FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA, 

No. 05-10344 Plaintiff-Appellee,

D.C. No.

v.  CR-04-00002-CRB

JOHN MILWITT,

OPINION Defendant-Appellant. 

Appeal from the United States District Court

for the Northern District of California

Charles R. Breyer, District Judge, Presiding

Argued and Submitted

February 14, 2006—San Francisco, California

Filed February 5, 2007

Before: J. Clifford Wallace, Michael Daly Hawkins, and

Sidney R. Thomas, Circuit Judges.

Opinion by Judge Thomas;

Dissent by Judge Wallace

1265
COUNSEL

Michael Shepard and James Mink, Heller Ehrman LLP, San

Francisco, California, for the defendant-appellant. 

Kevin V. Ryan, Barbara Valliere, and Shawna Yen, United

States Attorney’s Office, San Jose, California, for the

plaintiff-appellee. 

OPINION

THOMAS, Circuit Judge: 

John Milwitt (“Milwitt”) appeals his conviction of five

counts of bankruptcy fraud and his sentence of twenty-four

months imprisonment and three years supervised release.

Milwitt challenges his conviction on several bases, including

sufficiency of the evidence. Because the evidence presented

was insufficient to sustain the verdict, we reverse the conviction.

I

Sometime prior to March 1997, Milwitt placed an advertisement in the yellow pages of the phone book under the

1268 UNITED STATES v. MILWITT
headings of “Attorneys” and “Landlord Tenant Law.” The

advertisement was for a company called “AP Assistance” and

suggested that the company could provide both legal services

through attorneys as well as assistance for individuals representing themselves. The advertisement was one of the few, if

not the only, that explicitly mentioned “tenants’ rights.”

Milwitt never attended law school and has never been admitted to practice law. 

Based on the advertisement in the yellow pages, several

tenants, including the six tenants described in the indictment,

who were having problems with their landlords, contacted

Milwitt. The tenants paid Milwitt varying amounts of money

for his assistance with defending their unlawful detainer

actions. Each of the tenants testified that Milwitt represented

himself as an attorney and that he seemed to know what he

was talking about. Milwitt advised the tenants that they were

entitled to withhold rent from their landlords. In addition,

Milwitt told one of the tenants that she could use money that

she withheld from her landlord to pay his fees. 

Milwitt collected fees from each of the tenants. The tenants

believed that Milwitt was going to represent them in unlawful

detainer actions filed against them by their landlords.

Although Milwitt collected fees from the tenants with the

understanding that he would represent them in court, Milwitt

only filed papers on their behalf. He did not appear in court

for any of the unlawful detainer actions, and default judgments were entered in favor of each of the landlords. 

Although Milwitt listed each of the tenants as appearing

pro per on their court documents, the tenants believed that

Milwitt was their attorney and taking care of their cases. Further, Milwitt listed a street address which actually corresponded to a general public mail services business where he

rented a mailbox as the tenants’ address on all documents he

filed with the courts. Therefore, all correspondence relating to

UNITED STATES v. MILWITT 1269
the cases was forwarded to Milwitt rather than to the tenants,

slowing their discovery of Milwitt’s failure to represent them.

Milwitt filed bankruptcy petitions on behalf of several of

the tenants, without their authorization or knowledge. These

bankruptcy petitions listed the relevant landlords as well as

fabricated creditors. While the tenants did not know about or

authorize the filing of these petitions, Milwitt did tell them

that for various reasons they did not have to pay judgments

entered against them or move out after receiving eviction

notices. The petitions were filed under Chapter 13 of the

United States Bankruptcy Code, and the petitions indicated

that the debtors would be filing a plan for repayment of the

debts. 

In 1999, Milwitt was indicted and convicted on charges of

the unauthorized practice of law in California state court.

Milwitt was released from state custody in February 2002. On

March 21, 2002, Milwitt was indicted on six counts of bankruptcy fraud in violation of 18 U.S.C. § 157.1

 These charges

were based on the bankruptcy petitions he filed on behalf of

the tenants. In particular, the indictment states that between

March 1997 and November 1998, Milwitt made “false and

fraudulent representations, claims and promises concerning or

in relation to a proceeding under [the Bankruptcy Code]” in

relation to a scheme to defraud. The indictment describes the

scheme in the following language:

2. Defendant Milwitt represented to persons threatened with eviction by their landlords that he

would fight their eviction in court or negotiate

an arrangement with their landlord.

1Milwitt was also charged with six other counts of bankruptcy fraud and

four counts of social security fraud in violation of 42 U.S.C.

§ 408(a)(7)(B) related to petitions he filed in his own name. Those charges

have been held in abeyance and are not relevant to this appeal. 

1270 UNITED STATES v. MILWITT
3. Based on his solicitations a number of persons

retained the defendant’s services to stop the

eviction process. Defendant Milwitt normally

charged fees for his services, as well as reimbursement for filing fees and other expenses.

4. As a part of and in furtherance of his scheme,

defendant Milwitt filed voluntary petitions with

the United States Bankruptcy Court. . . . Under

a provision of the United States Bankruptcy

Code, the filing of a bankruptcy petition automatically suspends all judgments, collection

activities, foreclosures, and repossessions of

property, and prevents foreclosure on the property of a debtor until such time as the landlord

or lender obtains relief from this stay or the

bankruptcy is dismissed.

5. In fact, the bankruptcy petitions were shams: the

clients did not grant defendant Milwitt permission to file for bankruptcy on their behalf.

Rather, with intent to deceive and for the purpose of filing the bankruptcies identified above,

the defendant forged the names of the clients on

documents filed without their knowledge or consent. As a further part of the scheme to defraud,

he frequently supplied false social security numbers on the petitions.

