United States v. One 1988 Prevost Liberty Motor Home (952 F. Supp. 1180, 1996)

MEMORANDUM AND ORDER

ATLAS, District Judge.

INTRODUCTION

This Memorandum and Order supersedes the Court’s Findings of Fact and Conclusions of Law entered on October 21, 1996 [Doe. # 167] in this ease.

The United States of America (the “United States” or “Government”) brought this civil forfeiture action against One 1988 Prevost Liberty Motor Home (“Defendant Property” or the “Motor Coach”) pursuant to 18 U.S.C. § 981(a)(1)(A). The Government contends that the Defendant Property is proceeds traceable to a money laundering violation under 18 U.S.C. § 1956(a)(1)(A). The money laundering violation is premised on bankruptcy fraud by Lawrence or Larry Sheehan (“Sheehan”) in .violation of 18 U.S.C. § 152.

LMC Investments Inc. (“LMC” or “Claimant”) is a Missouri corporation that has filed a claim in this action, contesting the forfeiture and contending that it is the owner of the Motor Coach. Sheehan does not personally make a claim to the Defendant Property. The Government contends that LMC lacks standing to contest this forfeiture since it lacks a genuine interest in the Defendant Property.

Claimant LMC asserts eleven defenses in its Third Amended Answer and Claim for Damages and Attorney’s Fees [Doc. #79] (“Answer”), which can be summarized into four categories. First, LMC claims that there was no bankruptcy fraud or money laundering violation by Sheehan and therefore forfeiture is unlawful since the Defendant Property is not involved in and is not proceeds of any illegal activity. Second, it contends that there is no substantial connection between the fraud allegedly committed in Sheehan’s bankruptcy and the Defendant Property or the farm and lake house, the proceeds of which were used to purchase the Defendant Property. Third, Claimant contends that it is an “innocent owner,” and is entitled to avoid the forfeiture since the predicate offenses have been shown to have been committed without knowledge of the owner. Fourth and finally, Claimant challenges the procedures used in connection with and the timeliness of this action. See Answer, at 12-16.

A five day bench trial was held in this case. The Court holds that LMC has failed to establish that it has standing to contest this forfeiture. Nevertheless, since a substantial trial was held, the Court addresses the merits, in the event of a challenge to its initial ruling. On the merits, the Court holds that many of the LMC defenses are not legally viable, and that Claimant has failed to prove any of the other defenses by a preponderance of the evidence. The Defendant Property therefore is forfeited to the United States for disposition as appropriate under law.

FINDINGS OF FACT

1. Procedural Posture of This Forfeiture Action

The Defendant Property is a 1988 Prevost Liberty Motor Home, measuring 40 feet in length, also known by vehicle identification number 2P9M33403J1001532, and bearing Oregon license plate H998173.

Upon application of Plaintiff United States, on April 2, 1993, Magistrate Judge Mary Milloy issued a Warrant for Arrest in Rem directing the United States Marshal for the Middle District of Florida to seize and maintain the Defendant Property. On that day, the Defendant Property was in the possession of Larry Sheehan and his wife, Loretta Jean Adkinson Sheehan, at Richardson’s Fish Camp, 1550 Scotty’s Road, Kissimmee, Florida. Testimony of Larry Sheehan (“Sheehan Testimony”). On April 9, 1993, the property not having yet been seized, the United States moved for issuance of an Amended Warrant for Arrest in Rem, alleging as grounds that the Defendant Property had been removed from the Middle District of Florida. On April 9, 1993, Magistrate Judge Marcia Crone issued an Amended Warrant for Arrest in Rem directing the United States Marshal’s Service to seize and maintain the Defendant Property.

The Defendant Property was seized near Covington, Kentucky by the United States Marshal’s Service for the Western District of Kentucky on or about April 14, 1993, after being abandoned by Larry Sheehan and Loretta Jean Adkinson Sheehan. Since its seizure, the Defendant Property has remained in the care and custody of the United States Marshal’s Service for the Western District of Kentucky in Louisville, Kentucky.

Pursuant to a Stipulation entered into by the United States and LMC, see Doe. #21, probable cause existed for the seizure of the Defendant Property. Because LMC sought repeatedly to withdraw its agreement to the Stipulation, the Court at trial also made a finding that probable cause existed based on the evidence adduced during the first several days of trial.

The only claimant with respect to the Defendant Property is LMC. Sheehan has expressly disclaimed any ownership, lessee or possessory interest in the Defendant Property.

2. Background of LMC and its Shareholders, Officers and Directors

LMC has two 50% shareholders, William A. Ross (“Ross”) and Michelle T. Sheehan. Ross is president and Michelle Sheehan is secretary of LMC. Ross and Michelle Sheehan also constitute LMC’s board of directors. William A. Ross was a fellow pilot of Sheehan’s at Continental Airlines (and a farm owner); they met at Continental Airlines in the mid-1980’s. Michelle Sheehan, who was born on August 27, 1970, is the daughter of Sheehan.

There is no evidence that Michelle Sheehan’s involvement in LMC extended beyond signing documents prepared by others. See Memorandum and Order, dated March 7, 1995 [Doc. # 55], at 2. Michelle Sheehan has never refused to sign any documents prepared and sent to her by others relating to LMC. Ross’ involvement was only slightly more substantive on isolated occasions in 1989, and ceased completely after he learned he had cancer. Cully and Ross Testimony; see LMC Ex. 30.

