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TO CONSIDER POSSIBLE IMPEACHMENT OF 

UNITED STATES DISTRICT JUDGE G. THOMAS 

PORTEOUS, JR. (PART II) 

HEARING 

BEFORE THE

TASK FORCE ON JUDICIAL IMPEACHMENT 

OF THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

DECEMBER 8, 2009 

Serial No. 111–44 

Printed for the use of the Committee on the Judiciary 

( 

Available via the World Wide Web: http://judiciary.house.gov 

(II) 

COMMITTEE ON THE JUDICIARY 

JOHN CONYERS, JR., Michigan, Chairman 

HOWARD L. BERMAN, California 

RICK BOUCHER, Virginia 

JERROLD NADLER, New York 

ROBERT C. ‘‘BOBBY’’ SCOTT, Virginia 

MELVIN L. WATT, North Carolina 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

MAXINE WATERS, California 

WILLIAM D. DELAHUNT, Massachusetts 

ROBERT WEXLER, Florida 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

PEDRO PIERLUISI, Puerto Rico 

MIKE QUIGLEY, Illinois 

JUDY CHU, California 

LUIS V. GUTIERREZ, Illinois 

TAMMY BALDWIN, Wisconsin 

CHARLES A. GONZALEZ, Texas 

ANTHONY D. WEINER, New York 

ADAM B. SCHIFF, California 

LINDA T. SA ́ NCHEZ, California 

DEBBIE WASSERMAN SCHULTZ, Florida 

DANIEL MAFFEI, New York 

LAMAR SMITH, Texas 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

HOWARD COBLE, North Carolina 

ELTON GALLEGLY, California 

BOB GOODLATTE, Virginia 

DANIEL E. LUNGREN, California 

DARRELL E. ISSA, California 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio 

TED POE, Texas 

JASON CHAFFETZ, Utah 

TOM ROONEY, Florida 

GREGG HARPER, Mississippi 

PERRY APELBAUM, Majority Staff Director and Chief Counsel 

SEAN MCLAUGHLIN, Minority Chief of Staff and General Counsel 

TASK FORCE ON JUDICIAL IMPEACHMENT

ADAM B. SCHIFF, California, Chairman 

SHEILA JACKSON LEE, Texas 

WILLIAM D. DELAHUNT, Massachusetts 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

PEDRO PIERLUISI, Puerto Rico 

CHARLES A. GONZALEZ, Texas 

BOB GOODLATTE, Virginia 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

DANIEL E. LUNGREN, California 

J. RANDY FORBES, Virginia 

LOUIE GOHMERT, Texas 

(III) 

C O N T E N T S 

DECEMBER 8, 2009 

Page 

OPENING STATEMENTS 

The Honorable Adam B. Schiff, a Representative in Congress from the State 

of California, and Chairman, Task Force on Judicial Impeachment ............... 1 

The Honorable Bob Goodlatte, a Representative in Congress from the State 

of Virginia, and Ranking Member, Task Force on Judicial Impeachment ...... 2 

WITNESSES 

Mr. DeWayne Horner, Special Agent, Federal Bureau of Investigation, New 

Orleans, LA 

Oral Testimony ..................................................................................................... 8 

Mr. Claude Lightfoot, Attorney, New Orleans, LA 

Oral Testimony ..................................................................................................... 41 

The Honorable Duncan Keir, Chief Judge, United States Bankruptcy Court, 

District of Maryland 

Oral Testimony ..................................................................................................... 67 

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

Material submitted by Kirsten Konar, Counsel, Task Force on Judicial Impeachment ............................................................................................................. 10 

Material submitted by the Honorable Sheila Jackson Lee, a Representative 

in Congress from the State of Texas, and Member, Task Force on Judicial 

Impeachment ........................................................................................................ 39 

APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD

Exhibits Accompanying Statement of Alan Baron, Esq., Counsel, Task Force 

on Judicial Impeachment .................................................................................... 83 

Exhibits Accompanying Testimony of DeWayne Horner, Special Agent, Federal Bureau of Investigation, New Orleans, LAName here .............................. 112 

Exhibits Accompanying Testimony of Claude Lightfoot, Attorney, New Orleans, LA .................................................................................................................. 133 

(1) 

TO CONSIDER POSSIBLE IMPEACHMENT OF 

UNITED STATES DISTRICT JUDGE G. THOMAS PORTEOUS, JR. (PART II) 

TUESDAY, DECEMBER 8, 2009 

HOUSE OF REPRESENTATIVES, 

TASK FORCE ON JUDICIAL IMPEACHMENT

COMMITTEE ON THE JUDICIARY, 

Washington, DC. 

The Task Force met, pursuant to notice, at 10:10 a.m., in room 

2141, Rayburn House Office Building, the Honorable Adam B. 

Schiff (Chairman of the Task Force) presiding. 

Present: Representatives Schiff, Jackson Lee, Johnson, Sensenbrenner, Goodlatte, Lungren and Gohmert. 

Staff Present: Alan Baron, Counsel; Harold Damelin, Counsel; 

Mark H. Dubester, Counsel; Kirsten Konar, Counsel; and Jessica 

Klein, Staff Assistant. 

Also Present: Richard W. Westling, counsel for Judge G. Thomas 

Porteous, Jr. 

Mr. SCHIFF. This hearing of the House Judiciary Committee Task 

Force on Judicial Impeachment will now come to order. Without objection, the Chair will be authorized to declare a recess of the hearing. 

I will now recognize myself for an opening statement. 

Today the Task Force will continue its inquiry into whether 

United States District Court Judge Thomas Porteous should be impeached by the U.S. House of Representatives. At our last hearing, 

we focused on allegations that Judge Porteous violated the public 

trust, law, and ethical canons by presiding over the case In re: 

Liljeberg Enterprises, Inc. 

Today’s hearing will focus on allegations that the judge violated 

the public trust, law, and ethical canons by making false and misleading statements, including the concealment of debts under oath 

and in disregard of a bankruptcy court’s orders. The Judicial Conference, in its referral of this matter to Congress, noted that this 

conduct allowed Judge Porteous to obtain a discharge of his debts 

while continuing his lifestyle at the expense of his creditors. 

We will follow the same format used in our last round of hearings. After all the Members who wish to make an opening statement have been given the opportunity to do so, Task Force counsel 

Alan Baron will brief us to provide a general overview of the matter under consideration today. After his presentation, the first witness will be sworn in and questioned for up to 20 minutes by a 

2 

Task Force counsel. After that initial period, Members will be recognized for questions under the 5-minute rule. Judge Porteous’s 

counsel will then be permitted to question the witness for 10 minutes. Finally, Members will be permitted to ask any further questions of the witness. After the Task Force has concluded with one 

witness, the next will be called. 

I now recognize my colleague Mr. Goodlatte, the distinguished 

Ranking Member of the Task Force, for his opening remarks. 

Mr. GOODLATTE. Thank you, Mr. Chairman, for continuing this 

series of hearings. 

On June 17, 2008, the Judicial Conference of the United States 

certified to the U.S. House of Representatives that consideration of 

impeachment of U.S. District Judge G. Thomas Porteous may be 

warranted. This certification was the culmination of an investigation and formal complaint by the Department of Justice, an investigation and final report by a special investigatory committee appointed by the Fifth Judicial Circuit, and consideration and vote by 

the Judicial Council of the Judicial Conference of the United 

States. 

The Task Force on Judicial Impeachment was then created by 

the House Judiciary Committee to further investigate the allegations of misconduct by Judge Porteous to determine if impeachment 

is warranted. The Task Force has been working with law enforcement and judicial officials, has conducted numerous interviews, 

taken depositions from key witnesses, and gathered evidence and 

transcripts from previous investigations. These efforts have uncovered a large amount of information, including new evidence that 

was not uncovered in previous investigations. 

We are now in the process of holding a series of hearings, each 

examining a separate aspect of alleged misconduct by Judge 

Porteous. Today’s hearing will focus on the potential misconduct of 

Judge Porteous during his bankruptcy filings and proceedings. 

The allegations against Judge Porteous during this timeframe include that he filed for bankruptcy under a false name, that he hid 

income and assets from the bankruptcy court, that he failed to disclose certain preferential payments to creditors, and that he continued to incur debt in violation of a court order prohibiting him from 

incurring any new debt after he had filed for bankruptcy. 

We will hear from witnesses who have firsthand knowledge of 

Judge Porteous’s conduct, as well as a Federal bankruptcy judge 

who has expert knowledge of bankruptcy laws and procedures. 

It is again worth noting that Judge Porteous was extended an invitation to come make a statement before the Task Force and respond to questions, but has so far declined to do so. It is also worth 

noting that the Task Force has permitted Judge Porteous’s counsel 

to ask questions of the witnesses today. 

If the evidence shows that wrongdoing occurred, then the Task 

Force will make the appropriate recommendations to the full Judiciary Committee, and we will have more work to do. I look forward 

to hearing from the witnesses and rooting out the facts in an objective manner. 

Mr. SCHIFF. I thank the gentleman. 

Would any other Member like to be recognized? 

3 

Seeing none, we will now hear a brief introduction to the factual 

predicate from special impeachment counsel Alan Baron. Mr. 

Baron, have a seat and please proceed. 

Mr. BARON. Thank you, Mr. Chairman. 

You may recall at the last hearing we discussed Judge Porteous’s 

deteriorating financial condition during the Liljeberg case. As you 

can see, his credit card debt of $44,000 at year-end 1996 by April 

of 2000 was $153,000, and his IRA balance had gone from $59,000 

down to $12,000. 

Judge Porteous’s financial condition continued to deteriorate 

from there. One year later when he filed for bankruptcy, Judge 

Porteous showed $196,246 in unsecured credit card debt. You can 

see that up on the PowerPoint. 

Judge Porteous filed for Chapter 13 bankruptcy on March 28, 

2001, in large part, it appears, because of his substantial gambling 

activities. The FBI did a partial analysis of Judge Porteous’s credit 

card records and bank account records between—for the period 

July 1995 and July of 2000, and what that analysis showed was 

that approximately $66,000 in gaming charges appeared on Judge 

Porteous’s credit card statements, and Judge Porteous wrote checks 

or made cash withdrawals at casinos for an additional $27,700, so 

there is a minimum total of $93,000 in gambling charges and related gaming expenses during that period. 

Now, I emphasize this analysis did not examine all of Judge 

Porteous’s credit cards and other accounts, so ultimately we expect 

that the grand total of debt related to gaming for that period is 

much higher. 

In the summer of 2000, Judge Porteous retained attorney Claude 

Lightfoot as his bankruptcy counsel, and Mr. Lightfoot is here 

today and is prepared to testify later today. At this early stage of 

the representation of Judge Porteous, Mr. Lightfoot specifically told 

the judge he should not incur any more debt going forward. We 

have Mr. Lightfoot’s testimony in the fifth circuit, where he says, 

‘‘I remember telling him at the workout stage, don’t make the debt. 

If you can’t afford to pay it, or they are not trying to solve the problem short of bankruptcy with us, stop paying them, but by no 

means incur any more debt at this point.’’ 

Now, it was Mr. Lightfoot’s job to help Judge Porteous prepare 

a full and complete bankruptcy petition, but as it turns out, Judge 

Porteous was less than candid with Mr. Lightfoot regarding his 

debts and other activities. The testimony today will show that, 

among other things, Judge Porteous failed to tell Mr. Lightfoot 

about, one, the fact that the judge gambled or the existence of any 

gambling losses; two, that he was paying off credit cards and gambling debts at casinos immediately, literally the day before he filed 

for bankruptcy; third, Judge Porteous did not tell Lightfoot that he 

expected a $4,000 tax refund from the year 2000, and he did not 

disclose his increased judicial salary in 2001. 

In addition to failing to inform his bankruptcy counsel about 

these relevant facts, which have an impact on the veracity of the 

schedules ultimately filed, Judge Porteous also disregarded Mr. 

Lightfoot’s advice that he should not be accruing additional debt. 

One specific type of debt that Judge Porteous continued to accrue 

in the months leading up to his bankruptcy and also after his 

4 

bankruptcy was filed were casino markers. Judge Porteous himself—and this is important so there not be any dispute about this— 

Judge Porteous himself has acknowledged a casino marker is a 

form of debt. 

At the fifth circuit he was presented with a definition of what a 

marker is, and that is that it is credit extended by a gambling establishment, such as a casino, that enables the customer to borrow 

money from the casino. The marker acts as the customer’s check 

or draft to be drawn upon the customer’s account at a financial institution. Should the customer not repay his or her debt to the casino, the marker authorizes the casino to present it to the financial 

institution or bank for negotiation and draw upon the customer’s 

bank account any unpaid balance after a fixed period of time. 

Judge Porteous was asked, is that an accurate definition? He answers, I believe that is correct. It probably was contained in the 

complaint or the second complaint. There is a definition contained. 

And ultimately he is asked, do you have any quarrel with that 

definition? And he says, no. That is important to keep in mind as 

we go through the history of Judge Porteous’s activities, because 

there are a lot of gambling markers involved. 

Judge Porteous’s activities in the period leading up to his bankruptcy demonstrate Judge Porteous’s disregard for his own deteriorating financial condition and his desire to keep gambling, despite 

the imminent bankruptcy. For example, remember, he files for 

bankruptcy on March 28, 2001. One month earlier, February 27, 

2001, he gambles at the Grand Casino Gulfport and takes out 

$2,000 in markers. He doesn’t repay those markers until April 5 

and 6 of 2001, after his original bankruptcy petition was filed. Remember, he doesn’t tell his bankruptcy counsel about this. It is not 

going to be reflected on his bankruptcy schedules. 

On March 2, 2001, Judge Porteous requested a credit limit increase at the Treasure Chest Casino from $3,000 to $4,000, and 

then he takes out $3,500 in markers from the casino. He leaves the 

casino that day owing $1,500, which he repays on March 27, 2001, 

the day before he files for bankruptcy. Again, he doesn’t tell his 

bankruptcy counsel about it, so it is not going to appear on his 

schedules, as well it should have been. 

Now, Judge Porteous, as I said, filed his initial Chapter 13 bankruptcy on March 28, 2001, and as we saw from our hearings last 

time, he files the petition under a false name, Ortous, O-R-T-O-US. The initial petition also lists a P.O. Box address instead of Judge 

Porteous’s normal residential address. This P.O. Box was opened 

by Judge Porteous just 8 days earlier. It was an intentional thing 

to go out and get a P.O. Box to be used in the filing of this initial 

petition. 

Now, Judge Porteous should have listed his new P.O. Box address in the mailing address field and should have listed his residential address in the street address field, but he doesn’t do that. 

So anybody looking at this or reporting it in the press would see 

Ortous as the debtor who is filing and just the P.O. Box. You 

wouldn’t even know where the person lived. I would note further 

that Judge Porteous signed his initial bankruptcy petition under 

penalty of perjury. 

5 

On April 9, 2001, Judge Porteous files an amended bankruptcy 

petition. He corrects the false name, and he includes his residential 

address instead of the P.O. Box. Also on April 9th he files his 

Chapter 13 schedules and his statement of financial affairs. Let’s 

look at those schedules. 

The evidence shows that Judge Porteous’s Chapter 13 schedules 

contain numerous, we think at least seven, false statements or 

omissions, all of which are made under the penalty of perjury. I am 

going to address just a few of them here. 

Schedule B is where you list personal property. Category 17 on 

Schedule B required Judge Porteous to list ‘‘other liquidated debts 

owing the debtor, including tax refunds.’’ Judge Porteous checked 

none. You can see the X should be in the column ‘‘none’’ in response to this category. So he is saying, there is no tax refund I 

am expecting. 

However, just 17 days before filing his bankruptcy schedules, 

Judge Porteous submitted his tax return for the year 2000 and 

sought a tax refund in the amount of $4,143.72. That tax refund 

was electronically deposited into Judge Porteous’s Bank One checking account on April 13, 2001, just 4 days after he had filed his 

bankruptcy schedules. None of that is ever disclosed to his bankruptcy counsel, and, of course, it is never reflected anywhere in the 

bankruptcy schedules. 

Schedule I of the bankruptcy petition is supposed to list the current income of the individual debtor. It asks the debtor to list his 

current monthly gross wages and also his monthly net wages. Instead of listing his 2001 salary on Schedule I, Judge Porteous listed 

his monthly income from calendar year 2000, which was several 

hundred dollars a month less than what he was making at the time 

he was filing his bankruptcy schedule. So, by understating his judicial income and concealing his tax refund, Judge Porteous concealed around $7,000 in 2000 alone that should have been made 

available to his creditors. 

Additionally, an FBI financial analyst determined that Judge 

Porteous’s bank records from 2001 revealed yet another $4,600 in 

untraceable cash deposits. So the grand total, at a minimum, of 

concealed sources of income is about $12,000 for that year, which 

should have been available for creditors. Again, Judge Porteous 

signs his bankruptcy schedules under penalty of perjury. He signs 

it despite all of the false statements and omissions that are contained in those documents. 

If we turn to Judge Porteous’s statement of financial affairs, 

which is another document that is filed in conjunction with the 

bankruptcy, it contained at least three false statements or omissions made under penalty of perjury. 

Question 3 talks about payments to creditors. It required Judge 

Porteous to list all payments of debts aggregating more than $600 

to any creditor which were made within 90 days immediately preceding the commencement of the bankruptcy case. In response to 

this question, Judge Porteous writes in, ‘‘Normal installments.’’ 

You will hear from a witness what the term ‘‘normal installments’’ normally encompasses. But this response was false, because, for example, Judge Porteous made a lump sum payment of 

6 

$1,500 to the Treasure Chest Casino on March 27, 2001, the day 

before he filed for bankruptcy. It is nowhere listed in the schedule. 

Question 8 required Judge Porteous to list all losses, including 

specifically gambling losses, within the year immediately preceding 

the bankruptcy filing. In response to this question, Judge Porteous 

checks ‘‘none.’’ But an analysis of Judge Porteous’s gambling in the 

year preceding his bankruptcy performed by the FBI revealed that 

Judge Porteous had a net gambling loss of $6,233.20 over the 

course of that year, and that is giving him the benefit of—actually 

his total losses were more like $12,000, but we are netting out the 

figure. It comes out to approximately $6,200. Again, Judge 

Porteous signs his statement of financial affairs under the penalty 

of perjury that all the answers in the document are true and correct. 

Despite the fact that Judge Porteous filed for bankruptcy protec- tion and claimed to have over $350,000 in total liabilities, both secured and unsecured, Judge Porteous continued to gamble and incurred thousands of dollars in additional debt immediately following his bankruptcy filing. For example, he went on four gambling trips to casinos between April 7, 2001—remember, he filed for 

bankruptcy on March 28—and May 7, 2001, during which he took 

out a total of $8,000 in markers. 

On April 30, 2001, roughly a month after filing for bankruptcy, 

Judge Porteous also submitted a casino credit application at 

Harrah’s Casino and requested a $4,000 credit limit, and on the application, curiously, he puts down zero dollars for indebtedness, despite the fact that several weeks earlier he had listed his total unsecured debt as $196,246. And on that same day of April 30th, 

Judge Porteous proceeded to take out $1,000 in markers at 

Harrah’s, which he doesn’t pay back until May 30, 2001. 

Now, on May 9, 2001, a creditors meeting was held which was 

presided over by Judge Porteous’s bankruptcy trustee. At that 

meeting he was given a copy of a pamphlet entitled ‘‘Your Rights 

and Responsibilities in Chapter 13.’’ Section 6 of the pamphlet specifically states, ‘‘You may not borrow money or buy anything on 

credit while in Chapter 13 without permission of the bankruptcy 

court. This includes the use of credit cards or charge accounts of 

any kind.’’ Also at the creditors meeting, the bankruptcy judge specifically told Judge Porteous he is on ‘‘a cash basis now.’’ 

Despite the clear instructions from the bankruptcy trustee and 

the language in the pamphlet that Judge Porteous should not be 

incurring any additional debt, Judge Porteous continued to gamble 

on credit, using markers. For example, he goes on three gambling 

trips to casinos between May 16, 2001, and June 20, 2001, during 

which he takes out a total of $2,000 in markers. 

On June 28, 2001, the U.S. bankruptcy judge, William Greendyke, signed Judge Porteous’s confirmation order. That order clearly stated the debtor shall not incur additional debt during the term 

of this plan except upon written approval of the trustee, and Judge 

Porteous admitted during his testimony before the fifth circuit special committee that he understood Judge Greendyke’s order. 

He is asked: ‘‘Are you familiar with the order signed by bankruptcy Judge Greendyke? It is ordered that, ‘going down to number 

4,’ the debtor shall not incur additional debt during the term of this 

7 

plan except upon written approval of the trustee. Did I read that 

correctly?’’ 

Answer by Judge Porteous: ‘‘You did.’’ 

‘‘Was that your understanding at the time in the order?’’ 

‘‘It was.’’ 

During the fifth circuit hearing, Judge Greendyke was asked 

about his decision to sign the Porteous confirmation order, and he 

provided the following testimony. He is asked: ‘‘Given the sum of 

these events, the false filing of the name on the initial petition, the 

omission of the tax refund on the schedules where it should be 

noted, the preferred payment to certain creditors, given the sum of 

those events, had you known that, what would have been your 

course of action while you were the judge supervising that bankruptcy? Had you known all those events, what action would you 

have taken?’’ 

Judge Greendyke’s answer was: ‘‘If I had been aware of those 

items prior to the signing of the confirmation order, I would not 

have signed the confirmation order. I would probably have sua 

sponte objected on the basis of lack of good faith.’’ 

Then the question: ‘‘In a bankruptcy filing, is good faith on behalf of the debtor one of the key elements that a judge and the 

trustee rely on?’’ 

Answer: ‘‘It is a confirmation requirement.’’ 

Question: ‘‘Okay. It is required the judge list all of his assets, 

bank accounts, and that his true income be listed; is that correct?’’ 

‘‘Yes, that is correct in any case. Truth and candor in connection 

with any bankruptcy proceeding is paramount to maintaining the 

integrity of the entire process.’’ 

Now, Judge Porteous was in bankruptcy for 3 full years after 

Judge Greendyke signed that confirmation order on June 28, 2001. 

During the first year alone, Judge Porteous violated the confirmation order on at least 17 different occasions. 

For example, Judge Porteous took out 42 markers at 4 different 

casinos during 14 different gambling trips. He also opened up a 

new low-limit credit card, and he used the card regularly throughout the bankruptcy. And he applied to increase his credit limit at 

one of the casinos where he gambled and thereafter utilized his increased credit line. 

You can see from the PowerPoint he took out at least 42 markers 

at casinos between July 19, 2001, and July 5, 2002, for a total extension of credit of just under $150,000. I don’t mean to suggest at 

the end of that period he owed $150,000. He would get the extension of credit, pay off most of it very often the same day, but on 

other occasions he left still owing the money. Ultimately it is all 

paid off, but in each instance he is incurring indebtedness that he 

should not have been doing and was violating the court order. 

Second, he violated the confirmation order when he applied for 

a new Capital One credit card on August 13, 2001, less than a 

month after the order was entered, and he used that card regularly 

throughout the bankruptcy period. 

Again, Judge Porteous again violated the confirmation order on 

July 4, 2002, when he applied to increase his credit limit at the 

Grand Casino Gulfport from $2,000 to $2,500, and immediately 

8 

after this credit increase was authorized, Judge Porteous continued 

to gamble at the casino and to take out the full $2,500 in markers. 

Mr. Chairman, that concludes my overview. 

We have signed up three witnesses, the first of whom is the FBI 

agent, Mr. Wayne Horner. 

Mr. SCHIFF. Thank you, Mr. Baron. 

Our first witness is Special Agent DeWayne Horner of the FBI. 

Agent Horner, if you could come sit at the table. 

Agent Horner works out of the FBI’s New Orleans office, where 

he is assigned to that office’s Public Corruption Squad. He worked 

on the investigation of Judge Porteous and is testifying today as a 

fact witness. 

I will now swear the witness. Agent Horner, if you could rise and 

raise your right hand. 

[Witness sworn.] 

Mr. SCHIFF. Task Force counsel Kirsten Konar will now question 

the witness. 

TESTIMONY OF DeWAYNE HORNER, SPECIAL AGENT, 

FEDERAL BUREAU OF INVESTIGATION, NEW ORLEANS, LA 

Ms. KONAR. Agent Horner, good morning. 

Mr. HORNER. Good morning. 

Ms. KONAR. Where are you employed? 

Mr. HORNER. I am a special agent with the Federal Bureau of 

Investigation assigned to the New Orleans Division. 

Ms. KONAR. How long have you worked for the FBI? 

Mr. HORNER. Approximately 14 years. 

Ms. KONAR. And what division do you work in? 

Mr. HORNER. I am currently assigned to a Public Corruption 

Squad in New Orleans. 

Ms. KONAR. Were you one of the FBI case agents assigned to the 

Department of Justice’s investigation of Judge Porteous? 

Mr. HORNER. I was. The Judge Porteous investigation was kind 

of carved out of a larger investigation, but I was the agent who 

handled the Porteous investigation. 

Ms. KONAR. What was your role in that investigation? 

Mr. HORNER. I was the lead agent. 

Ms. KONAR. Are you familiar with the documents and evidence 

which were obtained as a part of that investigation? 

Mr. HORNER. I am. 

Ms. KONAR. Did the FBI’s investigation include an analysis of 

Judge Porteous’s financial records? 

Mr. HORNER. It did. 

Ms. KONAR. More specifically, did the FBI analyze Judge 

Porteous’s credit card debts and bank account withdrawals related 

to gambling for the 5 years preceding his 2001 bankruptcy filing? 

Mr. HORNER. Yes. We had a financial analyst that did a lot of 

financial analysis on the financial records. 

Ms. KONAR. I would like to direct your attention to Exhibits 327 

and 328. Do you recognize these documents? 

