United States Trustees Complaint Objecting Discharge to Charles R Lance's Chapter 7 Bankruptcy...

7/22/2019 United States Trustees Complaint Objecting Discharge to Charles R Lance's Chapter 7 Bankruptcy Discharge

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UNITED STATES BANKRUPTCY COURT

MIDDLE DISTRICT OF FLORIDA

ORLANDO DIVISION

In re:

CHARLES RANDOLPH LANCE,

Debtor.

____________________________________

DONALD F. WALTON,

Plaintiff,

v.

CHARLES RANDOLPH LANCE,

Defendant.____________________________________

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Case No.: 6:11-bk-19272-ABBChapter 7

Adv. Pro. No.: 6:12-ap-_____-ABB

UNITED STATES TRUSTEES COMPLAINT

OBJECTING TO ENTRY OF THE DEBTORS DISCHARGE

Plaintiff, Donald F. Walton, United States Trustee for Region 21, by and through his

undersigned counsel, objects to the entry of an order of discharge for Charles Randolph Lance

pursuant to 11 U.S.C. 727, and alleges the following:

JURISDICTION

1. This is an adversary proceeding in which Plaintiff is seeking the denial of theDefendants discharge pursuant to 11 U.S.C. 727(a)(2) and (a)(4).

2. This Court has jurisdiction pursuant to 28 U.S.C. 157 and 1334.3. This is a core proceeding pursuant to 28 U.S.C. 157(b)(2)(J).4. Plaintiff was appointed by the United States Attorney General as the United States

Trustee for Region 21, which includes the Middle District of Florida.

5. Plaintiff has standing to bring this action pursuant to 11 U.S.C. 307 and 727.

Case 6:12-ap-00169-ABB Doc 1 Filed 09/14/12 Page 1 of 20


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6. Venue is proper pursuant to 28 U.S.C. 1409(a) and Local Rule 1071-1 of theUnited States Bankruptcy Court for the Middle District of Florida.

BACKGROUND FACTS

7. On December 29, 2011 (the Petition Date), Charles Randolph Lance (theDefendant) filed a voluntary petition for relief (the Petition) under Chapter 7 of the

Bankruptcy Code, thereby initiating Bankruptcy Case Number 6:11-bk-19272-ABB (the Main

Case).

8. The Defendants Petition, Bankruptcy Schedules, Statement of Financial Affairs,and amended bankruptcy schedules are part of the Court record and were signed by the

Defendant under penalty of perjury (Dkt. Nos. 1, 12 and 15 in the Main Case).

9. Gene T. Chambers was appointed as the Chapter 7 Trustee (the Chapter 7Trustee) in the Main Case.

10. On December 30, 2011, the Clerk of Court docketed the Notice of Commencementof the Defendants bankruptcy case (Dkt. No. 6 in the Main Case), wherein the Court established

April 3, 2012 as the deadline for any interested party to file a complaint objecting to the

Defendants discharge.

11. On April 27, 2012, the Court entered an Order Granting United States TrusteesMotion to Extend Time for Filing a Complaint Objecting to Discharge(Dkt. No. 32), in which

the Court extended this deadline through and including July 23, 2012.

12. On July 24, 2012, the Court entered an Order Granting United States TrusteesUnopposed Motion for Second Extension of Time to File Complaint Objecting to Debtors

Discharge (Dkt. No. 45), in which the Court extended this deadline through and including

September 24, 2012.



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13. The Section 341 Meeting of Creditors was initially held on February 3, 2012 (theInitial 341 Meeting), when it was continued to, and concluded on, February 17, 2012 (the

Continued 341 Meeting; collectively, the Initial 341 Meeting and the Continued 341 Meeting

shall be referred to as the 341 Meetings).

14. On July 16, 2012, the undersigned counsel for the United States Trustee and ScottLivingston, Esquire, counsel for Fifth Third Bank, conducted a Bankruptcy Rule 2004

Examination of the Defendant (the 2004 Examination).

15. The following facts are based substantially on the Defendants Petition, bankruptcyschedules as amended, Statement of Financial Affairs, papers filed in the Main Case, documents

that the Defendant provided to Plaintiff and the Chapter 7 Trustee, and the Defendants

testimony at the 341 Meetings and 2004 Examination.