6. By filing the sham petitions, the defendant

fraudulently interfered with the process of the

United States Bankruptcy Court,2 and fraudulently obstructed the creditors’ legal right to collect back rents, and repossess the properties.

2Fraud on the Bankruptcy Court was not argued at trial, was not

instructed and is not an issue on appeal. 

UNITED STATES v. MILWITT 1271
7. On or about the dates listed below, the defendant

John Milwitt, having devised a scheme to

defraud, for the purpose of executing and concealing the scheme and attempting to do so, concerning or in relation to a proceeding under Title

11 of the United States, did file bankruptcy petitions in the Northern District of California in the

following debtors’ names using false and fraudulent representations, each such act being a separate violation of 18 U.S.C. Section 157.3

At the end of a two day jury trial, Milwitt was convicted

of five counts of bankruptcy fraud.4 Milwitt timely filed a

notice of appeal. 

The evidence is sufficient to support a conviction if, “viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential

elements of the crime beyond a reasonable doubt.” Jackson v.

Virginia, 443 U.S. 307, 319 (1979). Milwitt challenges the

sufficiency of the evidence to sustain the bankruptcy fraud

conviction, contending that the government proved that he

acted with the intent to defraud the tenants rather than “the

intent to defraud a creditor” of the tenants as charged in the

indictment. 

II

Although “[m]odern bankruptcy’s origins are in English

criminal law,” in our country, “the criminal side of bankruptcy has assumed a more modest role.” 1 Collier on Bankruptcy ¶ 7.01 (Alan N. Resnick & Henry J. Sommer, 15th ed.

rev. 2006). Indeed, “every state legislature [has] enacted stat3The indictment goes on to name each of the six tenants on whose

behalf Milwitt filed bankruptcy petitions as well as the case numbers and

the dates those petitions were filed. 

4The government dismissed one count of bankruptcy fraud before trial.

1272 UNITED STATES v. MILWITT
utory and constitutional provisions that limit[ ] or entirely

prohibit[ ] imprisonment for debt.” Becky A. Vogt, State v.

Allison: Imprisonment for Debt in South Dakota, 46 S.D. L.

Review 334, 335 (2001) (internal quotation and citation omitted). The bankruptcy act passed by Congress in 1841 was the

first in world history allowing individuals to obtain voluntary

discharge of their debts. Jason K. Kilborn, Mercy, Rehabilitation, and Quid Pro Quo: A Radical Reassessment of Individual Bankruptcy, 64 Ohio St. L.J. 855, 858-59 (2003). 

[1] Although American bankruptcy law affords honest

debtors civil remedies as a substitute for criminal punishment,

Congress has always provided for the imposition of criminal

penalties for those who abuse the bankruptcy system. The

early enactments of Congress criminalized fraudulent and perjurious acts by debtors and creditors in connection with a

bankruptcy. Craig Peyton Gaumer, Bankruptcy Fraud: Crime

and Punishment, 43 S.D. L. Rev. 527, 532 (1998). With some

modifications, these core bankruptcy criminal provisions have

remained intact to this date, with the essential components

codified into 18 U.S.C. § 152. Id. at 532-33. 

[2] In 1994, as part of the Bankruptcy Reform Act of 1994,

Pub. L. No. 103-394, Congress enacted a new bankruptcy

crime statute. The centerpiece of the new criminal provisions,

as codified in 18 U.S.C. § 157, was intended to “deter[ ] a

person from using the bankruptcy process to further [ ] fraudulent schemes.” Gaumer, 43 S.D. L. Review at 535. Section

157 was “consciously patterned on the federal mail fraud statute.” 1 Collier on Bankruptcy ¶ 7.07[1][a]. 

[3] As opposed to the historic bankruptcy crimes, as exemplified in § 152, which concerns acts committed in the bankruptcy context, the focus of § 157 is a fraudulent scheme

outside the bankruptcy which uses the bankruptcy as a means

of executing or concealing the artifice. Specifically, § 157, the

bankruptcy fraud statute under which Milwitt was charged,

provides that:

UNITED STATES v. MILWITT 1273
A person who, having devised or intending to devise

a scheme or artifice to defraud and for the purpose

of executing or concealing such a scheme or artifice

or attempting to do so— 

(1) files a petition under title 11, including a fraudulent involuntary bankruptcy

petition under section 303 of such title; 

(2) files a document in a proceeding

under title 11; or 

(3) makes a false or fraudulent representation, claim, or promise concerning or in

relation to a proceeding under title 11, at

any time before or after the filing of the

petition, or in relation to a proceeding

falsely asserted to be pending under such

title,

shall be fined under this title, imprisoned not more

than 5 years, or both. 

18 U.S.C. § 157. 

[4] In enacting § 157, Congress made it quite clear that the

new crime was a specific intent crime. As Representative

Brooks, who was Chair of the House Judiciary Committee

and a sponsor of the legislation, stated in his official floor

statement: 

An essential element of the new fraud action, as with

other fraud actions, is requirement of proof beyond

a reasonable doubt of a specific intent to defraud.

Under no circumstance is this section to be operative

if the defendant is adjudicated as having committed

the act alleged to constitute fraud for a lawful purpose. 

1274 UNITED STATES v. MILWITT
140 Cong. Rec. H10752 (daily ed., Oct. 4, 1994) (statement

of Rep. Brooks). 

[5] While we have not interpreted 18 U.S.C. § 157, we

have discussed the elements of 18 U.S.C. § 1341 and 18

U.S.C. § 1343, the mail and wire fraud statutes upon which

§ 157 was modeled, stating:

[t]o allege a violation of the wire and mail fraud provisions, we have required only that the government

show that there is 1) a scheme to defraud, 2) a use

of the mails or wires in furtherance of the scheme,

and 3) a specific intent to deceive or defraud.