Mr. HORNER. Yes. 

Ms. KONAR. What are these documents? 

9 

Mr. HORNER. 327 is a schedule prepared by our financial analyst 

which reflects checks written to either casinos or anything associated with gambling, and also cash withdrawals at casinos. 

Ms. KONAR. Turning to the last page of Exhibit 327, what is the 

total dollar amount that Judge Porteous either wrote in checks or 

withdrew in cash at casinos between January 1997 and May of 

2000? 

Mr. HORNER. It is at least $27,739. 

Ms. KONAR. Turning to the last page of Exhibit 328, what is the 

total dollar amount charged to Judge Porteous’s credit cards related to gambling between July 1995 and July of 2000? 

Mr. HORNER. The total is $66,051.05. 

Ms. KONAR. Do you know whether these charts list all of Judge 

Porteous’s credit card debts and bank account withdrawals for this 

time period related to gambling? 

Mr. HORNER. No, it doesn’t include everything. There is probably 

some additional credit card charges that were not included in this 

time period, and there may be some additional withdrawals out of 

his bank account that were not included. 

Ms. KONAR. Mr. Chairman, at this time I move to have Exhibits 

327 and 328 made a part of the official record of these proceedings. 

Mr. SCHIFF. Without objection. 

[The information referred to follows:] 

10 


327-1.eps
11 


327-2.eps
12 

Mr. KONAR. In addition to the financial analysis conducted by 

the FBI, did the FBI also review Judge Porteous’s casino records? 

Mr. HORNER. We did. 

Ms. KONAR. Was that review one of your primary areas of responsibility? 

Mr. HORNER. Yes. I think I visited every casino on the Gulf 

Coast. 

Ms. KONAR. Would you please describe for the Task Force how 

you obtained Judge Porteous’s casino records? 


328.eps
13 

Mr. HORNER. First we would issue a subpoena to the casino, and 

then they would call and tell us that they had the records. I would 

usually drive over there and get them, or sometimes they would 

mail them. After we received the records, we would go over them 

and look at them and try to analyze them and see what was going 

on. A lot of times, not all of the time, but a lot of the times, the 

casinos have a very complicated method to their bookkeeping and 

recordkeeping, so sometimes we would have to go back to the casinos and have them explain the records or explain the abbreviations 

that were on the records. 

Ms. KONAR. Why did the casinos have specific records for Judge 

Porteous? 

Mr. HORNER. Judge Porteous was an established rated player at 

these casinos, meaning he had set up an account with the casinos 

so they could keep track of his gaming winnings and losses, and 

then in return for that, Judge Porteous would receive comps from 

the casino, which are shows, rooms, food, booze, things like that. 

Ms. KONAR. Did the casino records that you collected and reviewed include listings of all of the markers that were taken out 

by Judge Porteous? 

Mr. HORNER. Yes, they did. 

Ms. KONAR. Did the casinos explain to you what a marker was? 

Mr. HORNER. Yes, they did. 

Ms. KONAR. What did they tell you? 

Mr. HORNER. A marker just basically is an extension of credit by 

the casino to the customer. It allows the customer to draw down 

on the credit limit, and then what the casino does is it will draw 

any unpaid sums from the marker from the customer’s bank account after some fixed period of time. The fixed period of time can 

vary by casino. They can have 3-day holds on the markers or 5-day 

holds or 30-day holds. It just depends. 

Ms. KONAR. Did the casinos tell you whether players were required to fill out a credit application before they could obtain markers? 

Mr. HORNER. What was that? 

Ms. KONAR. Were gamblers required to fill out a credit application before they could take out markers at a casino? 

Mr. HORNER. Yes, they were. It is much like probably a credit 

card application. 

Ms. KONAR. Are you aware that Judge Porteous filed for Chapter 

13 bankruptcy in March of 2001? 

Mr. HORNER. I am. 

Ms. KONAR. Directing your attention to Exhibit 125, which is 

Judge Porteous’s initial bankruptcy petition, what is the name that 

Judge Porteous used on this petition? 

Mr. HORNER. Judge Porteous used G.T. Ortous. 

Ms. KONAR. Is that a false name? 

Mr. HORNER. That is a false name. 

Ms. KONAR. What is the address used on this petition? 

Mr. HORNER. He used Post Office Box 1723, Harvey, Louisiana 

70059. 

Ms. KONAR. Now, directing your attention to Exhibit 145, do you 

recognize this document? 

Mr. HORNER. Yes, I do. 

14 

Ms. KONAR. What is this document? 

Mr. HORNER. That is an application Judge Porteous made for a 

post office box in New Orleans shortly before he filed for his bankruptcy, specifically 8 days prior to his filing bankruptcy. 

Ms. KONAR. As a part of your investigation for the Department 

of Justice, did you obtain a copy of this document? 

Mr. HORNER. Yes, I did. 

Ms. KONAR. Are you also aware that Judge Porteous filed his 

bankruptcy schedules on April 9th, 2001? 

Mr. HORNER. I am. 

Ms. KONAR. I would like to direct your attention to Judge 

Porteous’s bankruptcy Schedule B. What information is asked for 

in question 17? 

Mr. HORNER. Schedule B is his personal property schedule in the 

bankruptcy. Question 17 asks for other liquidated debts owing the 

debtor, including tax refunds, and then it specifically asks for particulars. 

Ms. KONAR. What was Judge Porteous’s response to question 17? 

Mr. HORNER. Judge Porteous responded he had none. 

Ms. KONAR. Do you know whether that response was truthful? 

Mr. HORNER. That was not truthful. 

Ms. KONAR. Why was that not truthful? 

Mr. HORNER. Because on March 23rd, he filed his year 2000 tax 

return asking or requesting a $4,300 refund from the IRS. 

Ms. KONAR. Turning your attention to Exhibit 141, is this the 

2000 tax return you just referenced? 

Mr. HORNER. Yes, it is. 

Ms. KONAR. And turning to page 2 of the document, is this the 

$4,000 tax refund you just referenced? 

Mr. HORNER. Yes. Specifically it is $4,143.72. 

Ms. KONAR. And March 23rd was just 5 days before Judge 

Porteous filed his original bankruptcy petition? 

Mr. HORNER. That is correct. 

Ms. KONAR. I would now like to direct your attention to Exhibit 

142. Do you recognize this document? 

Mr. HORNER. What is the exhibit number? 

Ms. KONAR. 142. 

Mr. HORNER. Yes, I do. 

Ms. KONAR. What is this document? 

Mr. HORNER. This is a copy of Judge Porteous’s Bank One statement. 

Ms. KONAR. Did you obtain a copy of Judge Porteous’s Bank One 

records as a part of your investigation? 

Mr. HORNER. I did. 

Ms. KONAR. Does this document contain any information concerning Judge Porteous’s tax refund? 

Mr. HORNER. Yes. This document shows that Judge Porteous received the $4,100 refund on April 13th of 2001. 

Ms. KONAR. And April 13th was just 4 days after Judge Porteous 

had filed his bankruptcy schedules and stated that he was not 

owed a tax refund? 

Mr. HORNER. That is correct. 

15 

Ms. KONAR. Turning your attention to Schedule I of Judge 

Porteous’s bankruptcy schedules, what information is supposed to 

be disclosed on Schedule I? 

Mr. HORNER. Schedule I is his current income he is supposed to 

provide to the bankruptcy trustee. And Judge Porteous provided 

his—well, he provided his gross income as $7,531.52, which really 

is his net income for the period. 

Ms. KONAR. Was Judge Porteous’s response that his net income was $7,531 in the year 2001 a truthful answer? 

Mr. HORNER. No, because he used a pay stub from May of 2000. 

Ms. KONAR. I would like to direct your attention back to Exhibit 

142, which you just testified was Judge Porteous’s Bank One statement. Does this statement contain any information concerning 

Judge Porteous’s 2001 income? 

Mr. HORNER. It does. It shows that on April 2nd, which is April 

2 of 2001, his Federal salary was deposited into his Bank One 

checking account, and it shows the government deposited 

$7,705.51, which is different than what he represented to the bankruptcy court. 

Ms. KONAR. So Judge Porteous’s 2001 salary was approximately 

$200 a month greater than what he disclosed on his Schedule I? 

Mr. HORNER. That is correct. 

Ms. KONAR. Are you aware that Judge Porteous also filed a statement of financial affairs with the bankruptcy court on August 9, 

2001? 

Mr. HORNER. I am. 

Ms. KONAR. Directing your attention to question 3 on the statement of financial affairs, what information does this question ask 

for? 

Mr. HORNER. Specifically question 3 asks for Judge Porteous to 

list all payments on loans, installments, purchases and any other 

kind of debt totaling more than $600. 

Ms. KONAR. What was Judge Porteous’s response to question 3? 

Mr. HORNER. Judge Porteous reported normal installments. 

Ms. KONAR. What does the term ‘‘normal installments’’ mean? 

Mr. HORNER. Normal installments would mean something like 

your mortgage payments, car payments, credit card payments, 

something like that. 

Ms. KONAR. Do you know whether Judge Porteous’s response of 

normal installments was truthful? 

Mr. HORNER. It was not truthful. 

Ms. KONAR. What did your investigation reveal regarding Judge 

Porteous’s payments of any debts paid in the past 90 days preceding his bankruptcy? 

Mr. HORNER. Say that again? 

Ms. KONAR. What did your investigation reveal regarding whether Judge Porteous did, in fact, make any payments within the 90 

days preceding his bankruptcy? 

Mr. HORNER. He did. 

Ms. KONAR. Did Judge Porteous make any payments to the 

Treasure Chest Casino? 

Mr. HORNER. He did. 

Ms. KONAR. Directing your attention to Exhibit 302, do you recognize this document? 

16 

Mr. HORNER. I do. 

Ms. KONAR. What is this document? 

Mr. HORNER. This is a part of Judge Porteous’s gaming records 

from the Treasure Chest Casino, which is located in Kenner, Louisiana, and this is a history of some of the markers that he took 

at the casino. 

Ms. KONAR. What does this document show regarding Judge 

Porteous’s activities at the Treasure Chest Casino in March of 

2001? 

Mr. HORNER. It shows that on March 2, 2001, Judge Porteous 

took out seven $500 markers, okay? And then on March 3rd of 

’01—which means the gambling trip probably passed over midnight, so that is why it is repaid on March 3rd. On March 3rd, he 

repaid four of the markers with chips. And then on March 27th of 

2001, he goes back to the casino and pays the remaining markers 

in cash. He makes a $1,500 cash payment to the casinos. 

Ms. KONAR. So on the day before Judge Porteous filed for bankruptcy, he made a $1,500 cash payment to the Treasure Chest Casino? 

Mr. HORNER. That is correct. In cash. 

Ms. KONAR. Do you consider that payment to be a normal installment? 

Mr. HORNER. No. 

He also on the 27th, I should add, deposited—he made a $2,000 

deposit in his checking account on March 27th, $1,960 of which 

was cash also. 

Ms. KONAR. Do you know the source of that cash? 

Mr. HORNER. No. 

Ms. KONAR. Directing your attention to question 8 on the statement of financial affairs, what information does this question ask 

for? 

Mr. HORNER. Specifically question 8 asks for any losses from fire, 

theft, casualty, and then it specifically lists out gaming, within 1 

year immediately preceding the bankruptcy application. 

Ms. KONAR. What was Judge Porteous’s response to question 8? 

Mr. HORNER. He stated he had no losses. 

Ms. KONAR. Do you know whether that response was truthful? 

Mr. HORNER. That was not truthful. 

Ms. KONAR. As a part of your investigation, did you analyze all 

of Judge Porteous’s gambling losses for the year immediately preceding his bankruptcy filing? 

Mr. HORNER. We did. 

Ms. KONAR. I would like to direct your attention to Exhibit 337. 

Do you recognize this document? 

Mr. HORNER. I do. 

Ms. KONAR. What is this document? 

Mr. HORNER. This is a document that shows our analysis of his 

gaming activities for the 1 year preceding bankruptcy, and it shows 

any winnings or any losses that he incurred in that 1-year period. 

Ms. KONAR. What does this analysis show regarding Judge 

Porteous’s gambling losses for that year? 

Mr. HORNER. Specifically it shows that he had gross gaming 

losses of $12,895.35, with a net loss of $6,233.20. 

17 

Ms. KONAR. Where did you get all the necessary information to 

determine what Judge Porteous’s gambling losses were? 

Mr. HORNER. We got them from the casino records. 

Ms. KONAR. Do you know whether a confirmation order was entered in Judge Porteous’s bankruptcy case? 

Mr. HORNER. I do. 

Ms. KONAR. Directing your attention to Exhibit 133, which is a 

copy of the Porteous confirmation order, does this order address 

whether Judge Porteous was allowed to incur any additional debt? 

Mr. HORNER. It does. 

Ms. KONAR. What does it say in that regard? 

Mr. HORNER. Specifically it says, the debtor shall not incur additional debt during the term of this plan except upon written approval of the trustee. 

Ms. KONAR. Did Judge Porteous continue to take out markers at 

casinos after this confirmation order was entered? 

Mr. HORNER. He did. 

Ms. KONAR. I would like to direct your attention to the summary 

chart prepared by Task Force staff which shows all the casino 

markers taken out by Judge Porteous after the confirmation order 

was entered up until July of 2002. How many total markers did 

Judge Porteous take out during this time period? 

Mr. HORNER. Judge Porteous took out 42 total markers. 

Ms. KONAR. What is the total dollar amount that Judge Porteous 

borrowed and then repaid in the casino for those 42 markers? 

Mr. HORNER. $149,400. 

Ms. KONAR. As one example of the gambling trips listed on this 

chart, did Judge Porteous gamble at the Treasure Chest Casino in 

August of 2001? 

Mr. HORNER. He did. 

Ms. KONAR. Directing your attention to Exhibit 313, do you recognize this document? 

Mr. HORNER. I do. 

Ms. KONAR. What is this document? 

Mr. HORNER. This is Judge Porteous’s marker history from the 

Treasure Chest Casino for the time period August of 2001. 

Ms. KONAR. All right. What does this exhibit show specifically regarding Judge Porteous’s activities at the Treasure Chest Casino in 

August of 2001? 

Mr. HORNER. Specifically it shows that he took out eight $1,000 

markers for a total of $8,000 over the time period of August 20-August 21. So, again, the gaming trip probably flipped over midnight. 

Then he repaid five of the markers in chips on either August 20th 

or August 21st. He left owing the casino that night with an amount 

of $3,000. Then he comes back to the casino on September 9th, 

2001, and repays two of the markers in cash. And then the last 

marker he comes back to the casino on September 15th, 2001, with 

another $1,000 in cash. 

Ms. KONAR. Was it a violation of the confirmation order for 

Judge Porteous to take out these eight markers at the Treasure 

Chest Casino? 

Mr. HORNER. Yes. 

Ms. KONAR. Do you know whether Judge Porteous opened up any 

credit cards after the confirmation order was entered? 

18 

Mr. HORNER. He did. 

Ms. KONAR. Directing your attention to Exhibit 341-A, do you 

recognize this document? 

Mr. HORNER. I do. It is the Capital One credit card application 

signed by Judge Porteous. 

Ms. KONAR. Was this one of the documents obtained as a part 

of your investigation? 

Mr. HORNER. It was. 

Ms. KONAR. What is the date on this credit card application? 

Mr. HORNER. August 13th, 2001. 

Ms. KONAR. August 13, 2001, was less than 1 month after the 

confirmation order was entered, correct? 

Mr. HORNER. That is correct. 

Ms. KONAR. To the best of your knowledge, is that Judge 

Porteous’s signature on the credit card application? 

Mr. HORNER. That is his signature. 

Ms. KONAR. Directing your attention to Exhibit 341-B, do you 

recognize these documents? 

Mr. HORNER. I do. 

Ms. KONAR. What are these documents? 

Mr. HORNER. These are the charges on the Capital One credit 

card that he applied for just previously. 

Ms. KONAR. Do these charges show whether Judge Porteous used 

the Capital One credit card after the confirmation order? 

Mr. HORNER. They do. 

Ms. KONAR. Was it a violation of the confirmation order for 

Judge Porteous to open the Capital One credit card and thereafter 

use the card to incur new debt? 

Mr. HORNER. Yes, it was. 

Ms. KONAR. Do you know whether Judge Porteous applied for a 

credit limit increase at any of the casinos where he gambled after 

the confirmation order was entered? 

Mr. HORNER. He did. In July, July 4, 2002, he applied to increase 

his credit limit at the Grand Casino Gulfport. 

Ms. KONAR. Directing your attention to Exhibit 324, do you recognize this document? 

Mr. HORNER. I do. 

Ms. KONAR. What is it? 

Mr. HORNER. This is the credit line change request that Judge 

Porteous signed on July 4th of 2002. 

Ms. KONAR. Is that Judge Porteous’s signature? 

Mr. HORNER. It is. 

Ms. KONAR. Based on your investigation, will a casino ever increase a gambler’s credit line without the gambler proactively requesting that credit line increase? 

Mr. HORNER. No. 

Ms. KONAR. What is the normal procedure at a casino when a 

gambler requests a credit line increase? 

Mr. HORNER. Usually what they will do is ask the customer to 

fill out some kind of application or some kind of change request, 

and then what they will do is run either a consumer credit report 

or what is called a central credit report, which is a credit report 

specifically used by casinos for gamblers. 

19 

Ms. KONAR. How else is a central credit report different from a 

normal commercial credit report? 

Mr. HORNER. Well, the central credit report only reports gaming 

activity on a particular gambler. So what it does, it keeps track of 

the gambler’s limits, what casinos they have applied credit at, and 

then it will also show or reflect any negative histories at the casinos, if they failed to pay a marker or bounced a check or something 

like that. 

Ms. KONAR. Is it important to gamblers to keep their central 

credit reports clean of any blemishes? 

Mr. HORNER. Absolutely, because if a gambler gets a negative 

history on his central credit report, what happens is the other casinos generally cut him off. 

Ms. KONAR. Turning back to this Grand Casino Gulfport credit 

line increase, after Judge Porteous requested this increase, do you 

know whether he gambled at the casino on that same day? 

Mr. HORNER. He did. 

Ms. KONAR. Turning your attention to Exhibit 325, do you recognize this document? 

Mr. HORNER. This is the marker history from the Grand Casino 

Gulfport which covers the time period in question. 

Ms. KONAR. Does this exhibit show whether Judge Porteous took 

out markers at the Grand Casino Gulfport in July of 2002? 

Mr. HORNER. It does. 

Ms. KONAR. What is the total dollar amount in markers Judge 

Porteous took out? 

Mr. HORNER. Twenty-five hundred. 

Ms. KONAR. And $2,500 was his newly increased credit limit; is 

that correct? 

Mr. HORNER. That is correct. 

Ms. KONAR. So Judge Porteous applied to increase his credit 

limit at the Grand Casino Gulfport and thereafter utilized his new 

credit limit to gamble up to that limit? 

Mr. HORNER. That is correct. He maxed it out as soon as he got 

it. 

Ms. KONAR. Was that a violation of the confirmation order? 

Mr. HORNER. It was. 

Ms. KONAR. Did your investigation reveal a pattern where Judge 

Porteous favored making repayments at casinos over making repayments of other debts? 

Mr. HORNER. It did. 

Ms. KONAR. What did that pattern show specifically? 

Mr. HORNER. Well, specifically it showed that Judge Porteous favored the casinos and a credit card company over his other creditors. 

Ms. KONAR. Mr. Chairman, that concludes my questioning. 

Mr. SCHIFF. Thank you. 

Let me ask you a few questions, Agent Horner. 

What would have been the result if Judge Porteous had listed 

markers on his bankruptcy petition or defaulted on debt to a casino? 

Mr. HORNER. Well, if he would have listed the marker on the 

bankruptcy decision, the marker would have been discharged in 

bankruptcy, or since this was a 13, the casino would have been 

20 

treated like any other creditor and probably got—I think his plan 

was 39 cents on the dollar. So the casino would have been paid 39 

cents on the dollar. 

Mr. SCHIFF. And had that happened, would the casinos have continued extending credit to him? 

Mr. HORNER. No. If the casino had found out that he had filed 

for bankruptcy, they would not have extended credit to him anymore. 

Mr. SCHIFF. And did the judge indicate any of his casino debt on 

his bankruptcy petition? 

Mr. HORNER. No. None. 

Mr. SCHIFF. As a result, did the casinos get paid 100 percent of 

their debt whereas other creditors got maybe a third of their debt? 

Mr. HORNER. That is exactly what happened. Treasure Chest, 

Grand Casino, Beau Rivage, they were all paid 100 percent, versus 

his credit cards, Bank of America and stuff, they got 39 cents on 

the dollar, the same as there was a bank loan that he had that was 

listed in the bankruptcy which got 39 cents on the dollar. 

Mr. SCHIFF. Were the markers always paid either by cashing out 

chips or by the judge coming in later and giving cash? Or you mentioned the markers gave the casinos the right to tap into the 

judge’s bank account. Did they ever have to use that mechanism, 

or did the judge always go and pay the marker one way or another? 

Mr. HORNER. No. What happened in Judge Porteous’s case was 

the markers were repaid, I think, one of four different ways. Sometimes he would pay with chips. When he was at the casino, he 

would pay it off with chips. Sometimes he would pay it off with 

cash. Other times he would write a check to the casino paying it 

off. And then the fourth way, sometimes his secretary wrote a 

check to the casino paying off the marker. 

Mr. SCHIFF. This was his judicial secretary? 

Mr. HORNER. Yes. 

Mr. SCHIFF. You were showing some of the charts earlier that 

would show him gambling for a period of a day and a half; it would 

go after midnight. 

Mr. HORNER. Right. 

Mr. SCHIFF. Some of the markers he would pay in chips, and 

some he would pay a day or so later, and some he would pay a 

week or two later. 

Mr. HORNER. Right. 

Mr. SCHIFF. Were those at multiple casinos on the same day, or 

how is it that some were paid a day later, and some were paid 

through chips, and some were paid a week later? Were those all 

debts at the same casino? Were those visiting multiple casinos in 

the course of a single day? 

Mr. HORNER. No, generally it was one casino per trip. If he had 

a stack of chips in his hand when he was done gambling, I suppose 

he would just walk to the cage and try to pay off any markers he 

had outstanding with whatever chips he had left. 

Mr. SCHIFF. The multiple debts that appear on some of the exhibits, some of which he paid out right away and some of which 

he paid out later, those would have been incurred at the same casino during the same day? 

Mr. HORNER. Yes. 

21 

Mr. SCHIFF. Does that mean he would gamble—he would get 

chips through a marker. 

Mr. HORNER. Right. 

Mr. SCHIFF. At, say, the beginning of the evening. 

Mr. HORNER. Right. 

Mr. SCHIFF. He would gamble and win some, lose some. 

Mr. HORNER. Right. 

Mr. SCHIFF. Cash in chips. 

Mr. HORNER. That is correct. 

Mr. SCHIFF. And then later in the evening borrow more chips. 

Mr. HORNER. Yes, he did that sometimes, too. He would draw on 

a marker, gamble for a while; go back, probably lose what he drew 

down on the marker; go back, draw another marker, either win or 

lose; go back, either draw another marker or pay off the two previous markers or just pay off one marker if that he is all he had 

in his pocket at the time. So it just kind of depended upon whether 

he was winning or losing what would happen. 

Mr. SCHIFF. Those multiple transactions were at the same casino, and it just reflected the process of the evening of cashing in 

and cashing out. 

Mr. HORNER. Right. Exactly. 

Mr. SCHIFF. But to your knowledge, the casinos never actually 

had to go and draw the money from his own accounts? 

Mr. HORNER. No. They did. Sometimes they did drop the markers. 

Mr. SCHIFF. That is called dropping the markers? 

Mr. HORNER. Yes. They deposited the marker to his bank account. I guess there is five ways that the markers were paid. 

Mr. SCHIFF. So sometimes they took advantage of the process, 

the link to his bank account, and actually when he didn’t within 

the time period make the payment, they went and they drew the 

funds out of his account? 

Mr. HORNER. That is correct. 

Mr. SCHIFF. Now, you did a summary of the amount of checks 

and cash he had written or paid for gaming expenses from 1997 to 

2000 that add up to $27,000, and then the number of credit card 

debts he incurred from 1995 to 2000, which was $66,000. I want 

to ask you about those two different periods. For one you looked 

at the period from 1997 to 2000. 

Mr. HORNER. That is correct. 

Mr. SCHIFF. And the other, ’95 to 2000. Why did you choose two 

different periods? Do you know what the amount of checks and 

cash from ’95 to 2000 would have been? 

Mr. HORNER. I don’t know it off the top of my head, but I am 

sure the financial analyst that prepared the schedules, he would 

know the numbers or the answer to that question. 

Specifically, the two different time periods, those were the time 

periods that were used in the fifth circuit, I believe, at the fifth circuit hearing. And I don’t know why they specified those two time 

periods. That was the financial analysts working with the fifth circuit people. 

Mr. SCHIFF. In your investigation, did you determine when the 

judge’s gambling problem began or how long had it been ongoing? 

22 

Mr. HORNER. Well, he had credit at—I think the Treasure Chest 

was the first casino that he had credit established at, and I’m going 

from memory here. I think it went back to ’95 or ’92, something 

like that. But that is kind of an estimate, because I can’t remember 

exactly how far back the Treasure Chest records went. 

Mr. SCHIFF. As far as you recall, the Treasure Chest may be the 

first casino where he became an established—— 

Mr. HORNER. Yes. That was his preferred—he liked to go to the 

Treasure Chest because it was real close to his house. 

Mr. SCHIFF. The 149,000 in markers that were taken out, many 

of which were repaid—— 

Mr. HORNER. Right. 

