Court Opinion

ID: 2964640
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:28:44.368574+00
Date Added: 2024-06-11T15:02:01.171460
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT

        No. 95-1395
                              UNITED STATES OF AMERICA,

                                      Appellee,

                                          v.

                                 MICHAEL D. SHADDUCK,

                                Defendant, Appellant.

                                                     
                                 ____________________
        No. 95-1396
                              UNITED STATES OF AMERICA,

                                      Appellee,

                                          v.

                                 ANDREA D. SHADDUCK,

                                Defendant, Appellant.

                                                     
                                 ____________________

        No. 96-1342
                              UNITED STATES OF AMERICA,

                                      Appellee,

                                          v.

                                 MICHAEL D. SHADDUCK,

                                Defendant, Appellant.

                                                     
                                 ____________________

                    APPEALS FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                 [Hon. Morris E. Lasker,* Senior U.S. District Judge]
                                          __________________________

                                                     
                                 ____________________

                            
        ____________________

             *Of the Southern District of New York, sitting by designation.

                                        Before

                                 Cyr, Circuit Judge,
                                      _____________

                           Campbell, Senior Circuit Judge,
                                     ____________________

                              and Stahl, Circuit Judge.
                                         _____________

                                                     
                                 ____________________

             James B. Krasnoo with whom Law Offices of James B. Krasnoo was on
             ________________           _______________________________
        brief for appellants.
             Mark J.  Balthazard, Assistant United States  Attorney, with whom
             ___________________
        Donald K. Stern, United States Attorney, was on brief for appellee.
        _______________

                                                     
                                 ____________________

                                    April 24, 1997
                                                     
                                 ____________________

                                          2

                    CYR,  Circuit Judge.    Appellants  Michael and  Andrea
                    CYR,  Circuit Judge
                          _____________

          Shadduck  challenge  the  judgments of  conviction  and  sentence

          entered against them for  bankruptcy fraud, see 18 U.S.C.    152,
                                                      ___

          following their four-day  jury trial.  We affirm the convictions,

          but vacate, in part, the  sentence imposed upon Michael  Shadduck

          and remand for resentencing.  

                                          I
                                          I

                                     BACKGROUND1
                                     BACKGROUND
                                     __________

                    Appellant  Michael  Shadduck  ("Shadduck"), a  self-em-

          ployed insurance salesman, invested in several insurance policies

          and a  pension fund  with Guardian Investor  Services Corporation

          ("Guardian").  Three days before the Shadducks filed  their joint

          chapter 11 petition on  June 4, 1993, Shadduck had  requested the

          maximum loan  advances available on four  Guardian life insurance

          policies.   The chapter 11 petition,  unaccompanied by schedules,

          listed liabilities  totaling $2,269,381.13 to the  twenty largest

          unsecured creditors. 

                    On the  day the  joint chapter  11 petition  was filed,

          Mrs.  Shadduck drew  an $8,000 check  on their  personal checking

          account and  endorsed it over to her  husband.  Three days later,

                              
          ____________________

               1Viewing the  evidence in  the light  most favorable to  the
          verdicts, we recite the  facts as the jury reasonably  could have
          found  them.  United  States v. Josleyn,  99 F.3d 1182,  1185 n.1
                        ______________    _______
          (1st  Cir. 1996), cert. denied, 117 S.  Ct. 959 (1997).  We note,
                            ____  ______
          however,  that  the  record  on appeal  is  woefully  incomplete,
          particularly as  it includes no district  court trial transcript.
          Of course,  the proponent of a  claim must "bear the  brunt of an
          insufficient record  on appeal."  Real v.  Hogan, 828 F.2d 58, 60
                                            ____     _____
          (1st. Cir. 1987).  See also LaRou v. Ridlon, 98 F.3d 659, 664 n.8
                             ___ ____ _____    ______
          (1st Cir. 1996).

                                          3

          four checks totaling $124,383.66 were deposited in a bank account

          in the  name of John Shepard, a friend of Shadduck.  Three checks

          had been issued to Shadduck by Guardian and  represented portions

          of the aforementioned loan proceeds, as well as policy dividends.

          The fourth was the  $8,000 check withdrawn by Mrs.  Shadduck from

          the joint account three days earlier.  

                    At the  creditors meeting  on June 14,  Shadduck denied

          having made any payment in excess  of $600 to any creditor within

          the 90-day period preceding June 4, denied having a bank account,

          and disavowed  any beneficial interest either  in insurance poli-

          cies or a  pension plan.   Mrs. Shadduck,  who was continuing  to

          write checks  on their joint  checking account during  this time,

          remained  silent  as her  husband  made these  misrepresentations

          under oath. 

                    Following  the creditors  meeting,  two other  Guardian

          checks,  totaling $13,346.01,  payable to  Shadduck and  endorsed

          over to Shepard, were deposited in the Shepard account.  Two days

          later Shadduck gave Shepard a  $73,900 check, drawn on Shadduck's

          Guardian pension plan and endorsed over to Shepard.  At the time,

          the Shadduck pension plan account contained $118,339.05.  On July

          19,  1993, a $33,517.36 check  was drawn on  the Shadduck pension

          plan account, representing  the balance in the pension plan after

          the required $10,921.69 withholding for federal income tax.