LMC apparently was formed in or about April 1986, according to unsigned Minutes of First Meeting of Shareholders and Minutes of First Meeting of Board of Directors and an unsigned stock certificate, each dated April 2, 1986. USA Ex. 6, 7, 8. The evidence of the identity of the initial shareholder^) is the unexecuted stock certificate and a reference in the Minutes of First Meeting of Shareholders indicating Sheehan was the sole shareholder. USA Ex. 6, 7. The certificate was in the files of LMC’s and Sheehan’s attorney, Michael Cully (“Cully”). Cully Testimony. Sheehan claims he was never a shareholder of LMC. There is no dispute, however, that he was President of LMC from the time of its formation until sometime in May 1989, when he purportedly resigned. LMC Ex. 9A, 9B. The share certificates evidencing Michelle Sheehan’s and Ross’ ownership interests in LMC were prepared in 1994, after this litigation was commenced. USA Ex. 9-12. Neither Ross nor Michelle Sheehan could recall when they first received their certificates. Only after this action was filed by the United States did Ross and Michelle Sheehan prepare lost stock certificates. Id.

3. Sheehan’s Rationale For Use of Corporate Ownership

On March 10, 1986, Sheehan informed United Savings & Loan Association of Lebanon, Missouri (“United Savings”) by letter that he had instructed his attorneys to transfer his personal assets to “corporate umbrellas” in order to shield them from potential creditors. USA Ex. 1. He stated that he was in the process of transferring legal title to personal assets into corporate nominees. USA Ex. 1; Sheehan Testimony. Sheehan was in default of a May 1985 personal loan, that already had been extended twice but was due on May 6, 1987. He owed $90,-900.00 on this loan to Union National Bank of Colorado (“Union National Bank”) as of that time. In May 1987, Union National Bank began collection activities.

Sheehan’s method of operating was to attempt to conceal his assets. Sheehan was familiar with bankruptcy proceedings at this time since, in 1985 or 1986, a company he owned, Wooden Nickel, Inc., had been forced involuntarily into bankruptcy. Sheehan Testimony; see USA Ex. 323 (Transcript from Sheehan’s Section 341 Meeting of Creditors), at 102.

Sheehan had represented to United Savings that his net worth in 1985 was $5.7 million. USA Ex. 18. He thus had a significant incentive to hide his assets. He testified at trial that he was afraid he would be sued personally if a plane he was piloting was in an airplane accident, since his employer, Continental Airlines, had changed its indemnity policies. He also stated that he wanted to be sure his former wife, Betty Olson Sheehan, did not get his property.

Sheehan thereafter held virtually no assets in his own name. In or about April 1986, shortly after LMC was formed, Sheehan transferred title in 1514 So. Glenstone (“Glenstone Property”) from himself to LMC. USA Ex. 93; Sheehan Testimony. Thereafter, LMC’s principal business related to the ownership of two buildings in which restaurants operated.

Sheehan’s financial problems grew worse with time. On January 24, 1989, Sheehan confessed to a $125,000.00 judgment in a lawsuit brought against him by Union National. USA Ex. 71, 71.1. By March or April 1989, Union National Bank began its attempts to garnish Sheehan’s wages as a result of this judgment. USA Ex. 123. Sheehan counseled with Cully concerning the garnishment action and the Bank’s efforts to seize certain assets located in Springfield, Missouri. USA Ex. 39; Sheehan Testimony. Sheehan also experienced several heart attacks and other health problems starting in mid 1988.

On May 29, 1989, Sheehan filed for bankruptcy protection under Chapter 7 in Houston, Texas. USA Ex. 128, 161. The Government’s claim of forfeiture of the Defendant Property arises from fraud in which it contends Sheehan concealed his interest in various corporations and their assets over which he had control and beneficial ownership interests from the Bankruptcy Trustee, the Court and the estate’s creditors.

4. Creation of LMC, Inc., Banner Advertising, Inc. and B & B Development, Inc.

Sheehan created LMC in April 1986. Michelle Sheehan acquired her interest in LMC in April 1986, when Sheehan gave her 100% of the corporation. Michelle Sheehan was 15 or 16 years old at the time of her “acquisition.” M. Sheehan Testimony. She relied entirely on her mother, Carole, to read to her the documents she received on LMC and the other companies. She admits she did not listen or “pay much attention” when her mother discussed these matters with her. She had little recollection of events, although she claimed at trial to have been involved in decision making. Michelle Sheehan had no business experience in general and no experience with restaurants in particular. M. Sheehan Testimony. She was involved in LMC’s business to only a minor and purely ministerial extent. Her representations to this Court of material involvement are not credible.

In or about 1986 or 1987, Sheehan and his wife at the time, Betty Olson Sheehan, separated. On or about June 6, 1987, in a Legal Separation and Property Settlement Agreement with Betty Olson Sheehan, Sheehan became the owner of all of the stock in various corporations including, but not limited'to, all of the stock in both Banner Advertising, Inc. (“Banner”) and B & B Development, Inc. (“B & B”).

Banner had been incorporated under the laws of the State of Missouri on November 30, 1981. B & B, formerly, Clearwater Development, Inc. (“Clearwater”), had been incorporated under the laws of the State of Missouri on December 30, 1974. Prior to July 7, 1987, Sheehan owned all of the stock of Banner and B & B. From a time prior to June 6, 1987, until at least early May 1989, Sheehan served as President of LMC, Banner and B & B. As of July 7, 1987, Banner’s assets were a lake house in Barry County, Missouri, a house near Rogersville, Missouri, and a Stearman aircraft. Cully, Sheehan, and Ross Testimony. As of July 7, 1987, B & B’s assets were a farm in Barry County, Missouri and assorted farm equipment. Id. The B & B farm consisted of approximately 800 acres of land. Ross estimated that at the time of the July 7, 1987 Agreement, the Banner lake house was worth $300,000, and the B & B farm was worth $500 per acre, or $150,000. Sheehan’s estimate of the value of the lake house was double Ross’ estimates.