Mr. SCHIFF. How much was the sort of net loss from those markers? In other words, he goes to a casino; he takes out a mark; at 

some point, he cashes in chips to pay part of the mark. Was it generally or often the case that he lost and therefore couldn’t pay off 

the mark at that visit and had to pay it off in the days or weeks 

that followed? 

Mr. HORNER. I don’t know the exact total, but in reviewing the 

records—I mean, I’m going to estimate that maybe half the time 

he lost—half the time he won, half the time he lost. Okay. That 

is just a rough estimate. But I don’t know the total loss, net loss, 

or the amount of money that he owed casinos when he left. I don’t 

know that number. 

Mr. SCHIFF. Now, the 140—was it 149,000? 

Mr. HORNER. 149,000. 

Mr. SCHIFF. That was during the course of 1 or 2 years while he 

was in bankruptcy? 

Mr. HORNER. That was for the time period after the order was 

entered through I think 2002, because our gaming records only 

went up to about 2002. I think he was discharged in July of ’04. 

Mr. SCHIFF. So that amount and any amounts that he lost subsequent to the filing of the bankruptcy petition, that all postdates 

that 66,000 and $27,000 figure. 

Mr. HORNER. That’s correct. 

Mr. SCHIFF. At this point, you have to check. You’re not aware 

of how much of the 149,000 was in that loss that subsequently had 

to be repaid? 

Mr. HORNER. Right. I don’t know that number. 

Mr. SCHIFF. Now, you say half the time he won, half the time 

he lost. Does that mean that the amounts were the same or that, 

ultimately, when you looked at a given date like the charge you 

showed us, he would win and he would lose, but at the end of the 

day there were usually markers that he did not have the ability to 

pay off? 

Mr. HORNER. Usually—I’m going to say probably—and this is a 

rough estimate—40 percent of the time he left the casino owing 

money. But that is really just an estimate by reviewing the records. 

Mr. SCHIFF. Do you know, did the credit card application that he 

filled out during the pendency of the bankruptcy proceeding, did 

that credit card application ask him whether he had ever filed 

bankruptcy? 

Mr. HORNER. I don’t think so, because it was one of those quick 

applications where you just basically sign it and date it and you 

23 

can get the card. And it was one of those low-limit cards. It was 

a Capital One. I think the balance was—or the credit limit on it 

was for $200. So I think it was one of those cards that sometimes, 

if you file bankruptcy, I think you might get the application, 

maybe. I don’t know. But it didn’t ask that question, not that I 

know of. 

Mr. SCHIFF. Thank you, Agent. 

I now recognize the Ranking Member of the Task Force, Mr. 

Goodlatte. 

Mr. GOODLATTE. Thank you, Mr. Chairman. 

Agent Horner, are there reasons that Judge Porteous or anyone 

who may gamble frequently would want casinos to track their gambling patterns? 

Mr. HORNER. Yes. The main benefit that—well, there is two reasons. One for tax purposes, for wins and losses, because they have 

to report their winnings and losings. Number two, a gamer or gambler would want their gaming activity rated—they call it rated 

play—because the casino will then give the customer food and room 

specials. They will give them free shows if they play enough. They 

will even give them free transportation to the casino. 

There is a term of art that is used, RFB. It is called room, food, 

beverage. A gambler will try to attain RFB status at the casino 

where when he walks in—or he or she walks in, you know, everything is paid for, including your room. So that is the main benefit 

to a gambler. 

Mr. GOODLATTE. Do you know if Judge Porteous received such 

benefits? 

Mr. HORNER. He did. 

Mr. GOODLATTE. How many casinos did you identify where Judge 

Porteous was an established or rated player? 

Mr. HORNER. Probably about 10. 

Mr. GOODLATTE. All in the Gulf Coast region and New Orleans? 

Mr. HORNER. Most of them in the Gulf Coast region, but he is 

also rated at Caesars in Vegas and Caesars in Tahoe. 

Mr. GOODLATTE. You indicated that one of the reasons for having 

that tracked was the convenience in terms of completing your tax 

return. Have you had the opportunity to examine Judge Porteous’s 

tax returns? 

Mr. HORNER. I have. 

Mr. GOODLATTE. Did you find anything unusual in those tax returns? 

Mr. HORNER. Well, for one, he took a deduction for a gift, I think 

the first year, like a $4,200 deduction for gifts, but he doesn’t put 

any gifts on the bankruptcy because there is a question on there 

for gifts given. Okay. Well, he didn’t report that in the bankruptcy. 

But on the tax return, he did take a $4,200 deduction for gifts. If 

I remember right, I don’t think there was any gaming wins or 

losses reported on his tax return. 

Mr. GOODLATTE. Earlier in your testimony you said that you and 

the FBI analyst had attempted to add up withdrawals at casinos 

on Judge Porteous’s credit cards and bank; and you indicated that 

you had come up with a chart that depicted the extent of those 

withdrawals, quote, at a minimum. Why do you think there may 

be more gambling-related charges and withdrawals? 

24 

Mr. HORNER. Because I think what the analyst did was he took 

kind of a narrow view of gaming withdrawals or gaming charges 

and only used withdrawals that were taken at the casino. But we 

know that there is a cash machine located right outside the Treasure Chest casino, 5500 Williams Boulevard, and Judge Porteous 

would frequently go to that cash machine right before he went to 

the casino, and I don’t think that those transactions are reflected 

in the chart. So if you add all of those, the cash machines that are 

located around the casinos, that we could see he was hitting before 

he was going into the casino, the number is probably going to be 

bigger. 

Mr. GOODLATTE. Do you have any way of calculating what that 

was based upon looking at his bank records? 

Mr. HORNER. We do. But that is something that the financial analyst would calculate. But we do because we have got the bank 

records and we can see where the cash withdrawals are made and 

we know which cash machines are located right outside the casinos. 

Mr. GOODLATTE. And how do you come to the conclusion that casinos would not extend credit to individuals in bankruptcy? Did you 

learn that from speaking with officials at the casinos you visited 

or—— 

Mr. HORNER. Yeah, I asked them that question. 

Mr. GOODLATTE. What did they say to you? 

Mr. HORNER. They said absolutely not. 

Mr. GOODLATTE. Once they know somebody is in bankruptcy, 

they cut them off? 

Mr. HORNER. Right. They are much—they are just like a bank. 

A bank is—you know, I shouldn’t say because banks do—don’t loan 

money to people, and they did to Judge Porteous. He refinanced a 

loan. But, you know, casinos generally are not going to extend credit to people who have filed for bankruptcy. 

Mr. GOODLATTE. Thank you. 

Agent Horner, when you obtained Judge Porteous’s tax returns, 

did you do so under a court order? 

Mr. HORNER. Yes. 

Mr. GOODLATTE. Thank you very much. Those are all the questions I have. 

Mr. SCHIFF. The gentleman yields back. 

Ms. Sheila Jackson Lee. 

Ms. JACKSON LEE. Thank you very much. 

Agent Horner, what do you think would have happened if Judge 

Porteous had listed an outstanding casino marker on his bankruptcy petition or otherwise defaulted on a debt to a casino? 

Mr. HORNER. Well, if he had listed the casino debt on the bankruptcy application, the casino would have been treated like any 

other creditor. They would have participated in the plan. They 

would have been paid I think it was 39 cents on the dollar, just 

like all the other credit card companies were; and then that debt 

would have been discharged after the time period. 

Ms. JACKSON LEE. We can also speculate that that would have 

been a real red flag on a bankruptcy petition, would it not? 

Mr. HORNER. Yes. It would. It would have. It would have given 

the creditors an opportunity maybe to ask Judge Porteous about 

25 

his gaming activity as a method to maybe to try to find some more 

funds for the bankruptcy estate. 

Ms. JACKSON LEE. As an FBI agent dealing with either criminal 

failures or civil failures—and this is speculation and I understand 

that—if you were in a courtroom, you might assume that a judge 

might take note of that as well? 

Mr. HORNER. I would assume that, yes. 

Ms. JACKSON LEE. Do you have any evidence that Judge 

Porteous secured funds from individuals—I hate to use the term 

‘‘loan sharks’’. That may be dated. Do you have any evidence that 

he might have tried to get funds from other than credit card 

sources that seem to be part of your testimony today? 

Mr. HORNER. Well, he obtained funds from other lawyers, you 

know. He had a little situation with some lawyers that, you know, 

they were paying him some funds for some curatorships. So he was 

generating funds like that back in the ’90’s. But as far as during 

this time period, other than—I don’t know that he obtained money 

from any loan sharks. Or anything like that. 

Ms. JACKSON LEE. And help me again. How far back did this 

gambling evidence suggest that he had been gambling? 

Mr. HORNER. I think the records from Treasure Chest went back 

to the early to mid ’90’s. 

Ms. JACKSON LEE. At the level of the evidence which you reviewed about his gambling habits, would it suggest that he needed 

to keep a constant flow of money going? 

Mr. HORNER. Yes. 

Ms. JACKSON LEE. And so he needed to be pretty nimble, pretty 

astute at trying to move dollars around? 

Mr. HORNER. Well, what he did was, by overinflating his expenses in the bankruptcy and underestimating his income, what he 

was able to do was kind of create a little pot of money during the 

bankruptcy period which he could then gamble with that money. 

Ms. JACKSON LEE. Say that again for me so that I can understand. 

Mr. HORNER. What he did was he provided an old pay stub to 

the bankruptcy trustee which it was a low figure, okay? And so 

that created money every month for him to gamble, which was outside the bankruptcy estate, outside the purview of the trustee; and 

then he overinflates his expenses, okay, which then creates another 

little pot of money that he is able to gamble with or use however 

he wants to use. But those funds are kept outside the bankruptcy 

estate. 

Ms. JACKSON LEE. In addition, that document is viewed as a Federal document or a document which would make representations to 

the Federal Government is it not, the bankruptcy petition? 

Mr. HORNER. That’s correct. 

Ms. JACKSON LEE. Are there unique ways that casinos determine 

creditworthiness of a customer that are different from other typical 

commercial creditors? 

Mr. HORNER. What a casino will do is they will have you fill out 

the credit application, and then most casinos will run what is 

called a central credit report, which is a credit report specifically 

aimed at gamblers and casinos and it tracks gaming activity of the 

casino’s customers. And with the central credit report a casino can 

26 

determine whether or not a gambler has a good credit history at 

the casinos or a bad credit history at casinos. 

Ms. JACKSON LEE. So they do so—their inside ball game? 

Mr. HORNER. That’s right. 

Ms. JACKSON LEE. We know you are a gambler, you might be 

selling your house, but are you good with us? 

Mr. HORNER. That’s right. And also casinos do—one thing I 

found out was casinos usually own numerous sister properties is 

what they call them and they have very good lines of communication between sister properties. So if I went to Harrah’s in New Orleans and I bounced a check or something at Harrah’s in New Orleans, they are immediately going to put that out to all casinos 

owned by Jazz Casino Corp., which is the company that owns 

Harrah’s. So they are going to know about it within various casinos. 

Ms. JACKSON LEE. It looks like he was focusing around the Gulfport region. Did he travel, though? I didn’t see that. Did he make 

his way to various sites—Michigan, Las Vegas, Atlantic City? 

Mr. HORNER. He went to Las Vegas and Tahoe, Lake Tahoe. I 

never saw anything that he gambled in Atlantic City. 

Ms. JACKSON LEE. It sounds like Judge Porteous may have only 

underestimated his income by a few hundred dollars per month in 

the 2001 schedules. Is that a fair understanding of the evidence? 

Mr. HORNER. I need to find something here. I have some figures 

that I wrote down here to show you how much difference there was 

in the paychecks, and I can’t put my hands on it. 

Okay. Here it is. Well, anyway, the pay stub that he provides is $7,500, approximately. Well, the very next deposit into the Bank 

One checking account, the first deposit in there after the bankruptcy is filed is, like, $7,700. The next month, it goes up to—I 

think the next month is $7,700. The next month, it goes up to 

$7,800; and then the next month after that it jumps to like $8,500, 

because they are not with holding FICA and all that stuff anymore. 

So from August through December, the pay that is deposited in his 

account every month is about $8,500. 

Ms. JACKSON LEE. And he only—and what—August and December, what year again? 

Mr. HORNER. 2001. 

Ms. JACKSON LEE. So you see a decided little cash hedge that he 

is able to utilize? 

Mr. HORNER. Correct. And then he never did report his wife’s income either. Which was very small. But still I think we found it 

averaged, you know, between 2 and $300 a month. But still—and 

it increased over the term of the bankruptcy. The 3-year period of 

the bankruptcy her income steadily increased. So that was another 

little piece of income that he—— 

Ms. JACKSON LEE. That he dipped into? 

Mr. HORNER. That he dipped into. 

Ms. JACKSON LEE. Let me just quickly ask these last two questions. 

One, is it your testimony today that Judge Porteous committed 

fraud in his bankruptcy proceedings to conceal the extent of his 

gambling so he could continue gambling without interference; is 

that correct? 

27 

Mr. HORNER. Yes. 

Ms. JACKSON LEE. And then, lastly, I’m still curious about—because when you think of gambling, certainly you can think of great 

fun and entertainment. But did you have any evidence of his association or having to be involved with unsavory characters—using 

an old terminology? 

Mr. HORNER. No, not that I know of. 

Ms. JACKSON LEE. Thank you. 

Mr. SCHIFF. The gentlewoman yields back. 

Without objection, all the exhibits referenced by Agent Horner or 

Mr. Baron will be made a part of the record; and now I will recognize Judge Porteous’s attorney, Mr. Westling, for 10 minutes to 

question the witness. 

Mr. WESTLING. Thank you, Mr. Chairman. 

Special Agent Horner, do you have the casino—— 

Mr. SCHIFF. Counsel, could you hold off for one quick second? 

I’m sorry. I didn’t see my colleague. Would you care to question 

the witness? 

Mr. GOHMERT. Thank you, Mr. Chairman, just briefly. 

Mr. SCHIFF. Mr. Gohmert is recognized. 

Mr. GOHMERT. Thank you. 

You have done an extraordinarily good case of just laying out the 

facts as they were found, and that really makes me appreciate the 

thoroughness of the job, and it makes our job easier when—as Sergeant Friday used to say, just the facts. But when my friend from 

Texas asked you about unsavory characters, you had a very long 

pause there; And so I would like to ask you what it is that was 

going through your mind. You clearly have a good mind and apparently you were going through some files and checking your directories mentally and I’m wondering what the hesitation was. Is 

there some people with whom he had contact that gave you cause 

for concern? 

Mr. HORNER. Well, first, the term ‘‘unsavory’’ can mean probably—cover a broad number of people in New Orleans. 

Mr. GOHMERT. In New Orleans? 

Mr. HORNER. In New Orleans. 

Mr. GOHMERT. Really. That’s a shock. 

Mr. HORNER. So the question really—what I was trying to determine is, in 14 years of public corruption investigations, I mean, 

there is a lot of people that we have investigated and we have come 

across and who could maybe fit the term ‘‘unsavory’’. Now, you 

know, to try to reconcile that with Judge Porteous’s relationship 

with any of these people, okay, I’m sure he has or knows unsavory 

people in New Orleans. But to define what the relationship is in 

regards to the question is a difficult one. So—— 

Mr. GOHMERT. Well—and I understand that. And so that you understand where I’m coming from, our Chairman of our Crime Subcommittee, Bobby Scott, and I were part of a hearing down in New 

Orleans a couple of years ago in which a U.S. attorney testified a 

big problem in New Orleans before Hurricane Katrina was graft 

and corruption, and it remains a big problem in New Orleans. And 

I understand that is a big problem there. 

So let me try to hone in a little more, and I really appreciate my 

friend from Texas asking the question, because it is important. 

28 

This is a Federal judge who has tremendous power and control 

over people’s future, businesses’ futures. Are there people who have 

been investigated for graft or corruption who had personal ties to 

Judge Porteous? 

Mr. HORNER. Yes. 

Mr. GOHMERT. And are there people who have been investigated 

for graft and corruption who may have come before Judge Porteous 

as a judge who had personal ties to Judge Porteous? 

Mr. HORNER. So the question is, if an unsavory or somebody who 

has been investigated—— 

Mr. GOHMERT. I’m setting aside unsavory now and trying to get 

more specific. 

So, specifically, you had indicated that there are people who had 

been investigated for graft and corruption who had personal ties to 

Judge Porteous. 

Mr. HORNER. Right. 

Mr. GOHMERT. So I’m taking that the next step to be even more 

exclusive. Were there people who had been investigated for graft or 

corruption who had personal ties to Judge Porteous and who came 

before him as a judge? 

Mr. HORNER. Well, we had a case in New Orleans called Wrinkled Robe which was a large public corruption investigation which 

involved judges, lawyers, the sheriff’s office, and bail bondsmen in 

Gretna, Louisiana; and you’re going to hear from two of those— 

from a couple of people that were involved on the wrong side of 

Wrinkled Robe in a couple of days. 

But Judge Porteous did have a relationship with a bondsman 

named Louis Marcotte, who was later on investigated for corruption because he corrupted the 24th judicial system. He did have 

some dealings in front of Judge Porteous when Judge Porteous was 

on the State bench, okay, not on the Federal bench. 

But as far as if you’re just asking for the time period of when 

Judge Porteous was on the Federal bench, I don’t know of anybody 

that would fit that category. 

Mr. GOHMERT. And one follow-up to that, if I might. The casinos 

obviously were extending markers, giving him credit. Do you know 

of any business that anyone associated with the casinos who extended him markers and credit had before his court? 

Mr. HORNER. So the question is whether or not a casino had a 

matter before him? 

Mr. GOHMERT. Or people involved with the casino individually 

had. Because it may be that the casino did not as the casino, but 

people involved with the casino who had an interest in the casino, 

pecuniary interest in the casino and had some business before the 

court. 

Mr. HORNER. I don’t know the answer to that question. But—I 

don’t know the answer to that. 

Mr. GOHMERT. With the data bank that you have from your obviously very thorough investigation, would it be possible to run a 

cross-check between litigants before the court during the time he 

was a Federal judge and people who had a pecuniary interest in 

the casinos where he was extended credit? 

Mr. HORNER. I don’t think we could do that because we would 

have to know the name that we would want to run. We would have 

29 

to know if that person also had—is an established player at a casino, and casinos generally don’t give us that information unless we 

issue them a subpoena. So if I had the name of John Smith that 

appeared as a litigant in front of Judge Porteous, I would have no 

way of knowing whether or not John Smith has an account at 

Treasure Chest or Beau Rivage or anything like that. 

Mr. GOHMERT. It may be worth following up. But, thank you, Mr. 

Chairman. 

Mr. SCHIFF. I thank the gentleman. 

The gentleman yields back. We will now go back to Judge 

Porteous’s attorney, Mr. Westling, for his questions. 

Mr. WESTLING. Thank you, Mr. Chairman. 

Special Agent Horner, you have testified a bit about the casino 

credit process. I just want to make sure I understand some things 

about that. You’ve indicated that there is a credit report that is 

generated inside, I would put it, the casino system, players credited 

at various facilities that is often used in determining whether to 

extend a marker; is that correct? 

Mr. HORNER. It is not really a credit system inside the casino 

system. It is a company separate and apart from the casinos that 

the casinos will subscribe to the service, the central credit service; 

and the central credit then provides information back to the casinos. So, you know, I don’t think it is a part of the casinos. They 

just provide information to casinos. 

Mr. WESTLING. But, in essence, it is a database of information 

that relates to casino credit as compared to other credit? 

Mr. HORNER. That’s correct. And it does have some banking information on there, also. Like, it will show high and low limits of 

the customer’s bank accounts and things like that. 

Mr. WESTLING. All right. Do they also typically run credit reports? 

Mr. HORNER. Sometimes they do. 

Mr. WESTLING. And, obviously, had they run a credit report in 

this case, the bankruptcy would have showed up, would it have 

not? 

Mr. HORNER. Yeah, it would have shown up. 

Mr. WESTLING. So to the extent the bankruptcy is out there, it 

is a public record like a tax lien or anything else. It is going to 

show up on a credit report, and it is available in the normal 

sources that a casino would check to determine creditworthiness. Is 

that a fair statement? 

Mr. HORNER. Well—but the problem you have with Judge 

Porteous’s bankruptcy is that he has got his Social Security number listed, and then he has also got the fake name, and then he 

has also got the real name. So when the credit report is issued and 

the bankruptcy shows up under—it is going to show up under his 

Social Security number, but it also going to show up under—as G. 

T. Orteous. So somebody reading the credit report doesn’t know if 

the Social Security number is wrong or if the name is wrong. So 

it is hard to determine what is correct on the consumer credit report. 

Mr. WESTLING. But as a practical matter, a credit report typically lists a number of names anyone has ever been associated 

with? 

30 

Mr. HORNER. It does. 

Mr. WESTLING. So this isn’t exactly a puzzle for people who are 

day in and day out granting credit, is it? 

Mr. HORNER. No. Well—I mean, it would show up, but there 

would be a question as to whether or not—what the correct information is. 

Mr. WESTLING. But as a practical matter, the information would 

be there. They would just have to decide what value it had? 

Mr. HORNER. Right. That’s correct. 

Mr. WESTLING. Okay. Do you have the—there is a chart that was 

used earlier, Judge Porteous’s casino markers post confirmation. 

Do you have that in front of you? 

Mr. HORNER. I do. What is the exhibit number? 

Mr. WESTLING. I don’t think it has an exhibit number. I think 

it was projected on the screen. This was the chart that has the 

total of $149,000—— 

Mr. HORNER. Right. 

Mr. WESTLING [continuing]. And 42 markers. 

Mr. HORNER. Okay. I have it. 

Mr. WESTLING. Do you have that in front of you? 

Mr. HORNER. I do. 

Mr. WESTLING. Okay. So I just want to quickly walk through the 

chart so that we can get a sense of what is happening here. 

On July 18, 2001 there is one marker at the Treasure Chest, 

which is then repaid in that same visit; is that correct? The first 

entry on the chart. 

Mr. HORNER. I don’t have that page. 

I have got it right here. Okay. 

Mr. WESTLING. Okay. So we are looking at—I think it is the first 

page—yeah, there we go. The July 18, 2001, visit. And there is a 

repayment of that marker on the same casino visit on the 19th. 

Mr. HORNER. That’s correct. 

Mr. WESTLING. Okay. And then going down to the 23rd again, repaid on the same visit, correct? 

Mr. HORNER. That’s correct. 

Mr. WESTLING. All right. Now, on the 20th of August and the 

21st, we see that some amount, 5,000, is repaid in the same visit, 

but there is a total of 3,000 that remains owing when he leaves the 

casino and is subsequently repaid on the 9th and 15th of September, correct? 

Mr. HORNER. Right. 

Mr. WESTLING. So we know that on one occasion there is 3,000 

left owing that is not liquidated the same day. 

Mr. HORNER. Right. 

Mr. WESTLING. Now, going down to the 28th of September, there 

are two at Harrah’s, $2,000 and again repaid in the same visit. 

Mr. HORNER. Right. 

Mr. WESTLING. All right. Next page. We are looking at October 

13th of ’01, two markers for 1,000, again repaid the same visit. 

Mr. HORNER. That’s correct. 

Mr. WESTLING. October 17th and 18th, there is a total of nine 

markers for $5,900—1,500 repaid on that visit, 44 he leaves the casino still owing, correct? 

Mr. HORNER. That’s correct. 

31 

Mr. WESTLING. All right. He repays that on November 9th, it 

looks like, of ’01. 

Mr. HORNER. Right. 

Mr. WESTLING. Next entry again, on the 31st and 1st, 31st of October, 1st of November, total of 3,000 repaid in the same visit? 

Mr. HORNER. That’s correct. 

Mr. WESTLING. All right. On 11/27, two markers again repaid the 

same visit. 

Mr. HORNER. That’s correct. 

Mr. WESTLING. 12/11, two markers again repaid the same visit. 

On the 20th of December of ’01, one marker repaid subsequently. 

So that is another thousand he leaves the casino still owing. 

Mr. HORNER. Right. 

Mr. WESTLING. 2/12 of ’02, a $1,000 again repaid the same visit, 

correct? 

Mr. HORNER. That’s correct. 

Mr. WESTLING. April 1st, 2,500 repaid the same visit, correct? 

Mr. HORNER. That’s correct. 

Mr. WESTLING. All right. And then on May 26th, one marker, 

$1,000 repaid the same visit. 

Mr. HORNER. That’s correct. 

Mr. WESTLING. All right. Now, on 7/4 and 5 of ’02, there were three markers, totaling $2,500. 1,200 is repaid that day, and he 

leaves the casino owing 1,300. 

Mr. HORNER. Right. 

Mr. WESTLING. All right. So if I have got my notes right, there 

is one debt he leaves owing of 3,000, one of 4,400, one of 1,000, and 

one of 1,300. So of $149,000, 400 in markers total, only 9,700 were 

not repaid on the same date they were taken out; is that correct? 

Mr. HORNER. That’s correct. 

Mr. WESTLING. All right. Thank you. 

I want to direct your attention briefly to—I think it is Exhibit 

341, which are the credit card statements that relate to the Capital 

One card that was taken out—I think it was in August of ’01. 

Mr. HORNER. Right. 

Mr. WESTLING. Do you have that in front of you? 

Mr. HORNER. I do. 

Mr. WESTLING. Have you reviewed the charges on these statements? 

Mr. HORNER. Only a couple of them. 

Mr. WESTLING. Okay. In general—and, again, we can go through 

them, but is it fair so say that these represent pretty standard 

meals, clothing, Breaux Mart, which is a grocery store in New Orleans, but kind of day-in-and-day-out living expenses? I mean, these 

are not repeating the pattern of regular gambling-type debt; is that 

correct? 

You can take your time. 

Mr. HORNER. Just give me a couple of seconds here. 

