Ninth Circuit reverses bankruptcy fraud convictions; sheds light on meaning of bankruptcy fraud statute

In what I believe is a very exciting decision, the Ninth Circuit Court of Appeals has reversed the seven count bankruptcy fraud conviction of a northern California man who pretended to be a lawyer in order to defraud numerous tenants facing eviction of fees paid to him to assist them.  The opinion in United States v. Milwitt, No. 05-10344 (9th Cir. Feb. 5, 2007) is available here.

I say the opinion is "exciting" not because of the result (a reversal in which I have no stake), and despite the ugly fact that many people were defrauded, but because this is the first time in a long time that an appellate court has construed 18 U.S.C. 157 - a statute that creates so many unanswered interpretive questions.  It is exciting also because the opinion touches on several issues of first impression that I specifically identified - and attempted to resolve - in my bankruptcy crimes treatise (Bankruptcy Crimes Law and Procedure - available here). 

In short, the Ninth Circuit reversed Milwitt's convictions on seven counts of bankruptcy fraud on sufficiency of the evidence grounds because the government proved at trial that Milwitt acted with intent to defraud the tenants, rather than intent to defraud the landlords as the indictment charged.

I will be digesting the opinion (complete with a dissent) tonight and will be discussing multiple aspects of it in several posts throughout the day.  Among the issues addressed by the Ninth Circuit are (1) to what extent should mail fraud jurisprudence inform interpretations of the bankruptcy fraud statute, after which section 157 was patterned? and (2) must a bankruptcy fraud defendant have specific intent to defraud a victim or the victims of the scheme to defraud, that constitutes the first element of the crime?  More to come ...