5. Sheehan’s Purported Transfers of Ownership of Banner and B & B to Ross

By an agreement dated July 7, 1987, Ross acquired a 100% interest in Banner and at least a 90% interest in B & B. Each Ross and Sheehan now claim that the transfer was a gift from Sheehan. Ross and Sheehan Testimony; USA Ex. 2, 3. The agreement, as prepared by Cully, stated'that the transfer from Sheehan to Ross was in consideration for Ross’ release of all claims that he had arising from the loss of his investment of approximately $150,000 in Sheehan’s company, Wooden Nickel, Inc., which had been foreed into bankruptcy in or about 1986. See •USAEx. 2, 3.

Sheehan and Ross have testified inconsistently as to whether or not the transfer agreement was a binding contract. USA Ex. 343, 344. Ross testified that he participated in these transactions as a favor to his friend, Sheehan, and did not receive his interest in Banner and B & B, and later LMC, as consideration for the release by him of a potential claim against Sheehan for a prior failed investment. Ross Testimony. This is contrary to Sheehan’s divorce proceeding testimony and his testimony in his own Bankruptcy Case. See Sheehan Testimony.

Sheehan testified that in July 1987, he and Ross agreed that Ross would exchange his interests in Banner, B & B and other entities for a 50% interest in LMC. USA Ex. 4, 5; Answer, ¶ 17. Ross and Sheehan testified that they agreed Ross would get involved with these companies on the condition that a lawyer would be involved to do the legal work and handle all communications among officers and shareholders, that Sheehan would stay actively involved for 5 years, and that Ross would not have to deal with Sheehan’s former wives. There is no writing that supports this testimony. The parties’ agreement reflecting the transfer of 50% of LMC’s shares to Ross for 100% of Banner and B & B’s stock from Ross seems to have been executed on September 18, 1987. There is no explanation given as to why Michelle Sheehan, the 100% owner of the LMC stock, according to Sheehan’s testimony, would agree to this transfer; she received nothing in return for the loss of 100% control over LMC’s assets. There is no evidence that there was any discussion with Michelle Sheehan prior to the execution of the July or September 1987 agreements. Ross and Sheehan agreed that all communications concerning LMC, Banner or B & B would be through their attorney, Cully. The documents establish that this is the course that was in fact followed.

Sheehan and Ross testified that Sheehan gave Ross these companies (and their assets) so Sheehan could provide for Michelle Sheehan after he died. Sheehan testified that he wanted to prevent his estranged wife, Betty Olson Sheehan, from getting the property. He had recently been diagnosed with diabetes and testified that he believed he was likely, according to his family’s pattern, to suffer heart attacks as a result.

Sheehan’s explanations lack credibility. While he may have been justifiably concerned about his health, his purported concerns about his former wife are spurious, since he had just reached a formal and final property settlement with her by which he received full ownership of the corporations. The Court is persuaded that Sheehan’s true concerns were his deteriorating financial condition,- as explained below. If Sheehan truly wanted to provide for his daughter Michelle Sheehan, he easily could have used a traditional method of estate planning, such as creating a trust for her benefit, with an appropriate independent trustee. It is questionable whether Ross would have been asked to serve such a role, since Ross possessed no financial acumen or experience in commercial real estate, which constituted a substantial part of the assets of LMC and its subsidiaries, Banner and B & B. Instead, Sheehan designed the transactions to permit, and even to require, according to the testimony of Ross and Cully, that Sheehan remain in control of the assets while divesting himself of formal ownership. Sheehan never explained why he opted for such a complex arrangement.

Therefore, the Court finds that Sheehan transferred the Banner and B & B stock to Ross to prevent Sheehan’s creditors from reaching his assets, and to attempt to place the asserts outside his bankruptcy estate, should he decide to file.

6. Sheehan Retained Control of Operations of LMC, Banner and B &B

Ross’ involvement in LMC, Banner and B & B’s business affairs was, like that of Michelle Sheehan, at all times minimal. Neither the LMC Board of Directors nor shareholders ever had a meeting that Ross or Michelle Sheehan attended. Cully, Ross, Michelle Sheehan and Sheehan all testified that Cully (as attorney for Sheehan, LMC, Banner and B & B) ran the businesses, in that he prepared formal documentation when it was needed. Cully would call Ross as needed, and Ross signed virtually all documents Cully sent to him. Ross did not make business policy decisions, and orally approved decisions suggested by others. There is no evidence Ross ever declined to do what he was asked. He was not consulted on certain matters, such as a proposed real estate swap that Sheehan was trying to arrange in October 1988 to divest LMC of certain real estate in exchange for commercial property in Nashville, Tennessee. See USA Ex. 51. The only connection that this proposed property had to LMC was that it was located near the residence of Jean Adkinson, Sheehan’s girlfriend and future wife, at the time.

It is undisputed that for the years 1987 and 1988, Sheehan was the president of LMC. USA Ex. 28. For the year 1987, Sheehan was a member of LMC’s Board of Directors. USA Ex, 28. For the year 1988, Sheehan was the only member of LMC’s Board of Directors. USA Ex. 28. For the years 1987 and 1988, Sheehan was also the president of Banner and was the only member of Banner’s Board of Directors, and was the president of B & B and the only member of B & B’s Board of Directors. USA Ex, 29, 30.