Yeah, it looks like it is a lot of restaurants, shopping, things like 

that. 

Mr. WESTLING. All right. Thank you. 

Agent Horner, you have testified about the bankruptcy petitions 

in this case and the dates they were filed; and I guess there were 

actually two of them, if I understand all of this correctly. The first 

32 

that was—had the name Orteous and then there was an amended 

filing, correct? 

Mr. HORNER. That’s correct. 

Mr. WESTLING. And do you know whether or not they were 

signed by Judge Porteous and his wife on the dates that they are 

dated or not? 

Mr. HORNER. So your question is whether or not he actually 

signed the voluntary petition on March 28, 2001, as it is reflected 

on the form? 

Mr. WESTLING. Right. In other words, to the extent it bears that 

date, do you know if it was signed on that date? 

Mr. HORNER. I do not know if it was actually signed on that date. 

I mean, he represents that it is, so—— 

Mr. WESTLING. I understand. That is the date on the document. 

Mr. HORNER. Right. 

Mr. WESTLING. But you don’t know one way or the other wether 

he signed it and it was subsequently dated? 

Mr. HORNER. Right. 

Mr. WESTLING. I mean, if you look at the dates—just so we can 

talk about it—they are clearly all put on there by the same individual, are they not? 

Mr. HORNER. I don’t know who put them on. 

Mr. WESTLING. Now, I want to go back to one final exhibit, and 

then I will move on, and I think it is the exhibit that shows your 

analysis of gambling losses and winnings. Do you have that? I will 

probably have a number for you in just a second, but I’m looking. 

Yeah, it is 337. 

Mr. HORNER. Okay. 

Mr. WESTLING. And so for the period of 3/28/2000 to 3/28/2001, 

your analysis—and this is based on your investigation; is that correct? 

Mr. HORNER. That’s correct. 

Mr. WESTLING. All right—indicated that there was approximately $6,000 in gambling losses on a net basis? 

Mr. HORNER. Yeah, that’s correct. 

Mr. WESTLING. Okay. So in about a year, he had about a $6,000 

loss? 

Mr. HORNER. That’s correct. 

Mr. WESTLING. All right. And then the other thing is you were 

asked some questions about tax returns. There is no requirement 

of reporting gambling losses on your tax returns, is there? 

Mr. HORNER. Well, as it—I mean, you can deduct losses against 

winnings. 

Mr. WESTLING. But to the extent you have more losses than 

winnings, it is a nondeductible event, correct? 

Mr. HORNER. That’s correct. 

Mr. WESTLING. So there would be no basis to report it? 

Mr. HORNER. Right. 

Mr. WESTLING. I have no further questions, Mr. Chairman. 

Mr. SCHIFF. Thank you. 

Agent Horner, I just have a few follow-up questions I want to ask 

you. On the chart of casino markers, one of the dates was September 28th. I don’t know if you have that in front of you. It was 

at Harrah’s. There were two markers in the amount of 2,000. 

33 

Mr. HORNER. Right. 

Mr. SCHIFF. Now, it shows a repayment date which I think counsel may have assumed was the same date, but that is a month 

later, right? 

Mr. HORNER. Right, it is a month later. 

Mr. SCHIFF. Now, is the total of the two markers 2,000, or is it 

one marker each for 2,000? 

Mr. HORNER. It is two $1,000 markers. 

Mr. SCHIFF. So that the amount not repaid would have been 

11,000 for that period, instead of 9,000? 

Mr. HORNER. Right, because he repaid it a month later. 

Mr. SCHIFF. Do you know, Agent Horner, whether on the dates 

where the markers showed they were repaid, whether they were always repaid with chips or whether they were repaid with cash or 

with check or credit card? 

Mr. HORNER. It shows on the gaming records how it was repaid— 

chips, cash, checks or if they had to drop the marker. 

Mr. SCHIFF. And do you know in terms of the markers that are 

listed on this chart whether they were all paid with chips or 

whether some were paid in cash, check, or credit card? 

Mr. HORNER. It varied. Chips, cash, checks, for the purposes of 

this chart. 

Mr. SCHIFF. So then we can’t tell from this chart what his losses 

were. His losses may exceed the 11,000 if he paid off the loss the 

same day by a check or credit card? 

Mr. HORNER. That’s right. So really what the chart reflects is— 

or the losses that you can deduce from this chart would be, when 

he walks out of the casino, money owing the casino when he left. 

Mr. SCHIFF. Well—— 

Mr. HORNER. But as he is gambling, he could be losing, okay, and 

then he may repay some of it, lose, repay—I mean, it just kind of— 

you would have to kind of really look at the records if you could 

even determine down to that level. 

Mr. SCHIFF. It is more complicated than that, isn’t it? Because 

the fact that he walked out of the casino having paid off the marker doesn’t mean that he walked out without losses. It may mean 

that he lost and paid in the casino with a check the remaining balance, right? 

Mr. HORNER. That’s correct. 

Mr. SCHIFF. So if in the course of this period in 2001 and part 

of 2002 he had 149,000 in markers and left the casino with 11,000 

not repaid, we would know at a minimum the losses were 11,000, 

but they may have been substantially greater? 

Mr. HORNER. They could have been more, because you don’t 

know—I guess you don’t know the source of the funds that he repaid the markers with, the ones he repaid while he was at the casino. 

Mr. SCHIFF. Now I’m just doing some rough math. But 11,000 out 

of 149,000, if it were 10 percent, it would be basically 15,000. So 

we are talking about 8 percent of the total amount of markers he 

ended up losing, assuming—— 

Mr. HORNER. That would be money owed walking out of the casino, would be 8 percent. 

34 

Mr. SCHIFF. Now, during the period from 1995 to 2000 and 1997 

to 2000, during that 3- to 5-year period you were able to total up, 

looking at cash, checks, and credit cards, gambling debts of around 

100,000, right? 

Mr. HORNER. Right. When you add the two figures together, it 

would be not necessarily debt but just money spent on gambling. 

Mr. SCHIFF. Money spent on gambling. 

Mr. HORNER. Right. 

Mr. SCHIFF. So in that 3- to 5-year period you have about 

100,000 in money spent on gambling. Assuming that it was an entire 5-year period, this would be a conservative figure, that would 

represent about 20,000 a year in gambling expenses? 

Mr. HORNER. So the question would be, did he spend—he spent 

about 20,000 a year gambling? 

Mr. SCHIFF. Well, my question is, conservatively, from the period 

of ’95 to 2000, if there were 100,000 that he was paying through 

cash, check, or credit card for gaming, does that indicate on average about a $20,000-a-year expenditure on gambling during that 

period? 

Mr. HORNER. It would. But the one element it doesn’t take into 

consideration is he had a large amount of cash that we could never 

really trace the source of. So if he used some of that cash to gamble 

with, you know, we wouldn’t know. So of what we can tell, the 

$20,000 figure would probably be fairly accurate. That’s a problem 

you have with a gambler is you have got cash a lot of times 

that—— 

Mr. SCHIFF. Okay. That concludes the questions I have. 

Would anyone else like to—Mr. Gohmert. 

Mr. GOHMERT. Okay. Thank you. Yeah, some follow-up. 

First of all, following up the Chairman’s questions, you mentioned that he may have had cash. You couldn’t account for the 

source; is that correct? 

Mr. HORNER. That’s correct. 

Mr. GOHMERT. So you don’t know whether it may have been attorneys that were providing money for his son’s college or something like that that ended up being used for gambling, correct? 

Mr. HORNER. That’s correct. Or could have just been gaming 

winnings that he had in his pocket and he just deposited them. 

Mr. GOHMERT. We have heard testimony about cash being obtained for the judge or on the judge’s behalf from attorney friends 

who were just trying to help him out. Have you checked to see if 

there is any time linkage between the acquisition of cash from attorneys who appeared before Judge Porteous and gambling that occurred at these casinos? 

Mr. HORNER. We did. We tried to do that. And we could not 

reach a conclusion. 

Mr. GOHMERT. So it is inconclusive whether that cash would 

have been used. Did you follow up like we had heard testimony 

about requests for cash because the child’s tuition was coming due? 

Have you done any follow up to see if tuition was actually following—coming up due following that request for cash? 

Mr. HORNER. Well, we didn’t on the child’s tuition because sometimes it is a little sensitive if you issue a subpoena to a school regarding a child. So we didn’t do that, okay? 

35 

Mr. GOHMERT. Well, but you can pretty well figure out when tuition is due. You have a general knowledge that colleges usually like 

to have their tuition paid before they will allow you to attend class. 

I know, with my kids, we haven’t been able to get them to allow 

them to go to class until their tuition has been paid. They may let 

them go a week or two, but eventually they get real sticky about 

that. 

Mr. HORNER. And, you know, the financial analyst may have 

looked to see if there were checks written to the schools or things 

like that. I guess I don’t know the answer to that. But I know that 

we did try to trace a lot of the cash to see how it was being spent, 

and it was very difficult. 

Mr. GOHMERT. One of the things it seemed from the testimony— 

and you may be able to indicate more specifically—but it seemed 

like the testimony of witnesses was, on one occasion we were asked 

for cash because the tuition was coming due, but they couldn’t be 

specific on which occasion that was. Is that the kind of problem you 

ran into in trying to trace the cash? 

Mr. HORNER. That’s one of them. And the situation I’m referring 

to, another problem is that it was old, dated material. It was outside the statute of limitations. 

Mr. GOHMERT. Okay. And I did want to follow up on a question 

asked by Attorney Westling. It was a good question about if the 

judge applied for a marker at a casino for credit or made application for a credit card, well, they could get his credit report and see 

that there had been a bankruptcy filed; and I thought that was a 

good question. But I wanted to do a follow-up to that. And it should 

be easy to discern this just from looking at the dates, the different 

things, the data that you have compiled. But since we have you 

here and you’re the one that compiled the data, I will just ask you, 

it would be a lot easier to research. Was there an application for 

credit either at a casino or for a credit card that came after the 

judge filed bankruptcy under a false name but before the time that 

he corrected that name? 

Mr. HORNER. That would be between March 28, 2001, and April 

9, 2001, that time period? 

Mr. GOHMERT. Yes. 

Mr. HORNER. I don’t believe that he applied for any credit cards 

or any new casino credit during that 10-day time period. 

Mr. GOHMERT. You don’t believe? 

Mr. HORNER. No. I know he applied for credit at Harrah’s during 

the pendency of the bankruptcy, but that was outside your window—your question. 

Mr. GOHMERT. Once the name was corrected at the bankruptcy 

pleadings, did you see—did that effect a change in a credit report 

or did it remain under the original name filed under which the 

bankruptcy was filed? 

Mr. HORNER. My recollection is that, when it was first filed, the 

credit reports—— 

Mr. GOHMERT. They would pick that up, right? 

Mr. HORNER. They didn’t pick it up until it was after April 9th, 

and it may have just been a function of—— 

Mr. GOHMERT. Yeah, it just takes time. 

36 

Mr. HORNER. To get a bankruptcy on a credit report. But it did 

eventually show up on the credit report. 

Mr. GOHMERT. Under the fictitious name or under his actual 

name? 

Mr. HORNER. Well, it just shows up under his credit report. He 

will see—you will see the bankruptcy. They just list the bankruptcy 

listed. 

Mr. GOHMERT. Okay. 

Mr. HORNER. And then it will list all of the names that he has 

used or the names that are associated with the Social Security 

number. 

Mr. GOHMERT. Okay. So, by using the fictitious name, did that, 

do you think, delay the time that it appeared in his credit report? 

Mr. HORNER. You know, that—I don’t know. I guess—— 

Mr. GOHMERT. I see my time has run out, but I would ask that, 

if you find answers to the questions that I have asked, if you could 

submit that in writing after the hearing, we would appreciate it 

very much. Thank you. 

Thank you, Mr. Chairman. 

Mr. SCHIFF. The gentleman yields back. 

Ms. Sheila Jackson Lee. 

Ms. JACKSON LEE. Thank you, Agent, for your testimony and for 

your diligence. 

Help me out again and tell me how long in your review did 

Judge Porteous have a gambling—participate in gambling activities? 

Mr. HORNER. Well, that I can establish through the records, I 

would say from the early to mid ’90’s. 

Ms. JACKSON LEE. Early to mid ’90’s? 

Mr. HORNER. That’s what the records would establish. Now he 

may have been gambling before that as an unrated or 

unestablished player, but I wouldn’t know that. 

Ms. JACKSON LEE. And, again, in your review of documents and 

your experience, in what you reviewed was it participation in gambling or did you sense a gambling habit? 

Mr. HORNER. You know, he gambled a lot, okay? He gambled a 

lot. It would be hard for me to determine whether it is a habit or 

a problem, but he did gamble a lot. 

Ms. JACKSON LEE. In the review of records and his gambling a 

lot, did he leave debts that ultimately came back to be paid, but 

did he have, I guess you call it a running debt, and you have to 

pay it—when he left after each time or was all his debts paid up 

or did he come back and pay debts? 

Mr. HORNER. Sometimes he would leave owing the casino money, 

and then he would come back and pay the casino. Or sometimes, 

if he didn’t come back and pay, that’s when the casino deposits the 

marker to the bank account. 

Ms. JACKSON LEE. And then they get it automatically? 

Mr. HORNER. Right, they get the money automatically. 

Ms. JACKSON LEE. He was nominated for the bench in I guess 

1994. Was he gambling then? 

Mr. HORNER. Was he what? 

Ms. JACKSON LEE. Was he gambling then? 

Mr. HORNER. In ’94? 

37 

Ms. JACKSON LEE. Yes. 

Mr. HORNER. I would have to check the records. Specifically ’94, 

I would have to check. 

Ms. JACKSON LEE. Is there any records here for you to check 

or—— 

Mr. HORNER. No. I don’t have all of the gaming records here, but 

I could check to see how far back they go. 

Ms. JACKSON LEE. All right. I would appreciate if I could get that 

answer. Because I would like to ask you a question in particular 

regarding the judicial application or the application that one has 

to file. And it is a Federal form. Did you review his application that 

is called form 86—SF-86? 

Mr. HORNER. I did, but it has been a while since I looked at it. 

Ms. JACKSON LEE. I’ll hold it up for you to see. There’s fine print, 

but I’m going to read the language to you. And that is why I would 

like to have this question answered. 

He has to see it this way, please. Thank you. 

The language on—I think it is—it looks like it is 10(s): Is there 

anything in your personal life that could be used by someone to coerce or blackmail you? Is there anything in your life that could 

cause an embarrassment to you or to the President if publicly 

known? And, if so, please provide full details. 

So that would have been—in 1994, that question would have 

been asked. 

Mr. HORNER. Right. 

Ms. JACKSON LEE. And the question would be, from an FBI 

agent’s perspective, would the gambling question be a relevant 

question in a question like that? 

Mr. HORNER. Well, it would be relevant in the sense that if it is 

creating a financial burden, okay, because financial hardships by 

judges or anybody in public service could be used as a source of 

blackmail. And I know those are issues—when I was hired, they 

wanted to know what my financial condition was before they hired 

me. Just because if I’m in a bad financial way or bad financial situation, you know, I may be open for a bribe or blackmail or to do 

something, you know, that you shouldn’t do. 

Ms. JACKSON LEE. And in the review of the documents that you 

had going forward, because your memory doesn’t serve you at this 

point as to what time frame, was the gambling habits of Judge 

Porteous a burden a financial burden? 

Mr. HORNER. Yes, they were. It was a major factor in his bankruptcy. 

Ms. JACKSON LEE. And you did testify today that—I think I 

asked the question—that you testified that you believed Judge 

Porteous committed fraud in his bankruptcy proceedings to conceal 

the extent of his gambling. And you testified so that he could continue gambling without interference. Was that correct? 

Mr. HORNER. That’s correct. 

Ms. JACKSON LEE. So, therefore, anyone that would engage in 

that activity certainly was burdened by—seemingly burdened by 

those debts or burdened by those activities? 

Mr. HORNER. That’s correct. 

Ms. JACKSON LEE. And I just want the—Mr. Chairman, I would 

like to ensure that the witness is able to give us records that would 

38 

reflect the start, to his knowledge or his documentation, of Judge 

Porteous’s gambling; and I want the record to reflect that this form 

that we believe is signed by Judge Porteous—and are you able to 

detect as to whether or not that is his signature? 

Mr. HORNER. That looks like his signature. 

Ms. JACKSON LEE. We will just have that reflected, and I will try 

to affirm the documents, and I’m not sure whether I can ask unanimous consent for this document to be placed in the record. 

Mr. SCHIFF. Without objection. 

Ms. JACKSON LEE. And I just want the record to reflect—and I 

will read it again; and this document is dated April 27, 1994. There 

is a portion or a supplement to Standard Form 86—I’m again saying S as in Sam—SF-86. But but I will read it again. 

Is there anything in your personal life that could be used by 

someone to coerce or blackmail you? Is there anything in your life 

that could cause an embarrassment to you or to the President if 

publicly known? If so, please provide full details. 

And the answer that is reflected here is a no, and this is a duplicate, and I will ask that this document be submitted in the record. 

Mr. SCHIFF. Without objection. 

[The information referred to follows:] 

39 


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40 

Ms. JACKSON LEE. I thank you, and I yield back. 

Mr. SCHIFF. I thank the gentlewoman for her questions, and I 

think the point you raised is one that applies with equal force to 

the issues we discussed in our last hearing, and whether those 

were required to be disclosed. 

Agent Horner, that will conclude your testimony. 

Mr. SCHIFF. We are going to recess because we have votes coming up now, and they will give Members a chance to grab someVerDate Aug 31 2005 10:30 Jan 28, 2010 Jkt 000000 PO 00000 Frm 00044 Fmt 6633 Sfmt 6601 H:\WORK\JUDIMP\120809\53943.000 HJUD1 PsN: DOUGA

B-2.eps
41 

thing to eat. I think we have four votes that are scheduled for approximately now. We will resume after the fourth vote. 

We are now in recess. 

[Recess.] 

[1:14 p.m.] 

Mr. SCHIFF. Our Task Force will come to order. 

Our second witness this afternoon is Claude Lightfoot, Esquire. 

Mr. Lightfoot is an attorney with a law practice in the New Orleans area. He is here pursuant to a subpoena. 

I will now swear the witness. 

[Witness sworn.] 

Mr. SCHIFF. Ms. Konar, you may now question the witness. 

TESTIMONY OF CLAUDE LIGHTFOOT, ATTORNEY, 

NEW ORLEANS, LA 

Ms. KONAR. Good afternoon, Mr. Lightfoot. Where are you employed? 

Mr. LIGHTFOOT. With my own firm, sole practioner in New Orleans. 

Mr. SCHIFF. Mr. Lightfoot, you need to pull the microphone close 

to you and make sure you have it turned on. If you hit the button 

at the base. 

Mr. LIGHTFOOT. How about now? 

Mr. SCHIFF. Perfect. And I would even pull it closer to you. 

Mr. LIGHTFOOT. I am a sole practioner and attorney in New Orleans. 

Ms. KONAR. What type of law do you practice? 

Mr. LIGHTFOOT. Bankruptcy only since about 1990. 

Ms. KONAR. In the summer of 2000, were you retained by Judge 

Porteous? 

Mr. LIGHTFOOT. I was. 

Ms. KONAR. Why did he retain you? 

Mr. LIGHTFOOT. To seek to achieve a workout of his financial 

problems and ultimately to consider bankruptcy, if necessary. 

Ms. KONAR. What is a workout? 

Mr. LIGHTFOOT. Well, I analyzed the assets and the debts that 

he had and came up with a plan to offer at least partial payment 

in settlement of the claims to his credit card debt. 

Ms. KONAR. And is a workout something that would take place 

in lieu of a bankruptcy? 

Mr. LIGHTFOOT. That would have been in lieu of a bankruptcy. 

That was the effort. 

Ms. KONAR. Had you ever met Judge Porteous at the time he retained you? Had you met him prior to the time? 

Mr. LIGHTFOOT. No, I didn’t. 

Ms. KONAR. Did you know who he was? 

Mr. LIGHTFOOT. I knew who he was because some years before, 

I had a bankruptcy appeal which had been allotted to his court, but 

the appellant—I was the appellee, representing the appellee—dismissed the appeal, so it never went through and I never did meet 

Judge Porteous. 

Ms. KONAR. But at a minimum, you did know that he was a Federal judge? 

Mr. LIGHTFOOT. I knew that, yes, ma’am. 

42 

Ms. KONAR. Did you take any steps in the summer of 2000 to collect information from Judge Porteous? 

Mr. LIGHTFOOT. I did. 

Ms. KONAR. What did you do? 

Mr. LIGHTFOOT. I presented him with my usual packet of worksheets that mimic the ultimate bankruptcy schedules to obtain all 

the information about his debts and his assets. 

Ms. KONAR. Could you give us a little more specific information 

about the types of questions that appeared on your work sheets? 

Mr. LIGHTFOOT. Well, every single question that appears in the 

petition, the schedules and the statements and the Chapter 13 

plan, the things that ultimately go into a bankruptcy or, for that 

matter, in a Chapter 7 bankruptcy, I have covered in my worksheets; just explain more simply, lots more room to write, asking 

the prospective clients to list out all of their debts, list all of their 

assets. The form is more comprehensive than anyone would have, 

but it contains everything that would ultimately be contained in a 

bankruptcy filing. 

Ms. KONAR. Did the fact that you were trying to work out Judge 

Porteous’s debts in the summer of 2000 as opposed to preparing for 

a bankruptcy filing in any way effect or change your process for 

how thorough you were in collecting his information? 

Mr. LIGHTFOOT. No. 

Ms. KONAR. Did you specifically explain to Judge Porteous that 

he needed to disclose all of his assets and all of his debts to you? 

Mr. LIGHTFOOT. Yes, I did. 

Ms. KONAR. Did Judge Porteous fill out the worksheets that you 

gave to him? 

Mr. LIGHTFOOT. Yes, he did. 

Ms. KONAR. Did he disclose on those worksheets that he had any 

debts owed to casinos? 

Mr. LIGHTFOOT. No. 

Ms. KONAR. Did Judge Porteous otherwise inform you in the 

summer 2000 that he had debts owed to casinos at that time? 

Mr. LIGHTFOOT. No. 

Ms. KONAR. If in fact Judge Porteous had owed debts to casinos 

at that time, should he have disclosed them to you? 

Mr. LIGHTFOOT. I would have expected them to be listed and provided to me, and I would have listed them as creditors. 

Ms. KONAR. Is that why it would have been important for you to 

know about the debts, because they should have been listed as 

creditors? 

Mr. LIGHTFOOT. They are obligations to pay, so they would be a 

debt, like any other debt. 

Ms. KONAR. Did you give Judge Porteous any legal advice in the 

summer of 2000 regarding whether he should or should not continue to incur new debt? 

Mr. LIGHTFOOT. Yes. 

Ms. KONAR. What was that advice? 

Mr. LIGHTFOOT. Not to make any more debt. 

Ms. KONAR. Is that advice you give to all of your bankruptcy clients? 

Mr. LIGHTFOOT. Yes. 

Ms. KONAR. Why do you give that advice to all of your clients? 

43 

Mr. LIGHTFOOT. Well, by the time someone is in a financial distress sufficient to be consulting about a bankruptcy, it is not good 

faith for such a person to continue making debt. So I always admonish them not to do it anymore, not to make any more credit 

card charges, et cetera. 

Ms. KONAR. Was the workout that you attempted on behalf of 

Judge Porteous ultimately successful? 

Mr. LIGHTFOOT. No. 

Ms. KONAR. Was a decision made in approximately February or 

March of 2001 to file for a bankruptcy? 

Mr. LIGHTFOOT. Yes. 

Ms. KONAR. At that time, in approximately February or March 

of 2001, did you request that Judge Porteous provide you with any 

updated information since he had originally filled out the worksheets in the summer of 2000? 

Mr. LIGHTFOOT. Well, he had a practice of providing me with updated credit card statements. Every so often I would get another 

collection and I would adjust the balances, because the accrual of 

interest was making them get larger. And there was a process of 

reviewing a couple of drafts of the final schedules and plan that 

were filed to make sure that everything was accurate. 

Ms. KONAR. Did Judge Porteous tell you in early 2001 that at 

that time he had any debts owed to casinos? 

Mr. LIGHTFOOT. No. 

Ms. KONAR. Did Judge Porteous tell you more specifically that on 

February 27th of 2001 he gambled at the Grand Casino Gulfport, 

he took out $2,000 in markers and that he left the casino that day 

still owing $2,000? 

Mr. LIGHTFOOT. No. I never knew that he gambled at all or had 

any gambling debts. 

Ms. KONAR. Did he ever tell you that he owed $2,000 to the 

Grand Casino Gulfport on March 28th, which was the day that he 

filed the bankruptcy petition? 

Mr. LIGHTFOOT. No. 

Ms. KONAR. Should Judge Porteous have told you about those 

sorts of gambling debts? 

Mr. LIGHTFOOT. Yes, so I could list them. 

Ms. KONAR. During Judge Porteous’s fifth circuit testimony, he 

was asked about the definition of a marker and he agreed that the 

following definition was accurate: ‘‘A marker is a form of credit extended by a gambling establishment, such as a casino, that enables 

the customer to borrow money from the casino. The marker acts as 

the customer’s check or draft to be drawn upon the customer’s account at a financial institution. Should the customer not repay his 

or her debt to the casino, the marker authorizes the casino to 

present it to the financial institution or bank for negotiation and 

to draw upon the customer’s bank accounts any unpaid balance 

after a fixed period of time.’’ 

Do you agree with that definition of a marker? 

Mr. LIGHTFOOT. Yes. 

Ms. KONAR. I would like to direct your attention to Exhibit 125. 

Do you recognize this document? 

Mr. LIGHTFOOT. Yes. This is the original voluntary petition in 

Chapter 13. 