Original Bankruptcy Schedules

16. The Defendant filed his original bankruptcy Schedules (Original Schedules) (Dkt.No. 1) concurrently with the Petition.

17. Pursuant to the Defendants Declaration Under Penalty of Perjury for ElectronicFiling (Dkt. No. 5; the Declaration Under Penalty of Perjury), the Defendant signed his

Original Schedules under penalty of perjury, declaring under penalty of perjury that the

information contained therein is true and correct.

18. As reflected in the Defendants Original Schedule B, the Defendant listed assetswith values totaling $133,120.20, comprising the following:

a. $120.00 in cash;b. $0.20 in checking, Wells Fargo, garnishment;c. $200.00 for a laptop;



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d. $150.00 in clothing;e. $2,500 in jewelry (wedding band, watch);f. $150.00 in golf clubs;g. $0.00 in term life insurance Axea;h. $0.00 in term life insurance Lincoln National; andi. $130,000 for five different leased Lexus vehicles.

19. In his Original Schedule B, the Defendant did not list any interests in an E-Tradebank account, an E-Trade stock account, or any stock or other interest in incorporated and

unincorporated businesses.

20. In his Schedule I, the Defendant listed his employer as American Truck LeasingLLC and that he receives $19,750 in monthly gross wages, salary and commissions.

21. The Defendant is married, his spouse is an administrative employee at AmericanTruck Leasing, LLC, and her monthly gross wages, salary and commissions total $2,000. See

Schedule I (Dkt. No. 1 at p. 32).

Amended Schedule F

22. On January 26, 2012, the Defendant filed an Amended Schedule F to add and/orcorrect various creditors (Dkt. No. 12; the Amended Schedule F).

23. The Defendant signed his Amended Schedule F under penalty of perjury, certifyingunder penalty of perjury that the information contained therein is true and correct.

24. As reflected in both his Original Schedule F (Dkt. No. 1) and his AmendedSchedule F (Dkt. No. 12), the Defendant is seeking to discharge approximately $31,266,404.63

in unsecured debt.



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25. For every single debt included in his Original Schedule F (Dkt. No. 1) and hisAmended Schedule F, the Defendant, although required to do so, failed to specify the date each

claim was incurred, the consideration for each claim, and if each claim is subject to setoff.

Statement of Financial Affairs

26. The Defendant filed his Statement of Financial Affairs (Dkt. No. 1; SOFA)concurrently with the Petition.

27. As set forth in both the SOFA and the Defendants Declaration Under Penalty ofPerjury, the Defendant signed his SOFA under penalty of perjury, declaring under penalty of

perjury that the information contained therein is true and correct.

28. In response to Question 10(a) on his SOFA directing that the Defendant [l]ist allother property, other than property transferred in the ordinary course of business or financial

affairs of the debtor, transferred either absolutely or as security within two years immediately

preceding the commencement of this case, the Defendant checked the box marked, None.

29. In response to Question 10(b) on his SOFA directing that the Defendant [l]ist allproperty transferred by the debtor within ten years immediately preceding the commencement of

this case to a self-settled trust or similar device of which the debtor is a beneficiary, the

Defendant checked the box marked, None.

30. In response to Question 11 on his SOFA directing that the Defendant [l]ist allfinancial accounts and instruments held in the name of the debtor or for the benefit of the debtor

which were closed, sold, or otherwise transferred within one year immediately preceding the

commencement of this case, the Defendant listed a single checking account at Carolina First.



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31. In response to Question 14 on his SOFA directing that the Defendant [l]ist allproperty owned by another person that the debtor holds or controls, the Defendant indicated that

he was holding at his residence [p]ersonal property, furniture, etc. for his wife.

The Initial 341 Meeting

32. At the beginning of the Initial 341 Meeting on February 3, 2012, the Defendant wasduly sworn, and he proceeded to testify after taking an oath to tell the truth.