Ross testified that he-had significant contact with Cully in the process of managing the LMC affairs, since Ross and Sheehan testified that by design they never talked directly to each other concerning the operation of LMC. They had agreed that all communications related to LMC would go through Cully. Ross’ claim of significant involvement was belied by his answers on cross examination and is not borne out by the written record. During the period July 1987 through September 1989, when Sheehan and Ross testified that they were seeking to sell the real property holdings of LMC, Banner and B & B (allegedly in order to liquidate the companies’ assets and make them more productive), there is only one written communication between Cully and Ross. In this communication, a September 29, 1988 letter by Cully to Ross, Cully stated “I have not written or called you in many weeks, if not many months.” USA Ex. 48. Moreover, before the filing of Sheehan’s bankruptcy proceeding on May 26, 1989, Cully’s billing records contain no mention of Ross with regard to the operation of LMC, Banner, B & B, or their respective assets. USA Ex. 39.

The trial evidence leads the Court to find that, from July 1987 through April 1989, if not longer, Sheehan made all major decisions concerning the use and disposition of assets nominally titled in the names of LMC, Banner and B & B. USA Ex. 334, 337, 338; Yates, Cully, Sheehan, Ross, M. Sheehan Testimony.

From July 1987 through at least April 1989, Sheehan personally received the benefits of all assets nominally titled in the names of LMC, Banner and B & B. USA Ex. 109-111; Cully, Ross, M. Sheehan and Sheehan Testimony. Neither Ross nor Michelle Sheehan received any benefit arising out their purported ownership of LMC, Banner and B & B at any time. Ross and M. Sheehan Testimony.

7. Sheehan’s Purported Resignation From Ml Corporate Positions

Sheehan claims he resigned as an officer and director of Banner, B & B, and LMC effective May 1, 1989, four weeks before his Chapter 7 bankruptcy filing. LMC introduced in evidence a purported resignation which recites that it is effective May 1, 1989. LMC Ex. 9A. The Court questions this document’s authenticity. Unlike all other documents relating to LMC, there is no credible evidence that Cully or an attorney prepared this document, and if it was prepared by Cully or his staff, nothing about it convinces the Court it was prepared prior to May 1, 1989. The signature is undated, and the document recites that it is effective on May 1, 1989, which suited Sheehan’s purposes in light of his need to file bankruptcy to try to halt the intrusive collection efforts being made, by Union National Bank particularly, since March 1989. The document is an exceptionally poor copy. In addition, the corresponding Consent by the LMC Board of Directors, signed by Michelle Sheehan and Ross, bore signatures that were not dated, and neither of these witnesses could state with any precision when he or she signed it. See LMC Ex. 9B. In its original interrogatory answers, LMC stated that it had no “specific memory as to the date” when it learned of Sheehan’s resignation. USA Ex. 19.

Both before and after the stock transfers to Ross, and before and after Sheehan’s purported resignation as President of LMC, Banner and B & B, he continually exercised virtually total dominion and control over the assets of these three entities, and the proceeds of these assets. It was his long term strategy to market and sell these companies’ real estate assets. Sheehan was a signatory on bank accounts in the name of LMC. USA Ex. 104, 173.3. Ross concurred in this approach since he did not want to be involved in the business of the companies.

8. Sheehan’s Use of Corporate Property for His Own Purposes Prior to His Bankruptcy

Sheehan used the assets of LMC, Banner and B & B for his benefit and to suit his desires. The lake house (ostensibly owned by Banner) was at one time the personal residence of Sheehan, his then wife Carole Sheehan, and their daughter, Michelle Sheehan. Prior to its sale in November 1989, the lake house’s last known occupant was Sheehan. Neither Michelle Sheehan nor Ross ever lived in it after it was transferred to Banner.

On December 15, 1987, Banner conveyed the lake house to Sheehan and his then wife, Betty Olson Sheehan. USA Ex. 24. Three days later, on December 18, 1987, the Sheehan’s conveyed the lake house back to Banner. USA Ex. 26. The General Warranty Deed was not filed until almost a year later, on September 13, 1988, within one year of the filing of the bankruptcy petition at issue in this case. Sheehan testified that he conveyed the property because United Savings Bank refused to renew the loan if the property was held in the name of Banner, but the Bank agreed to refinance the existing loan if legal title to the property were placed temporarily in his and his wife’s names. Sheehan’s testimony was unclear as to whether he considered himself personally liable for the loan thus created. There is no evidence that he or LMC made payments on it until the property was sold in 1989.

Other examples of the dominion and control Sheehan exercised over the LMC and its subsidiaries’ assets follow. On October 12, 1988, Sheehan authorized Maurice Burlison, a Springfield real estate broker, to “act on my behalf as to all matters regarding my real estate holdings.” USA Ex. 53 (emphasis added). Among the properties covered by Sheehan’s agreement with Burlison was the lake house, whose record owner was Banner, and the farm purportedly owned by B & B. Id. On December 6, 1988, Sheehan wrote a letter, responding to an offer to purchase the Banner lake house by writing “your offer is not acceptable to me ” and further observing that “I dropped my listing price $75,000.00 below what I felt an appraiser would appraise this property for in today’s market.” USA Ex. 63 (emphasis added). Sheehan now denies he wrote this letter. Sheehan’s disclaimer is not credited by this Court. A notation at the bottom of the December 6, 1988 letter states “LAS/nh.” The initials “LAS” refer to Larry Allen Sheehan; the initials “nh” refer to Nancy Horton, who was Cully’s secretary in 1988. Cully Testimony. Cully denied preparing the December 6,1988 letter or preparing the letter for Sheehan’s signature. Cully’s billing records indicate that he had an office conference with Sheehan on December 6, 1988. USA Ex. 39:

