Summary of a Recent
Judicial Development in
Bankruptcy

Bankruptcy Fraud Convictions Against
Farmers Affirmed

Patrick Roberts
National AgLaw Center Graduate Assistant

In United States v. Ryder, 414 F.3d 908 (8th Cir. 2005), the United States Court of Appeals for the Eighth Circuit affirmed a district court's ruling that farmers who filed a Chapter 7 bankruptcy petition were guilty of money laundering and knowingly and fraudulently concealing estate assets from the bankruptcy trustee. Debtors Alfred and Mary Ann Ryder filed a Chapter 7 bankruptcy petition in July of 1995. See id. at 911. The debtors asserted that their farming assets were "owned by a corporation rather than by themselves personally, and they did not disclose in their personal bankruptcy schedules any real property, livestock, crops, or farm equipment." Id. The debtors were subsequently convicted in federal district court of money laundering and concealing assets because they failed to disclose their farm assets during the bankruptcy proceedings. See id. On appeal to the Eighth Circuit, Alfred Ryder contended that the government failed to establish that he conducted a financial transaction, which was an element of the money laundering charge. See id. at 913-14. The facts that supported the conviction showed that Albert maintained post-petition control over farm income accounts and that such income was property of the bankruptcy estate. See id. Further evidence showed that he had control over the business and that he willfully impersonated an individual to obtain property. See id. Mary Ann Ryder asserted that the evidence was insufficient to establish the charge of concealment. See id. at 914-15. Evidence that supported the charge showed Mary Ann signed the bankruptcy petition attesting that it listed all of her assets and that farm operation proceeds were deposited into a checking account bearing her name. See id.

The case was decided on July 14, 2005; this summary was posted Sept. 23, 2005.