33. At the Initial 341 Meeting, the Defendant testified that he read his schedules beforehe signed them; that he understood when he signed his bankruptcy schedules, he was swearing

that the information set forth therein was accurate and complete; and that he could not think of

anything he needed to change in his schedules at that time. See Transcript of Initial 341 Meeting

at page 4, lines 15 22.

34. When asked whether he has an ownership interest in Union Equity, Inc., theDefendant testified, I dont. Id. at page 24, lines 7-9.

35. When asked whether he ever had an ownership interest in Union Equity, Inc., theDefendant testified, Never. Id. at page 24, lines 10-12.

36. When asked, [i]snt it a fact that you had stock in Union Equity, Inc. and youtransferred it to the Martha Lance Irrevocable Trust in 2011, the Defendant testified, I never

had stock in it. Id. at page 24, lines 13-16.

37. With respect to his financial accounts, the Defendant testified as follows:Chapter 7 Trustee: You list one bank account in your statements. Whatother financial accounts do you have, either joint, individual, business,personal, anything you have the ability to sign on?

Defendant: I only have one other account. Thats the Wells Fargoaccount.

Chapter 7 Trustee: Where



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Defendant: American Truck Leasing.

Chapter 7 Trustee: Youre allowed to sign on American Truck Leasing?

Defendant: Yes, maam.

Chapter 7 Trustee: Okay. Any others that you are allowed to sign on?

Defendant: No, maam.

Chapter 7 Trustee: Okay.

Mr. Stovash (counsel for Fifth Third Bank): If I may (inaudible).

Chapter 7 Trustee: Just

Mr. Stovash: He has he had an E-Trade account.

Chapter 7 Trustee: Did you close that or

Defendant: No, maam

Chapter 7 Trustee: do you still have an E-Trade account?

Defendant: I dont know if its closed or open but I can check and let youknow.

Chapter 7 Trustee: So there may have been an E-Trade account?

Defendant: Yes, maam.

Id. at page 34, line 5 through page 35, line 7 (emphasis added).

38. Based on this excerpt, the Defendant did not acknowledge that he had an E-Tradeaccount until AFTER its existence was revealed through Mr. Stovash, counsel for Fifth Third

Bank.

The Continued 341 Meeting

39. At the beginning of the Continued 341 Meeting on February 17, 2012, theDefendant was duly sworn, and he proceeded to testify after taking an oath to tell the truth.



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40. At the Continued 341 Meeting, the Defendant testified to the following as to hisownership of stock in Union Equity, Inc.:

Mr. Stovash (counsel for Fifth Third Bank): You are familiar with the

name of a company called Union Equity, Inc.; isnt that correct?

Defendant: Yes.

Mr. Stovash: And that, sir, is a public company; isnt that correct?

Defendant: Thats correct.

Mr. Stovash: And did you not, sir, own numerous, hundreds andthousands of shares of Union Equity, Inc.?

Defendant: Not to my knowledge, no.

Transcript of Continued 341 Meeting at page 10, lines 16-24.

41. Further, Mr. Stovash asked the Defendant, [w]hat were the shares of stock that youowned worth when you purchased those shares in Union Equity, Inc.? to which the Defendant

testified that he didnt purchase any shares. Id. at page 15, lines 5-8.

42. Slightly later during the Continued 341 Meeting, Mr. Stovash asked the Defendant,[s]o its your testimony that you never owned a share of stock in Union Equity, Inc. of which

you are a director? to which the Defendant testified that he purchased stock through E-Trade,

yes. Id. at page 17, lines 13-16.

43. With respect to his E-Trade assets, the Defendant further testified as follows:Mr. Stovash (counsel for Fifth Third Bank): Yes, stock shares. Where arethey?

Defendant: Its in E-Trade.

Mr. Stovash: Im so sorry, sir, you told the Trustee that you dont haveany money in E-Trade at our last meeting.

Defendant: I didnt say that. Said I had seven dollars.



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Mr. Stovash: Seven dollars?

Defendant: Yes.

Mr. Stovash: Is it E-Trade?

Defendant: I think thats correct, yes.

Mr. Stovash: Now what happened what do you value these shares ofstock in E-Trade at, seven dollars?

Defendant: Thats cash in E-Trade.

