Opinion ID: 59526
Heading Depth: 2
Heading Rank: 1

Heading: The Stonebridge Property

Text: Upon Kokomo’s objection to Hecker’s claim of homestead exemption, the bankruptcy court found that the funds used to purchase the Stonebridge Property were drawn either from the NationsBank account or the revenues received from Heritage, both of which were traceable to the fraud proceeds. Hecker had directly deposited fraud proceeds into his personal NationsBank account, and the Heritage revenues constituted an automated return on Hecker’s capital contribution—a contribution composed of fraud proceeds. The court rejected Hecker’s argument that the Heritage revenues represented new income in the form of compensation for consulting services. Because a substantial amount of funds used to purchase Stonebridge Property were traceable to fraud proceeds, the court held that the property did not qualify for a homestead exemption and was subject to an equitable lien in Kokomo’s favor. The district court affirmed. 4