44 

Ms. KONAR. Did you prepare this? 

Mr. LIGHTFOOT. I did. 

Ms. KONAR. Did you discuss the preparation of this document 

with Judge Porteous? 

Mr. LIGHTFOOT. I did. 

Ms. KONAR. Did Judge Porteous personally review this document 

before it was filed with the bankruptcy court? 

Mr. LIGHTFOOT. He did. 

Ms. KONAR. Turning to page 2 of the document, did Judge 

Porteous sign this document under penalty of perjury? 

Mr. LIGHTFOOT. Yes. 

Ms. KONAR. And what was the date the original petition was 

filed? 

Mr. LIGHTFOOT. March 28th, 2001. 

Ms. KONAR. What was the name used on the original petition? 

Mr. LIGHTFOOT. G.T. Ortous. 

Ms. KONAR. Is that a false name? 

Mr. LIGHTFOOT. It is. 

Ms. KONAR. Why was the original bankruptcy petition filed with 

a false name? 

Mr. LIGHTFOOT. I had hoped that I could avoid him the embarrassment—or have him avoid the embarrassment of a big story in 

the newspaper. At that time, these filings were listed in the newspaper once a week. And I knew that it would be corrected very 

quickly before any notice would go out to creditors. And that was 

a mistake, and it was my suggestion, and I am sorry that I made 

that suggestion. 

Ms. KONAR. After you made the suggestion to Judge Porteous 

that he file under a false name in the original petition, did he object to your suggestion? 

Mr. LIGHTFOOT. No. 

Ms. KONAR. Did he ever say to you, no, I refuse to file a document with a false name? 

Mr. LIGHTFOOT. No. 

Ms. KONAR. Did Judge Porteous definitely know when he signed 

his bankruptcy petition under penalty of perjury that it did contain 

a false name? 

Mr. LIGHTFOOT. Yes. 

Ms. KONAR. Mr. Lightfoot, approximately how many bankruptcies have you worked on throughout the course of your career 

as a bankruptcy attorney? 

Mr. LIGHTFOOT. Many thousands. 

Ms. KONAR. And in any other case other than Judge Porteous, 

have you ever advised or counseled one of your clients to file a 

bankruptcy petition using a false name? 

Mr. LIGHTFOOT. No, I haven’t. 

Ms. KONAR. What was so special about Judge Porteous that on 

this one occasion you gave him this advice? 

Mr. LIGHTFOOT. I felt sorry for him. I did not know him. I respected him as a judge. And out of compassion I tried to save him 

some embarrassment. It was a very misguided effort. 

Ms. KONAR. Looking again at Exhibit 124, it also lists a P.O. Box 

address instead of a street address. Did Judge Porteous have a 

45 

P.O. Box address in the summer of 2000 at the time he retained 

you? 

Mr. LIGHTFOOT. I don’t think so. 

Ms. KONAR. Whose idea was it to use a P.O. Box address on the 

bankruptcy petition? 

Mr. LIGHTFOOT. It was part of the same effort, just to obscure for 

the paper discovering that he had filed. It, of course, backfired because it came out anyway. 

Ms. KONAR. So just to clarify, did you give the idea to him to use 

the P.O. Box? 

Mr. LIGHTFOOT. Correct. 

Ms. KONAR. And after you gave him the idea of using the P.O. 

Box, did Judge Porteous then himself affirmatively go out and open 

the P.O. Box? 

Mr. LIGHTFOOT. I don’t know how it came about, but I was provided with a P.O. Box. 

Ms. KONAR. So you didn’t open a P.O. Box for him? 

Mr. LIGHTFOOT. No. 

Ms. KONAR. Did you ever amend Judge Porteous’s bankruptcy 

petition to correct the false name? 

Mr. LIGHTFOOT. I did. 

Ms. KONAR. Directing your attention to Exhibit 126, do you recognize this document? 

Mr. LIGHTFOOT. Yes, this is the amended voluntary petition. 

Ms. KONAR. Did you prepare this document? 

Mr. LIGHTFOOT. I did. 

Ms. KONAR. What are the differences between the amended voluntary petition and the original petition? 

Mr. LIGHTFOOT. The name and the address are correct. 

Ms. KONAR. Did Judge Porteous personally review the amended 

bankruptcy petition before it was filed? 

Mr. LIGHTFOOT. He did. 

Ms. KONAR. Turning to page 2 of the amended bankruptcy petition, did Judge Porteous sign this document under penalty of perjury? 

Mr. LIGHTFOOT. Yes, he did. 

Ms. KONAR. When was the amended petition filed? 

Mr. LIGHTFOOT. April 9th, 2001. 

Ms. KONAR. Did you file any other documents on April 9th of 

2001? 

Mr. LIGHTFOOT. I filed the Chapter 13 schedules and statements 

and Chapter 13 plan the same day. 

Ms. KONAR. Drawing your attention to Exhibit 127, do you recognize these documents? 

Mr. LIGHTFOOT. I do. 

Ms. KONAR. What are these documents? 

Mr. LIGHTFOOT. These are the schedules and the plan. 

Ms. KONAR. As you said, you prepared these documents yourself? 

Mr. LIGHTFOOT. I did. 

Ms. KONAR. How did you obtain all the necessary information to 

fill out Judge Porteous’s bankruptcy schedules and his statement 

of financial affairs? 

46 

Mr. LIGHTFOOT. From the worksheets that I had had him fill out 

long before, and then we reviewed them at least a couple of times, 

a couple of drafts of these schedules thereafter. 

Ms. KONAR. So did you rely entirely on Judge Porteous to provide 

you with all the necessary information to complete these documents? 

Mr. LIGHTFOOT. I did. 

Ms. KONAR. Did you specifically review both the completed summary of the bankruptcy schedules, the schedules themselves, and 

the statement of financial affairs with Judge Porteous prior to the 

time that they were filed with the courts? 

Mr. LIGHTFOOT. Yes. 

Ms. KONAR. How extensive was that review process? 

Mr. LIGHTFOOT. Well, I would sit down, and I believe with his 

wife at one time as well, and we went through them to see that 

everything was accurate and there were no changes, just going 

page by page, pointing out what was there. 

Ms. KONAR. Did you review these documents on more than one 

occasion before they were ultimately filed? 

Mr. LIGHTFOOT. At least twice. 

Ms. KONAR. Did Judge Porteous sign his bankruptcy schedules 

under penalty of perjury? 

Mr. LIGHTFOOT. He did. 

Ms. KONAR. Did Judge Porteous also sign his statement of financial affairs under penalty of perjury? 

Mr. LIGHTFOOT. He did. 

Ms. KONAR. Turning your attention to question 17 on bankruptcy 

schedule B, what does this question ask for? 

Mr. LIGHTFOOT. This asks for a listing of the other liquidated 

debts owing to the debtor, including tax refunds. 

Ms. KONAR. What is the answer given? 

Mr. LIGHTFOOT. None. 

Ms. KONAR. Did Judge Porteous ever tell you that on March 23rd 

of 2001, he filed his tax return for the year 2000 and he requested 

a $4,143 tax refund? 

Mr. LIGHTFOOT. No. 

Ms. KONAR. Did Judge Porteous ever tell you that on April 13th, 

2001, which was just 4 days after his bankruptcy schedules were 

filed, that he received that $4,143 tax refund into his bank account? 

Mr. LIGHTFOOT. No. 

Ms. KONAR. Is the information concerning this tax refund that 

we have just discussed something that Judge Porteous should have 

disclosed to you? 

Mr. LIGHTFOOT. I would expect a positive answer to that. Relative to the term ‘‘liquidated,’’ if you filed a tax return, you know 

exactly what you are entitled to. So if earlier in the year, let’s say 

you are October of 2000, you can’t have filed your 2000 return yet, 

the year is not even over, you don’t file it until the following year. 

So if a tax return has been filed and there is a liquidated amount 

and it is owed, and you know that it is owed, then it should be in 

that answer. 

Ms. KONAR. What would you have done if you had found out 

prior to filing Judge Porteous’s bankruptcy schedules that he had 

47 

filed his year 2000 tax refund and that he had claimed a $4,000 

tax refund? 

Mr. LIGHTFOOT. I would have amended this schedule to list it, 

had it been absent, and probably informed the trustee, particularly 

if the meeting of creditors hadn’t been held yet. I would have mentioned it. 

Ms. KONAR. Turning your attention to bankruptcy schedule I, 

what is this schedule? 

Mr. LIGHTFOOT. This reflects his net income monthly. 

Ms. KONAR. What is the dollar amount listed on schedule I for 

Judge Porteous’s income? 

Mr. LIGHTFOOT. $7,531.52. 

Ms. KONAR. Did you fill out schedule I for Judge Porteous? 

Mr. LIGHTFOOT. I put the amount that was off the tax—I mean 

the check stub, which is attached. 

Ms. KONAR. And just to clarify, Judge Porteous provided you 

with the check stub dated May 31st of 2000, is that correct? 

Mr. LIGHTFOOT. This was probably the same stub that I got with 

the worksheets when I started preparing the analysis to make the 

workout offer. 

Ms. KONAR. At any later point in time, did Judge Porteous provide you an updated check stub? 

Mr. LIGHTFOOT. No. 

Ms. KONAR. Did Judge Porteous ever tell you that in 2001, his 

net judicial salary increased to $7,705 per month? 

Mr. LIGHTFOOT. No. 

Ms. KONAR. Did Judge Porteous ever tell you that the dollar 

amount listed on schedule I for his net worth was somewhat low? 

Mr. LIGHTFOOT. No. 

Ms. KONAR. Would it have been important for you to know that 

Judge Porteous’s salary in 2001 was actually higher than the 

amount listed on schedule I? 

Mr. LIGHTFOOT. I would have wanted to know exactly the correct 

amount for the time of filing. Afterwards, frankly, I didn’t even 

think that it might change. I just thought it was a fixed salary, so 

I really wouldn’t have thought to inquire after that point. In a 

Chapter 13 case, unless the trustee would have asked for some 

periodic report on income changes, I really wouldn’t have thought 

of it. 

Ms. KONAR. But at the time you filed, would you have wanted 

to know that his net income was not actually $7,500, but at that 

particular date it was $7,700? 

Mr. LIGHTFOOT. I would. I would have wanted it absolutely accurate at the time of the filing. 

Ms. KONAR. Now turning your attention to Judge Porteous’s 

statement of financial affairs, what does question 3 on the statement of financial affairs ask for? 

Mr. LIGHTFOOT. It asks for any payments that aggregate more 

than $600 to any creditor within the 90 days prior to the filing of 

the bankruptcy case. 

Ms. KONAR. And what is the response given to question 3? 

Mr. LIGHTFOOT. ‘‘Normal installments,’’ is what I put. 

Ms. KONAR. Why did you put ‘‘normal installments?’’ 

48 

Mr. LIGHTFOOT. Well, because so far as I knew, the judge had not 

been paying any of his credit card creditors, which was the bulk 

of this case, and that he had been paying his lease car payments 

and his two home mortgages. So ‘‘normal installments’’ was intended to cover the normal installments on his two leased cars and 

his two home mortgages. 

Ms. KONAR. Did Judge Porteous ever tell you that he gambled at 

the Treasure Chest Casino on March 2nd, 2001; that he left the casino that day owing $1,500; and that he repaid that $1,500 in cash 

on the day before his original bankruptcy petition was filed? 

Mr. LIGHTFOOT. No. 

Ms. KONAR. Should Judge Porteous have told you about that? 

Mr. LIGHTFOOT. Yes, that would have been the answer to this— 

that would have been included in an answer to this question. 

Ms. KONAR. So you would have listed the payment to Treasure 

Chest in response to question 3 if you had known about it? 

Mr. LIGHTFOOT. I would. 

Ms. KONAR. Turning your attention to question 8 on the statement of financial affairs, what does this question ask for? 

Mr. LIGHTFOOT. This asks for the listing of any losses from fire, 

theft, casualty or gambling within 1 year before the filing of the 

case. 

Ms. KONAR. What is the response to question 8? 

Mr. LIGHTFOOT. None. 

Ms. KONAR. Did you check ‘‘none’’ in response to question 8? 

Mr. LIGHTFOOT. Did I check it? 

Ms. KONAR. Yes. 

Mr. LIGHTFOOT. Unless I put something there, it automatically 

checks it. But I was not aware of any gambling losses, gambling 

debts or any gambling. 

Ms. KONAR. So just to clarify, did Judge Porteous ever disclose 

to you that he had $6,000 in net gambling losses for the year preceding his bankruptcy filing? 

Mr. LIGHTFOOT. No. 

Ms. KONAR. Would it have been important for you to know that 

Judge Porteous actually had over $6,000 in gambling losses during 

that year? 

Mr. LIGHTFOOT. Yes. 

Ms. KONAR. What would you have done if Judge Porteous had 

told you that? 

Mr. LIGHTFOOT. Well, the first thing I would have thought of is 

how much gambling debts are there, because I didn’t know about 

any gambling debts. So if there had been gambling losses that were 

told to me, last year there were gambling losses of such-and-such, 

then my immediate—besides listing that, my immediate concern 

would be, well, are there any gambling debts that you haven’t told 

me about? 

Ms. KONAR. If at any point during your representation of Judge 

Porteous he had ever told you that he had gambling debts, would 

that have caused you to ask him any other questions about his financial condition? 

Mr. LIGHTFOOT. Well, I would want to know a lot more about the 

gambling debts. 

49 

Ms. KONAR. What specifically would you have asked him about 

the gambling debts? 

Mr. LIGHTFOOT. What would I have asked? 

Ms. KONAR. Yes. 

Mr. LIGHTFOOT. I would want to know the name, the address, the 

account number, the amount due to everyone owed, because they 

are all creditors. I would want to know if there were incurred—if 

I found out in the middle of the case, then I would want to know 

if any of them were extant before the bankruptcy was filed. All 

kinds of things whenever I confront gambling that I would review 

with a client. 

Ms. KONAR. Was there a bankruptcy creditors meeting held in 

Judge Porteous’s case on May 9 of 2001? 

Mr. LIGHTFOOT. Yes. 

Ms. KONAR. Who presided over that meeting? 

Mr. LIGHTFOOT. The Chapter 13 trustee. 

Ms. KONAR. What is the purpose of a bankruptcy creditors meeting? 

Mr. LIGHTFOOT. Well, it is to examine the debtor under oath regarding the petition and the schedules that have been filed. It affords—and creditors are invited to attend and ask questions if they 

want. They rarely do, but they are invited. And it is for, in the case 

of a Chapter 13, for the trustee to make sure he has no additional 

requirements and to put him in the position where he is now thoroughly familiar with the plan and can make a recommendation as 

to whether or not the plan can be confirmed at a later confirmation 

hearing in the court. 

Ms. KONAR. Was Judge Porteous examined under oath at his 

creditors meeting? 

Mr. LIGHTFOOT. He was. 

Ms. KONAR. Did the trustee give any instructions to Judge 

Porteous about incurring debt? 

Mr. LIGHTFOOT. He gives a general instruction that no new debts 

are to be created without the court’s authority. 

Ms. KONAR. Was Judge Porteous given any materials at the 

meeting? 

Mr. LIGHTFOOT. The trustee either—well, he mails them out to 

the debtors along with the notice of the hearing, but also has a 

stack of them to hand out at the meeting of creditors, a brochure 

that explains all of these things, sort of like frequently asked questions brochure. 

Ms. KONAR. Directing your attention to Exhibit 148, do you recognize this document? 

Mr. LIGHTFOOT. This is his brochure. 

Ms. KONAR. Specifically when you say ‘‘his,’’ who are you referring to? 

Mr. LIGHTFOOT. I am sorry? 

Ms. KONAR. When you say ‘‘his brochure,’’ who are you referring 

to? 

Mr. LIGHTFOOT. The trustee’s brochure, that he mails and provides. 

Ms. KONAR. Does paragraph 6 of this pamphlet discuss incurring 

new debts? 

50 

Mr. LIGHTFOOT. It says you may not borrow or buy anything on 

credit while in Chapter 13 without permission from the bankruptcy 

court. 

Ms. KONAR. So Judge Porteous was both told by the bankruptcy 

trustee that he couldn’t incur new debt, and he was given a pamphlet which also told him in writing he should not be incurring 

new debt, correct? 

Mr. LIGHTFOOT. True. 

Ms. KONAR. Did Judge Porteous ever tell you that during the 

month after he attended the creditors meeting and received that instruction not to incur new debt, that in fact he went on three different gambling trips and that he took out a total of $2,000 in 

markers? 

Mr. LIGHTFOOT. No. 

Ms. KONAR. Who was the bankruptcy judge who presided over 

Judge Porteous’s case? 

Mr. LIGHTFOOT. Judge Greendyke. 

Ms. KONAR. Did Judge Greendyke issue a confirmation order in 

Judge Porteous’s case? 

Mr. LIGHTFOOT. He did. 

Ms. KONAR. Directing your attention to Exhibit 133, do you recognize this document? 

Mr. LIGHTFOOT. This is the order confirming the plan signed by 

Judge Greendyke. 

Ms. KONAR. What does paragraph 4 of this order say regarding 

incurring new debt? 

Mr. LIGHTFOOT. The debtor shall not incur additional debt during 

the term of this plan except upon written approval of the trustee. 

Ms. KONAR. Was Judge Porteous aware that this order was docketed in July of 2001? 

Mr. LIGHTFOOT. He was. It would have been sent to him, and I 

believe I sent him a copy as well. 

Ms. KONAR. So he definitely received a copy of this order? 

Mr. LIGHTFOOT. So far as I know. 

Ms. KONAR. Did Judge Porteous understand that he was not allowed to incur new debt unless he received the written permission 

from the bankruptcy trustee? 

Mr. LIGHTFOOT. I think so. 

Ms. KONAR. Why do you think he understood that? 

Mr. LIGHTFOOT. Because there was an occasion that arose sometime later when the car leases came—expired and the vehicles that 

he had for he and his wife had to be turned in. So he had to get 

new vehicles, which meant incurring a new debt. And he talked to 

me about that, and I went immediately back to the confirmation 

order, because this is a little different than the way we did it in 

the Eastern District of Louisiana. We would normally file a motion 

with the court and lay it out to the judge. Of course, we are always 

looking to make sure the payment on the new vehicle is about the 

same as the old vehicle so it would be neutral to the budget, so the 

plan could be funded at the same level. And in Judge Greendyke’s 

district, they let the trustee oversee that. 

So I had to—I found it in the confirmation order, I called the 

trustee and I said look, do you want me to file a motion anyway, 

as our normal practice is, or what do you want me to do, because 

51 

the confirmation order is a little different. He said no, get me the 

information and send it to me. And then he wrote a letter, the 

trustee that is, wrote a letter back approving the new car leases 

to replace the expired car leases. 

Ms. KONAR. Directing your attention to Exhibit 339, do you recognize this document? 

Mr. LIGHTFOOT. Yes. This is a letter from the trustee to me. And 

until reviewing with the staff here for this hearing, I really had forgotten of my own memory that there was also a refinance on one 

of the home mortgages. But this is a letter from the trustee, and 

I am sure I did follow the same procedure and sent the information 

about what was—what the debt was to be incurred, how much, and 

the details, the terms, and the trustee wrote me back approving 

the entry into that refinance. 

Ms. KONAR. I know your memory is a little hazier with regard 

to the home refinance, but the only reason you would have contacted the bankruptcy trustee to ask about refinancing Judge 

Porteous’s home would have been because Judge Porteous had first 

called you and said, I need to refinance my home; how do I get permission? 

Mr. LIGHTFOOT. Oh, yes. Sure. 

Ms. KONAR. Now turning to Exhibit 340, do you recognize this 

document? 

Mr. LIGHTFOOT. This is the same sort of letter from the trustee 

approving the application to him for authority for those new car 

leases. 

Ms. KONAR. So because Judge Porteous asked for permission to 

obtain two new car leases and to refinance his home, is that why 

you believe he understood the confirmation order that he was supposed to seek permission before incurring new debt? 

Mr. LIGHTFOOT. Yes. 

Ms. KONAR. Did Judge Porteous ever tell you that he nevertheless continued to incur new debt after the confirmation order was 

signed? 

Mr. LIGHTFOOT. No. 

Ms. KONAR. Did Judge Porteous ever tell you that within the 

first year after the confirmation order was signed, he took out 42 

markers over the course of 14 gambling trips? 

Mr. LIGHTFOOT. No. 

Ms. KONAR. Did Judge Porteous ever tell you that he applied for 

a new Capital One credit card after the confirmation order was entered and he thereafter proceeded to use that card on a regular 

basis while in bankruptcy? 

Mr. LIGHTFOOT. No. 

Ms. KONAR. Did Judge Porteous ever tell you that he applied to 

increase his credit limits at a casino after the confirmation order 

was entered and that he thereafter proceeded to gamble at that casino and to take out markers at his new increased credit rate? 

Mr. LIGHTFOOT. No, I never knew anything about any gambling 

at any time. 

Ms. KONAR. If you learned that Judge Porteous had indeed taken 

those actions, would you have considered those actions to be a violation of the confirmation order? 

Mr. LIGHTFOOT. They clearly would have been. 

52 

Ms. KONAR. Mr. Chairman, I have no further questions. 

Mr. SCHIFF. Thank you, Ms. Konar. 

Let me ask you a few questions, and then I will turn to my colleagues for their questions. You mentioned that you did not know 

Judge Porteous before he retained you as his bankruptcy lawyer, 

is that right? 

Mr. LIGHTFOOT. That is correct. 

Mr. SCHIFF. Do you know how he came to choose you as his counsel? 

Mr. LIGHTFOOT. I don’t know. He just called me. And I imagine 

he checked around. I did many many and still do many, many 

cases of that type. 

Mr. SCHIFF. As a Federal District Judge, Judge Porteous would 

handle appeals from bankruptcy cases? I think you mentioned you 

had an appeal at one point, at least for a time, before Judge 

Porteous? 

Mr. LIGHTFOOT. Yes, sir. 

Mr. SCHIFF. So he would have been familiar with bankruptcy law 

through handling appeals from bankruptcy court cases? 

Mr. LIGHTFOOT. I don’t know how many he ever had, and I never 

know—that is a hard question. Some of the district judges really 

have a background in bankruptcy, but they all get occasional appeals and then learn about bankruptcy. But it is the first level of 

appeal from bankruptcy to the District Court, and then from there 

to the fifth circuit. 

Mr. SCHIFF. How big is the bankruptcy bar in the area where you 

practice? Do you know all the other bankruptcy lawyers? 

Mr. LIGHTFOOT. Yes, sir. 

Mr. SCHIFF. Do you know whether any of the other bankruptcy 

lawyers had a relationship with Judge Porteous? In other words, 

whether any of them were friends of Judge Porteous or had a relationship with him? 

Mr. LIGHTFOOT. No. 

Mr. SCHIFF. Do you know whether you were chosen by Judge 

Porteous for the reason that you did not know about his gambling 

problem or other spending issues? 

Mr. LIGHTFOOT. I don’t know that. I have zero interest in gambling, so I don’t ever talk with anybody about gambling or hear 

about gambling from anybody. No, I was not aware of anybody who 

was a gambling buddy of his, for example, or anything like that. 

Mr. SCHIFF. But you don’t know whether you were picked by 

Judge Porteous precisely because you were unaware of his gambling problem? 

Mr. LIGHTFOOT. I don’t know that. No. 

Mr. SCHIFF. What would be the significance—there has been testimony that Judge Porteous paid off some of his gambling debts or 

markers prior to the filing of the bankruptcy. What would be the 

significance of his doing that? 

Mr. LIGHTFOOT. Here is how that works. If there is a payment 

during the preference period, the 90-day period, which exceeds the 

$600, and it truly is a preference—not all payments that exceed 

$600 are preferential. They might just be ordinary course-of-business payments, like your house notes, according to the contract. 

But when you have an unusual series of payments or payment that 

53 

exceeds these preference thresholds, in the answer to that question, 

in a Chapter 7 case it allows the Chapter 7 trustee to recover those 

funds as having been preferentially paid, bringing them back into 

the bankruptcy estate for distribution to all the creditors equitably. 

In a Chapter 13, the 13 trustee will consider that any—he will 

inquire maybe a little bit about them to make sure they are really 

preferential. But any payments like that would be considered as 

having been recovered in a hypothetical Chapter 7. So the trustee 

would then look to, well, how much is this debtor paying to the 

creditors under this plan and does it equal how much they could 

have received from the hypothetical Chapter 7 if this preference 

were recovered. 

Mr. SCHIFF. Well, this was Chapter 13, right? 

Mr. LIGHTFOOT. So in the 13 it goes toward the extent and the 

sufficiency of the plan. 

Mr. SCHIFF. Well, what would the effect have been if the bankruptcy court in this case had known that Judge Porteous had taken 

out markers and paid them off just preceding the filing of the 

bankruptcy and that the casinos were paid 100 percent of their 

markers? 

Mr. LIGHTFOOT. Well, if you had a sort of a pattern of behavior 

like that, I suppose a creditor interested enough to do something 

might oppose confirmation and feel that the plan was proposed 

with lacking good faith. That is one possibility—or the trustee. 

Mr. SCHIFF. Would there have been any opportunity as in a 

Chapter 7 to go after some of the payments made at the casino because they got basically 100 percent of their debts paid within 90 

days, whereas in the bankruptcy the creditors after only got a portion? 

Mr. LIGHTFOOT. It really goes to how much you are required to 

pay to the remaining creditors. That is where that comparison is. 

Because in the Chapter 13, the 13 trustee is not a litigator and a 

liquidator. He is more of an administrator of the funds that come 

in under the plan. But if a trustee identified preferential payments, 

then they would want to make sure that an equal amount of money 

was being paid, just as though that money had been recovered in 

a Chapter 7. But it would be paid through the plan, as opposed to 

obtained back from the preferential payees. 