Mr. Stovash: Ill tell you what, tell me where the shares of stock in UnionEquity are located so that the Trustee can know where to find an asset of

your estate.

Defendant: To find an asset of my estate?

Mr. Stovash: Shes going to want to know where those shares of stock arefor Union Equity.

Mr. Ainsworth (counsel for the Defendant): triple 0, zero (sic), I think.

Chapter 7 Trustee: Well, he didnt list he didnt even list an E-Tradeaccount. I want records.

Mr. Ainsworth: Well get them.

Chapter 7 Trustee: He was supposed to give me all of the records for anyaccount he had.

Id. at page 18, line 13 through page 19, line 11.

Omnibus Amendment to Schedules

44. On February 27, 2012, after both the Initial 341 Meeting and the Continued 341Meeting, the Defendant filed an Omnibus Amendment to Schedules (Dkt. No. 15; the Omnibus

Amendment(s)), wherein he amended Schedules A, B, C, and F and his SOFA.

45. In the Omnibus Amendment, the Defendant amended his Schedule B to add (i) anE-Trade Account with a value of $7.62 as the Petition Date; and (ii) E-Trade Stock with a value



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of $2,047.24 as of the Petition Date. The Defendant included a corresponding amendment to his

Schedule C to claim both of these assets as exempt.

46. The Defendant also amended his Schedule F for a second time to add one additionalunsecured creditor, Nordstrom Bank, but again, failed to specify the date the claim was incurred,

the consideration for the claim, and if the claim is subject to setoff, despite being required to do

so.

47. As set forth in this second amendment to Schedule F, the Defendant increased theamount of unsecured debt he is seeking to discharge to approximately $31,266,704.63.

48. Again, for the debt included in his Original Schedule F (Dkt. No. 1) and hisAmended Schedule F, the Defendant failed to specify the date the claim was incurred, the

consideration for the claim, and if the claim is subject to setoff as required.

49. While the Omnibus Amendments amended certain responses in the Debtors SOFA,the Defendant never amended his responses to SOFA items 10(a), 10(b), 11 or 14.

Rule 2004 Examination

50. At the beginning of Rule 2004 Examination on July 16, 2012, the Defendant wasduly sworn, and he proceeded to testify after taking an oath to tell the truth.

51. At his Rule 2004 Examination, in response to questions about his ownership ofstock in various entities, the Defendant testified as follows:

United States Trustee: Was there a reason that you were not a share holder (sic)of any of these companies or a member?

Defendant: Yes.

United States Trustee: What is that reason?

Defendant: Its because I had federal restitution of $2,000,000 and I could not bean owner.



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United States Trustee: When did when were you obligated to pay the federalrestitution, at what point in time did that come about?

Defendant: I think in 1994 lasts for 20 years.

United States Trustee: And in that order you were prohibited from owning anyinterests from any companies?

Defendant: Well, I dont know what was said, but anything that I owned wouldobviously be given to the government.

United States Trustee: Okay. Why so youre (sic) understanding of therestitution, was it a restitution judgment?

Defendant: Yes, it was.

United States Trustee: And that was what was the lawsuit. Do you rememberthe name of the lawsuit?

Defendant: No, I dont.

United States Trustee: Okay.

Defendant: There was a restitution Im sorry. Go ahead.

United States Trustee: Tell me the nature of the lawsuit?

Defendant: Its just saying I owe a judgment back to the FDIC.

United States Trustee: And have you made any payments on you said it was a$2,000,000 judgment?

Defendant: 1930, and yes I made payments.

United States Trustee: And do you know how much?

Defendant: No, I dont.

United States Trustee: So youre (sic) understanding is that whatever you ownedthe judgment holder would be able to come after it?

Defendant: Any judgment holder, whether it be anybody else have a judgment, isheld by a path. It is non-dischargeable in bankruptcy.

Transcript of Rule 2004 Examination at page 37, line 16 through page 39, line 2.



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52. Although Bankruptcy Schedules E and F require debtors (i) to provide a completelist of claims entitled to priority, listed separately by type of priority; and (ii) to identify all

entities holding unsecured claims without priority against the debtor or the property of the

debtor, as of the date of filing the petition; the Defendant did not list the existence of the FDIC

judgment or obligation or identify the FDIC as a creditor in his Original Bankruptcy Schedules,

his Amended Schedule F or in his Omnibus Amendments.