United Savings posted the lake house (owned ostensibly by Banner) for foreclosure on two occasions — on or about September 15, 1988, and on or about April' 10, 1989. USA Ex. 45, 89. Sheehan claimed that he did not know about United Savings’ threats of foreclosure on the lake house after August 1988 because, as a result of a heart attack he had suffered in August 1988, Jean Adkinson, Tom Johnson (who was hired to manage the day-to-day affairs of LMC, Banner and B & B) and Cully refused to give him his mail. This assertion lacks credibility since, on January 14,1989, Sheehan forwarded under cover of a handwritten letter two checks to United Savings that he personally signed to bring his loan current. USA Ex. 66. Moreover, Ross had no knowledge of either threat of foreclosure against the lake house and there is no evidence of anyone acting on behalf of a corporation. Ross Testimony. Thus, Sheehan’s testimony that he was unaware of United Savings’ threats of foreclosure and uninvolved in the affairs of LMC or Banner is not credible.

LMC guaranteed the fees for legal services rendered to Sheehan in his personal capacity by Cully’s law firm. Legal services rendered to LMC, Sheehan personally, and other business ventures associated with Sheehan were billed to one account at Cully’s law firm; no effort was made to separate responsibility for these billing matters.

After July 1987, a building at 1514 So. Glenstone, Springfield, Missouri (“the Glen-stone Property”), was owned by LMC. Sheehan’s role in the sale of this property is illustrative of the central position he played throughout as to LMC, Banner and B & B. Sheehan testified that he had been trying to sell that property and all the real estate owned by LMC, Banner and B & B, but in the late 1980’s there was a very depressed market. Sheehan testified that his role in the sale of the Glenstone Property in April 1989 was limited to depositing the proceeds of the sale into a bank account in a Kansas City suburb and dividing the proceeds pursuant to instructions from others. However, CuUy testified that Sheehan was his primary contact concerning the sale of the Glenstone Property. For instance, Cully obtained initial approval of the terms and price of the sale from Sheehan. When Cully received the contract for sale on February 17, 1989, he forwarded it via Federal Express to Sheehan. USA Ex. 79. Cully’s billing records for the period February 14, 1989 through April 17, 1989 show contact with Sheehan by letter or telephone on 22 days, including the following entry on April 17, 1989, the day of the closing of the Glenstone Property: “several calls to Larry; to closing on the Glen-stone Property.”. During the same time period, there are no references in Cully’s billing records to either Ross, Michelle Sheehan, or Carole Sheehan. USA Ex. 39.

Finally, on April 17, 1989, LMC sold the Glenstone Property for a total of $500,000. Answer [Doc. # 79], If 23; USA Ex. 102, 321. The net proceeds of $84,713.58 from the sale of the Glenstone Property were deposited into an LMC account over which Sheehan had check writing authority. USA Ex. 107, 321. On April 19, 1989, Sheehan caused three checks to be cashed against LMC’s account that used almost all of the net proceeds: (i) an unnumbered check in the amount of $40,727.77, payable to “Commerce Bank,” which references three cashiers checks; (ii) cheek no. “002” in the amount of $4,477.36, payable to “Commerce Bank/Larry Sheehan,” which references four other cashiers checks; and (iii) check no. “003” in the amount of $37,006.00, payable to “Commerce Bank/Larry Sheehan,” which references “money orders.” USA Ex. 108, 321 (and documents referenced therein).

Much of the $40,727 used to purchase cashiers checks from Commerce Bank was for the benefit of Sheehan or those he owed: $10,000.00 was paid to Tom Johnson, manager of LMC, for the sum due under his Agency Agreement with LMC (of which Ross and Michelle Sheehan knew little if anything); $24,032.15 was paid to Cully for undifferentiated legal fees for LMC, Sheehan and the other corporations; $3,000.00 was paid David Sesserman, an attorney who rendered services to Sheehan in his individual capacity in the lawsuit filed by Union National Bank in Colorado; and $3,687.62 was paid to Michael Godar for work done for Bo James Co. USA Ex. 71.1, 109, 321. The disbursement to Michael Godar was not authorized by Ross, LMC’s president, or Michelle Sheehan, neither of whom seemed to know anything about it. Ross and M. Sheehan Testimony.

In addition, almost $5,000 in personal obligations of Sheehan, such as bills for medical and legal services, were paid out of the proceeds of the Glenstone Property sale. See USA Ex. 109-111. Sheehan (and/or Jean Adkinson, his girlfriend/wife) received at least three $10,000 checks payable to him from the proceeds. The Court therefore finds that Sheehan’s testimony concerning the limited nature of his involvement in the sale of the Glenstone Property is not credible and is not supported by the evidence.

Sheehan’s total control over LMC, and thus its assets including its subsidiaries, is further evidenced by the fact that Sheehan was a signatory on bank accounts in the name of LMC, including one account that had been opened in late April, 1989 (within a month of his bankruptcy filing) on which he was sole signatory. USA Ex. 104, 173.3. These accounts were not disclosed in Sheehan’s bankruptcy. USA Ex. 161.

