Motion: Insufficient evidence to sustain Putnam attorney's bankruptcy fraud conviction

HUNTINGTON - Following his conviction for bankruptcy fraud last month, a Putnam County attorney is asking that either his conviction be set aside or he be granted a new trial.

After a two-day trial in U.S. District Court, a jury found Winfield attorney Patrick B. Anderson guilty of bankruptcy fraud, and fraudulent transfer and concealment of assets. Anderson was indicted on the charges in October following allegations he transferred property owned by a Poca couple to their daughter to conceal ownership of it from creditors.

However, Anderson's attorney, Assistant U.S. Public Defender David Bungard on May 5 filed a motion for Judge Robert C. "Chuck" Chambers to either enter a judgment of acquittal for Anderson or grant him a new trial. On both charges, Bungard said, there is insufficient evidence to show Anderson committed fraud.

Prior to the one on May 5, Bungard made similar motions for a judgment of acquittal. The first came upon conclusion of the government's case on April 27, and conclusion of the defense's case two days later.

In the motion, Bungard said Anderson does not dispute the fact that after the couple, Herman and Peggy Matney, retained him to file a Chapter 7 bankruptcy, he prepared a deed to transfer the mobile home and one acre of property they owned on Harmons Branch Road to their daughter Melissa Davis. However, per the Matney's wishes, Anderson prepared the deed when Herman said it his hope was to avoid losing the home, and ownership should go to Melissa.

"There was no testimony presented at trial which suggested that the defendant was aware of any illegality associated with real estate transfers prior to a Chapter 7 bankruptcy filing or that the defendant specifically intended to make an unlawful transfer," Bungard said.

Anderson's understanding, Bungard said, was that the Matneys wanted to have a life interest in their property. They would remain in their home until death at which such time ownership would transfer to Melissa.

The deed Anderson filed with the Putnam County Clerk's Office is consistent with the Matney's wishes, Bungard said. The language in the deed disputes the testimony the Matneys gave that Anderson told them they could transfer the property back after a year.

"The property was not transferred in its entirety to the Matneys' daughter and there is no contemplation of any subsequent transfer back to the Matneys within the language of the deed," Bungard said.

Also, Bungard said it makes no sense why Anderson would advise the Matneys they could transfer the property back after a year. Not only would a life interest allow them to remain in their home the remainder of the their lives, but also the value of their property fell within the exemption of a couple filing under Chapter 7.

If Anderson is guilty of anything, Bungard said, it's allowing a "combination of errors" to occur. The loss of part of the Matney's file following a Feb. 16, 2007, fire at Anderson's office along with a misunderstanding of filing Chapter 7 petitions following required consumer credit counseling, and Anderson's failure to review the Matney's petition resulted in it being filed with the U.S. Bankruptcy Clerk containing "numerous errors and omissions." Anderson intended to correct the mistakes by filing an amended schedule, but was prohibited from doing so after the Matneys discharged him shortly after the petition was filed on May 1, 2007.

Though possibly negligent, Anderson's actions were not illegal, and certainly not fraudulent, Bungard said.

"The negligent manner in which the defendant represented the Matneys' legal interests did not constitute a scheme to defraud," Bungard said. "By providing the Matneys' creditors with an opportunity to obtain access to assets which could have been legally protected, it cannot be found that the defendant acted with the specific intent to defraud such creditors, the U.S. Trustee, or the U.S. Bankruptcy Court.

"Likewise," he added, "any misunderstanding which the defendant had concerning the value of the defendant's real estate, the timing requirements for filing after credit counseling, the look back provisions for fraudulent transfers under federal and state law, or the property exemption process under Schedule C does not rise to the level of conduct constituting fraud."

U.S. District Court for the Southern District of West Virginia, case number 09-cr-233