Document Production

53. In response to a number of document requests, the Defendant produced to thePlaintiff various documents.

Martha D. Lance Irrevocable Marital Trust

54. The Defendant produced a document entitled, Martha D. Lance IrrevocableMarital Trust, which was made as of August 11, 2010 (the Trust) by the Defendant as grantor

and Blake Bolin, as trustee.

55. As set forth in the Assignment that the Defendant executed on August 11, 2010,which is included as Schedule A to the Trust (the Assignment), the Defendant, as grantor,

assigned to Blake Bolin, as trustee of the Trust, all of his right, title and interest in an to: (1)

One Hundred Seven Million five Hundred Ninety Eight Thousand (107,598,000) shares of the

Common Stock of Union Equity, Inc., a Delaware corporation, owned by him; and (2) One

Thousand (1,000) shares of the common stock of CML III Funding, Inc., a Florida corporation,

owned by him, which constitutes all of the authorized capital stock of said corporation.

56. The Defendant did not list in any of his bankruptcy schedules or on his SOFA thetransfers of stock reflected in the Assignment.



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E-Trade Statements

57. After the Initial 341 Meeting when Mr. Stovash revealed the existence of theDefendants E-Trade account, the Defendant produced to Plaintiff certain E-Trade Statements

(the E-Trade Statements) for his bank and stock accounts held at E-Trade under Account

Number xxxx-7264 (the E-Trade Account), which account includes a stock account and a bank

account.

58. The E-Trade Statements reflect that during the time period beginning on January 1,2011 and through and including December 31, 2011, the Defendant made at least 265 separate

purchases of Union Equity, Inc. stock.

59. The E-Trade statements also reflect that the Defendant had a bank account with E-Trade which he used regularly during 2011.

60. The Defendants balances in his E-Trade assets, including stock and funds, were asfollows:

Date Stock Cash Total Balance

December 31, 2010 $65,580.05 $1,961.79 $67,541.84

January 31, 2011 $45,610.24 $1,081.12 $46,691.36

February 28, 2011 $50,563.92 $1,082.60 $51,646.52

March 31, 2011 $856.01 $56,899.15 $57,755.16

April 30, 2011 $481.02 $51,609.12 $52,090.14

May 31, 2011 $1,706.24 $11,700.40 $13,406.64

June 30, 2011 $572.46 $13,954.60 $14,527.06

July 31, 2011 $591.37 $20,041.20 $20,632.57



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Date Stock Cash Total Balance

August 31, 2011 $583.60 $4,845.89 $5,429.49

September 30, 2011 $475.38 $4,759.02 $5,234.40

October 31, 2011 $224.08 $447.66 $671.74

November 30, 2011 $7.62 $393.70 $402.32

December 31, 2011 $7.62 $284.25 $291.87

61. On or about July 8, 2011, the Defendant transferred out of his E-Trade account100,000 shares of Union Equity, Inc. stock to, upon information and belief, an E-Trade account

xxx-xx004-1 held by Dawn Renne, the Defendants daughter.

62. Upon information and belief, when the Defendant transferred out of his E-TradeAccount these 100,000 shares of Union Equity, Inc. stock on or about July 8, 2011, this stock

was worth somewhere between $1.01 and $1.90 per share.

63. The Defendant failed to disclose anywhere in his bankruptcy schedules or SOFAhis transfer to his daughter of 100,000 shares of Union Equity, Inc. stock on or about July 8,

2011.

64. On or about October 26, 2011, the Defendant transferred out of his E-Trade account90,000 shares of Union Equity, Inc. stock to, upon information and belief, an E-Trade account

xxx-xx004-1 held by Dawn Renne, the Defendants daughter.

65. Upon information and belief, when the Defendant transferred out of his E-TradeAccount these 90,000 shares of Union Equity, Inc. stock on or about October 26, 2011, this stock

was worth approximately $0.18 per share.