                    On July 1, the  Shadducks filed their bankruptcy sched-

          ules, signed the  same day  under penalty  of perjury,  asserting

          that  they had no interest in pension plans or insurance policies

                                          4

          and, further, that  they had  no bank account.   Throughout  this

          entire period,  however, Shadduck had  funds in his  pension plan

          and Mrs.  Shadduck  continued  to  write checks  on  their  joint

          checking account.    Shepard subsequently  drew  checks  totaling

          $171,211.12  to Shadduck on September 29 and November 2, 1993, in

          amounts mirroring the checks  Shadduck had issued to Shepard  the

          previous  June.   Three  of  these  checks, totaling  $17,134.70,

          explicitly  noted  that  the proceeds  represented  pension  plan

          funds.  

                    The Shadducks were indicted on January 19, 1994:  he on

          four counts,  for concealing assets  and falsely stating  that he

          had  no bank  account,  insurance policies,  or pension  plan, in

          violation  of 18  U.S.C.    152; she  on one  count,  for falsely

          stating she had  no bank  account.  At  trial, Shadduck  admitted

          making false statements but nevertheless insisted that he had not

          listed  the pension plan funds on the schedules because they were

          exempt, even though  he concededly  had failed also  to list  any

          pension plan funds as property  claimed exempt.  Shadduck further
                                          _______ ______

          testified  that the  monies  invested in  the insurance  policies

          belonged to  clients who  had requested  that he  invest approxi-

          mately  $85,000 in their behalf.   Shadduck admitted making false

          statements at the  creditors meeting and on the bankruptcy sched-

          ules, but vouchsafed  that his wife had not  known what was going

          on.

                    After  the jury returned  guilty verdicts  against both

          defendants, the district court sentenced Shadduck to twenty-seven

                                          5

          months' imprisonment,  including enhancements based on  the total

          intended loss, see U.S.S.G.    2F1.1(b)(1) (Nov. 1994), violation
                         ___

          of a judicial order, id.   2F1.1(b)(3)(B), and  defrauding multi-
                               ___

          ple victims, id.    2F1.1(b)(2)(B).  Shadduck appeals his convic-
                       ___

          tions  and sentence.   Mrs.  Shadduck, who  was sentenced  to two

          years' probation, principally challenges her conviction.2

                                          II
                                          II

                                      DISCUSSION
                                      DISCUSSION
                                      __________

          1.   Andrea Shadduck 
          1.   Andrea Shadduck
               _______________

                    Andrea Shadduck concedes that she  purchased the $8,000

          bank check with funds  drawn from the joint checking  account and

          endorsed it  to  her  husband,  that she  signed  the  bankruptcy

          schedules  listing no bank account,  and that she remained silent

          at the  creditors meeting  while her husband  falsely represented

          that they had  no bank  account.  She  nonetheless contends  that

          there  was insufficient  evidence that  she intentionally  made a

          false statement,  since  her husband  testified  to her  lack  of

          knowledge. 

                    There  was ample  evidence  to support  the conviction.

          The  jury  reasonably could  infer  from  all the  circumstances,

          especially  the  timing of  the  various  transactions, that  she

          possessed the requisite  fraudulent intent.   She drew an  $8,000

                              
          ____________________

               2Although  both appellants  challenge  the    2F1.1(b)(3)(B)
          enhancement,  the  district  court imposed  a  downward departure
          before sentencing Mrs. Shadduck  to probation.  United  States v.
                                                          ______________
          Shadduck, 889 F. Supp. 8, 11-12 (D.Mass. 1995).  Thus, no purpose
          ________
          would  be served by  remanding for resentencing  in these circum-
          stances. 

                                          6

          bank check on the unscheduled joint checking account the very day

          she  and  her husband  signed and  filed  their joint  chapter 11

          petition.   She signed the bankruptcy schedule stating she had no

          bank account, yet continued  to draw checks on the  joint account

          for  more than  three  months, even  after  her husband,  in  her

          presence, falsely denied the existence of any such account at the

          creditors meeting.   This circumstantial evidence alone supported

          a reasonable  inference  that her  motive  in making  the  $8,000

          withdrawal  from the joint checking  account on the  eve of bank-

          ruptcy was  to prevent  its  disclosure to  creditors.   Finally,

          fraudulent intent  was readily inferable  from the fact  that the

          Shadducks  omitted from  their joint  list of  claimed exemptions

          only  the property  not elsewhere  disclosed as  assets  on their

          schedules.3   Moreover, the jury was free to discredit the excul-

          patory  testimony  offered  by  her  husband,  United  States  v.
                                                         ______________

          Restrepo-Contreras, 942 F.2d 96,  99 (1st Cir. 1991), and  we are
          __________________

          not  at liberty to presume otherwise, see United States v. Laboy-
                                                ___ _____________    ______

          Delgado,  84 F.3d 22, 26  (1st Cir. 1996)  (noting that appellate
          _______

          court must "resolve all disagreement regarding the credibility of

          witnesses to the government's behoof").

          2.   Michael Shadduck 
          2.   Michael Shadduck 
               ________________

                              
          ____________________

               3Mrs. Shadduck also urges us to consider testimony presented
          by her counsel  at a postjudgment  hearing to correct  Shadduck's
          sentence  pursuant to 28 U.S.C.    2255.   Counsel testified that
          the joint  checking account  had been inadvertently  omitted from
          the schedules.  In  evaluating a challenge to the  sufficiency of
          the  evidence on direct appeal, however, we may consider only the
          evidence presented at trial.  See United States v. Laboy-Delgado,
                                        ___ _____________    _____________
          84 F.3d 22, 26 (1st Cir. 1996). 

