60604

Submitted November 6, 2015*

Decided November 9, 2015

Before

WILLIAM J. BAUER, Circuit Judge

JOEL M. FLAUM, Circuit Judge

DAVID F. HAMILTON, Circuit Judge

No. 14-2298

UNITED STATES OF AMERICA

ex rel. GLENN McCANDLISS,

Plaintiff-Appellee,

v.

ORAL SEKENDUR,

Defendant-Appellant.

Appeal from the United States

District Court for the Northern District 

of Illinois, Eastern Division.

No. 03 C 807

James F. Holderman,

Judge.

O R D E R

In 2007 the district court entered a judgment against Oral Sekendur and his 

brother under the False Claims Act, see 31 U.S.C. § 3729(a), after finding that the two men 

had induced the Social Security Administration to pay disability benefits to the brother 

even though he was not impaired. The brothers were deemed jointly and severally liable 

for over $1.5 million in damages. In supplementary enforcement proceedings, the 

district court, relying on the Federal Debt Collection Procedures Act, 28 U.S.C. §§ 3001 to 

 

* After examining the briefs and record, we have concluded that oral argument is 

unnecessary. Thus the appeal is submitted on the briefs and record. See FED. R. APP. P.

34(a)(2)(C).

NONPRECEDENTIAL DISPOSITION

To be cited only in accordance with Fed. R. App. P. 32.1
No. 14-2298 Page 2

3308, authorized the government to garnish funds from retirement accounts that 

Sekendur says are exempt. This appeal followed. We uphold the garnishment.

In the same year that the judgment was entered, the United States served a 

citation of assets on Smith Barney (which, to simplify, we will call Morgan Stanley in 

light of later mergers). Morgan Stanley responded that Sekendur had two Keogh 

accounts, a type of retirement account for persons who are self-employed. The 

government did not take further action, but then in 2012 the relator (the underlying 

action having been filed as a qui tam, see 31 U.S.C. § 3730(b)) asked the district court to 

conduct a hearing to determine if the funds in the accounts were exempt from collection. 

The district court referred the matter to a magistrate judge, see 28 U.S.C. § 636(b)(1)(B), 

who allowed the United States to revive the supplementary proceeding that was 

commenced in 2007 by serving the citation of assets. The government then moved under 

the FDCPA for an order of garnishment. See 28 U.S.C. § 3205. Sekendur responded that 

the Keogh accounts were exempt from garnishment because the FDCPA permits the 

debtor to shield property that, under state law, is exempt from collection. See 28 U.S.C. 

§ 3014(a)(2)(A). Illinois provides such exemptions, including for retirement plans, 735 

ILCS 5/12-1006(a), (b)(1), and $4,000 of personal property, id. § 5/12-1001(b).

In 2014, after allowing discovery, the magistrate judge conducted an evidentiary 

hearing. In a Report and Recommendation, the magistrate judge concluded that funds in 

Keogh accounts are exempt only to the extent those funds represent contributions within 

the annual limit in the Internal Revenue Code, which was 25% of self-employment 

income. The magistrate judge reasoned that Sekendur bore the burden of establishing 

that the account balances resulted from permissible contributions. Yet Sekendur 

produced very few account records, and, according to the magistrate judge, his 

testimony attributing the money to self-employment “lacked any sense of credibility.” 

As a result, the magistrate judge recommended that the government be permitted to 

garnish 76% of the total funds in the two accounts, less the $4,000 exemption for personal 

property (in all, $149,570).

Sekendur objected to the Report and Recommendation but did not obtain a 

transcript of the evidentiary hearing. He argued that the district court lacked 

subject-matter jurisdiction to order garnishment because, according to Sekendur, the 

government had waited too long before acting on the information received from

Morgan Stanley in 2007. Sekendur added that the magistrate judge should have placed 

the burden on the United States to prove that the accounts are not exempt. He also 

protested that he had not been allowed to cross-examine the government’s lawyer or its 
No. 14-2298 Page 3

witness, a paralegal who summarized documents obtained in discovery. But Sekendur 

did not object to the magistrate judge’s credibility assessment, except to say that the 

proposed finding “indicates that the court ignored documents” he introduced. The 

district court overruled Sekendur’s objections, adopted the Report and 

Recommendation, and ordered Morgan Stanley to turn over $149,570. (The parties do 

not say whether Morgan Stanley has complied.) The district court noted that, as to 

Sekendur’s objections about the evidentiary hearing, he had not provided a transcript.

On appeal Sekendur first renews his contention that the citation to discover assets 

had gone stale and, thus, deprived the district court of subject-matter jurisdiction. In the 

absence of a more specific federal provision, the FDCPA provides the exclusive civil 

procedures for the United States to collect a judgment. See 28 U.S.C. § 3001; United States 

v. Sheth, 759 F.3d 711, 716 (7th Cir. 2014). The Federal Rules of Civil Procedure apply to 

proceedings under the FDCPA, see 28 U.S.C. § 3003(f), and Rule 69 allows judgment 

creditors to use state supplementary proceedings to collect, see United States v. Gianelli, 

543 F.3d 1178, 1182 (9th Cir. 2008). When Morgan Stanley was served with the citation to 

discover assets, the government was relying on Rule 69(a) and Illinois Supreme Court 

Rule 277. And the latter rule provides, as a general matter, that a supplementary 

proceeding terminates automatically after six months. See ILL. SUP. CT. R. 277(f). On 

Sekendur’s view, then, the government’s years of inaction after learning about his Keogh 

accounts were fatal.

This argument fails for two reasons. First, the Illinois courts do not interpret 

Rule 277(f) so rigidly; a court may extend a supplementary proceeding beyond 

six months, so long as extensions do not constitute harassment of a party. See Levine v. 

