Court Opinion

ID: 4098417
Source: CourtListenerOpinion
Date Created: 2016-11-15 20:00:57.615334+00
Date Added: 2024-06-11T14:47:23.699754
License: Public Domain

PUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                             No. 15-1088

UNITED STATES EX REL. KURT BUNK AND RAY AMMONS,

                Plaintiffs – Appellants,

          and

UNITED STATES EX REL. DANIEL HEUSER,

                Plaintiff,

          v.

GOVERNMENT LOGISTICS N.V.,

                Defendant – Appellee,

          and

BIRKART GLOBISTICS GMBH & CO. LOGISTIK UND SERVICE KG; THE
PASHA GROUP; ANDREAS CHRIST SPEDITION & MOBELTRANSPORT
GMBH; JOHN DOE, 1-100; AMERICAN MOPAC INTERNATIONAL,
INCORPORATED;   DOE   DEFENDANTS;   GATEWAYS   INTERNATIONAL;
ALLIED FREIGHT FORWARDERS; NORTH AMERICAN VAN LINES, INC.;
GLOBAL WORLDWIDE INCORPORATED; AIR LAND FORWARDERS SUDDATH;
COVAN INTERNATIONAL; JET FORWARDING INCORPORATED; ARPIN
INTERNATIONAL; BIRKART GLOBISTICS AG; THIEL LOGISTIK AG;
VIKTORIA SCHAFER INTERNATIONALE SPEDITION GMBH; VIKTORIA-
SKS KURT SCHAFER INTERNATIONALE GMBH & CO., KG; GILLEN &
GARCON GMBH & CO. INTERNATIONALE SPEDITION KG; GILLEN &
GARCON GMBH & CO. KG; M.T.S. HOLDING & VERWALTUNGS GMBH,
d/b/a   M.T.S.   Gruppe;   ANDREAS   CHRIST   GMBH;   MICHAEL
VILLINGER;   ERWIN   WEYAND;   NICODEMUS   GOSSELIN;   DIETER
SCHMEKEL; JURGEN GRAF; HORST BAUR; KURT SCHAFER; MARTINA
SCHAFER; BIRKART VERMOGENSVERWALTUNG GMBH; LOGWIN AIR +
OCEAN DEUTSCHLAND GMBH; LOGWIN HOLDING DEUTSCHLAND GMBH;
MISSY    DONNELLY;    GEORGE   PASHA;    AMERICAN    SHIPPING
INCORPORATED;    CARTWRIGHT     INTERNATIONAL    VAN    LINES
INCORPORATED; JIM HAHN; INTERNATIONAL SHIPPERS ASSOCIATION
INCORPORATED; GOSSELIN WORLDWIDE MOVING, N.V.; GOSSELIN
GROUP N.V.; MARC SMET; GOSSELIN WORLD WIDE MOVING, N.V.;
VIKTORIA INTERNATIONAL SPEDITION; JEFFREY CARLL COFFMAN;
ITO MOBEL TRANSPORT GMBH,

                Defendants.

------------------------------

UNITED STATES ATTORNEY GENERAL,

                Amicus Curiae.

Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria.      Anthony John Trenga,
District Judge. (1:02-cv-01168-AJT-TRJ; 1:07-cv-01198-AJT-TRJ)

Argued:   September 21, 2016          Decided:     November 15, 2016

Before KING, SHEDD, and THACKER, Circuit Judges.

Vacated and remanded by published opinion. Judge King wrote the
opinion, in which Judge Shedd and Judge Thacker joined.

ARGUED: John Edgar Petite, GREENSFELDER, HEMKER & GALE, PC, St.
Louis, Missouri, for Appellant.    William Francis Coffield, IV,
Laina Catherine Wilk Lopez, BERLINER CORCORAN & ROWE LLP,
Washington, D.C., for Appellee.     Michael Shih, UNITED STATES
DEPARTMENT OF JUSTICE, Washington, D.C., for Amicus United
States of America.    ON BRIEF: Ann Lugbill, Mark Hanna, Lauren
Hoff-Downing, MURPHY ANDERSON PLLC, Washington, D.C.; Richard E.
Greenberg, GREENSFELDER, HEMKER & GALE, PC, St. Louis, Missouri,
for Appellant.    Benjamin C. Mizer, Principal Deputy Assistant
Attorney General, Michael S. Raab, Civil Division, UNITED STATES
DEPARTMENT OF JUSTICE, Washington, D.C.; Dana J. Boente, United
States   Attorney,   OFFICE  OF  THE   UNITED  STATES   ATTORNEY,
Alexandria, Virginia, for Amicus United States of America.

                                  2
KING, Circuit Judge:

      We are for the third time entertaining this complex matter,

which began more than fifteen years ago as a bid-rigging scheme

conjured up by shipping businesses to defraud the United States.

In 2004, Gosselin Group N.V. (then known as Gosselin World Wide

Moving, N.V.) and another business entity entered conditional

guilty pleas in the Eastern District of Virginia to a pair of

criminal   conspiracy   offenses.        The   district    court   thereafter

dismissed one of those charges, and cross-appeals ensued.                 We

determined in those appeals that the defendants were criminally

liable for both conspiracies and remanded for resentencing.               See

United States v. Gosselin World Wide Moving, N.V., 411 F.3d 502

(4th Cir. 2005).

      More recently, in the qui tam proceedings at issue herein,

a jury returned a verdict in 2011 against three defendants that

we collectively refer to as the “Gosselin defendants”:              Gosselin

Group; Gosselin Worldwide Moving, N.V.; and Marc Smet, Gosselin

Group’s Chief Executive Officer and former Managing Director.

Appeals were pursued by the United States and by relators Kurt

Bunk and Ray Ammons (together, the “Relators”), who contested

the   district   court’s   refusal   to    award   civil    penalties.    We

granted relief, directing the court to enter judgment on a claim

pursued by Bunk in the sum of $24,000,000 — to be levied against

the Gosselin defendants — and remanding for further proceedings.

                                     3
See United States ex rel. Bunk v. Gosselin World Wide Moving,

N.V., 741 F.3d 390 (4th Cir. 2013).

       On remand, the district court was called upon to resolve

the issue of whether Bunk was entitled to recover his judgment

from    another    defendant,         Government       Logistics     N.V.    (“GovLog”),

which    was    alleged     to   be    a    successor     corporation        to    Gosselin

Group.       In   disposing      of     the    successor       corporation        liability

issue, the court ruled against Bunk on two bases.                             See United

States ex rel. Bunk v. Birkart Globistics GmbH & Co., No. 1:02-

cv-01168       (E.D.    Va.      Dec.      23,       2014),    ECF     No.    1362     (the

“Decision”).           First,    the       court     decided    that    the       successor

corporation liability claims against GovLog should be dismissed

because they had been inadequately pleaded.                      In the alternative,

the Decision rejected those claims on the merits and awarded

summary judgment, ruling that there was insufficient evidence to

justify a trial.          The Relators have appealed from the judgment,

and as explained below, we are satisfied that the court erred.

We therefore vacate and remand.

                                              I.