Another mechanism used by Sheehan to benefit those he chose and not the shareholders of LMC was to arrange through Cully for Johnson (LMC’s recently hired manager), Jean Adkinson (Sheehan’s girlfriend and later wife), and LMC to enter into an “Agency Agreement,” effective January 27, 1989, in relation to the sale of the Glenstone Property. USA Ex. 75. According to LMC documents, Adkinson was paid pursuant to the Agency Agreement for suggesting that the Glenstone Property be offered for sale to a neighbor, who at that time already held a right of first refusal on it, and who owned all the surrounding land. Other than this alleged suggestion, Adkinson performed no services in connection with the sale. USA Ex. 348 (J. Adkinson Deposition), at 51-53. Adkinson and Johnson are not now and have never been licensed real estate brokers. USA Ex. 348 (J. Adkinson Deposition), at 51; see USA Ex. 327, 328, 334. Neither are entitled to receive real estate commissions under Missouri law for services rendered as a real estate agent. Cully Testimony. Other than the transaction involving the Glenstone Property, Adkinson has no other experience in real estate. USA Ex. 348. Ross knew little about the services provided by Adkinson in connection with the sale. Jean Adkinson’s receipt of a fee as a result of the Glenstone Property sale thus is further evidence of Sheehan’s use of LMC for his personal benefit, rather than for the benefit of the shareholders or for his daughter.

The Court therefore finds incredible Sheehan’s testimony that he did not control the distribution of the proceeds from the sale of the Glenstone Property.

Ross and Michelle Sheehan’s testimony support the conclusion that Sheehan orchestrated and then received much of the benefit of the Glenstone Property sale. Ross testified that Sheehan was contacted whenever decisions needed to be made regarding the sale of that Property, including price. Ross never discussed with Michelle Sheehan the adequacy of the price for the Glenstone Property and she could recall no information concerning the transaction. Ross and M. Sheehan Testimony.

Significantly, during the time Ross and Michelle ■ Sheehan both owned LMC stock, until in or about 1995, Ross never spoke to or conferred substantively with Michelle Sheehan about LMC, despite the fact that she turned 18 in August 1988. Finally, despite their record ownership of 100% of the LMC stock, neither Ross nor Michelle Sheehan received any of the proceeds from the sale of the Glenstone Property. USA Ex. 102, 103.

9. Sheehan’s Bankruptcy

On May 26, 1989, Sheehan filed a voluntary petition for bankruptcy under Chapter 7 of Title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of Texas, Case No. 89-03977-H1-7. Answer, ¶ 6; USA Ex. 128. The bankruptcy resulted from Union National Bank’s efforts to garnish Sheehan’s wages and its other collection efforts, which were commenced after the Bank obtained a judgment in late January 1989. See USA Ex. 39, 123. In his initial filing, Sheehan listed assets of only $10,350.00. USA Ex. 128, 161. This was in stark contrast to the financial statements he had submitted to United Bank in 1985 and 1987 showing $5.7 million and $4.7 million net worth. According to Sheehan’s schedules, he owed his secured creditors $163,363.89, and he owed his unsecured creditors $284,477.69. USA Ex. 161.

Sheehan’s initial filing did not list Banner, B & B, LMC or their respective properties (including the lake house and the farm) as assets.' USA Ex. 128, 161. Sheehan’s initial filing also did not disclose his indebtedness on the United Savings note which was secured by the lake house. USA Ex. 128, 161. On August 8, 1989, Sheehan filed schedules of assets and liabilities in his bankruptcy proceeding. USA Ex. 161. Despite a direct question concerning business associations during the past six years, Sheehan did not disclose in his schedules or statements of affairs his involvement with Banner, B & B, or LMC. Id. Sheehan did not disclose his ongoing attempts to sell the lake house and the farm. Id. Sheehan did not disclose the disbursements paid to him in April 1989 as a result of the sale of the Glenstone Property or that he was personally holding two of the checks on and after the date he filed his bankruptcy petition. Id. Sheehan did not disclose the fact that certain of his medical expenses and legal fees had recently been paid on his behalf as a result of the sale of the Glenstone Property. Id. Sheehan did not disclose any interest in any real property, including the Banner lake house and the B & B farm. Id, Schedule B-l. Sheehan did not disclose that he was an authorized signer on the LMC account at Commerce Bank, or on LMC’s account at Mercantile Bank. Id. Sheehan did not disclose the pending patent application for the fishing lure he had invented, or his interest in Bo James Co., the nominal owner of the product. Id.

Further evidence of Sheehan’s intent to hide assets from the Bankruptcy Trustee, Steven Smith, was introduced by the United States. On November 6, 1989, Linda Kearney, a legal assistant to the Trustee, wrote to Ross, as president of LMC, and requested that LMC produce bank records for the period May 24,1989 through July 26,1989. USA Ex. 196. On January 4,1990, Cully drafted a response to Kearney’s letter for Ross’ signature, which Ross signed. Ross refused to produce the requested bank records, and stated: “After having reviewed these documents, we are at a loss as to why you wish to review these materials. I am curious to know what the bank records of LMC Investments, Inc. has to do with your proceeding.” USA Ex. 199, 201; Cully, Ross, Johannes and Smith Testimony.

Only Union National Bank, which had a judgment against Sheehan, sought to have its claim exempted from discharge. See generally LMC Ex. 12d. No other creditor sought such relief, and no creditor otherwise protested the granting of the discharge. Eventually the Union National Bank claim was settled and the Bankruptcy Court approved the settlement on August 14, 1991. LMC Ex. 12d and 12j. Sheehan contends that he was carefully and fully examined in pursuant to Bankruptcy Rule 2004 and during the Section 341 Meeting of Creditors (see USA Ex. 323 (transcript of Rule 2004 exam); cf. LMC Ex. 12e), as well as during two separate depositions about his past involvement with LMC and its subsidiaries. The Court cannot fully assess the intensity of these examinations, the degree of detail Sheehan provided, or the forthrightness with which he answered the questions posed, since the deposition transcripts are not in evidence. The Government disputes the characterizations of LMC’s counsel and Sheehan on this issue. Sheehan’s Bankruptcy Trustee, Steven Smith, conveyed that everyone believed this to be virtually a “no asset” case. He explained that he spent only a few minutes questioning Sheehan at the Section 341 Creditors Meeting (or the Rule 2004 Examination) and did not spend extensive time on the matter generally, because of the statements by Sheehan that there were only approximately $10,000 in assets. Smith filed a “no asset” report on March 8, 1993, believing it to be the end of that bankruptcy case. LMC Ex. 12a. The Court disagrees with Sheehan’s characterization of the Rule 2004 Examination, however. See USA Ex. 323. The Court finds that Sheehan’s responses were vague, incomplete and confusing.