                                          7

               a.   Supplemental Jury Instruction4
               a.   Supplemental Jury Instruction
                    _____________________________

                    Shadduck  claims the  jury verdict  was tainted  by the

          response to a question submitted by the jury.5  Although Shadduck

          would have us isolate the trial court's supplemental instruction,

          the law  is clear that it "'must be  viewed in the context of the

          overall charge.'"   United States  v. Femia, 57 F.3d  43, 47 (1st
                              _____________     _____

          Cir.) (quoting Cupp  v. Naughten, 414  U.S. 141, 146-47  (1973)),
                         ____     ________

          cert. denied,  116 S.  Ct. 349  (1995).   The general  charge had
          ____  ______

          explained, with respect to  each count, that the jury  would need

          to determine whether the alleged false statements and concealment

          had been "knowing" and  "fraudulent."  There was no  objection to

                              
          ____________________

               4We "review the  propriety of jury instructions for abuse of
          discretion."   United States v.  Mitchell, 85 F.3d  800, 809 (1st
                         _____________     ________
          Cir. 1996).  

               5Shadduck further  complains, for  the first time,  that the
          following  comment about the weather caused the jury to hurry its
          deliberations: 

                    Now  it's 3 o'clock in the afternoon.  It's a
                    pretty  nasty afternoon  in case  you haven't
                    been  able to  see  the weather  in the  jury
                    room.  Counsel and I  are willing to stay  as
                    long as you wish.   What I normally do  - and
                    what  I will  do -  is about 4  o'clock, I'll
                    come down and I  would normally excuse you at
                    that time  unless the jury or  a majority, at
                    least, of the jury  believes that they are so
                    close to completing the case that they'd like
                    to  stay a little bit  longer.  But if that's
                    not the case,  then I will excuse  you to re-
                    sume on Monday morning.

          There is nothing  in this  comment to suggest  that the jury  was
          pressured to rush  its verdicts.   Rather, the  trial judge  made
          abundantly clear that he was willing to remain  as long as neces-
          sary  that  afternoon  or  to  reconvene  the  following  Monday.
                                 __
          Moreover,  the defense failed to object to this reasonable proce-
          dure. 

                                          8

          the general charge.

                    Several hours  after retiring  to deliberate,  the jury

          inquired  in writing  whether  there would  be  a change  in  the

          ownership of certain  funds invested in an annuity contract under

          the  name of  one  Leonard Roy  were the  jury  to find  Shadduck

          guilty.   The trial judge  replied that there was  no evidence on

          which to base a response to their inquiry and that  they were not

          to consider this collateral matter in arriving at their verdicts.

          The court added: 

                    You  should decide  whether you  believe that
                    [Shadduck] intentionally made a  false state-
                    ment or he did not  make a false statement in
                    regard to  this material.  That  is the issue
                    before you.

          Shadduck objected that  a further instruction was required to the

          effect that the jury would need to determine whether Shadduck had

          made the  statements "fraudulently."   After explaining  that its

          response  was  consistent  with  its earlier  and  more  detailed

          charge, the court denied the request.  Later, Shadduck unsuccess-

          fully moved for a mistrial on the ground that the response to the

          jury  inquiry effectively  had eliminated an  element of  the of-

          fense.

                    Viewed  in the context of the  entire charge, and given

          the  clear  signal from  the trial  judge  that the  jury inquiry

          related to a collateral matter not appropriate  for their consid-

          eration, the response  was entirely  proper.  It  did nothing  to

          disturb, let alone  gainsay, the  very clear  instruction in  the

          general  charge; viz., that  the jury must  determine whether the
                           ____

                                          9

          alleged conduct had been  undertaken "knowingly" and "fraudulent-

          ly."

                         Now,  . . . the  offenses . .  . are al-
                    leged to have been done "knowingly and fraud-
                    ulently."
                         An act or failure  to act is "knowingly"
                    done if it's done voluntarily  and intention-
                                      ___________  ___ __________
                    ally and  not because of mistake  or accident
                    ____
                    or any other innocent reason.
                         The  purpose of requiring  that the gov-
                    ernment .  . .  prove that a  defendant acted
                    "knowingly" is to insure  that no one is con-
                                   __ ______  ____ __ ___ __ ____
                    victed because of an  act, or failure to act,
                    ______ _______
                    due to a mistake or an accident or some - any
                    innocent reason.
                         An act or failure to act is "fraudulent-
                    ly" done if it is done willfully and with the
                                           _________ ___ ____ ___
                    intent  to  deceive  or cheat  any  creditor,
                    ______  __  _______            ___  _________
                    trustee or bankruptcy judge.
                    _______ __ __________ _____
                         An act or failure  to act is "willfully"
                    done if it is done voluntarily and intention-
                                       ___________ ___ __________
                    ally and  with a specific intent  to do some-
                    ____ ___  ____ _ ________ ______  __ __ _____
                    thing which the law  forbids; that is to say,
                    _____ _____ ___ ___  _______  ____ __ __ ___
                    for bad purpose  either to disobey or  disre-
                    ___ ___ _______
                    gard the law.
                    ....
                         The intent with which an act is done may
                    also be  inferred from the nature  of the act
                    itself.  Accordingly, intent, willfulness and
                    knowledge  are  usually  established by  sur-
                    rounding  facts and  circumstances as  of the
                    time  the acts  in question  occurred  or the
                    events took  place and the  reasonable infer-
                    ences to be drawn from them.

          (Emphasis added.)  Thus,  the court defined both "knowingly"  and

          "fraudulently" through direct reference to  the voluntariness, as

          well  as the  general and  specific intent,  animating Shadduck's

          conduct.