       Two     government     programs        that    facilitate     the     shipment    of

household goods belonging to military and domestic personnel to

                                              4
and from Europe have been at the center of this litigation. 1                                     The

first, known as the International Through Government Bill of

Lading (“ITGBL”) program, involves the solicitation of bids by

the    Department               of   Defense    (the       “DOD”)      from    domestic       freight

forwarders            who       then    subcontract        their       foreign       operations    to

overseas             businesses.              The     second,       known       as     the    Direct

Procurement Method (“DPM”) program, involves the solicitation of

bids by the DOD directly from foreign businesses.                                    Both programs

were, as relevant to the bid-rigging conspiracy, administered by

the Army’s Military Transport Management Command (the “MTMC”). 2

          Beginning in about 2001, the Gosselin defendants and at

least          one    other          entity,    The       Pasha     Group,         agreed    to   and

implemented the bid-rigging scheme.                             Their scheme substantially

increased            the    prices      that    the       DOD   paid    to    the     culprits    for

shipping household goods belonging to military and diplomatic

personnel to and from Europe under the ITGBL and DPM programs.

As    a       result       of    what    we    characterized           in    the     2005    criminal

appeals as “naked bid rigging,” the DOD paid millions of dollars

more          to   the      conspirators        than       it   should        have    paid.       See

          1
       Because we are assessing the award of summary judgment, we
recite the facts in the light most favorable to the Relators.
See Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir. 2003).
          2
        The MTMC is                     now    the    Army’s        Surface        Deployment     and
Distribution Command.

                                                      5
Gosselin, 411 F.3d at 508.               The bid-rigging scheme did not go

undetected, as it resulted in these qui tam proceedings and the

successful criminal prosecutions.

                                          A.

     In 2002, the Relators instituted these qui tam proceedings

under the False Claims Act (the “FCA”). 3                  The Relators operated

businesses that provided to the DOD services much like those

performed by Gosselin Group and Pasha.                   Bunk filed his qui tam

action in the Eastern District of Virginia on August 2, 2002,

alleging     an   FCA   claim   related       to   the   DPM   program   (the   “DPM

claim”). 4        Ammons   filed   his    qui      tam   action   in   the   Eastern

District of Missouri on September 17, 2002, alleging FCA claims

related to the ITGBL program (the “ITGBL claim”) and to Gosselin

Group’s exertion of pressure on Covan International (the “Covan

claim”) and Cartwright International Van Lines (the “Cartwright

claim”) to submit higher ITGBL bids.                 Both qui tam actions were

     3 The FCA, codified at 31 U.S.C. §§ 3729-3733, imposes
liability on individuals and entities who defraud government
programs. A claim under the FCA can be instituted by the United
States or by a private individual (i.e., a relator) via a qui
tam action.   See 31 U.S.C. § 3730(a)-(b).  The government may
intervene in a qui tam action. Id. § 3730(b)(2). If a qui tam
action is successful, the relators are entitled to share with
the government in the award. Id. § 3730(d).
     4 Bunk initially filed his qui tam                     action with another
relator, Daniel Heuser, who has since                       withdrawn from the
litigation.

                                          6
commenced under seal, pursuant to 31 U.S.C. § 3730, and remained

sealed and pending in the district courts during the criminal

proceedings.

                                            B.

      On November 13, 2003, a grand jury in the Eastern District

of   Virginia      returned    a    two-count      indictment       against      Gosselin

Group and Smet, charging them with conspiracy to restrain trade,

in violation of 15 U.S.C. § 1, and conspiracy to defraud the

United States, in contravention of 18 U.S.C. § 371.                            Describing

the manner and means of the conspiracy to restrain trade, the

two-count indictment specified that Gosselin Group, Smet, and

their     co-conspirators            “participat[ed]           in     meetings        and

conversations to discuss and agree upon a strategy to eliminate

the prime rates” in specific transportation routes, or channels,

“from Germany to the United States for the transportation of

military household goods.”                  See Indictment, United States v.

Gosselin World Wide Moving, N.V., No. 1:03-cr-00551, at ¶ 16

(E.D. Va. Nov. 13, 2003), ECF No. 19.                      The indictment further

alleged     that    Gosselin        Group    and    Smet    engaged       in    “written

exchanges    and     other     communications”       to    ensure     other      freight

forwarders    would    not     match    the      rates   set   by    “a   certain     co-

conspirator U.S. freight forwarder” and would cancel any rates

lower than the second highest rate in channels from Germany to

the United States.            Id.    The indictment charged the same with

                                             7
respect to the conspiracy to defraud the United States.                             Id.

¶ 25       (alleging    that    Gosselin    Group      and    Smet   “discussed     and

agreed upon a strategy to eliminate the prime rates”); see also

id. ¶¶ 26-27.

       In February 2004, Gosselin Group and Pasha agreed to be

charged and prosecuted by criminal information in the Eastern

District of Virginia for those same conspiracy offenses.                             By

plea agreements with the United States Attorney, Gosselin Group

and Pasha also agreed to plead guilty to the two charges alleged

in    the    information.        Smet,    who    signed      Gosselin    Group’s   plea

agreement individually and on behalf of Gosselin Group, thereby

escaped further criminal prosecution.                   That is, as a result of

Gosselin       Group’s      plea       agreement       being       consummated,    the

prosecutors dismissed the indictment theretofore lodged against

Gosselin Group and Smet.

       Pursuant    to     its   plea     agreement,     Gosselin      Group    admitted

that, at Smet’s urging, Gosselin Group and Pasha had conspired

to undermine the ITGBL program’s competitive bidding process by

preventing “me-too bids,” or matching bids, from converging to

the    prime    through    rate    (i.e.,       the   low    bid   for   a   particular

route). 5      To accomplish that objective in particular channels,

       5
       A through rate “is a payment encompassing all the costs
involved in a door-to-door move of DOD personnel’s household
effects.” See Gosselin, 411 F.3d at 505.

                                            8
“[i]n early January 2002, [Smet] agreed in writing to pay twelve

of the largest German moving agents a specified fee,” and “[t]he

German agents . . . agreed not to handle business from freight

forwarders in those channels unless the forwarders submitted me-

too bids at the second lowest level . . . or above.”                                 See

Gosselin, 411 F.3d at 507.              Even more, as Smet acknowledged in a

writing filed with the district court, Gosselin Group, Pasha,

and their co-conspirators had “provided misleading information

to DOD personnel in Germany.”                     See Statement of Facts, United

States v. Gosselin World Wide Moving, N.V., No. 1:03-cr-00551,

at ¶ 31 (E.D. Va. Feb. 19, 2004), ECF No. 93 (the “Statement of

Facts”). 6         In    the    end,   the    scheme   to   defraud     the    DOD   was

successful and “Gosselin was awarded a contract, effective May

1, 2001, after colluding with its fellow bidders to artificially

inflate      the    packing      and   loading      component     of   the    submitted

bids.”        See       Bunk, 741 F.3d    at    396.    In    turn,      “Gosselin

subcontracted much of the work, in predetermined allocations, to

its supposed competitors.”              Id.       As a result of the bid-rigging

scheme, “DOD’s costs to transport military household goods were

     6  Pursuant to Gosselin Group’s plea agreement, Smet and
Gosselin Group “admit[ted] the facts set forth in the [Statement
of Facts] and agree[d] that those facts establish[ed] guilt for
the [two conspiracy] offenses charged beyond a reasonable
doubt.”    See Plea Agreement, United States v. Gosselin World
Wide Moving, N.V., No. 1:03-cr-00551, at 4 (E.D. Va. Feb. 18,
2004), ECF No. 92.

                                              9
greater than they would have been had the shipments moved at the

prime through rates.”          See Statement of Facts ¶ 32.