Moreover, Smith apparently did not consider Sheehan’s disclosures to be adequate. When the United States Attorney later informed Smith about the matters raised in the case at bar, Smith immediately took action to continue Sheehan’s bankruptcy case in an open status. USA Ex. 348, 349. Smith testified during the Government’s rebuttal ease at trial that he believes that Sheehan was incomplete in his bankruptcy disclosures. He stated also that creditors of the estate will receive the proceeds of this forfeiture if the Government is successful.

On April 9, 1993, without knowledge of Sheehan’s continuing involvement with the LMC assets, the Bankruptcy Court granted Sheehan his discharge. At that time, there were no objections. LMC Ex. 11.

The Court finds, based on the testimony of the Bankruptcy Trustee, that he on behalf of the creditors of the bankruptcy estate was not made aware of the extensive and continuing involvement of Sheehan in the affairs of LMC, Banner and B & B, and the degree of control Sheehan maintained over their assets.

10. Sheehan’s Continuing Domination of Corporate Affairs in 1989-90, Subsequent to His Bankruptcy Filing

Sheehan remained involved in efforts to market the lake house and the farm after his bankruptcy filing. Cully, Ross, Sheehan, Yates Testimony. Record title to the lake house was in Banner and record title to the farm was in B & B. On May 26,1989, a real estate agent representing James and Margaret Bergtold (the “Bergtolds”) forwarded to Sheehan a sales contract for “your” lake property. USA Ex. 129. On June 5, 1989, Cully forwarded to Sheehan the proposed contract on the lake house from the Bergtolds and stated that “we need to give some serious thought to what our counter offer should be.” USA Ex. 138; Cully Testimony; Answer, ¶ 26. On June 12, 1989, Cully forwarded to Sheehan an “offer” to sell the lake house property to the Army Corps of Engineers'. Cully instructed Sheehan to sign the instruments as “president.” USA Ex. 143. On August 4, 1989, the Bergtolds’ real estate agent wrote to Sheehan as follows: “I know you are busy but I expected some reply from our offer. If you will not make a counter offer, then let me know and we will not take any more of your time.” USA Ex. 159. Johnson responded as follows to the note:

Right now we have a problem with the Corp. over one boundary line and I can tell you all has been agreed to — but we do not have it in hand in writing, and Larry will not counter until a clear title could be presented if all parties were to come to an agreement.

USA Ex. 159 (emphasis added).

In his capacity as president of Banner, Sheehan executed annual registration reports for the years 1988 and 1989. USA Ex. 130. This was done on May 30,1989, the day after his bankruptcy filing. On that day Sheehan, denominated president of Banner, also executed a Missouri Department of Revenue Request for Tax Clearance of a Forfeited Corporation. USA Ex. 120, 126. On June 1, 1989, Cully wrote to Sheehan concerning the need to get Banner, B & B, and LMC reinstated as Missouri corporations. He also forwarded to Sheehan a copy of the Petition to Quash Execution and Levy with respect to the seizure action brought by Union National Bank. USA Ex. 135. On June 15, 1989, Cully forwarded to Sheehan two copies of LMC’s financial statement and requested that Sheehan provide information regarding LMC’s assets. USA Ex. 145. On June 20, 1989, Cully wrote to Sheehan observing that: “I am pretty much dead in the water on Banner and B & B until I get the tax returns from John Yates. If you have not worked these matters out with him, you need to do so.” USA Ex. 148. On July 12, 1989, Cully again wrote to Sheehan urging him to contact John Yates so that Banner, B & B, and LMC could be reinstated. USA Ex. 152. On July 19, 1989, Cully forwarded to Sheehan a “Durable Power of Attorney” which recited that Sheehan is president of Banner. USA Ex. 153; Answer, ¶ 26.

The weight of the credible evidence establishes that Sheehan continued to concern himself with the finances of LMC. On June 21, 1989, Cully forwarded to Sheehan a past due notice for an LMC loan owed at Mercantile Bank. USA Ex. 149. Nevertheless Sheehan used LMC as his personal financial institution. On June 7, 1989, Sheehan instructed Cully to pay $3,300.00 to Michael Godar (a debt of Bo James Co. or of Sheehan personally) from Cully’s firm’s account and assured him that reimbursement would be forthcoming from LMC. Cully complied with this request. USA Ex. 139, 140. In its original interrogatory answers, served on the United States on or about June 26, 1994, LMC stated that it did not authorize the expenditure of $3,300.00 to Godar and that “Mike Godar presumably provided legal services to Larry Sheehan for an unrelated matter.” USA Ex. 19. This is borne out by an August 1,1989 letter from Godar to Sheehan enclosing “your United States patent application.” USA Ex. 156.