United States v. Bonallo, 858 F.2d 1427, 1433 (9th Cir. 1988).5

[6] The specific intent to deceive or defraud element of the

mail and wire fraud crimes requires the prosecution to prove

that the defendant intended to defraud an identifiable individual. In McNally v. United States, 483 U.S. 350 (1987), the

Supreme Court held that the mail fraud statute only reached

5Most of the few courts that have interpreted 18 U.S.C. § 157 have

looked to 18 U.S.C. §§ 1341 and 1343 for guidance. See, e.g., United

States v. Wagner, 382 F.3d 598, 613 n.3 (6th Cir. 2004) (looking to analysis of the mail and wire fraud statutes in holding that actual reliance on

the scheme to defraud is not an essential element of the crime); United

States v. Daniels, 247 F.3d 598, 600 (5th Cir. 2001) (citing the constitutionality of the mail fraud statute in holding the bankruptcy fraud statute

constitutional); see also, 1 Collier on Bankruptcy § 7.07[1][a], at 7-119

(“Section 157 is consciously patterned on the federal mail fraud statute.

. . . The parallels between section 1341 and section 157 are close. . . . In

other contexts . . . the Court has looked to decisions under the mail fraud

statute when construing the new statutes. The same will follow for section

157.”); but see United States v. Lee, 82 F. Supp. 2d 389, 392 (E.D. Pa.

2000) (“Similar though the language of the bankruptcy fraud statute is to

that of the various other fraud statutes, we cannot, particularly as a matter

of what appears to be first impression, import wholesale into the bankruptcy fraud statute the thick judicial gloss that has been applied over the

years to these other statutes.”). 

UNITED STATES v. MILWITT 1275
the loss of money and property and not to “the intangible right

of the citizenry to good government.” Id. at 356 (overruled on

this point by 18 U.S.C. § 1346). There, the indictment identified the scheme as devised “to defraud the citizens and government of Kentucky.” Id. at 353. In reversing the mail fraud

convictions, the Court noted that for the jury instruction to

charge a crime under the mail fraud statute, it must show a

loss of money or property from “the Commonwealth itself,”

the victim identified in the jury instructions. Id. at 360. Further, the government could not rely on evidence of the loss of

property to another individual to support the conviction

because that individual had not been identified in the jury

instructions. Id. at 361. 

We applied McNally in United States v. Mitchell, 867 F.2d

1232 (9th Cir. 1989), a case involving an alleged scheme to

defraud a city and its citizens. In reversing the conviction, we

held that “[a]lthough both indictments alleged a scheme to

obtain money and property, neither alleged a scheme to obtain

them from the governmental body.” Id. at 1233. Similarly, in

United States v. Lew, 875 F.2d 219 (9th Cir. 1989), we cited

McNally, stating that “the Court made it clear that the intent

must be to obtain money or property from the one who is

deceived.” Id. at 221. 

[7] Given all of these considerations, we conclude that the

crime of bankruptcy fraud under 18 U.S.C. § 157 requires a

specific intent to defraud an identifiable victim or class of victims of the identified fraudulent scheme.

III

Applying these legal principles to the case at hand, we conclude that the evidence tendered by the government is insufficient to support the verdict of bankruptcy fraud pursuant to 18

U.S.C. § 157. As we have noted, the government charged

Milwitt with “fraudulently obstruct[ing] the creditors’ legal

right to collect back rents, and repossess the properties.” In

1276 UNITED STATES v. MILWITT
sum, the fraudulent scheme was one to prevent the landlords

from exercising legal rights, and the alleged victims were the

landlords. The required bankruptcy nexus alleged was the filing of sham Chapter 13 bankruptcy petitions. There were no

allegations in the indictment concerning a scheme to defraud

the tenants, nor were the tenants identified as victims of the

fraudulent scheme. 

At trial, the government attempted to prove an entirely different case under an entirely different theory. The government’s theory at trial was that the fraudulent scheme was to

deprive the tenants of money, which the tenants gave Milwitt

under the false pretenses that he was acting on their behalf to

forestall eviction proceedings. 

Throughout the trial, the government referred to the tenants, rather than the landlords, as the victims of Milwitt’s

fraudulent scheme. For example, in its opening statement, the

government began by telling the story of some of the tenants

who sought help from Milwitt. It went on to describe Milwitt’s overall scheme and then stated that “[n]one of the victims authorized [Milwitt] to file bankruptcy on their behalf.”

Milwitt never filed bankruptcy on behalf of anybody but the

tenants. Further, the government stated, 

[t]he evidence will show that the defendant intended

to defraud the [tenants named in the bankruptcy petitions.] He did it by passing himself off as an attorney

and by telling them he would be representing them

and performing various legal services. 

The government argued that the effect of the bankruptcy

filing was that it allowed Milwitt to continue to represent to

the tenants that he was taking care of their legal issues with

their landlords. As the government stated, 

the defendant’s supposed clients were aware that

they were not being evicted despite having received

UNITED STATES v. MILWITT 1277
this notice to be evicted, and the defendant led them

to believe that that was because he was working diligently on their behalf, he was defending them again

[sic] these eviction proceedings. [The tenants] had

no idea that a bankruptcy stay had anything to do

with the delay—with the halt in the eviction proceedings. 

The government went on to present evidence of fraud on

the tenants throughout its case in chief, presenting nine

witnesses—the six tenants, a former employee of the publisher of the phone book in which Milwitt advertised, an

expert witness who testified about the effects of the bankruptcy filing and the unlawful detainer process, and the owner

of the mail services business where Milwitt rented a mailbox.