     The guilty pleas of Gosselin Group and Pasha were tendered

to and accepted by the district court in Alexandria on February

18, 2004.       Pursuant to a separate agreement between Smet and the

Army, Smet was barred from doing business with the United States

for three years, from March 2004 to March 2007.                  Soon after that

agreement    was     executed,    a    so-called     United    States   Management

Team was created within Gosselin Group to handle its business —

in Smet’s absence — with the DOD.                  That team consisted of four

Gosselin     Group    employees:         Chief     Operating    Officer   Stephan

Geurts Sr., his son Stephan Geurts Jr., plus Timotheus Noppen

and Ludi Bokken.

     Meanwhile, Gosselin Group and Pasha exercised a reservation

under their plea agreements to pursue an immunity claim in the

district court, seeking dismissal of both the charges lodged in

the information.           In that regard, they asserted that their bid-

rigging scheme was entirely immune from federal prosecution.                    In

August     2004,     the     district    court      determined     that    certain

provisions      of   the    Shipping    Act   immunized    Gosselin     Group   and

Pasha    from    federal      prosecution     on    the   antitrust     conspiracy

                                         10
offense         alleged      in    the   information. 7          The   court   also     ruled,

however,         that       those    defendants        possessed       no    immunity    from

prosecution on the other charge, the conspiracy to defraud the

United      States.               Gosselin     Group      and    Pasha      were    therefore

sentenced on the conspiracy to defraud offense only.

       In 2005, the government successfully appealed to this Court

the district court’s immunity ruling on the antitrust conspiracy

offense.          Our decision rejected the proposition that Gosselin

Group and Pasha were somehow immune from prosecution on that

offense.          See Gosselin, 411 F.3d at 505.                       Concomitantly, we

rejected         Gosselin         Group’s     and    Pasha’s      cross-appeals       seeking

immunity from prosecution on the conspiracy to defraud offense.

Id.        As    Judge      Wilkinson        succinctly     explained,       “the    Shipping

Act’s immunity provisions afford [the conspirators] no relief

from liability for the antitrust violation and conspiracy to

defraud         they    have      admitted.”        Id.     Concluding       that    Gosselin

Group and Pasha were not entitled to immunity on either offense,

we    remanded         to    the    district     court     for    resentencing.         Those

proceedings were conducted in 2006.

       7
       The immunity provisions of the Shipping Act invoked by
Gosselin Group and Pasha were, at the time, 46 U.S.C. app.
§ 1706(a)(2), 46 U.S.C. app. § 1706(a)(4), and 46 U.S.C. app.
§ 1706(c)(1).   Currently, those provisions of the Shipping Act
are codified at 46 U.S.C. § 40307.

                                                11
      In the resentencing proceedings, the district court imposed

a   $6,000,000   fine     on   Gosselin      Group      for    its    offenses.         It

imposed two separate $4,600,000 fines on Pasha — one for each

count — for an aggregate fine of $9,200,000.                          The court also

ordered both Gosselin Group and Pasha to make restitution to the

DOD for losses suffered by the MTMC, in the sum of $865,000.

                                        C.

      In September 2006, with the criminal proceedings concluded,

the   Department     of    Justice      (the     “DOJ”)        gave    the     Gosselin

defendants notice of the two pending qui tam actions.                          The DOJ

lawyers   detailed      the    false    claims        and     bid-rigging      evidence

underlying the qui tam actions to the lawyers for the Gosselin

defendants   and     advised     them     that        the   United      States       might

intervene.       Shortly       thereafter,       in     January       2007,    the    DOJ

communicated a settlement demand to the Gosselin defendants.

      After completion of the criminal proceedings and with the

civil qui tam proceedings just beginning, Smet was completely

“fed up” with the DOJ and the DOD — a sentiment he expressed to

Geurts Jr.   See J.A. 637. 8        As Smet further explained to Noppen,

his   frustration     arose      from    the     “whole        criminal       case     and

everything around it.”          Id. at 675; see also, e.g., id. at 427

      8Citations herein to “J.A. ___” refer to the contents of
the Joint Appendix filed by the parties in this appeal.

                                        12
(“[Smet] was really fed up with all those chasings towards his

person . . . .”).          Smet thus approached Jan Lefebure, who worked

as Managing Director of International Freight Forwarding Service

(which      handled     Gosselin      Group’s    commercial   exports),      with   a

proposal      to    move   Gosselin     Group’s    business   with     the   United

States into the hands of another business entity.

       Lefebure      owned     a   corporation    called   Brabiver,    which   was

described by Geurts Jr. as a “company doing nothing.”                     See J.A.

640.       Notably, however, and helpful to Smet, Brabiver owned “a

license for transportation or freight forwarding.”                     Id.      Smet

proposed to Lefebure a scheme “to reopen [Brabiver], and to put

his    [i.e.,      Gosselin    Group’s]    . . .    government    contracts     into

it.”       Id. at 426.

       Joining Lefebure as principals in the Brabiver venture, as

orchestrated by Smet, were Noppen, Geurts Jr., and Rene Beckers

— all of whom were employed by Gosselin Group or one of its

subsidiaries.           On June 27, 2007, in order to carry out Smet’s

scheme and to capitalize Brabiver, Smet made several interest-

free       loans   to    the   four    principals,    totalling    approximately

€100,000. 9        Noppen, Geurts Jr., and Beckers each received loans

from Smet of more than €24,000.                  Lefebure received an initial

       9
       As of June 27, 2007, €100,000 was equal to approximately
$134,000.  See Foreign Exchange, N.Y. Times, June 27, 2007, at
C12.

                                          13
loan of more than €16,000, which was later increased to more

than   €27,000.            Notably,    those       interest-free           loans    were   not

secured in any way.             Each loan was repayable on Smet’s demand,

but no demands were ever made.

       On    June    28,     2007,    at    their       first   and    only       shareholder

meeting, Smet’s hand-picked principals used the foregoing loans

to purchase shares in and to formalize Brabiver’s resurgence as

GovLog — a new name selected by Smet himself.                                The next day,

June 29, 2007, GovLog and Gosselin Group entered into a series

of   agreements,       memorialized         by     contracts       prepared        by   Smet’s

attorneys and presented by Smet to the GovLog principals.                                  Two

of the agreements transferred Gosselin Group’s business with the

DOD to GovLog, and three other agreements committed GovLog to

exclusively use the services of Gosselin Group and its related

entities to perform the DOD contracts.

       In exchange for Gosselin Group’s business with the DOD,

GovLog      paid    nothing    at     the    time.        Instead,         GovLog   promised

Gosselin Group a percentage of its future net revenues.                                    The

agreements transferring Gosselin Group’s business with the DOD

to GovLog defined those net revenues as “all of those revenues

received     by     GovLog    . . .    minus       the    amount      of    the    [services]

invoiced by [Gosselin Group] to GovLog in connection with” the

services      provided        to     GovLog        by    Gosselin          Group    and    its

subsidiaries.          See      J.A.       832     (emphasis     omitted)          (regarding

                                              14
facility      services);     see    also    id.   at    839    (regarding      support

services).      The terms of the various agreements were not even

negotiated;     rather,      they   were    all    dictated      by    Smet.     After

Smet’s lawyers prepared the agreements, Smet simply handed them

to Lefebure, who signed each on behalf of GovLog.

       At no point during the implementation of the GovLog scheme

did Gosselin Group consider selling or seek to sell its business

interests to any entity other than GovLog.                       Manned with only

about twenty employees — all but one of whom joined GovLog from

Gosselin Group — GovLog began its DOD shipping operations on

behalf of Gosselin Group on July 1, 2007.

       Thereafter,     the    sole     business        of     GovLog     was   signing

contracts with the DOD and arranging shipping services for the

DOD.     It did not, as Lefebure said, actually do any shipping.