                    Against  the backdrop of this earlier detailed instruc-

          tion, we are not persuaded that any significant risk of confusion

          arose from the subsequent  umbrella response to the jury  that it

          was to decide whether  Shadduck "intentionally" made false state-

                                          10

          ments.  See United States v. Yefsky, 994 F.2d 885,  899 (1st Cir.
                  ___ _____________    ______

          1993) (instruction  on "intent,"  rather than  "specific intent,"

          held adequate given court's  earlier definition of "willfully" as

          encompassing specific intent); United States v. Nichols, 820 F.2d
                                         _____________    _______

          508,  511 (1st Cir.  1987) (unnecessary  to instruct  on specific

          intent "[g]iven  the  extensive  instruction  on  'knowingly  and

          willfully' [delivered] moments earlier").

               b.   Calculation of Intended Loss (U.S.S.G.   2F1.1)
               b.   Calculation of Intended Loss (U.S.S.G.   2F1.1)
                    ______________________________________________

                    The  district  court  imposed an  eight-level  sentence

          enhancement based on  its finding that  Shadduck had intended  to

          cause loss  totaling $246,280.   See  U.S.S.G.    2F1.1, comment.
                                           ___

          (n.7).  ("[I]f  [the] loss  that the defendant  was intending  to

          inflict can  be determined,  this figure  will be  used if it  is

          greater  than the actual loss.").  On appeal, Shadduck claims for

          the first  time that  the loss  calculation,  which included  the

          loans obtained  against the  Guardian insurance policies  and the

          funds  withdrawn from the pension plan, must be set aside because

          those  monies were in all  events exempt under  Bankruptcy Code  

          522, hence  not subject  to  administration in  bankruptcy.6   As
                              
          ____________________

               6Shadduck further claims, and the  government concedes, that
          the  presentence report  ("PSR") initially  "double  counted" the
          $8,000  removed  from the  joint  checking  account  the day  the
          Shadducks filed  for bankruptcy.  Although  the government claims
          that  the error  was  corrected in  an  amended PSR,  the  record
          contains no PSR.   In all events, any  such double counting would
          have been harmless, since the total-loss category was unaffected.
          See  U.S.S.G.    2F1.1(b)(1)(I)  (eight-level  increase  for loss
          ___
          exceeding $200,000 but less than $350,000).  Thus, addressing the
          error, if any, could have no effect on the sentence.   See United
                                                                 ___ ______
          States  v. Sepulveda, 15 F.3d 1161, 1199 (1st Cir. 1993) (noting,
          ______     _________
          in context  of drug-quantity calculation, that  "[i]t is unneces-
          sary to address an allegedly erroneous sentencing computation if,

                                          11

          Shadduck  failed to  object  below,  we  review only  for  "plain

          error."   United States  v. Carrington,  96 F.3d  1, 6 (1st  Cir.
                    _____________     __________

          1996),  cert. denied, 65 U.S.L.W. 3648 (U.S. March 24, 1997) (No.
                  ____  ______

          96-8027); see also Koon v. United States, 116 S. Ct. 2035 (1996);
                    ___ ____ ____    _____________

          United States v. Olano,  507 U.S. 725, 734 (1993)  ("plain error"
          _____________    _____

          means "obvious" error); see also Fed. R. Crim. P. 52(b).  
                                  ___ ____

                    The  present  contention   assumes,  contrary  to   our

          caselaw,  that property  of the  debtor  neither claimed  nor set

          apart as  exempt would not  have been subject  to administration.

          See Petit v. Fessenden, 80 F.3d 29, 33 (1st Cir. 1996); Mercer v.
          ___ _____    _________                                  ______

          Monzack, 53 F.3d 1, 3  (1st Cir. 1995), cert. denied, 116  S. Ct.
          _______                                 ____  ______

          1317 (1996); see  also 11  U.S.C.   522(l)  (requiring debtor  to
                       ___  ____

          list property claimed exempt); Fed. R. Bankr. P. 4003(b).  As the

          Supreme Court recently held, Bankruptcy  Code   522(l) and  Bank-

          ruptcy Rule  4003(b) are  to be  interpreted  in accordance  with

          their  literal intendment.  See  Taylor v. Freeland  & Kronz, 503
                                      ___  ______    _________________

          U.S. 638, 643-45 (1992); see also Mercer, 53 F.3d at 3.
                                   ___ ____ ______

                    Virtually all property of the debtor, except as provid-

          ed in  Bankruptcy Code   541(b),(c)(2)&(d),  becomes "property of

          the estate"  by operation of law without  regard to whether it is

          listed on  the schedules.   Id.    541(a).    Shadduck has  never
                                      ___

          argued that these pension  plan monies were not "property  of the

                              
          ____________________

          and  to the extent that, correcting it will not change the appli-
          cable offense level").

                                          12

          estate,"7  but only that they  were not subject  to process under

          applicable state law.8  

                              
          ____________________

               7Bankruptcy Code   541(c)(2)  excludes from "property of the
          estate"  an interest in a  trust subject to transfer restrictions
          enforceable under applicable nonbankruptcy law.  See Patterson v.
                                                           ___ _________
          Shumate,  504 U.S. 753, 757-58  (1992).  Patterson  held that the
          _______                                  _________
          antialienation  provisions  in  ERISA-qualified plans  constitute
          transfer restrictions for    541(c)(2) purposes, hence such plans
          are not  "property of the estate."   Id. at 760.   See also In re
                                               ___           ___ ____ _____
          Yuhas,  104 F.3d 612, 614-16 (3d Cir. 1997) (IRA funds not "prop-
          _____
          erty of estate");  In re Meehan, 102  F.3d 1209, 1214  (11th Cir.
                             ____________
          1997) (same).   Not only was this argument not  raised below, but
          there  is  no record  evidence,  see supra  n.1,  that Shadduck's
                                           ___ _____
          pension plan even contained transfer restrictions.

