Court Opinion

ID: 4169294
Source: CourtListenerOpinion
Date Created: 2017-05-17 20:04:01.353774+00
Date Added: 2024-06-11T14:12:55.714261
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                           MAY 17 2017
                    UNITED STATES COURT OF APPEALS                      MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS

                           FOR THE NINTH CIRCUIT

MARK CALVERT, as Liquidating Trustee            No.    15-35465
of the Meridian Investors Trust,
                                                D.C. No. 2:12-cv-01594-RAJ
             Plaintiff-Appellee,

 v.                                             MEMORANDUM*

GEORGE STEVEN KOOSHIAN, AKA
George Steven Kooshian,

             Defendant-Appellant.

                   Appeal from the United States District Court
                     for the Western District of Washington
                   Richard A. Jones, District Judge, Presiding

                            Submitted May 15, 2017**
                               Seattle, Washington

Before: HAWKINS, GOULD, and PAEZ, Circuit Judges.

      Defendant-Appellant George Kooshian (“Kooshian”) appeals the district court’s

order, following a bench trial, awarding bankruptcy trustee Mark Calvert (“Trustee”)

      *
             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).
$781,798.66 as a voidable transfer of profit Kooshian received from debtor Darren

Berg’s Ponzi scheme.1 We review the district court’s findings of fact for clear error,

FTC v. BurnLounge, Inc., 753 F.3d 878, 883 (9th Cir. 2014), its evidentiary rulings

for an abuse of discretion, Valdivia v. Schwarzenegger, 599 F.3d 984, 988 (9th Cir.

2010), and we affirm.

      There was substantial evidence to support the district court’s conclusion that

Berg was operating a Ponzi scheme, including Berg’s own plea agreement. A transfer

made “with actual intent to hinder, delay, or defraud” any creditor of the debtor may

be avoided by the trustee, 11 U.S.C. § 548(a)(1)(A), and the “mere existence of a

Ponzi scheme is sufficient to establish actual intent” to defraud. Donell v. Kowell, 533
F.3d 762, 770 (9th Cir. 2008) (internal quotation marks omitted). In his plea

agreement, Berg acknowledged creating and operating a series of investment funds

purportedly for the purpose of investing in seller-financed real estate contracts, short

term loans, real estate, and management fees. He admitted, however, that he actually

used the funds for other business ventures and for his personal benefit, and then used

      1
         A Ponzi scheme is a “financial fraud that induces investment by promising
extremely high, risk-free returns, usually in a short time period, from an allegedly
legitimate business venture. The fraud consists of funneling proceeds received from
new investors to previous investors in the guise of profits from the alleged business
venture, thereby cultivating an illusion that a legitimate profit-making business
opportunity exists and inducing further investment.” Donell v. Kowell, 533 F.3d 767
n.2 (9th Cir. 2008) (internal quotation marks omitted).

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other investors’ funds “to pay off the loans of earlier investors in order to conceal his

false statements and continue his scheme to defraud,” the quintessential hallmark of

a Ponzi scheme. See id. at 767 n.2; see also In re Slatkin, 525 F.3d 805, 814 (9th Cir.

2008) (debtor’s admissions in guilty plea and plea agreement that he operated a Ponzi

scheme conclusively established his fraudulent intent). “[O]nce the existence of a

Ponzi scheme is established, payments received by investors as purported profits–i.e.,

funds transferred to the investor that exceed that investor’s initial ‘investment’–are

deemed to be fraudulent transfers as a matter of law.” In re Slatkin, 525 F.3d at 814.

      Kooshian contends that Berg’s plea agreement is vague as to when the

fraudulent scheme began, and argues that it thus “does not necessarily encompass the

dates that Dr. Kooshian received transfers.” The plea agreement notes the fraudulent

scheme began “at an exact time unknown, but sometime within the last ten years, and

continuing until in or around August 2010.” However, the Trustee and a forensic

financial expert both testified based on their review of the Debtor’s financial records

that the scheme began as early as 2001 with the first investments to Meridian Fund I,

and thus the scheme already existed by the time Kooshian made his first investment

in 2004, and when he later received the return of his investment plus profit. The court

did not abuse its discretion by admitting the testimony of the Trustee as a percipient

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witness with personal knowledge of the Debtor’s bank records,2 nor did it abuse its

discretion by admitting the opinion of financial expert Randy Sugarman, a certified

fraud examiner. Fed. R. Evid. 702, 703.

      AFFIRMED.

      2
        Upon appointment, the bankruptcy trustee steps into the shoes of the debtor
and becomes the custodian of the debtor’s books, documents, records, etc. See 11
U.S.C. §§ 521(a)(4), 1108; In re Benny, 29 B.R. 754, 761 (N.D. Cal. 1983).

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