As Lefebure testified:

       Q.     . . . . Other than making the arrangements for
              these movements of household goods, does [GovLog]
              provide any other services?

       A.     For the time being, no.

See    J.A.   751.    Although      GovLog      contracted      with    the    DOD   and

GovLog’s carriers to perform shipping services, Gosselin Group

continued to perform nearly all those services.                        GovLog did not

have    its    own   warehousing      facilities;       it     leased     warehousing

facilities from Gosselin Group.                 GovLog owned nothing except a

couple of automobiles, a chair, and a table.

                                           15
     GovLog earned no net revenues, as defined by its agreements

with Gosselin Group, during the 2007 or 2008 fiscal years.                  As a

result, GovLog was not obligated to pay any funds to Gosselin

Group in exchange for Gosselin Group’s business with the DOD.

GovLog, however, paid Gosselin Group for the leased warehouse

facilities and other Gosselin Group services.                   In other words,

as a representative of GovLog succinctly explained, “the money

that’s    going    to   GovLog    is   actually   ending   up    being   paid   to

Gosselin.”       See J.A. 1322.

                                         D.

     Meanwhile, on November 7, 2007, Ammons’s qui tam action was

transferred from the Eastern District of Missouri to the Eastern

District    of    Virginia,      where   Bunk’s   qui   tam     action   remained

pending.     The two qui tam suits were thereafter consolidated.

In 2008, after GovLog was formed, the district court ordered the

Relators’ complaints unsealed.            On July 18, 2008, Ammons’s qui

tam complaint was superseded by the government’s Complaint in

Intervention.       See 31 U.S.C. § 3730(b)(2) (“The Government may

elect to intervene and proceed with the action . . . .”).                       The

government did not, however, intervene in Bunk’s qui tam suit. 10

     10 Although Relator Ammons became a subordinated party upon
the government’s intervention in his qui tam action, he
nevertheless maintained his status as a plaintiff.       See 31
U.S.C. § 3730(c)(1) (“[The person bringing the action] shall
have the right to continue as a party to the action . . . .”).
(Continued)
                                         16
      In    its   Complaint      in   Intervention,      the    government       named

GovLog      as    a     defendant,      alleging       that     GovLog        was    “a

successor/transferee        in     interest    of    Gosselin       [Group].”       See

Compl. Int. ¶ 15.          On October 2, 2008, Bunk filed his Second

Amended     Complaint,     which      also    included       GovLog    as    a   named

defendant and alleged a successor corporation liability claim

against GovLog.         In December 2009, Bunk amended his complaint

again, filing his operative Third Amended Complaint (the “Bunk

Complaint”).

      The    Bunk      Complaint      “pleaded      various     FCA    theories      of

liability against [the Gosselin defendants] and others.                          Suing

in   his    individual     capacity,      Bunk      joined    several       additional

claims, including a 42 U.S.C. § 1985 claim . . . and state law

claims.”     See Bunk, 741 F.3d at 398-99 (citations omitted).                       As

we   observed     in    Bunk,    however,     only    his     DPM   claim     was   not

superseded by the government’s Complaint in Intervention:

      Although the government did not intervene in the Bunk
      proceeding, the district court determined that all of
      Bunk’s   claims  had   nonetheless   been   effectively
      superseded   by   the   [government’s    Complaint   in
      Intervention], except for Count II of the Bunk

Bunk’s status did not change as a result of the government’s
intervention in Ammons’s action. See id. § 3730(c)(3) (“If the
Government elects not to proceed with the action, the person who
initiated the action shall have the right to conduct the
action.”).

                                         17
      Complaint, which sought recovery under the FCA for
      Gosselin’s actions in connection with the DPM scheme.

Id. at 399 n.8; see also Bunk Compl. ¶ 148 (alleging that the

Gosselin defendants “knowingly made, used, or caused to be used

a   false    record     or   statement    to   get    a   false   claim    paid   or

approved by the United States Government”).                   By incorporating

and realleging a substantial portion of the Bunk Complaint, see

Bunk Compl. ¶ 147, Count II of the Bunk Complaint alleged the

successor        corporation     liability     contention    in   the     following

terms:

      The transaction between [GovLog] and [Gosselin Group]
      is, knowingly, a sham transaction for inadequate
      consideration through which Gosselin Group . . .
      and/or its operating subsidiaries still profit through
      their business interests in shipping related to U.S.
      Government markets and that transaction is designed to
      hinder, delay and/or defraud Relators as a potential
      judgment creditor.

Id. ¶ 30.

      On May 11, 2011, after the government and the Relators had

moved for summary judgment on the issue of whether GovLog was

liable      as    a   successor    corporation       of   Gosselin   Group,       the

district     court     severed    the   claims    against   GovLog      from   those

against the Gosselin defendants.                 The court then proceeded to

conduct a trial, seeking to first resolve the claims against the

Gosselin defendants.

                                         18
        The jury trial on the DPM, ITGBL, and Covan claims against

the Gosselin defendants began in Alexandria on July 18, 2011. 11

At the close of the government’s case, on July 28, 2011, the

district      court    awarded      judgment      as     a    matter          of    law     to   the

Gosselin      defendants     on    the    ITGBL     claim.              The    DPM    and     Covan

claims were submitted to the jury, and on August 4, 2011, the

jury returned a verdict against the Gosselin defendants on the

DPM claim and in favor of the Gosselin defendants on the Covan

claim.

       With     respect      to    the    DPM     scheme,          the        trial        evidence

established      that     the     Gosselin    defendants           had        submitted       9,136

false       invoices    to   the     DOD.         Each       of        those       false     claims

authorized the imposition of a minimum civil penalty of $5,500.

As we explained in our Bunk decision, the “imposition of no more

than    the    statutory        minimum     . . .      would       have        resulted       in    a

cumulative penalty just in excess of $50 million.”                                 See 741 F.3d

at 401.        Nevertheless, the district court did not impose any

civil       penalties,       ruling       that      such          an     award        would        be

unconstitutionally punitive in violation of the Excessive Fines

Clause of the Eighth Amendment.               Id.

       11
        Before the 2011 jury trial began, the district court
granted partial summary judgment to the government on the
Cartwright claim against the Gosselin defendants. See Bunk, 741
F.3d at 399-400.

                                             19
      Both       the    government    and   the    Relators     appealed,        and   the

Gosselin         defendants       cross-appealed.           Bunk     challenged        the

district court’s denial of civil penalties in relation to the

DMP   claim;       the    government     challenged     the     court’s      award     of

judgment to the Gosselin defendants on the ITGBL claim; and the

Gosselin defendants argued that Bunk lacked standing to sue.

After rejecting the Gosselin defendants’ standing argument, we

directed the court to amend its civil penalties judgment and to

award $24,000,000 in civil penalties to Bunk on the DPM claim.

See Bunk, 741 F.3d at 404-05, 411.                   We explained that such an

award      was    not    unconstitutionally       excessive        under   the    Eighth

Amendment, and specified that the award “appropriately reflects

the gravity of Gosselin’s offenses and provides the necessary

and appropriate deterrent effect going forward.”                           Id. at 409.

Finally, we vacated the court’s entry of judgment in favor of

the Gosselin defendants on the ITGBL claim.                         Id. at 411.         We

thus remanded the matter for further proceedings. 12

                                            E.

      In     additional       Bunk   remand      proceedings,       with   the    claims

against      the       Gosselin    defendants      having    been     resolved,        the

      12On August 1, 2014, during the remand proceedings in the
district court, a jury in Alexandria returned a verdict in favor
of the government on the ITGBL claim.      On December 24, 2014,
however, the district court granted the Gosselin defendants’
renewed motion for judgment on that claim.