Mr. SCHIFF. What would the effect have been if Judge Porteous 

had listed the casinos as creditors on his bankruptcy filing? 

Mr. LIGHTFOOT. Well, when I have confronted—I have had some 

cases involving gambling, people who had markers, and, of course, 

they are a civil liability. It is a debt like any other debt in that 

sense. So it has to be listed. I would have listed and do list anybody 

who has a casino-type debt. 

But these markers have another feature that always brings me 

to more conversations with these clients that have that problem, 

that these markers are akin to checks, and if that check is negotiated and it comes back NSF, you may have a criminal issue with 

the issuance of a bad check. So it gives me the opportunity to have 

that discussion about markers. 

Mr. SCHIFF. But had these markers been listed, had these casinos been listed on his bankruptcy petition, would that mean that 

at the end of the day, depending on the bankruptcy plan that the 

54 

trustee and court arrive on, that the casinos would have gotten less 

than 100 percent of their money back? 

Mr. LIGHTFOOT. They would have gotten whatever—probably if 

there were more debt coming in than there was in this particular 

case, then everybody would have gotten a little less than they are 

getting now because the pool would have enlarged. But the casinos 

would have received only through the plan what everyone else got. 

Mr. SCHIFF. And do you remember what everyone got, the creditors got in this plan? 

Mr. LIGHTFOOT. Well, the percentage changed, as it does. The 

creditors are all issued a bar date, a deadline, to file claims to 

which they attach their invoice or whatever is the proof of their 

debt. And it is not unusual to see through their own negligence 

that some creditors do not file claims timely; and those late claims, 

if they file them late, they are disallowed. And usually there are 

some in every case that just don’t file a claim at all. So eventually 

when the bar date has come and gone, the trustee is able then to 

recalculate, well, this stream of money that is proposed can now go 

further. 

It can pay a higher percentage, because all of the scheduled 

creditors didn’t end up filing claims. And that is what happened in 

this case, as it does in many of them. So the percentage went up. 

I can tell you the original percentage was to be—well, actually, you 

know, there was an amended plan that ultimately was confirmed. 

I was watching the testimony before, 39 percent may have been 

correct initially, based on the scheduled creditors. But after all the 

claims came in, it went up considerably, another 15-20 points in 

terms of what the money actually paid with some creditors not participating. 

Mr. SCHIFF. When you say the amount went up, as the proceeding goes on and more creditors come forward, does that mean 

the amount per creditor actually goes down? 

Mr. LIGHTFOOT. No, it is a question of—I listed all the creditors 

that I had totaling a certain dollar amount. And then there is a 

later bar date, and I project the plan based on that, and I say that 

this payment per month for this many months will pay X percent 

of that debt. 

When the claims process is over and they are given 90 days after 

the creditors meeting to file a claim, when all those claims are in, 

if you had—I think in this case there was as much as $75,000 

worth of creditors that did not file claims, and so the money that 

I had originally proposed went a lot farther. It paid a much higher 

percentage. 

Mr. SCHIFF. Why would those creditors not file claims? 

Mr. LIGHTFOOT. They just don’t. I don’t know why. They get notices, they get blank claim forms, they get notice of the deadline, 

and they just don’t always file their claims. 

Mr. SCHIFF. Now, you mentioned that the list of those filings for 

bankruptcy is published in the paper, right? 

Mr. LIGHTFOOT. At that time, the paper would pick up the names 

and addresses of the debtors and publish them in the paper once 

a week. 

55 

Mr. SCHIFF. Now, was this, in part, as a way of letting creditors 

out in the community know who was filing for bankruptcy? Is that 

part of the reason for the public notification? 

Mr. LIGHTFOOT. No. There is no requirement for any kind of public notice in that sense, publication notice. All of the—and in this 

case, after the corrected petition and schedules and plan were filed, 

that is when the very first notice went out. So the only notice that 

ever went out to these creditors was—and presumably to anybody 

who was looking for the official proof of the filing, went out under 

the correct address and the correct name. 

Mr. SCHIFF. But the newspaper, you said, published the names 

of those filing bankruptcy? 

Mr. LIGHTFOOT. They do and they did. 

Mr. SCHIFF. They had to have a reason for doing that. What was 

the reason for publishing that? 

Mr. LIGHTFOOT. I don’t know. Public information. They put the 

DWI’s in the same area on another day of the week. And now in 

New Orleans, they are not publishing any of that anymore. 

Mr. SCHIFF. Wouldn’t the purpose have been to let people know 

that maybe creditors of the person filing the petition, that someone 

is filing a petition and if they need to make a claim, that this is 

happening? 

Mr. LIGHTFOOT. That could happen. I just don’t know—I don’t 

know if that is the motivation for publishing it. 

Mr. SCHIFF. You attempted initially to do a workout, but that 

was unsuccessful. Why was the workout unsuccessful? 

Mr. LIGHTFOOT. I couldn’t get any response, Mr. Chairman. I prepared the bankruptcy almost such as you see it, because I had to, 

to find out what the creditors could have expected to get in a Chapter 7 case. 

Mr. SCHIFF. When you say you couldn’t get a response, you 

couldn’t get a response from whom? 

Mr. LIGHTFOOT. From all of—I wrote to every single creditor, 

with the exception of Regents Bank, which was a small personal 

loan that he felt he could handle on his own, and I proposed that 

he go to the bank, borrow money against what small amount of equity he had in his house, to pay them all on a percentage basis. 

I showed them with a detailed analysis all the creditors that there 

were, I gave them an appraisal of the house, I gave them an analysis of what would have resulted in a Chapter 7 case to them from 

all of the judge’s assets. And I said this is how much we can pay, 

but we have to pay everybody the same. There will only be a limited pot of money. 

Mr. SCHIFF. So when you say it didn’t work out, none of the 

creditors took you up on the proposed workout? 

Mr. LIGHTFOOT. I sent big thick packages to all of them on several occasions. Every couple of weeks or so I would call, which was 

very frustrating, because you are using the 800 number that comes 

on the invoice to try to get contact, and I just could never get to 

anyone with any authority to do anything. 

Mr. SCHIFF. Now, part of the reason that you go through the 

workout sheets and the workout exercise with your client is to determine what you can approach creditors with, what kind of an 

56 

offer you can make; but it is also to determine what your client has 

the capacity to pay back, right? 

Mr. LIGHTFOOT. Well, I normally don’t try to do these workouts. 

Every time I have tried it, it has been an exercise in futility and 

frustration. 

Mr. SCHIFF. But part of the reason you go through the exercise 

with your client is you want to know what his spending is, what 

his income is—— 

Mr. LIGHTFOOT. You mean the worksheets. No, I had to have the 

complete worksheets to even analyze the information to prepare 

the workout offer. 

Mr. SCHIFF. And it would have been important for you in knowing whether your client could actually live up to a workout what 

his income and spending habits were, isn’t that right? 

Mr. LIGHTFOOT. True. 

Mr. SCHIFF. And you were unaware that in approximately the 5- 

year period prior to retaining you, that he had spent around 

$100,000 on gambling? 

Mr. LIGHTFOOT. Yes, sir. I didn’t know a thing about that. 

Mr. SCHIFF. Had you known about that, that would have, I take 

it, influenced your conclusion about whether he could meet a workout plan? 

Mr. LIGHTFOOT. Absolutely. 

Mr. SCHIFF. Is there a duty in a bankruptcy case to update the 

bankruptcy petition as circumstances change—we touched on this 

a little bit—in terms of whether your income changes? There is a 

duty to have an accurate listing of what your income is when you 

file your petition, right? 

Mr. LIGHTFOOT. Yes, sir. 

Mr. SCHIFF. If your income were to change substantially during 

the course of the bankruptcy case, isn’t there a duty to update the 

court on changes? 

Mr. LIGHTFOOT. I have not seen anything in the bankruptcy code 

on that, but I have seen it come up on occasion in a particular case, 

particularly where the trustee may feel that the income is sporadic 

or it goes up and it goes down; a commissioned salesperson, someone who is underemployed, that used to make more and is looking 

for new employment. In those cases, the trustee will recommend to 

the court that there be typically a 6-month report on income so 

that that can be monitored. 

Mr. SCHIFF. If you have a client, though, that gets a new job during the pendency of a bankruptcy case where they are making 

twice the income, isn’t there some obligation to let the court and 

creditors know that their income is now much greater? 

Mr. LIGHTFOOT. There really isn’t. And I may not know about it. 

When I learn there is a problem is when the clients don’t pay their 

plan payments. When good things happen, they don’t come and tell 

me. 

Mr. SCHIFF. Now, when you and Judge Porteous sat down and 

made the decision to file a bankruptcy, did the judge express concern about it becoming public and the public becoming aware he 

was filing bankruptcy? 

Mr. LIGHTFOOT. I expressed it, and he expressed it too. 

Mr. SCHIFF. What did he tell you about it? 

57 

Mr. LIGHTFOOT. He was clearly despondent over having to have 

to resort to the bankruptcy, and I had told him about my negative 

experience with these workouts with credit card—if you have your 

local bank and a lawyer to deal with, you can really approach settlement much more effectively. But when you have these large institutional creditors, it is just very hard to get through to anybody. 

I was not—I went—I really made every effort to try to accomplish 

it, but it just didn’t work. I think that he had hoped that it would 

work. 

Mr. SCHIFF. Did the judge express concern when the workout 

wasn’t successful that the public would become aware that he was 

filing for bankruptcy? 

Mr. LIGHTFOOT. No, he didn’t—I mean, he was just I think embarrassed to have to file bankruptcy. Of course, part of that I guess 

is that people will know. 

Mr. SCHIFF. Tell us about the conversation you had with the 

judge where the decision was made to file under a false name. How 

did that conversation begin and how did it proceed? 

Mr. LIGHTFOOT. Well, I explained the process by which the 

paper, the newspaper would come and get the names and would 

publish them, and also the process by which we would correct the 

false name and make sure that all creditors got the correct information so that none would be prejudiced, and hopefully that would 

save him the embarrassment of a big appearance in the paper. 

Mr. SCHIFF. But how did this conversation come up? Did he express a concern about it becoming public? Did you raise the issue? 

Mr. LIGHTFOOT. I raised the issue, and I wish I hadn’t, but I did. 

Mr. SCHIFF. And what made you feel that he would be ashamed 

of having the bankruptcy published in the paper? 

Mr. LIGHTFOOT. Well, because he was a judge. I mean, I hadn’t 

had a client like that before in Chapter 13. My clients are just regular working folks. And I knew that it would be very embarrassing, 

and I was compassionate about that. 

Mr. SCHIFF. Now, you said that ultimately filing under the false 

name was unsuccessful and you used a phrase I found striking, 

‘‘because it came out anyway.’’ What did you mean by that? How 

did it come out anyway? 

Mr. LIGHTFOOT. Well, in terms of the—there was later when—I 

don’t know how I could not have thought that gossip would have, 

you know, spread like wildfire, but, of course, it wasn’t just a listing of a name along with many, many other names in a column, 

which would have happened normally, but there was an article in 

the paper about the judge filing for bankruptcy, et cetera, that was 

a much more—larger article than the normal reporting of all the 

people who filed that week. 

Mr. SCHIFF. So when you filed the petition under the Ortous 

name, there was nonetheless in that paper an article about Judge 

Porteous? They had identified him? 

Mr. LIGHTFOOT. Not right away, but it came out later. 

Mr. SCHIFF. Did it come out prior to your filing the petition with 

the corrected name? 

Mr. LIGHTFOOT. No. 

Mr. SCHIFF. And during the period between filing with the false 

name and correcting the petition, did you get any information that 

58 

there were rumors going around or other information about the 

judge filing for bankruptcy? 

Mr. LIGHTFOOT. No. 

Mr. SCHIFF. When you had made the decision to file the petition 

in the false name, did you also discuss at that time at what point 

you would correct the name? 

Mr. LIGHTFOOT. Yes, sir. 

Mr. SCHIFF. And tell me how that conversation went? 

Mr. LIGHTFOOT. Well, immediately, as soon as it went in the 

paper, it had to be corrected, and I needed to correct it so that the 

notices would all go to the creditors with the proper name so that 

they could identify the accounts and file their claims. And the only 

notice that ever went out, went out with the proper name and address. 

Mr. SCHIFF. Well, tell me about the conversation. You still 

haven’t relayed the conversation you had with the judge. As best 

you can, tell us the conversation where you proposed the false 

name filing and what the procedure would be, and tell us what the 

judge’s reaction was and how the meeting resolved? 

Mr. LIGHTFOOT. Well, I explained how the notices, you know, just 

the the logistics of—until you file the schedules and the plan—— 

Mr. SCHIFF. If I could back up for just 1 second, was this at the 

same meeting where the decision was made to file a bankruptcy petition? 

Mr. LIGHTFOOT. Yes. 

Mr. SCHIFF. So you had a meeting with Judge Porteous. You said 

the workout isn’t working. You discussed whether to file and you 

made the decision that you needed to file. 

Mr. LIGHTFOOT. All of that didn’t happen in one meeting. The 

workout not working really came to a head because finally, not because of my efforts to talk to the credit card companies, but finally 

two of the credit card companies had assigned the debts to local 

collection lawyers to collect, and they had written demand letters 

or made a phone call. So initially I thought well, this is great. I 

have got someone to talk to now. And I sent the very same package 

to them that I had sent to their clients. And I said, I don’t know 

if you were provided this—of course they hadn’t been—but this is 

what I was proposing. Would you review it with your client and tell 

me? 

Of course, it was only two out of, you know, several—lots more. 

The workout would have needed to have at least the majority of 

them to really work. But one didn’t get back to me, one of the lawyers, and the other lawyer said the client said no. 

Mr. SCHIFF. So you made the decision with your client to file a 

bankruptcy petition. Tell me how the conversation began and the 

full nature of the conversation you had about filing under a false 

name? 

Mr. LIGHTFOOT. That was after the workout had failed, and we 

knew that, then the only alternative was the bankruptcy. And I 

had this idea about trying to save him the embarrassment of the 

splash in the paper, and I explained it to him and I explained—— 

Mr. SCHIFF. Well, if you would, rather than telling us in general 

terms what took place with the conversation, tell us what the conversation was. You raised with Judge Porteous—— 

59 

Mr. LIGHTFOOT. I said, you know, they publish these things in 

the paper, and if your name were incorrect and you had a P.O. Box, 

maybe the paper wouldn’t know that it is you. And then as soon 

as it is published in the paper, we can make the correction immediately, make sure that all the creditors get the proper notice and 

the case goes forward as normal, and hopefully that will avoid you 

with the embarrassment of a big article in the newspaper. 

Mr. SCHIFF. And what was Judge Porteous’s reaction to your suggestion? 

Mr. LIGHTFOOT. I asked if he wanted that or not. 

Mr. SCHIFF. Did you explain to your client what the legal risks 

were of filing a petition in a false name? 

Mr. LIGHTFOOT. I didn’t really cover that. 

Mr. SCHIFF. And what was the judge’s reaction? 

Mr. LIGHTFOOT. He was—well, he agreed to do it. 

Mr. SCHIFF. And what did he say? 

Mr. LIGHTFOOT. He said—well, I don’t remember him saying anything other than let’s do it. 

Mr. SCHIFF. And how did you preface the conversation? Did you 

tell him you had an idea about—once you made the decision to file 

the bankruptcy petition, hey, I have an idea about how to spare 

you some public embarrassment? How did you raise the—— 

Mr. LIGHTFOOT. That was exactly how I put it. I said, there is 

going to be a publication in the paper, and I imagine it will result 

in embarrassment for you. And that was the genesis of it. 

Mr. SCHIFF. Can you tell us anything more that Judge Porteous 

said in the conversation? 

Mr. LIGHTFOOT. He didn’t really say anything about it other than 

to agree to do it. 

Mr. SCHIFF. And the plan that you had was you file in the false 

name. Were you the one who suggested setting up the phony address as well? 

Mr. LIGHTFOOT. Yes. Because without—the address and the 

name were the things published in the newspaper, in the long list 

of those who had filed. 

Mr. SCHIFF. And at no time you advised your client of the risk 

of making a false statement and signing under penalty of perjury? 

Mr. LIGHTFOOT. It was a mistake. I rue the day that I thought 

of that. But that’s the way it was. 

Mr. SCHIFF. And your plan was to file a subsequent petition, an 

amended petition in the correct name within a certain period of 

time? 

Mr. LIGHTFOOT. As soon as it was in the paper, you know, the 

effort was to correct it immediately. There was no intent to ever 

have a false impression to a creditor or anyone who should have 

been paid in that case. In fact, they all got the correct notices with 

the correct name. No notices ever went out on the first petition. 

They only went out on the amended petition. 

Mr. SCHIFF. I take it the newspaper didn’t publish the names of 

those filing an amended petition. Is that how you intended to avoid 

publication? 

Mr. LIGHTFOOT. Right. Correct. Yes. 

60 

Mr. SCHIFF. So any creditors that may have relied on the newspaper to learn about people filing bankruptcies, they would never 

have gotten notice? 

Mr. LIGHTFOOT. If that is the only way that a creditor could tell, 

then I guess they would have found out from the later articles that 

appeared in the paper, but they wouldn’t have found out from that 

incorrect name in the very first listing. 

Mr. SCHIFF. But if you had been successful and Judge Porteous 

was able to keep his name out of the paper altogether, creditors 

who rely on the paper to find out would never have found out? 

Mr. LIGHTFOOT. Well, other than there were many other articles 

about him being in bankruptcy. 

Mr. SCHIFF. Yes. But your intention was to keep him out of the 

newspaper, right? 

Mr. LIGHTFOOT. That’s true. The only creditors that I knew of got 

an official notice with the right name because it was corrected before the notices went out. 

Mr. SCHIFF. My question, Mr. Lightfoot, is—— 

Mr. LIGHTFOOT. If anybody had relied on the newspaper, they 

might not have picked it up. 

Mr. SCHIFF. So if you were successful in keeping his name out 

of the paper by filing originally under a false name, any creditors 

that relied on the newspaper to learn about bankruptcies would not 

have found out about his bankruptcy? 

Mr. LIGHTFOOT. That’s true. 

Mr. SCHIFF. I just have a few more questions. 

You mentioned in discussion about the tax refund, that that 

would have been required to be disclosed when it was a liquidated 

asset. 

Mr. LIGHTFOOT. Yes, sir. 

Mr. SCHIFF. When Judge Porteous filed the bankruptcy petition, 

he had filed for the tax refund, correct? 

Mr. LIGHTFOOT. I don’t know anything about when he filed his 

return other than being here and listening. I didn’t know anything 

about that. 

Mr. SCHIFF. Well, let me ask you this. The bankruptcy form requires what to be disclosed in terms of a tax refund, whether they 

are expecting a tax refund? 

Mr. LIGHTFOOT. The way I interpret the liquidated amount 

means you have to have prepared a return so that you know what 

the amount is. 

Mr. SCHIFF. Does the bankruptcy petition refer to a liquidated 

amount? 

Mr. LIGHTFOOT. Yes, sir. All liquidated debts owing to the debtor, 

including tax refunds. 

Mr. SCHIFF. And if someone has applied for a tax refund prior 

to the filing, a week before the filing, would that be considered sufficiently liquidated to be reported? 

Mr. LIGHTFOOT. Yes, sir. 

Mr. SCHIFF. Now, you had Judge Porteous review the petition before you filed it to make sure it was all accurate? 

Mr. LIGHTFOOT. Yes, sir. 

61 

Mr. SCHIFF. So even though you were operating on a dated paycheck receipt, Judge Porteous would have known that the salary 

that you had written in was in fact an inaccurate salary? 

Mr. LIGHTFOOT. I certainly didn’t know, but he would have 

known. 

Mr. SCHIFF. And he told you everything that you had filled out 

was accurate? 

Mr. LIGHTFOOT. I didn’t really know it changed much. I figured 

it was probably the same. So I didn’t think to ask about it, but I 

wasn’t corrected. 

Mr. SCHIFF. You mentioned you have other clients that have had 

gambling problems over the years that you have worked on bankruptcy cases with; is that right? 

Mr. LIGHTFOOT. Yes, sir. 

Mr. SCHIFF. Where they have had debts to casinos, have you listed those debts in the bankruptcy petitions? 

Mr. LIGHTFOOT. I have. 

Mr. SCHIFF. During the meeting with the trustee in which Judge 

Porteous was present and was under oath, does a trustee generally 

ask the bankruptcy petitioner whether everything in their bankruptcy petition is correct and accurate to the best of their ability? 

Mr. LIGHTFOOT. Yes, sir. 

Mr. SCHIFF. And in this case in fact did the trustee ask if everything in here is true and correct and the judge answered yes? 

Mr. LIGHTFOOT. Yes, sir. 

Mr. SCHIFF. So if Judge Porteous were aware that the income 

level was inaccurate in the petition, that gambling debts were not 

listed, that the tax refund was not included when he answered that 

everything in the petition was accurate, that would have been a 

false statement under oath to the bankruptcy trustee? 

Mr. LIGHTFOOT. With everything that I have seen, it would be, 

yes. 

Mr. SCHIFF. At one point the trustee asks whether he had listed 

all of his assets, and he answered yes. In light of what you have 

seen, is that a false statement as well? 

Mr. LIGHTFOOT. Yes. 

Mr. SCHIFF. The court order prohibited the incursion of additional debt during the bankruptcy. For someone who takes out additional debt in the form of markers or other debt, is that a violation of a court order? 

Mr. LIGHTFOOT. Of the confirmation order in this case it was. 

Mr. SCHIFF. I have no further questions. 

Now I will recognize the Ranking Member, Mr. Goodlatte. 

Mr. GOODLATTE. Thank you, Mr. Chairman. 

Mr. Lightfoot, following up on the question by the Chairman, 

how well did you know Judge Porteous before you were retained to 

help him with this problem? 

Mr. LIGHTFOOT. I didn’t know him at all. 

Mr. GOODLATTE. Had you ever met him before? 

Mr. LIGHTFOOT. I don’t think I had ever met him. 

Mr. GOODLATTE. Do you know of him by reputation or anything? 

Mr. LIGHTFOOT. No, sir. 

Mr. GOODLATTE. After he retained you to handle the workout, 

there was quite a lot of time before you finally got around to filing 

62 

a Chapter 13 bankruptcy. Is that—about 9 months or something in 

that range? How many occasions did you have to converse with him 

during that time, either in person or over the telephone? 

Mr. LIGHTFOOT. I would say periodically or maybe like every 3 

weeks or a month. He would be anxious to know was I getting anywhere with the workout. 

Of course, initially, I was engaged in getting the worksheets 

back, getting a fresh opinion of value on his house so that I could 

complete the workout proposal and figure out what creditors could 

expect to receive. And after that it was just a periodic delivery of 

new statements from the credit card companies so that I could be 

aware of the changes in the amounts that were owed. 

Mr. GOODLATTE. Did Judge Porteous ever express hope that his 

circumstances would change, that he would not be required to continue this workout effort or that he would not ultimately wind up 

in bankruptcy? 

Mr. LIGHTFOOT. I think he hoped that the workout would be successful. 

Mr. GOODLATTE. But did he ever indicate that he might have a 

change of financial circumstances himself that would do that? 

Mr. LIGHTFOOT. No. 

Mr. GOODLATTE. What was your fee arrangement with him? 

Mr. LIGHTFOOT. I told him that I would charge him—we had a 

controlled fee in our district and still do for Chapter 13s. At that 

time, it was a thousand dollars. So I told him for the efforts that 

I had made in the workout that I was going to charge him an extra 

$750. So when I filed the case, I asked for a fee of $1,750. 

Mr. GOODLATTE. Did he pay any of that up front? 

Mr. LIGHTFOOT. He paid just the filing fee, and the fee got paid 

through the plan. 

Mr. GOODLATTE. And so the entire 1,750 was approved? 

Mr. LIGHTFOOT. It was. The trustee objected to it initially because it was more than what we normally charged, but Judge 

Greendyke felt that was a fair fee, and it was approved. 

Mr. GOODLATTE. And were you paid all of that fee? 

Mr. LIGHTFOOT. As he paid the trustee, the trustee paid me and 

I was paid. 

Mr. GOODLATTE. And the Chapter 13 was completed? 

Mr. LIGHTFOOT. It was. 

Mr. GOODLATTE. During the time that you were representing 

him, did you ever have any of these meetings over a meal? Did you 

meet him for lunch or dinner? 

Mr. LIGHTFOOT. No, but usually I would go to his office because 

I was—my office was in another part of the city at that time and 

I was in court most days, which was downtown and in the downtown area and the bankruptcy court was in the same building. So 

it was easier for me to go meet with him in his office. 

Mr. GOODLATTE. Bankruptcy court was in the same building as 

his office? 

Mr. LIGHTFOOT. Correct. 

Mr. GOODLATTE. All right. During your grand jury testimony, you 

refused to answer certain questions about your conversations with 

Judge Porteous based on the attorney/client privilege. 

Mr. LIGHTFOOT. Yes, sir. 

63 

Mr. GOODLATTE. Why did you do that? 

Mr. LIGHTFOOT. The judge had a lawyer and I would have to 

come out when a question was asked that might get into privileged 

material and the judge claimed through his lawyer the privilege 

and I had to go back in and say that I was directed not to answer. 

Mr. GOODLATTE. And ultimately the court ruled that the attorney/client privilege that Judge Porteous was attempting to raise 

did not protect these conversations. And what was the reason for 

that? 

Mr. LIGHTFOOT. Crime fraud exception and then I was free to answer all the questions. 

Mr. GOODLATTE. As a result of the fact that you could not exercise that privilege and he could not exercise it through you based 

upon the fact that there were criminal allegations made regarding 

his conversations and regarding the filing of the petition and his 

failure to put certain things in those petitions, is that the crime 

fraud exception? 