Each of the tenants testified about their living situations, the

conditions that prompted them to contact Milwitt, and their

experiences during the time they thought Milwitt was representing them. Each of the tenants testified that Milwitt

informed them that they had a right to withhold rent. Further,

after receiving notices of judgments against them, Milwitt

provided various explanations for why they would not have to

pay them or why they would not have to move out. 

The phone book employee provided testimony about working with Milwitt on placing the yellow pages advertisements.

In his dealings with the phone book company, Milwitt represented himself as “Joe Castle” and stated that he was either

the advertising director or office manager for AP Assistance.

An expert provided testimony about both bankruptcy and

landlord-tenant law, including testimony regarding the impact

of a bankruptcy petition on the filer’s creditors. Finally, the

owner of the mail services business provided testimony about

Milwitt renting a mailbox at her store and an incident in

which she overheard him tell another customer that he could

help because he was an attorney. 

1278 UNITED STATES v. MILWITT
[8] None of the landlords testified nor was evidence introduced about any losses they experienced because of Milwitt’s

actions or how Milwitt’s actions might have caused such

losses. Rather, the only connection made between Milwitt’s

actions and loss to the landlords came through the tenants’

testimony regarding the amount of rent withheld and the

expert witness’s testimony regarding the effect of bankruptcy

petitions on outstanding judgments and pending actions. No

evidence was presented concerning any scheme to defraud

creditors, only debtors. There was no proof that Milwitt

received or sought any money or other consideration from the

landlords, only that he defrauded the tenants. 

The proof, in fact, tended to show that the landlords were

“slum lords” with a despicable record of repair and maintenance. Indeed, the government presented evidence that the

tenants likely had valid claims against the landlords, justifying the withholding of rent. 

[9] Not only did the evidence fail to show that the landlords

were being wrongfully denied money and access to legal

recourse, but the actual bankruptcy petitions did not seek to

discharge the debt owed to the landlords. Rather, the petitions

were filed pursuant to Chapter 13, which does not contemplate outright discharge of debts after liquidation of nonexempt assets, but instead involves adjustment of debts of an

individual with regular income through a court-approved plan

of payment. 

[10] In sum, when the government rested its case, it had

presented no proof that there was a scheme to defraud the

landlords, much less that the bankruptcy petitions had been

filed as a means of executing or concealing the scheme.

Rather, the evidence showed that the tenants were likely justified in not paying the landlords; that the fraudulent scheme

was one by Milwitt to deprive the tenants of money by fraudulently representing to them that he was representing their

UNITED STATES v. MILWITT 1279
interests against the landlord; and that the purpose of the

bankruptcy filing was to conceal the fraud from the tenants.

After the government rested, the court presented counsel

with the jury instructions it intended to give. The instruction

at issue described the third element of bankruptcy fraud as

requiring the jury to find that “the defendant acted with the

intent to defraud a creditor of any person named in the corresponding bankruptcy petition.” The government asked the

court to reconsider the instruction, contending that it construed the indictment too narrowly by requiring proof that

Milwitt intended to defraud a creditor rather than a tenant

based on the general scheme described by the indictment,

including the fraud on the tenants. The court refused to

change the instruction based on paragraph six of the indictment, which states: 

By filing the sham petitions, the defendant fraudulently interfered with the processes of the United

States Bankruptcy Court, and fraudulently obstructed

the creditors’ legal right to collect back rents, and

repossess the properties. 

After learning of the court’s intended instruction, the government focused its closing argument on demonstrating that

the landlords were the indirect victims of the overall scheme

to defraud, while the tenants were the “primary mechanisms

of the fraud.” Essentially, the government argued that Milwitt

“directly deceiv[ed] the clients and indirectly deceiv[ed] the

landlords.” Therefore, as the government itself stated in its

closing argument, it had to prove that “[Milwitt] had the

intent . . . for the fraud scheme to result in money in his pockets from [the landlords].” However, the government acknowledged, the scheme “was about paying money for himself. . . .

He extracted filing fees for phony lawsuits, lawsuits that he

claimed he was filing. . . . And also it was to get . . . fees for

being a lawyer, which he wasn’t.” All of these filing fees and

attorneys fees were payed directly from the tenants to Milwitt.

1280 UNITED STATES v. MILWITT
Further, the government recognized that “[t]he bankruptcy

petitions were used to . . . cover the fact that the defendant

was actually not a lawyer and he therefore could not actually

file legal papers as he claimed he could and claimed he was

doing. Instead, he was secretly filing bankruptcy petitions that

anybody could file.” 

[11] The government argues on appeal that the evidence

demonstrates that Milwitt knew that he would be depriving

the landlords, at least temporarily, of their judgments against

the tenants and possession of their properties by filing the

bankruptcy petitions. However, the evidence demonstrates

that Milwitt’s intent was to prevent the tenants from discovering his fraud by filing the bankruptcy petitions. That he might

have known that the filing would stay the landlords’ claims is

not enough to demonstrate specific intent. See Bloch v. United

States, 221 F.2d 786, 788 (9th Cir. 1955) (reversing a tax

fraud conviction where the judge instructed that “[t]he presumption is that a person intends the natural consequences of

his acts, and the natural inference would be if a person consciously, knowingly and intentionally did not set up his

income, and thereby the government was cheated or

defrauded of taxes, that he intended to defeat the tax.”). Further, the use of a Chapter 13 bankruptcy filing in order to

adjust debts is perfectly proper. The Bankruptcy Code specifically addresses lessor-lessee relations. See, e.g., 11 U.S.C.

§ 363. Had the tenants consulted with a legitimate attorney,

that attorney might well have recommended a legal course

that involved a Chapter 13 bankruptcy filing, especially if an

attorney had been consulted after Milwitt had allowed the

default judgments to be entered against the tenants without

their knowledge. 