                                            20
district   court       turned       to   the    successor    corporation       liability

claims that were pending against GovLog.                       In that regard, the

court initially focused on identifying the applicable legal test

for   a   successor         corporation        liability     claim.     The     Relators

requested that the court apply the substantial continuity test

enunciated       by    this         Court      in   United    States     v.     Carolina

Transformer Co., 978 F.2d 832 (4th Cir. 1992), as an expansion

of    traditional       common        law      principles.       GovLog       contended,

however,     that      use     of    the     substantial      continuity       test    was

foreclosed by the Supreme Court’s 1998 decision in United States

v. Bestfoods, 524 U.S. 51 (1998).                     On September 12, 2014, the

district court agreed with GovLog and ruled that application of

Carolina     Transformer’s            substantial      continuity       test    in     the

context of the FCA would be inconsistent with Bestfoods.                              As a

result,    the    court       decided       that    only   traditional     common      law

principles would govern the issue of GovLog’s liability as a

successor corporation.               The court then invited the parties to

renew and litigate their motions for summary judgment.

      Relying     on    a    fraudulent        transaction     theory    of    successor

corporation liability under the common law, the Relators and the

government, on November 3, 2014, sought summary judgment with

respect to the successor corporation liability claims.                            GovLog

then cross-moved for summary judgment, also asking for judgment

on the pleadings.            In support of its request for judgment on the

                                               21
pleadings, GovLog maintained that the government’s Complaint in

Intervention       and   Count       II    of     the    Bunk      Complaint    failed    to

properly     allege      that        GovLog        was       liable   as   a     successor

corporation to Gosselin Group.                   In its summary judgment request,

GovLog cast the fraudulent transaction theory posited by the

government       and   the   Relators        as    entirely        speculative,    arguing

that the evidence was insufficient to create any material issues

of fact, thereby entitling GovLog to summary judgment.

      On December 23, 2014, the district court granted judgment

to   GovLog,     utilizing      two       theories.          See   Decision     2-3.     The

Decision    first      concluded      that       neither       complaint   had    properly

alleged that GovLog was liable as a successor corporation to

Gosselin         Group       under         any      recognized          legal      theory.

Alternatively, the court concluded that GovLog was entitled to

summary judgment for want of a genuine dispute of material fact.

Indeed, the court ruled that the various transactions between

Gosselin Group and GovLog were not shown to have been pursued

with a fraudulent intention.                     In the court’s view, there was

simply     “no     evidence      sufficient             to    establish    any     of    the

recognized ‘badges of fraud’” with respect to the creation and

operation of GovLog.          Id. at 9.

      The district court observed that Gosselin Group “had an

absolute right to end its direct contractual relationship with

the American carriers and there was nothing that could be deemed

                                              22
fraudulent         based   on    that       decision          alone,”    and    that    Gosselin

Group “was not under any obligation to stay in any particular

line    of    business      in    order          to     generate      revenue     to    pay    the

judgment.”           See   Decision         10.         The    Decision    swept       aside   the

government’s         and   the    Relators’            contentions       that    the    transfer

lacked       consideration,        explaining,               inter    alia,     that    Gosselin

Group       “did    not    transfer         or    assign        any     ITGBL    contracts      to

GovLog,”       and    “[t]here         is    likewise          no     evidence,       expert   or

otherwise, that the [various agreements between Gosselin Group

and GovLog failed to] provide commercially reasonable terms or

adequate       consideration.”               Id.        at    11-12.       Accordingly,         on

December      29,     2014,      the    court         entered        judgment    in    favor   of

GovLog.

       The Relators timely noted this appeal from the judgment.

We possess jurisdiction pursuant to 28 U.S.C. § 1291. 13

                                                  II.

       At the outset, we must address GovLog’s contention that the

district court lacked subject matter jurisdiction over Bunk’s

       13
        The government initially appealed from the judgment in
favor of GovLog, but dismissed its appeal.         We thereafter
requested the Attorney General to make an amicus curiae
submission in the Relators’ appeal.       The United States has
submitted a brief in support of the Relators, and government
counsel participated in the oral argument of this appeal.

                                                  23
successor corporation liability claim against GovLog and that

the claim thus must be dismissed.               The question is whether the

court possessed supplemental jurisdiction over Bunk’s claim.

       If a district court possesses original jurisdiction in a

civil proceeding, it “shall have supplemental jurisdiction over

all other claims that are so related to claims in the action

within such original jurisdiction that they form part of the

same     case     or     controversy.”         See    28    U.S.C.      § 1367(a).

Supplemental jurisdiction “is not limited to restatements of the

same basic ground for recovery.”                White v. Cty. of Newberry,

S.C., 985 F.2d 168, 172 (4th Cir. 1993).                   Indeed, the related

claims “need only revolve around a central fact pattern.”                         Id.

We     review    de     novo     an   issue    of    whether    subject     matter

jurisdiction was possessed by a district court.                   See Taylor v.

Kellogg Brown & Root Servs., Inc., 658 F.3d 402, 408 (4th Cir.

2011).

       Original        jurisdiction    is     supplied     in   these     qui     tam

proceedings by Bunk’s FCA claim (i.e., the DPM claim).                      See 28

U.S.C. § 1331.          Supplemental jurisdiction thus turns on whether

the    inquiry    into     the    successor    corporation      liability       claim

against GovLog involves the same facts as the FCA claim.                        Here,

GovLog’s liability as a successor corporate entity is wholly

dependent on the Gosselin defendants’ liability under the FCA;

that is, the facts upon which the $24,000,000 judgment against

                                         24
the     Gosselin         defendants    was       predicated        also     serve      as    the

foundation         for    GovLog’s     liability         as   a    successor        corporate

entity.       Simply put, those two issues “revolve around a central

fact pattern.”            See White, 985 F.2d at 172; see also, e.g., Bd.

of    Trs.,       Sheet    Metal    Workers’          Nat’l   Pension      Fund     v.      Elite

Erectors, Inc., 212 F.3d 1031, 1037 (7th Cir. 2000) (observing

that “federal courts may entertain vicarious-liability theories

in a single suit” by way of supplemental jurisdiction).

       Nevertheless,         GovLog        maintains      that     the    district          court

lacked       supplemental          jurisdiction          with      respect        to     Bunk’s

successor corporation liability claim under the Supreme Court’s

decision in Peacock v. Thomas, 516 U.S. 349 (1996).                            The Peacock

Court       was    concerned        with     a    district        court’s    exercise         of

ancillary jurisdiction over subsequent proceedings, concluding

that “ancillary jurisdiction is not justified over a new lawsuit

to impose liability for a judgment on a third party.”                                    Id. at

359 (emphasis added). 14              This matter is readily distinguishable

from    Peacock.           Bunk’s     successor        corporation        liability         claim

against GovLog, as alleged in Count II of the Bunk Complaint, is

not part of a new lawsuit; indeed, the successor corporation

       14
        In Peacock, the Supreme Court recognized that “Congress
codified   much  of   the  common-law   doctrine   of  ancillary
jurisdiction as part of ‘supplemental jurisdiction’ in 28 U.S.C.
§ 1367.” See 516 U.S. at 354 n.5.

                                                 25
liability question is part and parcel of Bunk’s original qui tam

action.         Accordingly,       the    Peacock    principle     is    inapplicable

here,     and     the     district       court’s     exercise     of     supplemental

jurisdiction       over    the     successor       corporation     liability        claim

against GovLog was entirely appropriate.