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66. The Defendant failed to disclose anywhere in his bankruptcy schedules or SOFAhis transfer to his daughter of 90,000 shares of Union Equity, Inc. stock on or about October 26,

2011.

COUNT I

Objection to Discharge Pursuant to 11 U.S.C. 727(a)(2)(A)

[The Defendant, with intent to hinder, delay, or defraud a creditor or an officer of theestate transferred, removed, destroyed, mutilated or concealed property of the Defendant

within one year before the date of the filing of the petition.]

67. The United States Trustee re-alleges and incorporates herein the allegationscontained in paragraphs 1 through 66.

68. Section 727(a)(2)(A) provides that the Court shall grant a debtor a discharge unless,the debtor, with intent to hinder, delay, or defraud a creditor or an officer of the estate charged

with custody of property under this title, has transferred, removed, destroyed, mutilated, or

concealed, or has permitted to be transferred, removed, destroyed, mutilated, or concealed,

property of the debtor, within one year before the date of the filing of the petition. 11 U.S.C.

727(a)(2)(A).

69. As set forth above, the Defendant, with the intent to hinder, delay or defraud acreditor and/or the Chapter 7 Trustee, an officer of the estate charged with custody of property

under the Bankruptcy Code, transferred, removed, and/or concealed, and/or permitted to be

transferred, removed or concealed property of the Defendant, including, without limitation, the

Defendants stock, the Defendants E-Trade Account, and stock and funds in the Defendants E-

Trade Account.

70. The Defendant sought to hinder, delay and defraud his creditors and/or the Chapter7 Trustee, an officer of the estate charged with custody of property under the Bankruptcy Code,



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by transferring, removing and/or concealing these assets and failing to disclose these assets in his

bankruptcy schedules and/or SOFA and at the Initial 341 Meeting.

71. The Defendant defrauded his creditors and the Chapter 7 Trustee by failing todisclose these assets.

72. As a result, and pursuant to 11 U.S.C 727(a)(2)(A), the Defendants dischargeshould be denied.

WHEREFORE, the United States Trustee respectfully requests that the Court deny the

Defendants discharge pursuant to 11 U.S.C. 727(a)(2)(A), and for such other and further relief

the Court deems appropriate.

COUNT II

Objection to Discharge Pursuant to 11 U.S.C. 727(a)(2)(B)

[The Defendant, with intent to hinder, delay, or defraud a creditor have transferred,removed, destroyed, mutilated or concealed property of the estate after the date of the

filing of the petition.]


74. Section 727(a)(2)(B) provides that the Court shall grant a debtor a discharge unless,the debtor, with intent to hinder, delay, or defraud a creditor or an officer of the estate charged

with custody of property under this title, has transferred, removed, destroyed, mutilated, or

concealed, or has permitted to be transferred, removed, destroyed, mutilated, or concealed

property of the estate, after the date of the filing of the petition. 11 U.S.C. 727(a)(2)(B).

75. As set forth above, the Defendant, with the intent to hinder, delay or defraud acreditor and/or the Chapter 7 Trustee, an officer of the estate charged with custody of property

under the Bankruptcy Code, transferred, removed, and/or concealed, and/or permitted to be



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transferred, removed or concealed, property of the estate including, without limitation, the

Defendants stock, the Defendants E-Trade Account, and stock and funds in the Defendants E-

Trade Account, after the Petition Date.

76. The Defendant sought to hinder, delay and defraud their creditors and/or theChapter 7 Trustee, an officer of the estate charged with custody of property under the

Bankruptcy Code, by transferring, removing and/or concealing these assets and failing to

disclose these assets in the bankruptcy schedules and/or SOFA.

77. The Defendant defrauded his creditors and the Chapter 7 Trustee by failing todisclose these assets.

78. As a result, and pursuant to 11 U.S.C 727(a)(2)(B), the Defendants dischargeshould be denied.


Defendants discharge pursuant to 11 U.S.C. 727(a)(2)(B), and for such other and further relief


COUNT III

Objection to Discharge Pursuant to 11 U.S.C. 727(a)(4)(A)

[The Defendant knowingly and fraudulently, in or in connection with the case

made false oaths and/or accounts.]