[12] Under the mail fraud statute, intent to defraud may be

established by circumstantial evidence, see, e.g., United States

v. Cloud, 872 F.2d 846, 852 n.6 (9th Cir. 1989), and there is

no reason not to apply this principle to the crime of bankruptcy fraud. However, as we have noted, bankruptcy fraud is

UNITED STATES v. MILWITT 1281
a specific intent crime, and even the circumstantial evidence

presented at trial was insufficient to prove that Milwitt had a

specific intent to defraud the landlords rather than the tenants.

There was no proof offered at trial that Milwitt devised a

scheme to defraud creditors of money and filed petitions in

bankruptcy with specific intent to execute or further the

scheme. Therefore, we conclude that the evidence presented

at trial is insufficient to establish the crime.6

IV

[13] The government also argues for the first time on

appeal that Milwitt committed a crime simply by filing bankruptcy petitions when there was evidence that at least some of

the the debtors had sufficient assets to pay off their debts. We

must forcefully reject this argument. First, until the enactment

of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, Pub. L. 109-8, 119 Stat. 23 (2005) (“the

2005 Act”), which does not apply to this case, there was no

statutory means testing at all in bankruptcy.7 Second, this

6Contrary to the government’s assertions, United States v. Crawford,

239 F.3d 1086 (9th Cir. 2001), does not compel a contrary result. Crawford was charged with wire fraud based on her use of interstate faxes to

sell through an art dealer a valuable painting that she took from her office

at UCLA. On appeal, she alleged insufficiency of evidence because ownership of the painting had not been established and, therefore, there was

no identifiable victim. Id. at 1092. However, in Crawford, the fraudulent

scheme was identified and proven, and the government established that

Crawford knew that she had no ownership interest. Crawford is in stark

contrast with the instant case, in which the indictment was based on an

entirely different fraudulent scheme and victims. The dissent essentially

urges an expansion of Crawford to include evidence of fraudulent schemes

other than the one upon which the prosecution was based. This expansive

interpretation would conflict with McNally. The dissent also contends that

other circuits have reached a different conclusion. However, each of the

cited cases involves a situation akin to Crawford in which there were identical schemes to defraud, but different named victims. This case involves

a reliance on a different fraudulent scheme. 

7The petitions in the case predate the effective date of the 2005 Act. See

id. § 102. Under the 2005 Act, bankruptcy petitioners with relatively high

1282 UNITED STATES v. MILWITT
notion is a serious misapprehension of the nature of a filing

of a voluntary petition in bankruptcy under Chapter 13 of the

Bankruptcy Code. The entire idea of a Chapter 13 filing is to

allow an individual debtor with a regular income to adjust his

or her debts through a plan of repayment approved by the

bankruptcy court. The requirements for Chapter 13 relief

“bar[s] debtors from Chapter 13 eligibility if they are unable

to make plan payments . . . .” 2 Collier ¶ 109.06[1] (emphasis

added). In short, at the time the petitions at issued were filed,

not only was it not a crime for a debtor to file a petition under

Chapter 13 when the debtor had sufficient means to make

payments; it was a requirement of Chapter 13 relief that the

debtor have sufficient means to do so.8

Third, bankruptcy fraud under § 157 cannot be predicated

only on acts that occur within the bankruptcy context that are

untethered to the underlying fraudulent scheme. Other provisions of the bankruptcy criminal statutes address those acts,

including § 152. However, bankruptcy fraud under § 157

must be related to the alleged fraudulent scheme. As Representative Brooks put it in his floor statement: 

incomes may be prevented from filing under Chapter 7 and instead given

the choice of converting to Chapter 13 (where some debt must be repaid

out of future income) or having their petitions dismissed and receiving no

bankruptcy relief. The presumption prior to passage of the 2005 Act was

that the debtor was entitled to relief under Chapter 7 except upon a showing of substantial abuse. There is a new means test in the 2005 Act for

individuals seeking Chapter 7 relief. However, even under the 2005 Act,

the means test does not affect eligibility for filing for relief under Chapter

13, the chapter under which the petitions in this case were filed; the new

means test only affects the requirements for Chapter 13 plan confirmation.

Id.

8This is not to say, or imply, that there are no consequences for bankruptcy abuse, which may be subject to sanction under a variety of theories.

Obviously, misrepresentations in a bankruptcy can lead to serious consequences, including potential bankruptcy crime charges under 18 U.S.C.

§ 152. However, the government does not allege that any affirmative misrepresentations were made in the Chapter 13 bare petition filings; rather,

the government argues that the act of filing a Chapter 13 petition itself

when the debtor has sufficient assets is a criminal act under § 157. 

UNITED STATES v. MILWITT 1283
It would also not be a crime under this section for a

person to make a false statement or promise concerning a proceeding under title 11, as long as the false

statement or promise was not made as part of a

scheme to defraud involving the bankruptcy proceeding. Similarly, a person who conveys incorrect

information about the pendency of a bankruptcy or

the planned filing of a bankruptcy case would not be

within the scope of this section unless that information was conveyed fraudulently and to further a

fraudulent scheme. 

140 Cong. Rec. H 10771 (daily ed. Oct. 4, 1994). 

Finally, which perhaps goes without saying, the government did not charge the offense upon which it now relies. 

[14] In short, the government’s new contention that Milwitt

could be liable for criminal bankruptcy fraud under § 157 for

merely filing a voluntary petition under Chapter 13 when the

debtor has sufficient means to repay the debts is not viable.

V

[15] Because the evidence presented was insufficient to

sustain the verdict, we reverse the conviction and need not

reach any other issue urged by the parties.9

REVERSED.