                                           III.

        Turning to the heart of this appeal, we must assess and

decide whether the district court erred by entering judgment in

favor of GovLog on the successor corporation liability issue.

In the district court, Bunk pressed two theories of successor

corporation       liability       against     GovLog:         (1) the     substantial

continuity       theory,    and    (2) the       fraudulent    transaction      theory.

After    an     opening    round    of    briefing,     the    court    rejected       the

substantial       continuity        test,    deeming     it     inconsistent         with

Supreme Court precedent.                 Additional briefing ensued, and the

court’s Decision ruled that Bunk had not adequately pleaded the

fraudulent transaction theory.               In the alternative, the Decision

determined that the fraudulent transaction theory of successor

corporation liability was without evidentiary support, leaving

no   genuine      issue    of     material    fact    and     entitling       GovLog    to

summary    judgment.        On     appeal,    Bunk    challenges       each    of   those

rulings.

                                            26
                                   A.

         As a general rule, a corporation that acquires the assets

of another corporation does not also acquire its liabilities.

See United States v. Carolina Transformer Co., 978 F.2d 832, 838

(4th      Cir.   1992).   The   traditional   rule   against   successor

corporation liability, however, is subject to four exceptions

under the federal common law.       That is, a successor corporation

takes on the liabilities of its predecessor if

         (1) the successor expressly or impliedly agrees to
         assume the liabilities of the predecessor; (2) the
         transaction may be considered a de facto merger;
         (3) the   successor   may  be   considered   a   “mere
         continuation”   of   the   predecessor;   or   (4) the
         transaction is fraudulent.

Id. 15

         15
        That federal common law principles apply in this matter
is not undisputed.      GovLog argued in its brief for the
application of Belgian law, premised on choice-of-law provisions
in contractual agreements it had with Gosselin Group.       See,
e.g., J.A. 314 (providing that any disputes arising under
agreement between GovLog and Gosselin Group shall be determined
by Belgian law); id. at 321 (same).      We are satisfied that
Belgian law does not apply because GovLog cannot foist upon Bunk
a choice-of-law provision contained in an agreement between
GovLog and Gosselin Group. See Berg Chilling Sys., Inc. v. Hull
Corp., 435 F.3d 455, 466 (3d Cir. 2006) (“In general, while it
makes sense to allow the parties to a contract to control which
law applies to their agreement, it does not follow that the
contract provisions should control an inquiry that, by its
nature, looks beyond the contract.”). Although there yet may be
some question of whether principles of federal common law or
Virginia law apply here, the parties have not argued that point.
In any event, Virginia law does not meaningfully diverge from
federal common law concerning successor corporation liability.
Notably, federal common law and Virginia law both recognize the
(Continued)
                                   27
      The mere continuation theory authorizes the imposition of

liability        if,        “after     the        transfer         of     assets,        only    one

corporation        remains,          and     there       is       an    identity         of   stock,

stockholders,          and     directors          between         the    two    corporations.”

Carolina Transformer, 978 F.2d at 838.                             Bunk is unable to rely

on the mere continuation theory because the two corporations —

GovLog and Gosselin Group — were both viable after the transfer.

      Bunk       therefore           relies       on        the    more       lax    substantial

continuity         theory            conceived          in         Carolina         Transformer.

Substantial continuity expands on the mere continuation theory,

allowing     a    court       to    look     at    an       ensemble     of    at   least       eight

factors    to     determine          whether       successor           corporation        liability

should be imposed.                 See Carolina Transformer, 987 F.2d at 838

(identifying       relevant          factors       as       “(1) retention          of    the   same

employees;        (2) retention            of     the    same      supervisory           personnel;

(3) retention          of    the     same       production        facilities        in    the   same

location; (4) production of the same product; (5) retention of

the   same       name;       (6) continuity            of    assets;      (7) continuity          of

traditional exceptions to the rule against successor corporation
liability.   Compare, e.g., Carolina Transformer, 978 F.2d at
838, with Harris v. T.I., Inc., 413 S.E.2d 605, 609 (Va. 1992).
Both bodies of law also look to and apply what are called
“badges of fraud” to determine whether a conveyance was
fraudulent. Compare BFP v. Resolution Tr. Corp., 511 U.S. 531,
540-41 (1994), with Fox Rest Assocs., L.P. v. Little, 717 S.E.2d
126, 131-32 (Va. 2011). In the circumstances, we are satisfied
to apply federal common law.

                                                  28
general business operations; and (8) whether the successor holds

itself out as the continuation of the previous enterprise”).

     As     the    Supreme    Court    instructed      in   United        States    v.

Bestfoods, however, “the failure of [a] statute to speak to a

matter as fundamental as the liability implications of corporate

ownership demands application of the rule that ‘[i]n order to

abrogate a common-law principle, the statute must speak directly

to the question addressed by the common law.’”                  See 524 U.S. 51,

63 (1998) (second alteration in original) (quoting United States

v. Texas, 507 U.S. 529, 534 (1993)).                 Put simply, the FCA does

not speak to successor corporation liability and thus has no

impact     on     the    traditional   common   law     principles         governing

successor       corporation    liability.       It    follows     that      Carolina

Transformer’s       substantial    continuity    theory     —    a    theory       that

alters the common law mere continuation rule — is not a viable

theory for Bunk to pursue.             Accordingly, we are satisfied that

the district court properly declined to apply the substantial

continuity test here.

                                        B.

     Without the substantial continuity theory, Bunk must rely

on the fourth exception identified in our Carolina Transformer

decision    —      the    fraudulent    transaction     theory       of    successor

corporation liability.           The district court, however, rejected

Bunk’s allegations as insufficient with respect to that theory.

                                        29
See Decision 2 n.3 (“The Court concludes that the plaintiffs had

not, prior to the current round of summary judgment proceedings,

adequately placed GovLog on notice of . . . their fraudulent

transaction theory.”).               We must therefore initially assess de

novo whether the relevant pleading was legally sufficient.                                See

Teachers’ Retirement Sys. of La. v. Hunter, 477 F.3d 162, 170

(4th Cir. 2007).

       In general, to survive dismissal, a complaint must “state a

claim   to    relief    that    is    plausible       on   its    face”       by    alleging

factual matter to support the claims asserted.                          See Ashcroft v.

Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.

Twombly,     550 U.S. 544,     570   (2007)).        More    may    be       required,

however, when a successor corporation liability claim is being

pursued      under    the    fraudulent       transaction         theory.           In   that

circumstance, the complaint may need to satisfy the heightened

pleading requirements of Rule 9(b) of the Federal Rules of Civil

Procedure.      Compare, e.g., Ricciardello v. J.W. Gant & Co., 717
F. Supp. 56, 59 (D. Conn. 1989) (“If plaintiff purports to rely

on fraud to impose successor liability . . . , he must plead

with    particularity        facts    from    which    fraud      may    be    inferred.”

(citing Fed. R. Civ. P. 9(b))), with Old Republic Ins. Co. v.

Hansa World Cargo Serv., Inc., 170 F.R.D. 361, 376 (S.D.N.Y.

1997) (“[P]leadings of successor liability are subject to the

lenient      pleading       requirements      of   Rule     8(a),        not       the   more

                                             30
rigorous      standards         of    Rule    9(b).”).             In   this       proceeding,

however, we need not either assess or decide whether Rule 9(b)’s

pleading requirements apply to a fraud-based successor liability

claim.         That       is     because,      assuming         those        standards         are

applicable, they are readily satisfied here.