Mr. LIGHTFOOT. The court ruled there was a crime fraud exception. I don’t think I really was aware of what on Judge Porteous’s 

side anybody was investigating at that time. But I just knew that 

I didn’t—I was now free to answer any questions. 

Mr. GOODLATTE. And that—okay. And they did not tell you the 

reason for their—— 

Mr. LIGHTFOOT. Did they tell me—— 

Mr. GOODLATTE. Did they explain the crime fraud exception to 

you? 

Mr. LIGHTFOOT. Well, I knew what it was, that there was something about what we may or may not have talked about, because 

I hadn’t even testified yet, that could lead to the crime fraud exception and the court was satisfied that it should be applied and it 

was. 

Mr. GOODLATTE. And it was your understanding that that exception meant that there was either allegations or more related to the 

activities of Judge Porteous related to his bankruptcy filing that 

were of a fraudulent or criminal nature? 

Mr. LIGHTFOOT. Yes, sir. 

Mr. GOODLATTE. Other than going to his office for his convenience and meeting with him, how else did the fact that Judge 

Porteous was a Federal judge impact the way that you dealt with 

him? 

Mr. LIGHTFOOT. Well, one thing that I was clear to do early on 

when I provided the worksheet, I explained the worksheets and 

said, now, let me show you these. I want to show you how to fill 

them out. And I went to his home and sat down when he and his 

wife and explained them. 

Because many times, for example, in the budget how much is 

spent for your monthly living expenses, maybe the wife took care 

of that. I really didn’t know him, so I didn’t know. And I wanted 

to make sure that I sat them down and explained how to proceed 

toward filling out these worksheets equally and as thoroughly as 

I would any other client that would be in my office, notwithstanding the fact that he was a judge, lawyer, whatnot. 

64 

Mr. GOODLATTE. In fact, more thoroughly, because he was a 

judge and because you probably don’t make house calls for most of 

your clients? 

Mr. LIGHTFOOT. Well, I didn’t know how much he knew about 

bankruptcy. All I knew was that I wanted to be as thorough as—— 

Mr. GOODLATTE. But you don’t know how much most of your clients know about bankruptcy. 

Mr. LIGHTFOOT. That’s true. 

Mr. GOODLATTE. It doesn’t entail your visiting them in their 

homes to clarify that, in most instances. 

Mr. LIGHTFOOT. No. Well, he lived near where my office was, and 

that particular time it was just more convenient for me to go there. 

And he suggested it, and I said that was fine. 

Mr. GOODLATTE. If after the confirmation order had been issued 

and Judge Porteous had asked you whether he could take out casino markers, what would you have told him? 

Mr. LIGHTFOOT. No. 

Mr. GOODLATTE. Why would you have so instructed him? 

Mr. LIGHTFOOT. Because first we had to have court authority, 

which as it turned out under Judge Greendyke’s order was trustee 

authority and the kinds of debts that you’re allowed to incur during 

a bankruptcy are those that are necessary and essential. And obviously making a marker at a casino is not essential. 

Mr. GOODLATTE. And is there any question in your mind that a 

marker is a form of indebtedness? 

Mr. LIGHTFOOT. No doubt at all. 

Mr. GOODLATTE. And if you had known that Judge Porteous gambled at all, what would that have triggered other than in terms of 

other questions for inquiries by you of him? 

Mr. LIGHTFOOT. I would want to know where are the gambling 

debts. They must be listed. You can’t gamble anymore. You can’t 

incur debt to gamble. Those admonitions. Have we listed all of the 

debts or do you have—— 

And then I would get into the area of the markers. Because the 

markers, although they are a civil liability to pay, as you were explaining, they also could—if the marker is put through as a check 

and it bounces and then you have a bad check, which is a more serious problem. 

Mr. GOODLATTE. Tell me what sorts of questions you would have 

asked him and what advice you would have given him if he told 

you he was a frequent gambler? 

Mr. LIGHTFOOT. Well, I would have told him exactly what—do 

you have any gambling debts that you haven’t told me about? If so, 

I need the name, address, account number, balance due. Are you 

doing it now? Because your budget will not work if you gamble. 

You have no authority to make any debts to gamble. 

Mr. GOODLATTE. And during the entire period of the workout, 

some 9 months, and during the time that you were filing the Chapter 13 in the initial proceedings in the Chapter 13 and you had conversations with him every few weeks, did he ever at any time indicate to you that he gambled at at least 10 different casinos on the 

Gulf Coast and also in Nevada? 

Mr. LIGHTFOOT. No, sir. In fact, my understanding was there was 

no debt being made. Because that is what I told him. I said, I can 

65 

understand that we have this workout pending, but you shouldn’t 

make any more debt. You’re just going to get yourself into a deeper 

hole. You have got all the debt you need now. Don’t make any more 

debt. Don’t use any credit cards. 

Mr. GOODLATTE. Did he show any interest in making more debt? 

Mr. LIGHTFOOT. He said fine. 

Mr. GOODLATTE. He said fine. 

Mr. LIGHTFOOT. It was good advice. He said, fine, I won’t make 

any more debt. And I said—at a certain point he was still continuing to make minimum payments that weren’t keeping up with 

the interest, and I was getting no response at all. And I said, well, 

you know, we are at a point now where it doesn’t look like it is 

working and maybe what we need to do next is, in addition to not 

making any new debt, stop paying them. Maybe we can get their 

attention. Because, ultimately, it will lead to bankruptcy through 

which they will get paid whatever they are going to get. 

But my understanding is no debts were being made. 

Mr. GOODLATTE. And Judge Porteous totally hid all of his gambling activities from you? 

Mr. LIGHTFOOT. Excuse me? 

Mr. GOODLATTE. I said, Judge Porteous totally hid all of his gambling activities? 

Mr. LIGHTFOOT. Oh, yeah. 

Mr. GOODLATTE. You didn’t even know he gambled; is that correct? 

Mr. LIGHTFOOT. Oh, I don’t gamble. 

Mr. GOODLATTE. No. I said, you didn’t even know he gambled. 

Mr. LIGHTFOOT. I didn’t know he gambled and—whatsoever. 

Mr. GOODLATTE. Were you intimidated by Judge Porteous? 

Mr. LIGHTFOOT. No. 

Mr. GOODLATTE. What was your reaction to Judge Porteous and 

his gambling when you found out afterwards that he had—not 

gambled, that he had perpetrated a fraud upon the bankruptcy 

court and, in fact, had used you to help perpetrate that fraud? 

Mr. LIGHTFOOT. Well, I don’t feel so good about it. I feel a little 

betrayed. Because had I known I would have said a lot of things 

to him in the hope to prevent him from doing that. But it didn’t 

happen because I didn’t know. 

Mr. GOODLATTE. Thank you. 

Thank you, Mr. Chairman. 

Mr. SCHIFF. The gentleman yields back. 

Mr. Gohmert. 

Mr. GOHMERT. Thank you. 

I appreciate your testimony, and I’m a little fuzzy on my recollection of bankruptcy rules. But what is the length of time before you 

file bankruptcy that any transfer of assets may be brought back 

into the bankruptcy determined later? 

Mr. LIGHTFOOT. At the time of this case, it was 1 year. 

Mr. GOHMERT. It was 1 year? 

Mr. LIGHTFOOT. Yes, sir. 

Mr. GOHMERT. Okay. And you had mentioned that you had had 

some bankruptcy appeals that obviously went to a district court. 

You had never heard of Judge Porteous before he came to you, 

though? 

66 

Mr. LIGHTFOOT. I knew he was a judge, but I never met him. 

Mr. GOHMERT. Okay. All right. 

Mr. LIGHTFOOT. I had this one appeal that was allotted to his 

court many years before, maybe even 10 years before, and I was 

prepared to write a brief. I was the prevailing party in the bankruptcy court. So the appellant was going to file a brief, and then 

the appellant dismissed their appeal. So it never went anywhere. 

So I never did meet Judge Porteous. 

Mr. GOHMERT. Okay. So you did know he was a judge. So that 

has got to be a pretty sincere form of flattery for a Federal district 

judge to come in and seek your services legally, correct? 

Mr. LIGHTFOOT. Well, I had never had a client like that before. 

Mr. GOHMERT. I know. But that has got to be very helpful? 

Mr. LIGHTFOOT. Well, I guess he must have called around and 

checked me out and thought I was a good choice, and I felt good 

about that. 

Mr. GOHMERT. Yeah, sure, it is flattering. And normally down 

the road it ends up being good business. People know, oh, this is 

the guy that helped the Federal judge, right? I mean, you had mentioned word gets around. 

Mr. LIGHTFOOT. My typical clients aren’t interested in that. I 

have just working-class people for the most part. 

Mr. GOHMERT. Well, I have represented working-class people myself; and I find that if they hear that one lawyer was used by a 

Federal judge, or by any judge, it makes a very big impression. So 

it is good—— 

But I’m wondering about, in the bankruptcy court, we have had 

the questions about, you know, his being asked the normal questions, put under oath and swearing to do things by the trustee. Did 

you see that he got any special treatment where maybe he wasn’t 

sworn in at any of those or did they treat him like a normal court 

participate? 

Mr. LIGHTFOOT. No, everything went usual. It is not a lengthy 

process. But I don’t believe it was any different than any other 

case. 

Mr. GOHMERT. Okay. So they didn’t cut him any slack or just because he was a judge not swear him in or anything like that? 

Mr. LIGHTFOOT. Oh, no. He was sworn. 

Mr. GOHMERT. Well, I just wanted to tie those up. 

Thank you, Mr. Chairman. 

Mr. SCHIFF. The gentleman yields back. 

Mr. Westling. 

Mr. WESTLING. Mr. Chairman, we have no questions for this witness. 

Mr. SCHIFF. All right. Well, I thank you for your testimony. 

Mr. SCHIFF. We will now call up our final witness of the day. Our 

final witness is the Honorable Duncan Keir, Chief Judge of the 

United States Bankruptcy Court for the District of Maryland. 

Judge Keir has served as a bankruptcy judge since November, 

1993. He is a distinguished academic, has had a distinguished academic legal career as well. He is the author of a chapter of Collier 

on Bankruptcy, a respected treatise on bankruptcy law. 

67 

He has served as an adjunct faculty member of the University 

of Maryland School of Law and is a Fellow of the American College 

of Bankruptcy. From 1999 through 2002, Judge Keir served as Circuit Governor for the Fourth Circuit on the Board of the National 

Conference of Bankruptcy Judges. 

I will now swear the witness. 

Judge Keir, if you wouldn’t mind rising and raising your right 

hand. 

[Witness sworn.] 

Judge KEIR. I do. 

Mr. SCHIFF. Thank you. You may be seated. 

And at the outset, Judge, I want to thank you for your willingness to come and testify today. You’re not a participant witness 

here and under no duty or compulsion, but we are very appreciative of your time. 

Judge KEIR. You’re very welcome. I’m glad to be here if I can be 

of assistance. 

Mr. SCHIFF. Thank you, Judge. And I will turn over to a Task 

Force counsel Harry Damelin to begin the questioning. 

TESTIMONY OF THE HONORABLE DUNCAN KEIR, CHIEF 

JUDGE, UNITED STATES BANKRUPTCY COURT, DISTRICT OF 

MARYLAND 

Mr. DAMELIN. Good afternoon, Judge. And could you please tell 

us first, in addition to being present here this morning to hear all 

of the testimony that has been brought forth today, what materials 

have you reviewed in preparation for your testimony before the 

Task Force? 

Judge KEIR. I have reviewed carefully, first of all, the docket 

which lists all of the documents filed in the bankruptcy case of 

Judge Porteous and his wife. I have reviewed the petition that was 

filed that initiated the case, the amended petition that was subsequently filed, the schedules that were filed under penalty of perjury, as well as a statement of financial affairs similarly sworn, the 

Chapter 13 plan that was proposed, the confirmation order that 

was entered, portions of the recorded prior testimony, the 341 

meeting of Judge Porteous, portions of prior testimony before the 

fifth circuit of various witnesses, an outline of financial transactions surrounding the time frame of the filing of the bankruptcy 

case and thereafter during the duration of the case, and including 

prior testimony, I might add, of both the trustee, who is the Chapter 13 trustee in the case, and Mr. Lightfoot, who has just testified. 

I also saw the letter of referral from the United States Attorney’s 

Office to the fifth circuit of the matter. 

Mr. DAMELIN. Thank you. 

Could you please start off by briefly describing for the Task Force 

what a Chapter 13 bankruptcy is? 

Judge KEIR. Chapter 13 bankruptcy is sometimes referred to as 

a wage earner’s plan. That is a little bit perhaps too narrow. It is 

only available to individuals who have receipt of a regular monthly 

income. Income can be unemployment. It doesn’t really have to be 

only wages. 

It is in lieu of, if you will, a liquidation in bankruptcy and the 

means by which the debtor has to provide to the trustee and then 

68 

the trustee distribute to unsecured creditors at least as much in 

value as they would have received had it been a liquidating Chapter 7 bankruptcy. In exchange for that opportunity, the debtor gets 

to keep property that otherwise would have been surrendered to 

the trustee for sale and liquidation and payout. 

The plan can be of a duration no more than 60 months. 

Mr. DAMELIN. In connection with a bankruptcy filing, is it important that a debtor be candid with the court in his or her filings? 

Judge KEIR. It is absolutely essential to the operation of the case 

and the integrity of the system and the bankruptcy laws. 

The United States Supreme Court in 1934 in a somewhat famous 

case referred to as Local Loan Company v. Hunt said something 

which has been often repeated in other courts in numerous opinions since then; and that was that Congress provided the relief in 

bankruptcy for the honest, but unfortunate, individual. And honest 

is an essential component because the debtor reveals in his or her 

schedules all of their debts, all of their assets, their present income 

and expenses, and their financial history through a series of questions called the Statement of Financial Affairs. 

All of this information is sworn to under penalty of perjury. So 

they are taking a court oath as to all of this, and this provides the 

essential information that both the creditors and the trustee can 

then use to decide whether further investigation by way of the examination or take action filing particular action before the bankruptcy court. They investigate the liabilities by asking questions of 

other witnesses or seeking bank records, for example. All of this activity would follow on based upon what the debtor has revealed. It 

has to be complete or there is no trail for the creditors and the 

trustee to follow. 

Mr. DAMELIN. What is the significance of the fact that Judge 

Porteous filed his initial bankruptcy petition under a false name 

and with a P.O. Box instead of his residential address? 

Judge KEIR. Well, Mr. Lightfoot has just testified that the intent 

was to keep secret the fact that Judge Porteous had filed a bankruptcy case from the general public and that it wouldn’t be published in the local newspapers. That in itself violates—first of all, 

it violates by perjury the oath contained in the petition itself which 

states that everything in the petition is true and correct under penalty of perjury. And in six different places on the original petition, 

the false name is put down. In no place is the true name put down. 

Secondly, it is true that most of the creditors are likely to get the 

information about the existence of the case through the notice that 

the clerk’s office sends out. In my district, that clerk’s office notice 

would have gone out more quickly than it did in this particular 

case; and they would have gotten a notice that said Mr. Ortous 

filed, rather than Gabriel Thomas Porteous and his wife filed. 

But, in addition, it is not uncommon that a person that maybe 

the debtor forgot or believes they were owed having an interest in 

the proceeding will find out about it from the newspaper and not 

be in the schedule and therefore the notice—the fact that it was 

corrected before the notice went out would not solve that problem. 

It kept back from the general public who had filed a bankruptcy 

case. 

69 

The other thing it did is, for a time, it falsified the official record 

of the United States court. 

All of the courts have mechanisms they have improved over the 

years with electronics whereby parties in interest can contact the 

court by telephone, calling in to a voice system, now through a system called PACER, and find out if a particular individual has filed 

a bankruptcy case. You go to buy a used car, there are some other 

transactions, this is something they may do as a part of determining whether or not they are going to make you the loan or deal 

with you in some way that incurs credit. And they would have been 

told there is no Gabriel Porteous that has filed this case. And, of 

course, they wouldn’t have asked about G. T. Ortous because it 

didn’t exist. So it falsified the record until it was corrected. 

Mr. DAMELIN. Now, the evidence has shown that the decision to 

file the original bankruptcy petition under a false name was Mr. 

Lightfoot’s idea, according to his testimony, and not that of Judge 

Porteous. Do you believe that Judge Porteous can claim advice of 

counsel as an excuse for filing under a false name? 

Judge KEIR. No. The petition is signed under oath by the debtor 

and not—it is signed but not under oath by debtor’s counsel. The 

testimony, the swearing is that of the debtor. And here it may be 

that Judge Porteous got the idea from Mr. Lightfoot of putting 

down a false statement as to his identity and then swearing to it. 

But he knew it was false. That is very clear from the record. He 

agreed to going along with it, and indeed he then entered into making the oath under penalty of perjury, that it was true and correct. 

So advice of counsel is not a defense at all. 

Mr. DAMELIN. Okay. Now, even though Judge Porteous filed his 

initial bankruptcy petition under a false name, this, again according to the testimony, was corrected several weeks later and Judge 

Porteous’s listed creditors received their notices with the correct 

name. Thus, was there really any damage done here? 

Judge KEIR. In terms of some finite amount of dollars, I don’t 

think anyone here can tell. I certainly could not tell. I cannot tell 

whether anybody would have checked to see whether or not a 

bankruptcy was filed by Gabriel Porteous and done some—— 

And I did note, however, in the record that, on April 7th and 8th, 

Judge Porteous borrowed by markers $2,000 from a casino. The 

correction of the name did not occur until April the 9th. I have no 

way of knowing whether that casino did or did not check to see 

whether this party that wanted these markers was in bankruptcy. 

If they did, they would not have discovered it because the record 

was falsified. So I don’t know whether there was any measurable 

damage, because I can’t tell enough facts. 

But if your question is would this somehow exonerate no-harm, 

no-foul kind of thing—if one goes 110 miles an hour the wrong way 

down a one-way street but by good fortune doesn’t hit anybody, 

they are not exonerated from their intentional misconduct for certain. 

Here in the United States, we strive to be a Nation of laws. We 

all know that there is not enough police officers, there is not 

enough courts and judges, so forth, to enforce laws if the public just 

decides that they can do whatever they want, ignoring laws, and 

70 

so long as you can’t measure the particular damage of the violation, 

there is no violation at all. That would be chaos. 

I suggest to you, particularly where this particular person knew 

the requirements of law, that this idea that you can’t demonstrate 

with particularity a particular creditor or creditors for a particular 

amount that were harmed somehow makes it not meaningful. 

Mr. DAMELIN. And what is the significance of Judge Porteous’s 

failure to disclose his tax refund from the year 2000 on his bankruptcy schedules or on his statement of financial affairs? 

Judge KEIR. Well, let me first address an answer to a similar 

question that Mr. Lightfoot gave. 

There was a question raised about what is a liquidated or not liquidated tax refund. I would point out that both have to be revealed. 

Question 17 about which the particular prior question to the prior 

witness was asked requires you to list on Schedule B of the schedules—this is the Schedule of Assets—a liquidated tax refund. That 

is including liquidated tax refunds. Liquidated, by the way, the 

legal meaning, of course, is that the amount is certain. It doesn’t 

mean you have collected it. It means the amount is determinable 

to a certainty. 

The pain and suffering that the jury has not yet evaluated in a 

verdict is unliquidated. A tax refund that has been determined or 

at least initially determined by the tax return is a liquidated 

amount. That is what Question 17 required him to put down. 

But I would note that Question 20 follows on and says, okay, put 

down your unliquidated amounts that may be owed to you, including tax refunds. So if you didn’t know because you hadn’t yet filed 

your return but you had finished your tax year in 2000, if you had 

an unliquidated amount, you had to divulge that as well, your best 

estimate. 

Nothing was put down. Either question, of course. 

Now, the effect in Chapter 13 is twofold. As I said, in Chapter 

13, one of the two measures of how much the debtor has to pay into 

a plan in order to be eligible for the plan to be confirmed is to deliver the same value or greater than would have been delivered in 

a hypothetical Chapter 7 liquidation. An asset of $4,100 would increase that amount. Because, in a Chapter 7, that tax refund would 

have gone to the Chapter 7 trustee for distribution to creditors. So 

if you hide $4,100 of your assets, you’re reducing the amount that 

the trustee is going to calculate in making a recommendation to 

the court as to how high the plan payment has to be. 

The second thing is, of course, a tax refund is effectively cash to 

put into your account. You can spend it. If you spend it and then 

your case for some reason was converted to Chapter 7, it is not 

going to be available to creditors. It is gone. So, often, at least in 

my district, the trustee will take the position and if not agreed will 

file a motion asking for a court order that the refund be paid into 

the trustee upon receipt and, as in effect, part of the payment required into the plan. 

On occasion, a debtor may work out and the trustee may recommend that some portion be retained for some finite necessary 

living expense that the refund is needed for. But, by hiding it, he 

both falsified the amount that the plan was going to have to pay 

71 

and took away from the trustee the opportunity to obtain the funds 

to make sure creditors got those funds. 

Mr. DAMELIN. Thank you. 

Isn’t it true in your years of experience that debtors often make 

mistakes and have inadvertent omissions in their bankruptcy filings? 

Judge KEIR. Yes. The keyword you have used is the same word 

that many opinions that have been written by appellate courts 

have used: ‘‘inadvertent’’. Mistakes happen. I couldn’t tell you 

today, sitting here, the exact dollar figure for the payoff on my 

mortgage; and I don’t know that anybody in this room is likely to 

carry that around in their hip pocket. So If the debtor were a few 

dollars off when they put down what do you owe to your first loan 

company that has your mortgage, it would be an inadvertent error. 

I have seen a doctor’s bill left off among many other doctor bills 

that were listed, things of that nature, where an inadvertent minor 

or at least isolated omission has occurred, an estimate was off. But 

the case law has also made it clear that a repetitive and pattern 

of false statements is not inadvertent. It is intentional. It is fraud. 

Mr. DAMELIN. Is that what you see here in this case? 

Judge KEIR. Very much so. There is a pervasive pattern, first of 

all, of not listing all of the debts, which says a couple of things. 

First, there is a credit card—I think it is Fleet—that was not 

listed. Fleet probably didn’t receive notice of the bankruptcy because, therefore, they wouldn’t be on the address list to whom the 

notice went. That means they wouldn’t have cut off the credit that 

they probably would have cut off immediately post bankruptcy. 

They get a notice there is a bankruptcy case for their borrower on 

the credit card, they generally—my experience has been—shut that 

card off right away. 

Similarly, with a casino who doesn’t get notice and therefore— 

it has already been testified—would have stopped allowing markers. 

In addition, in the Statement of Financial Affairs, question 3, he 

did not list any of these last-minute payments. 

Not only does that bear into this idea of recovering back for the 

estate, but it hides the fact that he did it. 

If the trustee had inquired further by making either an informal 

inquiry or formal inquiry to the casinos and so forth that these 

last-minute payments paid off, they would have known immediately, hey, this guy has filed a bankruptcy case. So they didn’t 

know that because no one makes that inquiry to them because they 

are not listed on question 3’s answer. He didn’t put anything down 

there other than ordinary installments. 

So you have both sides of not listing debt, not listing assets, and 

not listing the essential pre-petition financial transactions the 

Statement of Financial Affairs requires. 

As to not listing the pre-petition payments, the Chapter 13 trustee under the Bankruptcy Code has the authority, the standing to 

sue and recover preferences that occurred within 90 days of the filing of the bankruptcy case which allowed a particular creditor to 

get a greater return dollar for dollar than unsecured creditors generally in the case. You can reach back a year if the creditor that 

has been preferred is an insider, whichever the time frame. 

72 

It is true—and I think this is the reason for Mr. Lightwood’s testimony—Chapter 13 trustees do not often avail themselves of that 

in a formal sense, by filing an adversary proceeding, which is a 

Federal lawsuit with a funny name that they use in a bankruptcy 

practice. Instead, what they do is they say, well, we are going to 

assume we would have recovered that in Chapter 7. 

So add that amount to this calculation the plan has to return to 

creditors. If the debtor can come up with the money somehow, fine. 

That’s what the creditor is entitled to. But they can and on fairly 

rare occasion do actually launch these adversary proceedings to recover back from the preferred creditor all of the money, and then 

the creditor has to wait and get their aliquot share from distributions under the plan. 

So a bit of a long answer about inadvertent mistakes. But the 

bottom line is there is this pattern of not revealing essential information in a number of places: the petition, the Statement of Financial Affairs, and the schedules. 

Mr. DAMELIN. Okay. Now, are you familiar with the confirmation 

order entered in July of 2001 by Bankruptcy Judge Greendyke? 

Judge KEIR. I have read it. 

Mr. DAMELIN. Now, despite Judge Greendyke’s order, the evidence has established that Judge Porteous continued to take out 

markers at casinos. He applied to increase his credit limit at one 

casino, and he opened a new low-limit credit card, all without the 

approval of the bankruptcy trustee or of Judge Greendyke. Do you 

consider these actions by Judge Porteous to be a violation of the 

bankruptcy order? 

Judge KEIR. They most certainly are a flagrant violation. 

The order is direct and straightforward in this regard. It orders 

that the debtor—in this case, debtors plural, Judge Porteous and 

his wife—not incur any new credit during the bankruptcy case. The 

order was neither appealed according to the record that I reviewed 

nor was any motion filed for relief from that order in any way. It 

simply was disobeyed. Repeatedly Judge Porteous went out and incurred additional credit after the order was entered without asking 

or gaining any permission from the trustee or the court. 

Mr. DAMELIN. So we have heard evidence that even though these 

numerous violations that we have discussed by Judge Porteous 

were violations of the order, he nevertheless satisfied his bankruptcy repayment plan. Thus, are these violations really just a noharm, no-foul situation? 