9The dissent contends that the dispositive issues were not argued by the

parties. We respectfully disagree. One of the central arguments presented

by Milwitt was that the government’s evidence of fraud against the landlords, rather than the tenants, was insufficient to sustain the verdict. The

government was well prepared to address—and did address—the precise

questions at issue. 

1284 UNITED STATES v. MILWITT
WALLACE, Senior Circuit Judge, dissenting: 

Although the government’s case was less than overwhelming, the evidence was sufficient for a reasonable jury to find

that Milwitt possessed the requisite fraudulent intent beyond

a reasonable doubt. This is all that is required to sustain a conviction against a sufficiency of the evidence challenge. 

Additionally, the majority unnecessarily reaches the issue

of whether intent to defraud an identifiable victim is required,

which neither party raised. It resolves the issue in a manner

directly contradicted by our precedents. 

I therefore respectfully dissent.

I.

As outlined by the majority, the evidence that Milwitt committed fraud is overwhelming. In order to appear effective,

Milwitt filed fraudulent bankruptcy petitions on behalf of his

clients without their consent, forged their signatures, and gave

false accounts of their financial status. Many of these petitions

misspelled the tenants’ names or gave inaccurate social security numbers. A government expert testified that these inaccuracies would make it more difficult for creditors to assert their

rights. 

Milwitt filed the bankruptcy petitions in order to have the

bankruptcy court enter “automatic stays” against the petitioners’ creditors, here the landlords. These stays forced the landlords to halt any legal proceedings against the tenants,

including eviction proceedings and the default judgments

caused by Milwitt. 

In several of the fraudulent bankruptcy petitions, Milwitt

specifically listed the applicable landlords by name as creditors, subjecting them to the automatic stay. In at least one

UNITED STATES v. MILWITT 1285
instance, Milwitt also served a landlord-creditor with a “Notice of Bankruptcy Stay.” 

Milwitt also told at least one of the tenants, Janice Daniels,

that she could pay Milwitt’s fees in lieu of paying her rent.

Daniels further testified that Milwitt told her that she could

withhold rent payments and that all of the legal fees that she

paid to Milwitt came out of rent money she would have otherwise paid her landlord. 

After the jury convicted Milwitt on all five counts of bankruptcy fraud, Milwitt moved for a judgment of acquittal,

which the district court denied. 

We review the district court’s denial of a motion for judgment of acquittal based on insufficient evidence de novo.

United States v. Carranza, 289 F.3d 634, 641 (9th Cir. 2002).

Our review of the underlying jury verdict is much more deferential, however. We must defer to a jury’s guilty verdict if,

“after viewing the evidence in the light most favorable to the

prosecution, any rational trier of fact could have found the

essential elements of the crime beyond a reasonable doubt.”

Jackson v. Virginia, 443 U.S. 307, 319 (1979). This “standard

of review is a highly deferential one.” United States v. Henson, 123 F.3d 1226, 1236 (9th Cir. 1997) (internal quotations

omitted); accord United States v. Nyemaster, 116 F.3d 827,

828 (9th Cir. 1997) (“A challenge to the sufficiency of the

evidence is reviewed under a highly deferential standard”)

(internal quotations omitted). 

Importantly, “this inquiry does not require a court to ask

itself whether it believes that the evidence at the trial established guilt beyond a reasonable doubt.” Jackson, 443 U.S. at

318-19 (internal quotations omitted). Instead, “[t]his familiar

standard gives full play to the responsibility of the trier of fact

fairly to resolve conflicts in the testimony, to weigh the evidence, and to draw reasonable inferences from basic facts to

ultimate facts.” Id. at 319. 

1286 UNITED STATES v. MILWITT
We have long recognized that “[i]t is often difficult to

prove fraudulent intent by direct evidence and it must be

inferred in such cases from a pattern of conduct or a series of

acts . . . .” United States v. Lothian, 976 F.2d 1257, 1267 (9th

Cir. 1992) (internal quotations omitted). Therefore, “[i]t is

settled law that intent to defraud may be established by circumstantial evidence.” United States v. Rogers, 321 F.3d

1226, 1230 (9th Cir. 2003); see also United States v. Bucher,

375 F.3d 929, 934 (9th Cir. 2004) (“Culpable intent can be

inferred from the defendant’s conduct and from the surrounding circumstances”) (internal quotations and alterations omitted).

II.

The majority’s holding that “18 U.S.C. § 157 requires a

specific intent to defraud an identifiable victim or class of victims of the identified fraudulent scheme,” maj. op. at 1276,

will come as somewhat of a surprise to the parties, as neither

side has raised the issue. “Courts generally do not decide

issues not raised by the parties. If they granted relief to petitioners on grounds not urged by petitioners, respondents

would be deprived of a fair opportunity to respond, and the

courts would be deprived of the benefit of briefing . . . .”

Galvan v. Alaska Dep’t of Corr., 397 F.3d 1198, 1204 (9th

Cir. 2005) (footnote omitted). That is true here. The majority

has provided no reason for its deviation from the normal rules

of our adversarial system. 

In this case, the government has only argued that it did in

fact show that Milwitt intended to defraud the landlords. I

would require the government to prove intent to defraud the

landlords to the jury. I do not view the government’s statement as an invitation to address an issue not briefed by either

party. 

Because the majority insists on deciding this “argument,”

I will address the merits of the majority’s holding. I agree

UNITED STATES v. MILWITT 1287
with the majority that there is a substantial similarity between

wire fraud and bankruptcy fraud; I would apply United States

v. Crawford, 239 F.3d 1086 (9th Cir. 2001), and hold that an

identifiable victim is not an element of bankruptcy fraud.