               8Nor  does the record on appeal indicate that this claim was
          preserved below.  Shadduck contends that Mass. Gen. Laws ch. 235,
             34A,  exempts pension  plan funds  which  do not  exceed seven
          percent of the debtor's total income  within the five-year period
          preceding bankruptcy, and that  Mass. Gen. Laws ch. 175,    119A,
          exempts  insurance policies  under  certain conditions.   In  any
          event, this argument proves too much. 

                                          13

                    Were  we to  adopt  the regime  advocated by  Shadduck,

          property  fraudulently  concealed  throughout  the  course  of  a

          bankruptcy proceeding nonetheless  would become exempt by  opera-

          tion  of law.9  By  contrast, property duly  claimed exempt by an

          honest debtor does not  become exempt by operation of  law unless

          no  "party in interest" objects to the exemption claim within the

          allotted thirty-day period.  See In re Edmonston, 107 F.3d 74, 76
                                       ___ _______________

          (1st Cir. 1997);  11 U.S.C.   522(l); Fed. R.  Bankr. P. 4003(b).

          Thus, the  argument advanced by Shadduck  would short-circuit the

          exemption-claim screening process  explicitly envisioned in  Fed.

          R. Bankr. P. 4003(b), which  provides that the thirty-day limita-

          tion on objections  to exemption  claims "does not  begin to  run

          until  the  debtor  lists  the  'property  claimed  as  exempt.'"

          Mercer, 53  F.3d at 3 (quoting  Fed. R. Bankr. P.  4003(b)).  See
          ______                                                        ___

          also Petit,  80 F.3d at  33 ("Unless and  until a debtor  files a
          ____ _____

          timely claim of exemptions, however, as required by the Bankrupt-

          cy Code and the  Federal Rules of Bankruptcy Procedure,  there is

          no 'list of property claimed exempt' for the trustee or creditors

          to oppose.").   We therefore  reject it and  affirm the  district

          court's "intended loss" calculation.

                              
          ____________________

               9Shadduck seeks to supplement the record with "newly discov-
          ered evidence" which allegedly establishes that these monies were
          considered  exempt  by the  bankruptcy  court  even though  never
          claimed  exempt.    The  supplemental submissions      a  hearing
          transcript in  which the  bankruptcy judge  took  a matter  under
          advisement, and a letter from counsel for the trustee  suggesting
          that  the bankruptcy court might find that the pension plan funds
          were not reachable by creditors    establish nothing of the sort.
          We simply  note, therefore,  that the so-called  "evidence" would
          not have affected the outcome. 

                                          14

               c.   Enhancement for Violating a Judicial
               c.   Enhancement for Violating a Judicial
                    ____________________________________
                    Order (U.S.S.G.   2F1.1(b)(3)(B))10
                    Order (U.S.S.G.   2F1.1(b)(3)(B))
                    ________________________________

                    (i)  Judicial Order
                    (i)  Judicial Order
                         ______________

                    The district court imposed  a two-level enhancement  on

          the ground that Shadduck had  violated a judicial "order," within

          the meaning of U.S.S.G.   2F1.1(b)(3)(B) (1994) (prescribing two-

          level enhancement for  violating "any judicial or  administrative

          order,  injunction, decree, or  process"), by repeatedly flouting

          the obvious  intendment behind the Bankruptcy  Rules and Official

          Forms that all property  of the debtor be disclosed.   See United
                                                                 ___ ______

          States v. Shadduck, 889 F. Supp. 8, 10 (D. Mass. 1995).  See also
          ______    ________                                       ___ ____

          United States v.  Bellew, 35  F.3d 518, 520-21  (11th Cir.  1994)
          _____________     ______

          (affirming  enhancement  because  Bankruptcy  Rules  and Official

          Forms are "judicial orders").  

                    Shadduck  contends that  the term  "order," as  used in

          section 2F1.1(b)(3)(B), contemplates only a specific order,  such

          as a consent decree  or an adjudicative order or  mandate entered

          pursuant to judicial  direction.   He argues that  to uphold  the

          enhancement absent  a specific  order would permit  its automatic

          application in any bankruptcy fraud case, simply by virtue of the

          forum  in which the false statements were made and without regard

          to  the  aggravated criminal  intent  which  the enhancement  was

          designed  to redress.  As hereinafter discussed, we are unable to

          agree  that a  bankruptcy rule  or official  form is  a "judicial

                              
          ____________________

               10The guideline interpretation underlying the district court
          ruling is  reviewed de novo.  United States v. Garcia, 34 F.3d 6,
                              __ ____   _____________    ______
          10 (1st Cir. 1994).

                                          15

          order," as the term is used in section 2F1.1(b)(3)(B).

