United States District Court, D. Connecticut
MEMORANDUM ON RESTITUTION
Michael P. Shea, U.S.D.J.
August 23, 2016, the Court sentenced Mr. Green to three years
of probation, a fine in the amount of $20, 000, and a special
assessment of $100. The Court postponed the determination of
restitution until after sentencing under 18 U.S.C. §
If the victim's losses are not ascertainable by the date
that is 10 days prior to sentencing, the attorney for the
Government or the probation officer shall so inform the
court, and the court shall set a date for the final
determination of the victim's losses, not to exceed 90
days after sentencing. . . .
Court asked the parties to file supplemental briefs regarding
the restitution owed to the Connecticut Community Bank d/b/a
The Greenwich Bank & Trust Company. The Connecticut
Community Bank submitted a Memorandum Regarding Restitution
and the Defendant filed a reply. For the reasons stated
below, the Defendant is ordered to pay Connecticut Community
Bank restitution in the amount of $163, 324.00.
Green waived his right to be indicted and pled guilty to a
one-count information charging him with embezzlement against
a bankruptcy estate on January 29, 2016. (ECF No. 3 at 1.)
The Defendant and the Government stipulated to the following
offense conduct in the plea agreement. From January 1, 2010,
through July 1, 2013, the Defendant was a managing member of
a limited liability company known as T-Green Carting, LLC
("T-Green"). (Id. at 9.) The Defendant
also owned another company known as Strickland Road, LLC.
(Id.) Both companies were garbage collection
about February 23, 2010, T-Green owed approximately $534, 000
to CIT Small Business Lending Corporation ("CIT"),
including outstanding principal and accrued interest.
(Id.) On or about March 17, 2010, T-Green borrowed
$990, 000 from Connecticut Community Bank, N.A., d/b/a The
Greenwich Bank & Trust Company ("CCB"), in a
commercial loan transaction secured by liens on various
properties. (Id.) Mr. Green signed all of the loan
documents on behalf of T-Green. (Id.)
loan included a condition that some of the proceeds be used
to pay off the entire loan from CIT. (Id.) Mr. Green
continued to make monthly interest payments to CIT on the
remaining loan balance, but fraudulently provided CCB with an
altered payoff statement showing a payoff quote of $266, 994
for the CIT loan. (Id.) After the CCB loan closed,
Mr. Green continued to make monthly payments to CIT to
conceal the existence of the CIT loan and the false nature of
the information he had provided to CCB. (Id.)
Green filed or caused to be filed a voluntary Chapter 11
bankruptcy petition on behalf of T-Green on or about April
12, 2012, in the United States Bankruptcy Court for the
District of Connecticut, partly as a result of T-Green's
inability to make loan payments on the CCB and CIT loans.
(Id.) T-Green was a bankruptcy debtor and debtor in
possession under Title 11, United States Code, Chapter 11.
(Id.) During the period from approximately April 15,
2012, through June 30, 2013, Mr. Green was the sole signatory
on the bank accounts of T-Green, he collected or received all
of the customer checks made payable to "T-Green Carting,
LLC, " and he had access to property and documents
belonging to the T-Green bankruptcy estate. (Id.)
that period, though he knew that he was required under the
bankruptcy code and rules to deposit all of the customer
checks for services performed by the bankruptcy debtor
(T-Green) into its debtor in possession bank account
("DIP Account"), Mr. Green deposited some of the
checks payable to T-Green into his personal bank accounts.
Mr. Green deposited cash and cash proceeds totaling $169, 624
that belonged to the T-Green bankruptcy estate in his
personal accounts. (ECF No. 23 at 4.) In addition, during the
same period, Mr. Green transferred approximately $47, 800
from T-Green's DIP Account to his personal bank accounts.
(ECF No. 3 at 10.) He also transferred approximately $29, 100
from his personal accounts to T-Green's DIP Account.
(Id.) Thus, on a net basis, Mr. Green took an
additional $18, 700 in unauthorized funds from T-Green.
(Id.) Therefore, the total amount embezzled from the
bankruptcy estate is $188, 324.00.
the Chapter 11 bankruptcy proceeding, T-Green filed a Motion
for Authority to Use Cash Collateral and to Provide Adequate
Protection to CCB, which the Bankruptcy Court granted in an
order dated March 13, 2013 (the "Order"). (In
re T-Green Carting, Case No. 12-50689, ECF No. 95.) On
May 14, 2013, T-Green's Chapter 11 bankruptcy was
converted to Chapter 7 after T-Green failed to comply with
the Order. (In re T-Green Carting, Case No.
12-50689, ECF No. 118.) On July 14, 2014, after the
embezzlement, the Chapter 7 Trustee filed a report of no
distribution after determining that there were insufficient
funds to administer. (In re T-Green Carting, Case
No. 12-50689.) On July 16, 2014, the Chapter 7 bankruptcy was
dismissed without discharge. (Id.)
bankruptcy, several entities file proofs of secured claims:
CCB for $769, 615, CIT for $25, 000, Integrated Vehicle
Leasing for $65, 000, and All Points Capital for $19, 802.
(ECF No. 23 at 1.) Integrated Vehicle Leasing and All Points
Capital had debts secured by the vehicles that they were
financing, and both vehicles were abandoned by the estate.
(Id. at 6.) Both entities sold the vehicles and
either were paid in full or have only unsecured claims at
this point; in any event, neither entity had a security
interest in any of T-Green's assets other than the
vehicles. (Id.) This left CCB and CIT as the only
creditors whose secured claims were not paid off and who
would have been entitled to receive the $188, 324.00 in cash
in a Chapter 7 liquidation.
not clear whether CCB or CIT had first priority to
T-Green's cash. CIT filed a UCC Financing Statement
perfecting its interest in T-Green's assets in May 2007.
(Id. at 2.) As part of the CCB Loan Agreement, Mr.
Green agreed to pay down the CIT loan in full, but he did not
do so. (Id.) CCB filed a UCC-1 Financing Statement
perfecting its security interest on March 20, 2010.
(Id.) It simultaneously filed a UCC-3 Financing
Statement Amendment that terminated CIT's May 2007
Financing Statement. (Id.) CIT later filed a
Financing Statement Amendment stating that the "UCC
Financing Statement Amendment bearing filing no. 0002741779
was filed . . . in error and was not
authorized." (Id.) CIT filed another UCC-1
Financing Statement on October 17, 2011 claiming
"basically all" of T-Green's assets as
collateral. (Id.) As noted, during the bankruptcy
proceeding, T-Green filed a Motion for Authority to Use Cash
Collateral and to Provide Adequate Protection to CCB. (In
re T-Green Carting, Case No. 12-50689, ECF No. 95.) The
Bankruptcy Court granted the Motion on March 13, 2013,
authorizing T-Green to pay CCB $11, 495 per month as
protection of its secured interest. (In re T-Green
Carting, Case No. 12-50689, ECF ...