      Pursuant       to    Rule       9(b),   the     plaintiff         must      “state      with

particularity the circumstances constituting fraud or mistake.

Malice, intent, knowledge, and other conditions of a person’s

mind may be alleged generally.”                       See Fed. R. Civ. P. 9(b).

Although      we    must       view    the    facts        alleged      in    the      operative

complaint in the light most favorable to the plaintiff, “we will

not accept ‘legal conclusions couched as facts or unwarranted

inferences,        unreasonable         conclusions,          or     arguments.’”              See

Nathan, 707 F.3d at 455 (quoting Wag More Dogs, LLC v. Cozart,

680 F.3d 359,    365       (4th    Cir.     2012)).           In    simple        terms,    a

plaintiff      complies          with     Rule       9(b)      by,      “at       a     minimum,

describ[ing]        the    time,        place,       and     contents        of       the    false

representations, as well as the identity of the person making

the misrepresentation and what he obtained thereby.”                                   See Smith

v.    Clark/Smoot/Russell,             796 F.3d 424,     432      (4th       Cir.      2015)

(quoting United States v. Triple Canopy, Inc., 775 F.3d 628, 634

(4th Cir. 2015)).              As a general rule, as we have recognized, a

court “should hesitate to dismiss a complaint under Rule 9(b) if

the   court    is    satisfied         (1) that      the    defendant        has      been    made

                                              31
aware of the particular circumstances for which she will have to

prepare       a     defense         at     trial,      and      (2) that       plaintiff       has

substantial prediscovery evidence of those facts.”                                  Id. (quoting

Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 784

(4th Cir. 1999)).

        By incorporating and realleging a substantial portion of

the Bunk Complaint, see Bunk Compl. ¶ 147, Count II of the Bunk

Complaint         alleges       that,     “in     or   about      June      2007,    two    former

employees of [Gosselin Group] formed [GovLog], hired over twenty

(20)     employees         of    [Gosselin         Group]       and    . . .    entered      into

agreements          with    [Gosselin           Group]     to    purchase      all     of   [its]

business       interests         in       shipping       related      to     U.S.     Government

markets.”           Id. ¶ 30.            Gosselin Group and GovLog, as Count II

further alleges, then entered into various service agreements

“to enable [GovLog] to be able to provide services related to

the U.S. Government markets.”                      Id.       Count II also alleges that

GovLog       “hold[s]       itself        out    as    a     continuation       of     [Gosselin

Group]” and that Gosselin Group continues to reap profits from

its former contracts, all the while avoiding any liabilities for

its past misdeeds.              Id.

        It    is    thus    apparent         that      the      allegations     of     Count    II

sufficiently outline the dealings between GovLog and Gosselin

Group        that    form       a     solid       foundation          for     the     fraudulent

transaction theory.                 As a result, those allegations satisfy the

                                                  32
mandate    of    Rule     9(b).          In     dismissing        Bunk’s    successor

corporation     liability       claim     as     insufficiently       pleaded,     the

district court erred.

                                          C.

       Finally, as an alternative to its ruling that the successor

corporation     liability       claim     was    insufficiently       pleaded,     the

district court awarded summary judgment to GovLog on the merits.

In   the   court’s     view,     “there       [was]   an    absence    of   evidence

sufficient”     to    support    Bunk’s        fraudulent    transaction       theory.

See Decision 3.         Bunk challenges that ruling and requests that

we remand for trial and further proceedings, or for entry of

summary judgment in Bunk’s favor.                 We review de novo whether a

district   court’s      summary    judgment       award     was   warranted.       See

Bauer v. Lynch, 812 F.3d 340, 347 (4th Cir. 2016).

                                          1.

       The fraudulent transaction theory turns on the intention

underlying the transfer of assets to GovLog, i.e., whether it

was made with an actual intention to hinder, delay, or defraud

creditors.      See, e.g., BFP, 511 U.S. at 540; see also, e.g., 15A

William Meade Fletcher et al., Fletcher Cyclopedia of the Law of

Corporations     § 7403,       Westlaw     (database        updated    Sept.     2016)

(“Many jurisdictions provide that a transfer is fraudulent if

made    with     actual     intent        to     hinder,     delay     or      defraud

creditors.”).        Because direct evidence of such an intention is a

                                          33
rarity,     courts   generally      look    to    indirect    and     circumstantial

evidence for “badges of fraud”:

       Since . . . fraudulent intent is found by facts
       and circumstances, it is subject to indirect proof,
       with    the   following   recognized as   “badges   of
       fraud”:    (1) a  conveyance   to  a spouse  or   near
       relative; (2) inadequacy of consideration . . . ;
       (3) transactions that are different from the usual
       method of transacting business; (4) transfers in
       anticipation of suit or execution; (5) retention of
       possession by the debtor; (6) the transfer of all or
       nearly all of the debtor’s property; (7) insolvency
       caused by the transfer; or (8) failure to produce
       rebutting evidence when circumstances surrounding the
       transfer are suspicious.

Fletcher et al., supra, § 7403 (footnotes omitted); see also,

e.g., Aiken v. United States, 108 F.2d 182, 183 (4th Cir. 1939)

(“Fraudulent intent, as a mental element of crime . . . is too

often difficult to prove by direct and convincing evidence.                       In

many   cases   it    must   be     inferred      from   a    series    of   seemingly

isolated     acts    and    instances      which      have    been    rather   aptly

designated as badges of fraud.”); Fox Rest Assocs., 717 S.E.2d

at 131-32 (enumerating badges of fraud).                    Also among the badges

of fraud are “transactions whereby the debtor retains benefits.”

See 37 Am. Jur. 2d Fraudulent Conveyances & Transfers § 14,

Westlaw (database updated Sept. 2016).

       Of   importance,      the    issue        of   fraudulent      intention   is

generally not amenable to resolution on summary judgment.                         See

Morrison v. Nissan Motor Co., 601 F.2d 139, 141 (4th Cir. 1979)

(“[W]hen the disposition of a case turns on a determination of

                                           34
intent, courts must be especially cautious in granting summary

judgment, since the resolution of that issue depends so much on

the credibility of the witnesses, which can best be determined

by the trier of facts after observation of the demeanor of the

witnesses    during    direct     and   cross-examination.”).             Moreover,

when evidence of intention is ambiguous, summary judgment simply

cannot be awarded.         See Gen. Analytics Corp. v. CNA Ins. Cos.,

86 F.3d 51, 55 (4th Cir. 1996).

                                        2.

      In this situation, the evidence not only fails to dispel

the requisite fraudulent intention, but could easily be found to

establish    it.      Indeed,     Smet’s     own   words    provide     substantial

insight into — and direct evidence of — his fraudulent and

iniquitous    intention.          Before     hatching      his   scheme    to   move

Gosselin Group’s business with the United States into the hands

of GovLog, Smet had been indicted by the federal grand jury for

his   involvement     in    the    bid-rigging       scheme.       Although     that

indictment    was   later    dismissed,       Smet    admitted     to     strikingly

incriminating facts and was prohibited from doing business with

the United States for three years.

      After the criminal proceedings against Gosselin Group were

concluded, the DOJ informed Smet of these qui tam proceedings,

in which the government subsequently intervened.                  At the cusp of

the qui tam proceedings, as others testified, Smet loudly voiced

                                        35
his frustration with the “whole criminal case [against Gosselin]

and everything around it” and that he was “really fed up with

all those chasings towards his person.”                See J.A. 675, 703.        Any

reasonable juror could readily conclude that those sentiments —

expressed on the eve of GovLog’s creation — demonstrate Smet’s

fraudulent    intention       to   escape     liability    for    any   potential

judgment and     to   dodge    “those    chasings”      being    pursued    by   the

United States.