                    First,  it is  clear  that the  bankruptcy judge  never

          entered  an  order specifically  directing  Shadduck  to disclose

          property  of the debtor.  See Bankruptcy Code   541(a), 11 U.S.C.
                                    ___

             541(a).  The  district court  implicitly acknowledged  as much

          through its reliance on  the several verification requirements in

          the Official Forms,  see Official  Bankr. Forms 1,  6, 11  U.S.C.
                               ___

          (requiring  debtor's signature  verifying assertions  in petition

          and schedules); Fed. R. Bankr. P. 1008 (mandating verification of

          forms); 9011 (signature  constitutes representation by  signatory

          that information provided is  true).  See Shadduck, 889  F. Supp.
                                                ___ ________

          at 10; see also Bellew, 35 F.3d at 520.   Thus, as the bankruptcy
                 ___ ____ ______

          court entered no "order, injunction or decree" directing Shadduck

          to disclose property of the debtor, the  enhancement cannot stand

          unless the district court correctly determined that the universal

          admonitions in the various Official Forms and/or Bankruptcy Rules

          applicable to all  debtors in  bankruptcy proceedings  constitute

          "judicial  or  administrative  order[s]"  within  the meaning  of

          U.S.S.G.   2F1.1(b)(3)(B).

                    We turn to the  guideline commentary for further assis-

          tance.  See Stinson v. United  States, 508 U.S. 36, 42-43  (1993)
                  ___ _______    ______________

          ("Commentary  which  functions  to  interpret  [a]  guideline  or

          explain how it is to  be applied controls.") (internal  quotation

          marks omitted); see also  United States v. Weston, 960  F.2d 212,
                          ___ ____  _____________    ______

          219 (1st Cir. 1992).  The  application note accompanying U.S.S.G.

            2F1.1(b)(3)(B) focuses upon violations of prior orders, injunc-
                                                      _____

                                          16

          tions,  and decrees.  See  U.S.S.G.   2F1.1,  comment. (n.5) (ad-
                                ___

          verting  to defendant's  "knowledge of  the prior  decree or  or-

          der").11  The accompanying exemplar describes a defendant who had

          been  enjoined in  a prior  proceeding from  engaging  in certain

          conduct, but who violated the injunction anyway by committing the

          fraud  for which he was awaiting  sentence.  Id., see supra n.11.
                                                       ___  ___ _____

          Thus,  the  commentary makes  clear  that the  rationale  for the

          enhancement  is  to  redress  the  "aggravated  criminal  intent"

          inherent in  violating a  prior order specifically  enjoining the
                                 _  _____ _____

          defendant, or  an entity the defendant  controlled, from engaging
          _________

          in  the fraudulent conduct which formed the basis for the offense

          of conviction.  U.S.S.G.   2F1.1, comment. (backg'd).

                    In  the instant  case,  no pertinent  order, decree  or

                              
          ____________________

               11The application note provides in full:

                    Subsection  (b)(3)(B) provides  an adjustment
                    for violation of  any judicial or administra-
                    tive order, injunction,  decree, or  process.
                    If it  is established that an  entity the de-
                                               __  ______ ___ ___
                    fendant  controlled was a  party to the prior
                    _______  __________ ___ _  _____ __ ___ _____
                    proceeding, and the  defendant had  knowledge
                    ___________ ___ ___  _________ ___  _________
                    of the prior decree or order, this  provision
                    __ ___ _____ ______ __ _____  ____  _________
                    applies even if the  defendant was not a spe-
                    _______ ____ __ ___  _________ ___ ___ _ ____
                    cifically named  party  in that  prior  case.
                    _________ _____  _____  __ ____  _____  ____
                    For example, a  defendant whose business  was
                    previously enjoined from selling  a dangerous
                    product,  but  who  nonetheless   engaged  in
                    fraudulent conduct to sell the product, would
                    be subject  to this provision.   This subsec-
                    tion  does  not  apply  to  conduct addressed
                    elsewhere in the  guidelines; e.g., a  viola-
                                                  ____
                    tion of a condition of  release (addressed in
                     J.7 (Offense Committed While on Release)) or
                    a violation of probation (addressed in  4A1.1
                    (Criminal History Category)).

          (Emphasis added.)

                                          17

          injunction ever entered prior to the bankruptcy fraud perpetrated

          by Shadduck, either in the bankruptcy proceeding itself or in any

          prior  judicial  or  administrative  proceeding.    To  be  sure,

          Shadduck attempted to  cover up the  bankruptcy fraud with  false

          statements in the petition and  schedules submitted to the  bank-

          ruptcy  court, see Official Bankr. Forms  1, 6, 11 U.S.C, as well
                         ___

          as  under oath  at the  creditors meeting.   Thus,  by concealing

          property of  the debtor notwithstanding the  copious admonitions,

          instructions,  and  verifications  in the  Bankruptcy  Rules  and

          Official  Forms,  Shadduck  unquestionably  committed  bankruptcy
                                                                 __________

          fraud.  See 18 U.S.C.   152.
          _____   ___

                    Nevertheless, if the government cannot demonstrate that

          a prior order,  decree or injunction prohibited the defendant (or
            _____

          an entity controlled by the debtor) from engaging  in the type of

          fraudulent  conduct which  formed the  basis for  his conviction,

          there  has  been no  showing that  the  defendant acted  with the

          aggravated criminal intent  envisioned by the Sentencing  Commis-
          __________

          sion in section 2F1.1(b)(3)(B),  as illustrated by the applicable

          guideline text and commentary.  See United States v. Carrozzella,
                                          ___ _____________    ___________

          105  F.3d  796, 800  (2d Cir.  1997)  (the defendant  "violated a

          command not to  file false accounts, but  the command was  a rule

          applicable  to all  [debtors]  and not  specifically directed  to

          him.").12

                    The  nearest  likeness   to  a  section  2F1.1(b)(3)(B)
                              
          ____________________

               12We express no view regarding whether a departure  might be
          based  upon conduct that does not come squarely within U.S.S.G.  
          2F1.1(b)(3)(B).