80. Section 727(a)(4)(A) provides that the Court shall grant a debtor a discharge unlessthe debtor has knowingly and fraudulently, in or in connection with the case, made a false oath

or account. 11 U.S.C. 727(a)(4)(A).

81. The Defendant signed his bankruptcy petition, schedules, SOFA, and amendedschedules under penalty of perjury that the information provided therein was true and correct.



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82. The Defendant knowingly and fraudulently failed to disclose in his schedules andSOFA assets, including, without limitation, the Defendants stock, the Defendants E-Trade

Account, stock and funds in the Defendants E-Trade Account, and transfers of the Defendants

assets.

83. Failure to disclose all assets and /or transfers as required in bankruptcy schedulesand statements signed by the Debtor under penalty of perjury constitutes a false oath.

84. The Defendants purposeful omissions of assets and transfers in his OriginalBankruptcy Schedules, SOFA, and Omnibus Amendments are material misstatements and

constitute false oaths warranting the denial of discharge.

85. At the beginning of the Initial 341 Meeting on February 3, 2012 and at thebeginning of the Continued 341 Meeting on February 17, 2011, the Defendant was placed under

oath prior to testifying.

86. At the 341 Meetings, the Defendant made multiple false oaths relating to hisownership of certain assets, including, without limitation, the Defendants stock, the Defendants

E-Trade Account, funds and stock in the Defendants E-Trade Account, and transfers of the

Defendants assets.

87. These false oaths are material misstatements warranting the denial of theDefendants discharge.

88. The Defendants false oaths in his Original Bankruptcy Schedules, SOFA, andOmnibus Amendments, and at the 341 Meetings, were made to conceal his assets. The

concealment of assets constitutes fraud and as such, is grounds for the denial of discharge.

89. As a result, and pursuant to 11 U.S.C 727(a)(4)(A), the Defendants dischargeshould be denied.



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Defendants discharge pursuant to 11 U.S.C. 727(a)(4)(A), and for such other and further relief


COUNT IV

Objection to Discharge Pursuant to 11 U.S.C. 727(a)(5)

[The Defendant has failed to explain satisfactorily, before determination of denial ofdischarge under this paragraph, any loss of assets or deficiency of assets to meet the

debtors liabilities.]


91. Section 727(a)(5) provides that the Court shall grant a debtor a discharge unless thedebtor has failed to explain satisfactorily, before determination of denial of discharge, any loss of

assets or deficiency of assets to meet the debtors liabilities. 11 U.S.C. 727(a)(5).

92. As set forth in his Original Schedules, his Amended Schedule F, and his OmnibusAmendments, the Defendant is seeking to discharge approximately $31,266,704.63 in unsecured

debt.

93. However, the value of the Defendants personal property listed in his OriginalSchedule B as amended in the Omnibus Amendment totals $5,175.06 (excluding the $130,000 in

the Defendants five leased Lexus vehicles).

94. Based on the sheer discrepancy between the amount of the Defendants unsecureddebt, $31,266,704.63, and the $5,175.06 value of his personal property (excluding his five Lexus

vehicles), the Defendant has failed to adequately explain the loss, transfer, or deficiency of his

assets to meet his liabilities.



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95. The Defendant has not provided an adequate explanation to identify theconsideration received in exchange for his $31,266,704.63 in unsecured debt and/or the

disposition of such property.

96. Accordingly, the Defendants discharge should be denied for failure to satisfactorilyexplain the loss of assets.


Defendants discharge pursuant to 11 U.S.C. 727(a)(5), and for such other and further relief the

Court deems appropriate.

DATED: September 14, 2012. Respectfully submitted,

DONALD F. WALTONUnited States Trustee, Region 21

/s/ Jill Ellen KelsoJill Ellen Kelso, Trial AttorneyFlorida Bar No.: 0578541U.S. Department of JusticeOffice of the United States Trustee135 W. Central Blvd., Suite 620Orlando, FL 32801

Telephone No.: (407) 648-6301, Ext. 137Facsimile No.: (407) [email protected]


United States Trustees Complaint Objecting Discharge to Charles R Lance's Chapter 7 Bankruptcy...

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