     The transaction between Gosselin Group and GovLog is also

adorned   with   several      of   the   badges   of    fraud.      Those   badges

readily     support   Bunk’s       position     concerning       the    fraudulent

intention underlying the GovLog transaction.                    At least four of

the badges of fraud are readily apparent on the evidence as

forecast:

     •      Inadequacy of consideration. See 15A Fletcher et
            al. supra, § 7403; see also, e.g., In re
            Woodfield, 978 F.2d 516, 518 (9th Cir. 1992),
            cited by In re Sandoval, 153 F.3d 722 (4th Cir.
            1998) (unpublished table decision); Fox Rest
            Assocs., 717 S.E.2d at 132.

     •      Transactions that are different from the usual
            method of transacting business. See 15A Fletcher
            et al., supra, § 7403; see also, e.g., Aiken, 108
F.2d at 183.

     •      Transactions   in   anticipation    of suit  or
            execution.   See 15A Fletcher et al., supra, §
            7403; see also, e.g., In re Woodfield, 978 F.2d
            at 518, cited by In re Sandoval, 153 F.3d 722;
            Fox Rest Assocs., 717 S.E.2d at 132.

                                         36
     •         Transactions through which the debtor retains
               benefits.     See 37 Am. Jur. 2d Fraudulent
               Conveyances & Transfers § 14, Westlaw (database
               updated Sept. 2016); see also, e.g., In re
               Kaiser, 722 F.2d 1574, 1582 (2d Cir. 1983).

     First,          the   consideration          that          GovLog     paid       to     acquire

Gosselin Group’s business interests could be found to be grossly

inadequate.          GovLog did not pay for Gosselin Group’s business

with the United States upon transfer.                           Instead, GovLog agreed to

pay Gosselin Group a percentage of GovLog’s future net revenues,

which     their       agreements        defined        as       “all     of    those       revenues

received by GovLog . . . minus the amount of the [services]

invoiced by [Gosselin Group] to GovLog in connection with” the

services       provided          to     GovLog        by    Gosselin           Group       and    its

subsidiaries.              See    J.A.     832        (emphasis         omitted)       (regarding

facility       services);        see     also     id.      at     839    (regarding          support

services).           GovLog      did    not,     however,         net    any    revenues.          In

effect,     therefore,           GovLog        paid        nothing       for     the        business

interests it received pursuant to the GovLog transaction.

     Next, the GovLog transaction could be found to have been

conducted       in    a    manner       different          from    the        usual    method      of

transacting       business.             After     approaching            Lefebure          with   his

scheme    to    resurrect         the    then-defunct            Brabiver       as     a    business

entity    flush       with    Gosselin         Group’s      government          contracts,        the

plan unfolded quickly and suspiciously.                                 At the outset, Smet

made interest-free loans, totalling approximately €100,000, to

                                                 37
four hand-picked GovLog principals — each of whom worked for

Gosselin Group or one of its subsidiaries.                    The very next day,

Smet’s cronies     used     those    loans     to    purchase     Brabiver     and    to

formalize its recasting as GovLog, a name selected by Smet.                          The

following day, without conducting any financial analysis of the

transaction, GovLog consummated the transaction by entering into

a series of agreements with Gosselin Group.                       Those agreements

were    prepared   by    Smet’s     attorneys       and    presented    to   GovLog’s

principals for execution without any negotiations.                         The GovLog

transaction was thus made in haste and with little input from

GovLog or its purported owners, with Smet in control of every

facet.

       Even more suspicious is the timing of the Gosselin Group-

GovLog transaction, which could be found to have been made in

anticipation of suit or execution.                  In 2003, Smet and Gosselin

Group    were   indicted    for   their   bid-rigging         scheme.        In   2004,

Gosselin Group pleaded guilty and was convicted.                       In exchange,

the government agreed to dismiss Smet’s indictment.                     Although he

escaped    criminal      liability,     Smet    was       prohibited    from      doing

business    with   the     United    States     for       three   years.       At    the

conclusion of the criminal proceedings against Gosselin Group

and Pasha, Gosselin Group was fined $6,000,000 and ordered to

make nearly $1,000,000 in restitution to the DOD.

                                        38
     After      the    successful         criminal       prosecution     of    Gosselin

Group, the Gosselin defendants first learned in September 2006

of these qui tam proceedings seeking to impose civil liability

for the bid-rigging conspiracy.                  By December 2006, the Gosselin

defendants knew that the government might well intervene in the

qui tam proceedings; by January 2007, the Gosselin defendants

had received a settlement demand from the DOJ.                           Facing civil

liability for the bid-rigging conspiracy — and just a month

after     receiving    the    government’s         settlement        demand    —   Smet

approached      Lefebure     with    his    GovLog       scheme   to    move   Gosselin

Group’s business with the United States into the new business

entity.     By July 1, 2007, Smet had orchestrated the creation and

funding    of    GovLog     and     its    acquisition       of   Gosselin     Group’s

business with the United States.                 In sum, the temporal proximity

of the Gosselin defendants’ being advised of the qui tam actions

and the GovLog transaction being consummated suggests that the

transaction was made to defraud Bunk and the United States out

of civil penalties.

     Finally, a reasonable juror could find that Gosselin Group,

despite having moved its business with the United States into

the hands of GovLog, continued to reap the benefits of that

business.       GovLog did not provide shipping services; instead, it

signed     contracts      with      the    DOD     and     arranged     for    shipping

services.        Gosselin     Group       actually       performed     those   shipping

                                            39
services, and it also leased warehousing facilities to GovLog.

At   bottom,     all     the    monies     paid     to    GovLog      for       its     “shipping

services” ended up in Gosselin Group’s coffers.                                  As a result,

Gosselin    Group        retained     all       the      benefits       of       the    business

interest it purported to have sold to GovLog.                                   See J.A. 1322

(“[T]he money that’s going to GovLog is actually ending up being

paid to Gosselin.”).

       Seeking     to     dispel     the       impact      of     all      this        compelling

evidence,       GovLog    offers     an    alternative          basis      for     the    GovLog

transaction.           According     to     GovLog,        Smet      was     merely      selling

Gosselin Group’s business with the United States for practical

business reasons.         As Smet testified during his deposition,

       I thought it was beneficial to the company to be able
       to give this business to another company and still to
       some degree allow the Gosselin companies to continue
       to provide some logistical support service to the new
       company that took over these contracts and continue to
       handle that business so we could still make some money
       off this business and not get stuck with high
       severance pays on all the employees.

J.A.     927.          Although      Smet’s         explanation           for     the     GovLog

transaction       could    counter       the    evidence        of    fraud       forecast    by

Bunk, this explanation could well be rejected by a reasonable

juror.     In sum, the various factual disputes presented here are

simply     incapable           of   resolution           except      by      a     factfinder.

Importantly, there is a great deal of evidence — when viewed in

                                               40
the   proper   light    —     to   prove      fraudulent     intention    and    that

evidence is both direct and circumstantial.

      Accordingly, the district court erred in making the summary

judgment award to GovLog.           We are therefore satisfied to remand

this matter for further proceedings.

                                         IV.

      Pursuant    to    the   foregoing,       we   vacate    the   judgment     and

remand   for     such   other      and   further     proceedings     as    may    be

appropriate.

                                                           VACATED AND REMANDED

                                         41