                                          18

          "order"  contained in the Official  Forms is the  "Notice of Com-

          mencement  of  Case Under  Chapter  11  of the  Bankruptcy  Code,

          Meeting of Creditors, and Fixing of Dates," Official  Bankr. Form

          9, 11 U.S.C.,  which is  mailed by the  bankruptcy court  clerk's

          office to  the  debtor and  all creditors.   Virtually  identical

          variations  on Form  9 are  entered routinely in  most bankruptcy

          proceedings.   Form 9 bears the preprinted name of the Bankruptcy

          Court Clerk, acting  "for the  court," see id.,  and directs  the
                                                 ___ ___

          debtor to appear  at the  meeting of creditors  to provide  sworn

          testimony.  Id.  In the latter respect, Form 9 is no more akin to
                      ___

          a judicial order than is the administration of the oath itself.

                    Official Form  9 resembles in  considerable measure the

          official  letter  of  warning   discussed  in  United  States  v.
                                                         ______________

          Linville, 10 F.3d 630 (9th Cir. 1993), with  respect to which the
          ________

          Ninth Circuit explained:

                    It is  pellucid that there is  a vast differ-
                    ence between ignoring  prior decrees,  orders
                    and injunctions after being subject to formal
                    proceedings,  and  ignoring  letters and  the
                                                 _______ ___  ___
                    like, no matter how official they might look.
                    ____
                    To hold otherwise  would compel  enhancements
                    __ ____ _________  _____ ______  ____________
                    in every criminal case where a defendant  was
                    __ _____ ________ ____ _____ _ _________  ___
                    told by  someone in  authority that  what she
                    ____ __  _______ __  _________ ____  ____ ___
                    was  doing was illegal,  rather than limiting
                    ___  _____ ___ _______   ______ ____ ________
                    them to more  relatively unusual cases  where
                    ____ __ ____  __________ _______ _____  _____
                    someone violated  a specific court  or agency
                    _______ ________  _ ________ _____  __ ______
                    order or adjudication.
                    _____ __ ____________

          Id. at 632-33 (emphasis added).  Similarly, the notice of meeting
          ___

          of  creditors mailed by the bankruptcy clerk is an advisory which

          rises  neither to the level  of a judicial  nor an administrative

          order under any conventional meaning of the term.

                    Thus,  neither section  2F1.1(b)(3)(B) itself,  nor the

                                          19

          relevant  commentary, supports  the enhancement  rationale relied

          upon  below,  since their  language  plainly  indicates that  the

          enhancement  was meant  to  apply to  defendants who  have demon-

          strated a heightened mens  rea by violating a prior  "judicial or
                    __________ ____  ___                _____

          administrative  order,  decree,  injunction  or  process."    See
                                                                        ___

          U.S.S.G.    2F1.1(b)(3)(B), comment.  (n.5), (backg'd).   Were an

          enhancement to be predicated  on the ground that Official  Form 9

          constitutes a "judicial order," it would become applicable in all

          bankruptcy  fraud cases, simply by  virtue of the  forum in which

          the false statements were  made and without regard to  the aggra-

          vated  criminal  intent it  was designed  to  redress.   Any such

          automatic  application  in  bankruptcy  fraud  cases,  especially

          absent  the required  mens rea,  would work  an amendment  of the
                                ____ ___

          guideline, see  id.   2F1.1(b)(3)(B) (prescribing minimum offense
                     ___  ___

          level  of ten after enhancement); see id.   2F1.1(a) (setting BOL
                                            ___ ___

          at six).  As we can discern no hint that the  Commission meant to

          distinguish bankruptcy  fraud from  other frauds in  this regard,

          see U.S.S.G.    2F1.1, comment. (backg'd)  (explaining that fraud
          ___

          guideline  "is designed  to  apply to  a  wide variety  of  fraud

          cases"), we  conclude that  the two-level enhancement  imposed on

          Shadduck   for   violating   a   judicial   order   (U.S.S.G.    

          2F1.1(b)(3)(B)) was erroneous and cannot stand.

                    (ii) Judicial Process
                    (ii) Judicial Process
                         ________________

                    The  government  contends,  in  the  alternative,  that

          Shadduck  violated a  "judicial .  . .  process," see  U.S.S.G.  
                                                            ___

          2F1.1(b)(3)(B), by committing a bankruptcy fraud which abused the

                                          20

          bankruptcy  process itself.   See United  States v.  Messner, ___
                                        ___ ______________     _______

          F.3d  ___, 1997  WL  67847, *8  (10th  Cir. 1997)  (holding  that

          bankruptcy  fraud constitutes  violation of  "judicial process");

          United  States v. Welch, 103  F.3d 906, 908  (9th Cir. 1996) (per
          ______________    _____

          curiam)  (same); United States  v. Michalek, 54  F.3d 325, 330-33
                           _____________     ________

          (7th Cir. 1995) (same); United States v. Lloyd, 947 F.2d 339, 340
                                  _____________    _____

          (8th Cir.  1991) (same).   We  decline to address  the claim  for

          several reasons.

