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United States v. Green

United States District Court, D. Connecticut

November 7, 2016

United States of America
v.
Anthony Green

          MEMORANDUM ON RESTITUTION

          Michael P. Shea, U.S.D.J.

         I. Procedural History

         On 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. § 3664(d)(5):

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. . . .

         The 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.

         II. Factual Background

         Mr. 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 businesses. (Id.)

         On or 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.)

         The CCB 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.)

         Mr. 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.)

         During 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.

         During 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.)

         In the 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.

         It is 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."[1] (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 ...


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