Crawford squarely rejected the requirement that the government prove intent to defraud a specific victim or class of victims as an element of wire fraud. See id. at 1092-93. The

majority in Crawford also specifically rejected the argument

that McNally v. United States, 483 U.S. 350 (1987), and

United States v. Mitchell, 867 F.2d 1232 (9th Cir. 1989), the

only two supporting cases cited by the majority here, require

proof of an identifiable victim. See Crawford, 239 F.3d at

1093 n.6. In short, we decided this issue five years ago. 

In one brief footnote, the majority attempts to distinguish

Crawford. Neither of its two rationales is valid. First, the

majority argues that “in Crawford, the fraudulent scheme was

identified and proven, and the government established that

Crawford knew that she had no ownership interest.” Maj. op.

at 1282 n.6. But the same is true here. The evidence that

Milwitt was engaged in a fraudulent scheme is nothing short

of overwhelming. Milwitt was fraudulently representing himself as a lawyer and fraudulently filing bankruptcy petitions

on his “clients’ ” behalf without authorization, using phony

information. Milwitt was also fraudulently representing his

activities to his clients. The only question in this appeal is

whether the government actually proved the intent to defraud

the landlords as well as the tenants. That Milwitt was engaged

in a fraudulent scheme, which has been “identified and proven,” cannot be debated seriously. The majority’s attempt to

distinguish Crawford on the basis that the existence of a

fraudulent scheme has not been proven is therefore perplexing. 

The majority also attempts to distinguish Crawford on the

basis that Milwitt’s “indictment was based on an entirely different fraudulent scheme and victims.” Maj. op. at 1282 n.6.

The majority does not explain what the material differences

1288 UNITED STATES v. MILWITT
are — except for the implausible contention that the existence

of a fraudulent scheme has not been proved in this appeal. It

is impossible to discern from its opinion a rationale for the

distinction drawn by the majority. 

What then has the majority accomplished? The majority

has effectively adopted the legal position advanced by the dissenting opinion in Crawford. That dissent begins by stating its

disagreement with the majority: “I dissent because the majority reads an essential element out of the crime of wire fraud

and because the evidence is insufficient to prove that essential

element. Up to now, it has been the law that this crime

requires an identifiable victim . . . .” 239 F.3d at 1094

(Tashima, J., dissenting) (emphasis added). 

Similarly, while the dissent tried to use McNally and Mitchell in an identical manner as the majority does here, see 239

F.3d at 1094 (Tashima, J., dissenting), the majority in Crawford explicitly rejected the argument that McNally and Mitchell require an identifiable victim. See 239 F.3d at 1093 n.6.

After specifically distinguishing McNally and Mitchell, the

majority in Crawford stated that “we have never held [an

identifiable victim] to be an element of the offense of mail

fraud.” Id. The majority’s attempt to resurrect an argument

that we have already unambiguously rejected is startling. As

a three-judge panel, we lack the authority to change a dissent

into controlling law. See United States v. Rodriguez-Lara, 421

F.3d 932, 943 (9th Cir. 2005) (“a three-judge panel may not

overrule [circuit precedents] absent intervening Supreme

Court or en banc authority”). 

Additionally, it appears that the majority opinion in Crawford is in accord with every other circuit to decide this issue.

See United States v. Munoz, 430 F.3d 1357, 1369 (11th Cir.

2005) (“The crime of mail fraud does not include an element

requiring a contemplated harm to a specific identifiable victim”) (internal quotations omitted); United States v. Henningsen, 387 F.3d 585, 590 (7th Cir. 2004) (same); United States

UNITED STATES v. MILWITT 1289
v. Loayza, 107 F.3d 257, 260 (4th Cir. 1997)) (“Indictments

which do not identify specific mail fraud victims by name are

sufficient”) (internal quotations and alterations omitted). The

majority’s holding therefore simultaneously creates unjustifiable intra-circuit and inter-circuit conflicts. 

I therefore dissent from the majority’s unnecessary, unwise,

and unsupported conclusion that bankruptcy fraud requires an

identifiable victim or class of victims.

III.

This appeal therefore should turn on whether a reasonable

jury could have found that Milwitt possessed an intent to

defraud the landlords. We have previously defined the requisite “intent to defraud” as “to act willfully, and with the specific intent to deceive or cheat for the purpose of either

causing some financial loss to another, or bringing about

some financial gain to oneself.” United States v. Cloud, 872

F.2d 846, 852 n.6 (9th Cir. 1989). A reasonable jury could

easily have concluded that Milwitt acted with “specific intent

to deceive or cheat” the landlords (as well as the tenants) in

order to benefit himself financially. 

The success of Milwitt’s scheme to collect legal fees was

dependent in large measure on the landlords being successfully defrauded of rent money and forestalled from asserting

their rights against the tenants. A reasonable jury could have

readily concluded that if the landlords had not been fraudulently prevented from evicting the tenants and collecting on

the default judgments caused by Milwitt, the tenants would

have discovered that Milwitt was defrauding them. When the

tenants discovered that Milwitt was defrauding them, they

stopped paying his “legal fees,” as Milwitt undoubtedly

feared. The collection of his legal fees was thus based on

Milwitt’s ability to appear productive in the tenants’ disputes

with the landlords, which in turn was based on his ability to

defraud the landlords successfully. 

1290 UNITED STATES v. MILWITT
Milwitt specifically listed the landlords on several of the

fraudulent bankruptcy petitions, which caused the landlords to

be subject to the automatic stay. Milwitt even served one of

them with a “Notice of Bankruptcy Stay.” Milwitt was

undoubtedly aware that the effect of the bankruptcy petition

was to cause the automatic stay, and a reasonable jury was

entitled to infer as much. Because the successful halting of the

landlord’s eviction proceedings was essential to Milwitt’s

ability to collect legal fees, a reasonable jury could also have

concluded that Milwitt possessed the intent to defraud the

landlords, as well as the tenants. This alone is sufficient evidence to support the jury’s verdict. 