Pascal, 236 N.E.2d 425, 431 (Ill. App. Ct. 1968) (“‘[U]nswerving obedience’ is not 

demanded where no material harm is done to any litigant.”); see also Sheth, 759 F.3d at 

717 (noting that proceedings under Rule 277 may be extended “as justice may require”). 

Second, and more importantly, we have said that Rule 277 concerns only the mechanics 

of collection and does not affect the jurisdiction of the federal courts. Laborers’ Pension 

Fund v. Pavement Maint., Inc., 542 F.3d 189, 193–94 (7th Cir. 2008). The district court had 

subject-matter jurisdiction to order garnishment of the Keogh accounts, not because of 

Rule 277 or some other state law, but because the court had ancillary jurisdiction to 

enforce its underlying judgment, as well as original jurisdiction over the government’s 

effort to collect a debt on its own behalf. See 28 U.S.C. § 1345; United States v. Vitek 

Supply Corp., 151 F.3d 580, 585–86 (7th Cir. 1998).
No. 14-2298 Page 4

Sekendur also contends that it was error to assign him the burden of establishing 

that his Keogh accounts were exempt from collection. But the district court properly 

concluded that under the FDCPA, when either party requests a hearing on the 

applicability of an exemption, “[u]nless it is reasonably evident that the exemption 

applies, the debtor shall bear the burden of persuasion.” 28 U.S.C. § 3014(b)(2). 

Sekendur’s entitlement to an exemption for the Keogh accounts was not “reasonably 

evident” because, under the Illinois statute, exempting a “retirement plan” requires 

more than a showing that funds are held in an account earmarked for retirement. The 

plan in question must be “intended in good faith to qualify as a retirement plan under 

applicable provisions of the Internal Revenue Code of 1986, as now or hereafter 

amended.” 735 ILCS 5/12-1006. The dispute in this case centered on whether Sekendur 

had violated the contribution limit for Keogh accounts, a question directly related to his 

assertion that the Morgan Stanley accounts qualified as retirement accounts. 

In the alternative, Sekendur contends that, if he did bear the burden of 

persuasion, he met that burden by submitting account statements showing a few 

legitimate contributions stretching back to 1991. Documents obtained in discovery, 

mostly year-end account statements that shed little light on what happened in between, 

evidence that Sekendur had opened one of the Keogh accounts in 1991 and the other in 

2005. But because the second account was funded entirely by a transfer from the first, the 

parties focused on the contributions made to the first account. That account was opened 

with $8,300 but, for reasons not apparent from the scant records, had grown to $53,677 

by the end of the same year. No further contribution is documented until $5,600 was 

added in 1997, yet by the end of that year the account balance was $94,520. The last 

verifiable contribution of self-employment income was made in 2000; the total of those

contributions was $27,500 and the balance at the end of that year, $124,654. The 

difference, the government insisted, could not be attributed to earnings alone. After 

2000, though, no additional contributions were made (from any source), but earnings 

increased the total in the two accounts to $202,067 by the time of the evidentiary hearing 

in December 2013.

Before and after the evidentiary hearing, Sekendur repeatedly asserted that the 

unexplained difference came, not exclusively from earnings, but from legitimate 

contributions of self-employment income over the course of his working years. In 

various written submissions he ventured to explain how in 1991—theoretically—he could

have rolled over other legitimate retirement funds into the first Keogh account to reach 

the year-end balance that is more than six times the single, verifiable contribution of 

$8,300 made when the account was opened. He also proposed that, if he did make excess 
No. 14-2298 Page 5

contributions in any year, those contributions would have been correctable through 

carry-forward and carry-back provisions in the tax code. Finally, Sekendur submitted an 

unfiled 1985 tax return with a transmittal letter from his accountant instructing him to 

make a $12,240 Keogh contribution before April 15, 1986.

Yet in his written submissions Sekendur did not say that he actually rolled over 

other retirement accounts, or that he carried forward or back an excess contribution, or

even that he followed his accountant’s advice to make a Keogh contribution in 1986. His 

hypothetical scenarios are irrelevant, and nothing in the record causes us to question the 

district court’s determination that Sekendur did not meet his burden of demonstrating 

that the funds in his two Keogh accounts represent only permissible earnings and 

associated earnings. Indeed, Sekendur has not given us a transcript of the evidentiary 

hearing, which would include his own testimony that the magistrate judge declared to 

be unworthy of belief. The missing transcript is reason enough to rule against Sekendur

(and prevents us from addressing his contention that the magistrate judge improperly 

curtailed cross-examination of the government’s witness). See Morisch v. United States, 

656 F.3d 522, 529 (7th Cir. 2011); RK Co. v. See, 622 F.3d 846, 852–53 (7th Cir. 2010).

Anyway, Sekendur waived objection to the adverse credibility finding by not 

specifically objecting to the Report and Recommendation on that ground. See 28 U.S.C. 

§ 636(b)(1); Flint v. City of Belvidere, 791 F.3d 764, 769 (7th Cir. 2015).

Accordingly, we uphold the district court’s garnishment order. We note that 

Sekendur devotes a significant portion of his brief objecting to the filing restriction this 

court entered against him as a sanction in December 2005. See Support Sys, Int’l, Inc. v. 

Mack, 45 F.3d 185 (1995). As we have explained already in our order dated July 23, 2014, 

this appeal is limited to review of the garnishment order and related proceedings. 

Sekendur was permitted to participate fully in those proceedings despite his (still 

unpaid) sanction. We have considered the other contentions he makes in his brief, and 

we conclude that none merits discussion.

AFFIRMED.