                    First, the district court  explicitly declined to reach

          the question after holding that Shadduck had violated a  judicial

          order.  Shadduck,  889 F. Supp.  at 10.   Second, no  exceptional
                  ________

          circumstance warrants  our consideration of the  claim before the

          district court (as it is free to do) has occasion  to consider it

          on remand.  See United States v. Morales-Diaz,  925 F.2d 535, 540
                      ___ _____________    ____________

          (1st Cir. 1991).   Third, the issue is not free from  doubt.  See
                                                                        ___

          Carrozzella, 105 F.3d at  799-802 (questioning rationale employed
          ___________

          in  cases which hold that "abuse" of bankruptcy proceeding itself

          constitutes  "violation" of judicial  "process"); see also United
                                                            ___ ____ ______

          States v. Krynicki,  689 F.2d  289, 292 (1st  Cir. 1982)  (before
          ______    ________

          addressing issue  first raised on appeal,  appellate court should

          consider whether correct resolution is clear).

               d.   Multiple-Victims      Enhancement      (U.S.S.G.       
               d.   Multiple-Victims      Enhancement      (U.S.S.G.       
                    _______________________________________________________

          2F1.1(b)(2)(B))
          2F1.1(b)(2)(B))
          _______________

                    The  district  court  imposed a  two-level  enhancement

          pursuant to U.S.S.G.   2F1.1(b)(2)(B), based  on its finding that

          Shadduck had engaged in a scheme to defraud more than one victim.

                                          21

          Shadduck, 889 F. Supp. at 11.  Shadduck complained below that his
          ________

          crime was victimless, in that the monies he concealed were exempt

          and, therefore, that neither the trustee nor the creditors can be

          considered victims.   On  appeal, however, Shadduck  presses only

          two arguments:  (i) the trustee  alone qualifies as a victim, and

          (ii)  the multiple-victims  enhancement, in  tandem with  the en-

          hancement under U.S.S.G.    2F1.1(b)(3)(B), see supra pps. 14-19,
                                                      ___ _____

          amounted to impermissible "double counting."  As neither argument

          was raised  below, we review only for  "plain error."  See United
                                                                 ___ ______

          States v. Lilly, 13 F.3d 15, 17-18 (1st Cir. 1994).  
          ______    _____

                    There is  no merit in  the contention that  the trustee

          alone was victimized by  the concealment.  As used  in subsection

          2F1.1(b)(2)(B), the  phrase "'[s]cheme  to defraud more  than one

          victim,' . . .  refers to a design or plan to obtain something of

          value  from  more than  one person.    In this  context, 'victim'

          refers  to the person or entity from  which the funds are to come

          directly."  U.S.S.G.   2F1.1, comment. (n.3).  Thus, the relevant

          commentary makes clear  that the primary victims  of a bankruptcy

          fraud, for the most part, are the individual creditors.

                    Nevertheless,  as  the  representative  of  the  debtor

          estate, see Bankruptcy Code   323(a),  11 U.S.C.   323 (a), it is
                  ___

          incumbent upon the  trustee to  collect and reduce  to money  all

          nonexempt  assets of  the estate,  id.    704 (1).   Accordingly,
                                             ___

          although  the trustee has no prepetition claim to property of the

          debtor and therefore  does not  qualify as a  "creditor," a  pre-

          scribed portion of the  net recoveries from any "property  of the

                                          22

          estate" administered by the trustee comprises a priority cost  of

          administration  as   provided  in  Bankruptcy  Code       326(a),

          330(a)(1),  503(b)(1)(A)  & 507(a)(1).    Consequently,  not only

          creditors but the  chapter 7  trustee as well  may be  victimized

          directly  by a  bankruptcy fraud  to the  extent it  deprives the

          estate of assets otherwise subject to administration.

                    Moreover, it is likewise clear that Shadduck schemed to

          obtain  something of value.  By concealing pension plan funds and

          insurance policies  which were neither  claimed nor set  apart as

          exempt,  Shadduck  attempted to  retain  property  of the  estate

          otherwise  subject to  administration for  the benefit  of credi-

          tors.13   See Taylor, 503  U.S. at 643-44;  Mercer, 53 F.3d  at 3
                    ___ ______                        ______

          (property claimed  exempt is  initially "property of  the estate"

          and  becomes exempt  only  if there  is  no timely  objection  to

          exemption claim). 

                    The second  challenge Shadduck  makes to  the multiple-

          victims enhancement     that it amounts  to impermissible "double
                              
          ____________________

               13As the Ninth Circuit has noted: 

                    Clearly the false statement [the debtor] made
                    in  relation  to  his  bankruptcy  estate was
                    intended  to result  in an  undervaluation of
                    the estate in bankruptcy and the availability
                    of less  money to satisfy the  demands of the
                    creditors.    Thus, [the  debtor]  would have
                    "obtained something  of value from  more than
                    one  person," that being  whatever portion of
                    the  estate to which the creditors were enti-
                    tled but which was hidden by the false state-
                    ment.

          United States v.  Nazifpour, 944  F.2d 472, 474  (9th Cir.  1991)
          _____________     _________
          (per  curiam).   See also  Michalek, 54 F.3d  325, 330  (7th Cir.
                           ___ ____  ________
          1995) (concealing assets harms trustee and creditors).

                                          23

          counting"  when  imposed with  the  enhancement  for violating  a

          judicial order    need  not be discussed at  this time given  our

          decision to set aside the  latter ruling.  See supra pps.  14-19.
                                                     ___ _____

          Consequently, we affirm the two-level enhancement  imposed pursu-

          ant to U.S.S.G.   2F1.1(b)(2)(B).

                                          24

                                         III
                                         III

                                      CONCLUSION
                                      CONCLUSION
                                      __________

                    For the foregoing  reasons, appellants' convictions are

          affirmed.    Andrea Shadduck's  sentence  is  affirmed.   Michael

          Shadduck's  sentence is affirmed in part and vacated in part, and

          the case is remanded to the district court for resentencing.

                    So Ordered.
                    So Ordered.
                    __________

                                          25