The government also produced testimony that established

that misspelling the tenants’ names, as well as giving false

social security numbers, would make it more difficult for the

landlord-creditors to invalidate the fraudulently-obtained

stays. The government further produced evidence that Milwitt

was familiar with bankruptcy law and likely knew of this

effect. This evidence therefore further supports the jury’s verdict. 

The jury’s verdict is also supported by the testimony of

Janice Daniels, who testified that Milwitt told her to pay

Milwitt’s legal fees instead of paying rent to her landlord. A

reasonable jury could have concluded that Milwitt intended to

defraud the landlords by having his “legal fees” paid at their

expense, which is precisely what occurred. Viewing the evidence in the light most favorable to the government, this testimony reveals clear intent to defraud the landlords and obtain

financial gain at their expense. 

I must therefore respectfully, but forcefully, disagree with

the majority’s contention that “[n]o evidence was presented

concerning any scheme to defraud creditors, only debtors.”

Maj. op. at 1279. Absent from the majority opinion is any

demonstration of how the above evidence does not support

the government’s argument that Milwitt intended to defraud

UNITED STATES v. MILWITT 1291
the landlords. While the majority argues that “[t]here was no

proof that Milwitt received or sought any money or other consideration from the landlords, only that he defrauded the tenants,” maj. op. at 1279, a reasonable jury could have easily

concluded Milwitt intended to receive money at the expense

of the landlords — which is precisely what the jury did. Notably, Cloud only requires “intent to deceive or cheat for the

purpose of either causing some financial loss to another, or

bringing about some financial gain to oneself.” 872 F.2d at

852 n.6 (emphasis added). Milwitt need not have “received or

sought any money” directly from the landlords, as long as he

intended to “bring[ ] about some financial gain to [him]self,”

id., at their expense. I conclude that the second type of fraudulent intent under Cloud — which the majority ignores — is

plainly supported by sufficient evidence. 

Although the majority’s opinion initially states the Jackson

standard of review, its application strays from the Supreme

Court’s direction. The only relevant question is what a reasonable jury could have found, not how the majority would weigh

the evidence from a cold record. For example, the majority

argues that “[t]he proof, in fact, tended to show that the landlords were ‘slum lords’ with a despicable record of repair and

maintenance.” Maj. op. at 1279 (emphasis added). The relevant question is not what the evidence tends to show to our

panel of judges, however. In relying on the premise that the

landlords were not owed rent based on what the evidence

“tended to show” two appellate judges, the majority fails to

view the evidence in the “light most favorable to the prosecution.” Jackson, 443 U.S. at 319. 

The majority similarly states that “the evidence showed that

the tenants were likely justified in not paying the landlords.”

Maj. op. at 1279 (emphasis added). The majority later argues

that “[h]ad the tenants consulted with a legitimate attorney,

that attorney might well have recommended a legal course that

involved a Chapter 13 bankruptcy filing.” Maj. op. at 1281

(emphasis added). Once again, the question is not what seems

1292 UNITED STATES v. MILWITT
likely to us, or what “might well have” happened, but whether

any reasonable jury could have concluded fraud exists. The

majority’s use of “tended to show” and “were likely justified”

and “might well have recommended” is indicative of the

majority itself weighing the evidence and usurping the role of

the jury. The majority’s analysis thus gravely misconstrues

the nature of our review under Jackson. 

The majority also appears to believe that Milwitt could not

simultaneously possess the intent to defraud the tenants and

the landlords. It is true that the government erroneously pursued a wrong trial theory in focusing on fraud on the tenants.

However, the evidence reveals that Milwitt possessed no

shortage of fraudulent intent. The rulings of the district judge

pulled the government back and directed it to the right track.

The case went to the jury under proper instructions requiring

proof beyond a reasonable doubt that Milwitt defrauded the

landlords. Because a reasonable jury could have concluded

that Milwitt’s fraudulent intent was not solely directed toward

the tenants, but also toward the landlords, Milwitt’s conviction must be affirmed. 

Unfortunately, the majority opinion does not analyze the

evidence from which the jury could have found fraud on the

landlords. Instead, it substitutes a conclusory discussion,

which, as discussed above, is incorrect. A new trial is not in

order as the Double Jeopardy Clause will bar any retrial of

Milwitt. See Smith v. Massachusetts, 543 U.S. 462, 466-67

(2005) (collecting cases). 

Because I believe that the evidence is sufficient to support

the jury’s verdict, I would not reach the government’s argument regarding the ability of the debtors to pay off their debts.

IV.

The majority seriously exceeds our authority under Jackson

and as a three-judge panel. Simply put, we should not be

UNITED STATES v. MILWITT 1293
weighing evidence as if we were the jury. In addition, we are

not an en banc court that has the power to change dissenting

opinions into controlling law. 

This undoubtedly would have been an easier case if the

government had tried this case differently. Nonetheless, the

government’s poor tactical choice should not result in reversal. The majority does not discuss critical evidence supporting

the government’s case and fails to “view[ ] the evidence in the

light most favorable to the prosecution.” Jackson, 443 U.S. at

319. Under this “highly deferential” standard of review, I

come out with the opposite result and would therefore affirm

Milwitt’s conviction. 

I also must dissent from the majority’s attempt to change

the dissent in Crawford into the law of our circuit and its

attempt to resurrect an argument based on McNally and

Mitchell that Crawford explicitly rejected. Indeed, it is regrettable that the majority insisted on reaching an issue that neither party raised. 

1294 UNITED STATES v. MILWITT