Court Opinion

ID: 4171155
Source: CourtListenerOpinion
Date Created: 2017-05-23 20:03:50.845778+00
Date Added: 2024-06-11T14:39:09.491218
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                           MAY 23 2017
                    UNITED STATES COURT OF APPEALS                      MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS

                           FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,                        No.   15-16601

              Plaintiff–Appellee,                D.C. No.
                                                 1:09–cv–01689–AWI–GSA
 v.

ACACIA CORPORATE                                 MEMORANDUM*
MANAGEMENT, LLC, et al.,

              Defendants–Appellants.

                    Appeal from the United States District Court
                       for the Eastern District of California
                    Anthony W. Ishii, District Judge, Presiding

                             Submitted May 19, 2017**
                              San Francisco, California

Before: KLEINFELD and WARDLAW, Circuit Judges, and BENCIVENGO,***
District Judge.

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
      ***
             The Honorable Cathy Ann Bencivengo, United States District Judge
for the Southern District of California, sitting by designation.
      Michael S. Ioane, Acacia Corporate Management, LLC, Mariposa Holdings,

LLC, and Alpha Enterprises, LLC (collectively, “Ioane”) appeal the district court’s

entry of Final Judgment after a bench trial in which the court found that Ioane was

the Booths’ nominee, and that the government could foreclose on the Booths’

properties to satisfy the federal tax liens. We have jurisdiction pursuant to 28

U.S.C. § 1291, and we affirm.

      1.     The district court did not err in concluding that Ioane held title to the

Booths’ properties as the Booths’ nominee, or that all of the transfers of the

Subject Properties were shams. The district court properly applied the six-factor

test regarding the existence of a nominee relationship. See Fourth Inv. LP v.

United States, 720 F.3d 1058, 1069–70 (9th Cir. 2013).

      With regard to the first factor, “whether inadequate or no consideration was

paid by the nominees,” id. at 1070, the district court did not clearly err in finding

that Ioane paid no consideration for the properties. The Booths testified that no

money was ever paid for the transfers. Ioane states that he assumed $900,000 in

debt from the Booths, but this is not adequate consideration, as the debt was

initially owed to Southern Financial Trust, which the district court held was itself a

Booth nominee. See id. (assumption of debts between nominees of same entity

inadequate consideration). Ioane also argues that he paid the Booths $15,000 in

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cash. However, the district court found Ioane’s testimony not credible, and there

is no evidence of the payment beyond Ioane’s testimony.

       With regard to the second factor, “whether the properties were placed in the

nominees’ names in anticipation of a lawsuit or other liability while the transferor

remain[ed] in control of the property,” id., the district court did not clearly err in

finding that the Booths had transferred the properties to Ioane in anticipation of

litigation. Ioane argues that the transfers were not made in anticipation of litigation

because they took place in 2005, six years after the government recorded its tax

liens. However, Vincent Booth testified that the IRS investigation was “heating

up” in 2005, and asserted that he made the transfers in order to avoid IRS scrutiny,

Ioane cites no case establishing that a transfer must come within any set window of

time before the events giving rise to liability to satisfy this factor.

       With regard to the third factor, “whether there [was] a close relationship

between the nominees and the transferor,” id., the district court did not clearly err

in finding that the Booths and Ioane were close. It is undisputed that Ioane was the

Booths’ hired consultant, and the Booths testified that Ioane advised them about

the purpose of the transfers. Moreover, the record indicates that Ioane acted as the

Booths’ agent and signed papers on behalf of Bakersfield, which the district court

correctly found to be a Booth nominee, in the transfer of the properties to Acacia.

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While Ioane asserts that this factor is not satisfied because he and the Booths had

no familial connection, a familial connection is not necessary to find a close

relationship between nominees and a transferor. See, e.g., United States v.

Hounsom, No. 6:14–cv–93–Orl–40DAB, 2015 WL 6152964, at *4 (M.D. Fl. Aug.

11, 2015) (finding close relationship where nominee and transferor were friends).

      With regard to the fourth factor, whether the conveyances were recorded, the

district court did not clearly err in finding that the transfer of the properties from

the Booths was recorded. See Fourth Inv. LP, 720 F.3d at 1070. The government

does not dispute this finding.

      With regard to the fifth and sixth factors, the district court did not clearly err

in finding that the Booths “retained possession” of the properties and “continue[d]

to enjoy the benefits” of ownership. Id. Following the transfer, the Booths

continued to live on one of the properties, and maintained an office in another.

While Ioane argues that the Booths were rent-paying tenants, witness testimony

supports the district court’s finding that Ioane and the Booths maintained this

arrangement for the sake of appearance.

      The district court did not err in weighing all of the Fourth Inv. LP factors

and concluding that Ioane was the Booths’ nominee.

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      2.     Nor did the district court err in concluding that the United States’ tax

liens on the properties were valid. The government’s liens satisfied the

requirements of 26 U.S.C. §§ 6321, 7403.

      AFFIRMED.

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