Judge KEIR. Well, I have already spoken about this concept of a 

no-harm, no-foul defense or exoneration. There is no such doctrine. 

There cannot be. Because the whole system demands and depends 

upon the honesty of the honest but unfortunate person who seeks 

relief. 

I would also, because I just neglected to say it, would like to add 

to my answer to the previous question; and that is another thing 

occurred to me listening to the testimony this morning. In obtaining credit post order in the bankruptcy without authority and then 

allowing these casinos to recover back either by a check or particularly by putting the marker into the account, the situation resulted 

in a violation of Federal law. 

73 

Title 11, Section 362(a), is the automatic stay in bankruptcy. 

When a bankruptcy is filed, on the instant it is filed, there is this 

automatic stay that arises by statute. Congress has put it down. 

The court does not do it. And it is very, very strong. 

One of the things it stops is collection by a creditor from assets 

of the bankruptcy estate. It stops many other things, but that is 

the one I want to focus on. 

A creditor who becomes a creditor after the petition is filed is 

nonetheless stayed from attempting to collect from assets of the estate. In Chapter 13, the bankruptcy estate by statute specifically 

includes not only the property rights owned by the debtor on the 

date that the debtor filed the case but all after-acquired property 

including, and it puts it down with specificity, all earnings. 

So whatever money was in the checking account when the markers were deposited—I believe that was the agent’s term for negotiating the marker—were undoubtedly assets of the bankruptcy estate. They were used to pay a creditor and by the action of the 

creditor in violation of the stay. 

If the creditor didn’t know about the bankruptcy, they inadvertently violated the statute. But that is another damage done to the 

intent that the creditors under the plan are intended to have the 

best opportunity to be paid through a successful reorganization 

without other creditors reaching in and grabbing 100 cents on the 

dollar for themselves. 

The creditor has to go to the bankruptcy court and file a motion 

for relief from stay and convince the court there is some just reason 

why that creditor should be allowed to proceed. That didn’t happen. 

They simply deposed the markers and took the money because of 

the failure to learn of the bankruptcy through Judge Porteous’s violation of the court’s order. 

Mr. DAMELIN. Okay. Now, as you look at this case, is it of special 

significance that the debtor here who engaged in this conduct was 

in fact a Federal judge? 

Judge KEIR. Well, certainly there is only one statute and one 

book about 21⁄2 inches thick of the Federal Rules of Bankruptcy 

Procedure that applies, no matter whether the debtors or debtor is 

a Federal judge or someone totally unassociated with any government position. So there is no difference in the behavior that the 

judge was required to do. 

There is significance, though, on two levels. One, section 152 of 

title 18, which is the criminal statute, makes it a crime to intentionally falsify a material misstatement and also to intentionally 

falsely fail to—or falsely hide assets. So intent. 

Here I think the fact that the debtor was a Federal judge makes 

it rather clear that he knew what the oath penalty of perjury 

meant. And when he was signing the petition under penalty of perjury, signing the schedules under a declaration they were true and 

correct under penalty of perjury, signing a Statement of Financial 

Affairs under the same declaration, he knew he was giving a oath, 

he knew what the oath required, he knew that the violation of the 

oath was fraud and a crime. That knowledge comes with what he 

did in effect his position, and I think that goes to intent. 

The second thing is I think it brings disrepute upon the judiciary. Again, the public needs confidence in its leaders, whether they 

74 

are elected or whether they sit on the bench. Here you have got 

someone who appears to have falsely participated in a number of 

ways in this bankruptcy case and, although not held technically to 

a higher standard by statute, it certainly is behavior which, because he is a Federal judge, I would take more seriously. 

Mr. DAMELIN. Okay. You have been a bankruptcy judge for approximately 19 years; is that correct? 

Judge KEIR. Let us see. Who is counting? Sixteen. 

Mr. DAMELIN. Sixteen. Okay. My math error. 

If you had been the judge with your experience overseeing the 

Porteous bankruptcy and the facts established by the evidence 

today came to your attention, what actions, if any, would you have 

taken? 

Judge KEIR. Well, a number of things would have occurred, fairly 

clearly. 

First, the case would not have led to the discharge of the debtor. 

If the information had been known to the court at the time that 

confirmation of the plan was being considered, confirmation would 

have been denied. 

It is a requirement under section 1325 that the plan be proposed 

in good faith. The plan, based upon falsehoods like this, is not proposed in good faith and the confirmation would have been denied 

right at that point. 

If the case had converted to a seven, undoubtedly under Section 

727 the discharge also would have been denied. Perhaps the case 

would have been dismissed with prejudice against refiling. 

It is likely that the United States Trustee’s Office would have 

been filing motions asking for these remedies and the court I think 

would have granted them if this is the evidence the court had to 

consider without really much question in my mind. 

Finally I would have been compelled under title 18, section 3057, 

to refer this matter to the United States Attorney for investigation 

for prosecution of bankruptcy crimes. That section requires a Federal judge to make that referral where they see a reasonable basis 

that a crime may have been committed. 

And there is no question in my mind that this would have risen 

well beyond that level where that report would have been made. 

I mean, there was this pattern of the wrong name, false name in 

the petition under oath, creditors not all put down, and they were 

selectively not put down. The ones—the credit card that they wanted to use post petition omitted. Certain casinos to keep the relationship going with casinos omitted. That is on the schedules. 

The tax refund, for example, not listed as an asset keeps some 

liquidity that they could use—or Judge Porteous could use, not on 

the schedule. 

Do not reveal the last-minute payments that paid off certain casinos and so forth so that they wouldn’t be listed as creditors because on the instant of the filing they were owed zero, but then the 

trustee would not notify them either because they were not listed 

on the Statement of Financial Affairs. Another document, false 

statement under oath. 

All of this and the violation of the court’s order when put together would have been such a pervasive pattern of misconduct 

that the referral would have been made. 

75 

Mr. DAMELIN. Okay. Thank you, Judge Keir. 

Mr. Chairman, I have no further questions. 

Mr. SCHIFF. I thank the gentleman. 

Judge, let me ask you a few follow-up questions, if I could. 

The practice of the newspaper in this area to publish the names 

of those filing bankruptcy, have other courts in other parts of the 

country also—or other newspapers and judicial communities published the names of those filing for bankruptcy? 

Judge KEIR. I have certainly seen it in my district, although it 

seems to be changing. Newspapers seem to be getting lighter and 

lighter in terms of print copy. 

But it varies. A lot of jurisdictions do it. I think this is a bit of 

supposition on my part. I haven’t done a study. But I believe it is 

probably more prevalent in areas where—that are less in the 

megaurban centers, where what is going on in the Federal courthouse may be a little bit more a part of the news than in some 

other places. 

But it is not unusual that newspapers will pick this up on a daily 

basis and print it or some it of do it by week, the filings of the 

week. I have seen columns that are headed like that. 

In Baltimore, for example, which is where I sit, there is a newspaper, the Daily Record, that contains various columns from various courts that are located within the city listing cases filed that 

week in the various courts. 

Mr. SCHIFF. These are often listed in legal newspapers, right? 

Judge KEIR. Legal and in papers of general circulation. 

The Daily Record, which is becoming more and more a paper of 

general circulation, lists it, but I have seen it in years past in papers of general circulation as well. 

I don’t think the Baltimore Sun paper does it anymore, but they 

used to, I believe. 

Mr. SCHIFF. Is part of the purpose that the legal newspapers and 

some of the papers of general circulation would publish a list of 

those filing bankruptcy so that people that had an interest—that 

either credit agencies or others that might want to see who is filing 

would know that an asset they had was jeopardized in a bankruptcy? 

Judge KEIR. I think very clearly—this practice I believe goes 

back quite a ways, when there was less availability of information 

on an electronic basis and when it was probably the easiest and 

maybe even principal way one could ascertain what was going on, 

who had filed bankruptcy in your community. But it was offered 

to the public very clearly I think so that the public could use the 

information. 

And obviously the public had some interest in it or the paper 

would not have bothered to put it in the print. I know I have 

picked up numerous times something about someone filing that I 

would have not known about if I hadn’t been reading the paper. 

Even after I have been on the bench, sometimes I will see a filing 

in—that I was unaware of that may have some tangential effect on 

a case that I have. 

Mr. SCHIFF. In a case like this, for example, the casinos would 

not have been notified of the bankruptcy because they were not 

76 

listed as creditors. However, someone from the casinos may have 

seen a public notice of bankruptcy. 

Judge KEIR. That’s correct. I don’t know whether they had a 

practice of having someone delegated to review those columns or 

not, but they certainly could have. That is why it is there. 

Mr. SCHIFF. Well—and let me ask you, too, assuming the casino 

credit system works like many others, if somebody is borrowing 

money and paying it back in a timely way, you wouldn’t necessarily 

run a new credit check on them, would you? 

Judge KEIR. I would not think so, no. 

Usually credit checks are run often by attorneys preparing to file 

bankruptcy cases to see whether there is something out there that 

their client inadvertently left off or whether there is some other information. But most of the time it is run by companies who are 

looking to extend additional credit, new credit, or renew credit. 

Mr. SCHIFF. So if you’re a casino and you have someone who has 

filled out a credit application and has a pre-existing credit relationship with you and you are not notified of a bankruptcy because 

you’re not listed as a creditor and it doesn’t appear in the newspaper, you wouldn’t have any reason to run a credit check on them 

if they are making their payments. 

Judge KEIR. I would not think you would have any such reason 

to run a credit check. 

Mr. SCHIFF. I want to ask you one of the questions I asked Mr. 

Lightfoot to see if you had any different take on it. And that is, 

under what circumstances do you have a duty to update the bankruptcy court? When you have a change of income or have maybe 

new liabilities, are there any circumstances where you are required 

to update the court? 

Judge KEIR. Certainly in my district there are. I know that all 

of the judges in my district hold to this idea, and I think it is the 

correct one: The schedules generally reflect assets and liabilities on 

the date of the petition. Schedule A is real property, B is personal 

property, for example, just skipping down a few, schedule F is unsecured debts. But schedule I and schedule J list income and expenses as opposed to assets and liabilities. In a Chapter 13, we require that a material change in schedule I or J during the life of 

the case requires an amended schedule. The debtor gets promoted 

and now has a significantly higher income than they had 2 years 

ago, and they are in a 5-year plan and have 3 years left to go, now 

their disposable income is significantly greater. 

The second financial component tested in the level that the plan 

has to pay, in addition to the equivalence of Chapter 7, is that the 

debtor has to pay all the debtor’s disposable income. Now it is 

called ‘‘projected disposable income.’’ That change was in 2005. So, 

if the debtor’s disposable income has increased greatly, the trustee, 

specifically under section 1329, is authorized to come in and seek 

to modify the plan to require—get a court order to require that the 

plan now go to a higher level because it no longer is a plan that 

is receiving all of the disposable income of the debtor. 

The vehicle that the debtor is supposed to report that event to 

is an updated schedule I and an updated schedule J, where these 

changes have occurred. And counsel routinely seem to advise their 

clients of that. I see that. 

77 

Mr. SCHIFF. In this case we have heard evidence that the judge 

filled out an application that listed his income as $7,500 a month, 

when in fact it was $7,700. Do you consider that a material false 

statement if the judge was aware he was in fact—— 

Judge KEIR. Well, I don’t think that is the limit of the false statement there. I was listening to the testimony, and first of all, the 

schedule I is not filled in correctly, without regard to the numbers. 

The top line on schedule I is supposed to be your gross monthly income from wages, not your net. You are then required on the following lines to list what is taken out of your paycheck before you 

get your take-home pay. That gets your net. The net was put at 

the top, and therefore you didn’t see on that schedule what was 

taken out. 

We already know there was a tax refund of $4,100, which means 

there was an over-withholding going on. Not only was it an asset 

that should have come in, as we already talked, but in effect it affects the calculation of what is disposable income. If you claim no 

dependents, no deductions, and have them take out extra money, 

you can lower that take-home pay. All you are doing is putting it 

in your own savings account, if you are allowed to do that. Therefore, your monthly payment is also going to be less under this plan 

calculation. And that information is not there. It is just this number. 

In addition, I heard the testimony that take-home pay, as it was 

put down, went up significantly just several months after the filing, 

and since, as I have already stated, that should have been updated; 

I don’t think the measure is the $200. So I want to be careful in 

answering your question. 

Do I think the $200 itself is material? In amount, the word, first 

of all, ‘‘material’’ under section 152, courts have determined is in 

effect the same as ‘‘relevant.’’ It is not measured by dollars. It is 

measured by whether it bears on the financial affairs of the debtor, 

the rights of the bankruptcy estate and the process of bankruptcy 

itself. So any error is material in its relevancy. 

Significant? I think by itself a $200 error is on the borderline. 

It would have to—it always arises in a court case in the context 

of other facts. Is it the $200 there, but the debtor is probably underestimating his or her expenses a little bit, and you can see that 

because they didn’t put anything down for home repairs, for example. A common situation. 

The $200 might be readily—you look at that and you say, it is 

going to be absorbed in legitimate expenses. They made an error 

that is not really going to be—was not intentional and it is not 

going to change the math. But if it is intentional, then it is material, because it is a false statement. 

Mr. SCHIFF. You mentioned that the form is filled out incorrectly; 

$7,500 a month is listed as gross income when in fact it is net income, is that right? 

Judge KEIR. Yes. I have the schedule, a copy of it right here in 

front of me. 

Mr. SCHIFF. Is it also listed as net income later? 

Judge KEIR. Yes. What it does is it says $7,531.52 on the top line 

under current monthly gross wages. Then there is nothing taken 

78 

out until it hits the total net monthly take-home pay, which is the 

same figure. So it is readily apparent there is missing data here. 

Now, I can’t tell whether the pay stub was attached as an exhibit 

when it was filed with the bankruptcy court or not, so it may be 

that it was attached. I don’t know. 

But the lines are provided. The lines that are blank, that have 

zero, say payroll taxes and Social Security, zero. Insurance, zero. 

Union dues, zero. Other, specify, blank line, zero. Subtotal payroll 

deductions, zero. That is the information on the form that was 

filed. 

Mr. SCHIFF. The trustee during the hearing asked the judge, ‘‘According to the United States of America, you take home about 

$7,500 a month, is that right?’’ And he answers, ‘‘um-hum,’’ which 

I assume is an affirmative answer. 

Was that a false statement if his income was $7,700 a month and 

he was aware of it? 

Judge KEIR. It was a false statement at the time that he made 

it, because what I have heard of the testimony, his 

take-home income was higher. 

Mr. SCHIFF. The effect of not fully disclosing the full extent of 

your income, of not disclosing the tax return refund you are going 

to get, do I understand it correctly that the impact of that is that 

you actually have more income that you are not obligated to provide to creditors, but you still get the discharge of your debts at 

the end of the process? So you still get the benefit of the bankruptcy, but you actually get to keep more of your assets than if the 

court and creditors were aware of the full extent of your income? 

Judge KEIR. In a Chapter 13, I think I would phrase it, you actually get to pay less to your creditors and get your discharge anyway. Less than the Bankruptcy Code, which Congress enacted, required you to pay. 

Mr. SCHIFF. I take it, Judge, that the filing of a bankruptcy for 

many people, not solely for Federal judges, is somewhat of an embarrassing event for people. Is that a fair statement? 

Judge KEIR. I think that is a fair statement, yes. 

Mr. SCHIFF. So that a great many people, whether they are in 

the lofty position of a Federal judge or any other position in life, 

might not like to see their name in the paper as having to file 

bankruptcy. 

Judge KEIR. That is very true. 

Mr. SCHIFF. Of course, if everyone filed bankruptcy petitions in 

false names to avoid public disclosure, there would be serious problems with the system, wouldn’t there? 

Judge KEIR. That is absolutely true. 

Mr. SCHIFF. Is there any significance in terms of whether the 

court would consider it a mark or a debt, the speed with which the 

marker is paid off? In other words, some of these markers were 

paid off on the same day, some were paid off a week later, some 

were paid off a month later. If the judge has a successful day at 

the table and either wins money and doesn’t report it so the creditors don’t know about it, or breaks even and gets to pay off the 

marker before he leaves the casino, is that any less of an incurred 

debt while it existed? 

79 

Judge KEIR. No. The debt is incurred when the marker is taken. 

That is when the debt arises. You owe the money. And it is the incurrence of debt that was prohibited by the order. It was not qualified by saying ‘‘unless you pay it off within the same day,’’ or any 

other words, such as if you pay it off in the same session or something. It is the incurrence of debt. And, of course, when the marker 

was taken out, there is no way that Judge Porteous knew he was 

going to be able to or not going to be able to pay it from a particular source or at a particular time. It was gambling. There is a 

chance. So the only real event in terms of his disobedience of the 

order was the obtaining of the marker. 

There is a doctrine under section 363(b) which applies to debtors 

under section 1303 of the Code that permits a debtor to use assets 

in the ordinary course of business, which has been interpreted judicially as to a living, breathing individual. In Chapter 13, it would 

mean the ordinary course of living. But that doesn’t really bear on 

this question of incurring a debt for an unusual reason, gambling. 

It is not necessary for your living expenses. 

But more importantly, a direct order saying you are prohibited 

from incurring credit, you went out and incurred credit; the fact 

you paid it back that day, there is no exception to that order for 

ordinary course of any kind by timing or otherwise. So I don’t think 

it has any legal significance at all. 

Mr. SCHIFF. Last couple of questions. You were talking about the 

automatic stay. Is that only implicated when someone who is in 

bankruptcy and takes out a marker actually doesn’t pay it back 

and the casino uses the marker to go into their bank account; or 

would it also be implicated where the debtor writes a check to the 

casino or otherwise pays it back? 

Judge KEIR. Well, that is a somewhat complex question. I will 

take it in pieces, if I may. 

The automatic stay prohibits any act by a creditor who holds a 

pre-petition debt against the debtor’s assets, the estate and so 

forth. As to a post-petition debt, it stays the collection from the 

bankruptcy estate, which, as I said in a Chapter 13 includes afteracquired property and earnings. But it is an action by creditor. 

Where the creditor deposits the marker, they are taking the action. 

Mr. SCHIFF. Meaning where they have to go and draw the money 

from the account? 

Judge KEIR. I am borrowing the word from the testimony of the 

agent, but when they go to the bank and cash the marker out of 

the account, the creditor is collecting. That is a violation of the 

automatic stay. When the debtor hands them the check or hands 

them the chips, I think it is questionable that that is a creditor action. But it is still a violation of the Bankruptcy Code, it is just a 

different section. 

It is a violation of that section 363(b) that I spoke of a moment 

ago. It is a violation by the debtor, because the debtor is now using 

an asset of the estate, out of the ordinary course of business, without court authority. You have to file a motion and get a court order. 

As soon as Judge Porteous obtained the chips or had the money 

in the bank account to write the check upon, those funds were assets of the bankruptcy estate and his legal authority to use them 

80 

was limited under 363(b) and 1303 to use for ordinary course. And 

he was using them for a different purpose. 

So I would believe that where he gave them the check or cashed 

the chips out against the marker, that the creditor didn’t violate 

the stay in those occurrences; the debtor violated section 363(b) as 

well as, of course, the markers themselves violating the court 

order. So most of the violations were by Judge Porteous, except 

where the markers were cashed by the casino. 

Mr. SCHIFF. The last question. In the case where there is a confirmation order, is that an order of the trustee or is that, through 

the trustee, an order of the court? 

Judge KEIR. That is an order of the court. It is entered on the 

docket. The docket reflects it is entered. It is signed by the judge. 

The process in a nutshell is the case is filed, the trustee, who is 

usually a standing trustee in a Chapter 13, conducts the first meeting of creditors, which lawyers routinely refer to as a 341 meeting 

because that is the section of the Code that requires it. 

The judge cannot by law attend that meeting. It is held in a 

meeting room somewhere, chaired by the trustee, who asks questions under oath to begin the process of gathering information. The 

plan is filed by the debtor as a proposed plan. The trustee reviews 

it, may have some problems with it, does some investigation. Oftentimes he will go back to the attorney for the debtor and suggest 

some changes that would obviate the objections the trustee may 

bring. 

If it is not resolved, the trustee will file a formal objection. If that 

is not resolved, there is a hearing. At that point the hearing is in 

front of the court. It is the confirmation hearing. 

At the confirmation hearing the judge listens to the evidence 

from both sides, hears the oral argument, makes a ruling, just as 

in any other court case, and enters an order confirming the plan, 

if that is what the ruling is. 

Here Judge Greendyke entered an order confirming the plan, 

which order contained various provisions, one of which is the provision not to incur any credit. 

Mr. SCHIFF. So—— 

Judge KEIR. The final order, by the way, is reviewable on appeal. 

Mr. SCHIFF. The court orders that the debtor not incur new debt, 

the debtor then goes on and incurs new debt, that is a violation of 

court order. What does the judge have the power to do when it 

finds that a debtor has violated an order? Does the court have the 

power to hold a debtor in contempt? 

Judge KEIR. Yes. The court could hold the debtor in contempt. It 

depends on the nature of the violation. But the court could hold the 

debtor in contempt. The court could vacate its order of confirmation. The court could convert the case to a case under Chapter 7 

and make it into liquidation, dismiss the case outright, and just in 

effect throw the debtor out of the bankruptcy case without a discharge. And, of course, in addition to any of those, the court, if it 

thought it was a criminal violation, should report it under Title 18, 

as I previously discussed. 

Mr. SCHIFF. Thank you. That concludes my questions. I now recognize my colleague, Mr. Goodlatte. 

81 

Mr. GOODLATTE. Thank you, Mr. Chairman. To follow up on that 

last question, it is Judge Keir? 

Judge KEIR. Keir, yes. 

Mr. GOODLATTE. You indicated that presented with evidence of a 

bankruptcy filer who filed under a fictitious name, using an inappropriate address, leaving out his spouse, and then who went on 

to incur debt in violation of the bankruptcy order and failed to list 

debts that were not inadvertent in their omission, that you would 

indeed refer such a case to the United States Attorney? 

Judge KEIR. That is correct. And I have done so in various cases 

when it was necessary. 

Mr. GOODLATTE. In evaluating the conduct at issue, is there particular significance in your mind that Judge Porteous was a Federal judge who actually presides over bankruptcy-related disputes? 

Judge KEIR. Yes. The significance, as I stated, is he clearly knew 

what his responsibilities were when he testified under oath signing 

these documents, he testified at the section 341 meeting orally that 

they were accurate and fully divulged his financial affairs. He 

knew what the testimony was, he knew what the responsibility requirements of penalty of perjury means. I would have had to say, 

and I would say, that therefore he would be found clearly to have 

the requisite knowledge that the violation was intentional and not 

inadvertent. 

Finally, because it occurs by a Federal judge, I think it has a potential effect of denigrating, if you will, the integrity of the court. 

What happens if 6 months later somebody has been found by a 

bankruptcy court to have violated these oaths and denied a discharge, and they appeal it, and the appeal goes in front of Judge 

Porteous? What is that argument going to be? You did it? I did it? 

It is untenable. 

Mr. GOODLATTE. To put it another way, in fact in the way of the 

next question I was going to ask you, in your mind, is there any 

way that Judge Porteous could sit as a judge in a bankruptcy case? 

Judge KEIR. Well, clearly that would not be up to me. I would 

think that counsel would have a good basis to ask for recusal if he 

in fact was doing so in a bankruptcy case. 

Mr. GOODLATTE. We know that from previous hearings on Judge 

Porteous and previous cases, that Judge Porteous doesn’t necessarily voluntarily recuse himself in matters. So what kind of complications would that cause if a judge didn’t disclose that he had 

participated in all of this, and, notwithstanding that, went ahead 

and heard a case; and then it was later revealed that he had heard 

a case involving complaints of creditors in bankruptcy regarding a 

debtor, and went ahead and heard the case without having disclosed his own violations of the bankruptcy laws? 

Judge KEIR. You are asking me what would the effect be on the 

case that was heard, and the answer is the losing party would have 

an appeal point that would be almost irrefutable because it was not 

a fair and impartial judge. 

Mr. GOODLATTE. What would you say in your mind about the 

ability of Judge Porteous to sit as a judge in any case whatsoever, 

of any kind, where he must evaluate the honesty of a party that 

is in front of him? 

82 

Judge KEIR. Well, again, clearly that is not something that would 

come within my jurisdiction. But in many kinds of cases, criminal 

cases, civil cases, including but not limited to bankruptcy, what the 

trial judge in part must do is judge on the evidence, the candor, 

and the creditworthiness of the testimony that is being heard and 

determine, often, whether if there are inaccuracies, these are intentional or inadvertent. 

Is this fraud or was it not fraud? That is a question frequently 

that comes up, of course, in my court. Debt incurred by fraud is not 

dischargeable if the creditor can prove that it was incurred by 

fraud. Intent is one element of fraud. 

I can think of a myriad of cases in which this issue of honesty 

is an essential part of the decision, and it would certainly be troubling to me if the party who was to judge honesty himself was and 

had been shown not to respect honesty and not to obey the law in 

that regard. 

Mr. GOODLATTE. Thank you. Thank you, Judge Keir. I appreciate 

your answering our questions. 

Mr. SCHIFF. The gentleman yields back. Mr. Westling. 

Mr. WESTLING. Mr. Chairman, we have no questions. 

Mr. SCHIFF. I want to thank you, Judge Keir, for your time today 

and your expertise. It is greatly appreciated. I want to thank all 

the witnesses for their testimony today. 

Without objection, the record will remain open for 5 legislative 

days for the submission of any additional materials. 

We will now adjourn our hearing until our next hearing on 

Thursday at 10:30 a.m. Again, I thank everyone for their time and 

patience. This hearing of the Impeachment Task Force is adjourned. 

[Whereupon, at 3:40 p.m., the Task Force was adjourned.] 

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