Sheehan denied at trial having opened his correspondence except as given to him by Cully or Jean Adkinson. This representation is not material since the weight of the evidence at trial establishes that Sheehan saw the above-noted correspondence and acted on it. Cully and Sheehan Testimony. The evidence of record — both the documents and the witnesses’ testimony — establishes convincingly that LMC, Banner and B & B minimally followed corporate formalities, kept faulty records of corporate meetings and actions, and were not in good standing with the Secretary of State of Missouri for extended periods. USA Ex. 28-30; 202, 207-209, 330; Cully Testimony. Sheehan and his agents, Cully and Johnson, repeatedly stated that Sheehan personally owned or was personally responsible for assets nominally titled in the names of LMC, Banner and B & B, including the lake house and the farm, the proceeds of which were used to purchase the Defendant Property. USA Ex. 18, 34, 43, 47, 53, 63, 65, 66, 69, 70, 76, 78, 83, 85, 94, 96, 129, 138, 139, 143, 149, 153, 159, 232.1, 249, 250 and 258.

11. Events Subsequent to Sheehan’s Bankruptcy Filing

A. The Sale of the Lake House and the Farm

In October 1989, the Bergtolds executed real estate purchase agreements to pay almost $500,000 for the purchase of the lake house and the farm property. Cully Testimony. The sale of both parcels to the Bergtolds closed on November 22,1989.

Each Michelle Sheehan and Ross was aware of and approved the sales, and signed documents in order for the sales to proceed. LMC Ex. 13a; Ross and M. Sheehan Testimony. Each also approved the purchase of the Defendant Motor Coach. See LMC Ex. 13f; Ross and M. Sheehan Testimony. Neither of LMC’s shareholders or directors, Ross and Michelle Sheehan, however, was aware of the details of how the proceeds, other than those used for the purchase of the Defendant Property, were spent or allocated. Id. In fact, of the total $491,639.67 paid by the Bergtolds for the farm and lake house, $152,337.15 was used to pay off the United Savings note executed by Sheehan which encumbered the lake house. USA Ex. 322; Answer, ¶ 30. The net proceeds of the two sales — a total of $332,318.52 — were deposited into Cully’s law firm trust account, USA Ex. 322; Answer, ¶31, and were used to purchase the Defendant Property.

B. Purchase, Use and Operation of the Motor Coach Exclusively by Sheehan

Ross and Michelle Sheehan each testified that they thought it a good idea to sell the real estate of LMC, Banner and B & B. Ross stated that he wanted LMC to buy a motor coach because he believed it would be a good investment that would not depreciate. Nothing in the record indicates where he got this idea. Indeed, the aggressive depreciation to be taken over five (5) years according to CPA Yates, once he was informed that LMC owned the Defendant Property, is directly contrary to Ross’ concept. Ross never checked about his investment strategy with Cully, his and the corporation’s counselor, or with Michelle Sheehan, the person whose financial situation he and Sheehan purportedly were trying to benefit.

There is no dispute that each Ross, Michelle Sheehan and Cully knew about the purchase of the Defendant Property prior to LMC’s use of the funds, at least to the extent that each signed documents approving the purchase using the sales proceeds of the lake house and the farm.

Ross stated that he wanted Sheehan to shop for a motor coach because Sheehan had experience in such purchases, having previously owned a motor coach through Clear-water, a predecessor to B & B. Ross and Sheehan Testimony. Sometime in 1989, Sheehan located a motor coach he wanted LMC to purchase, the Defendant Property, and met Glen Patch in Tahoe, Nevada to inspect it. Sheehan testified that he committed to purchase the Defendant Property after consulting with Ross. Prior to purchasing the Defendant Property, neither Ross nor Sheehan consulted with Michelle Sheehan on the matter, despite her 50% ownership in LMC and their use of LMC property to purchase the Defendant Property. Neither Ross nor Michelle Sheehan has ever received any of the proceeds from the sale of the lake house or the farm. M. Sheehan and Ross Testimony; USA Ex. 322. In fact, Sheehan testified that it was not until after this ease was filed that he met with Michelle Sheehan and explained details about the purchase of the Defendant Property and the structure, purpose and operations of LMC. M. Sheehan Testimony. Sheehan did the same with Ross after this case was filed. Ross Testimony. Neither Ross nor Michelle Sheehan has received compensation of any type, including dividends or distributions of property, from either LMC, Banner, or B & B. USA Ex. 262-279.

On or about November 22, 1989, the day the funds were received from the title company on the real estate sales, Cully signed a cheek in the amount of $286,075.00 from his firm’s account to purchase a wire transfer in the same amount, payable to Marathon Coach in Eugene, Oregon, for the purchase of the Defendant Property. USA Ex. 322; 19; 21.

Sheehan oversaw the purchase and refurbishment of the Defendant Property. Sheehan Testimony. Sheehan is the only person who used the Defendant Property from the time LMC acquired it; he used it at his sole option for years, and may have used it as his sole residence during some of that time. Sheehan attempted to conceal his involvement by having the funds flow from Cully’s law firm, account. He also concealed any connection to the Defendant Property by using Oregon and Colorado addresses for LMC on the purchase paperwork. The purchase order states that LMC’s address is 13502 E. Asbury, Aurora, Colorado, which at the time was the home address of Jean Adkinson, and was also a former residence owned by Larry Sheehan. USA Ex. 190. A second purchase order for the Defendant Property states that LMC’s address is 1902 N.E. 38th Avenue, Portland, Oregon. USA Ex. 191, at 2. Rather than signing his own name to the work orders at Marathon Coach, Sheehan signed Jean Adkinson’s name, purportedly because the work was ordered in her name and therefore it was the only name Marathon would accept. Sheehan Testimony. Sheehan’s explanation is farfetched at best, since he testified that the Marathon representative talked on the phone to Adkinson before allowing him to sign. There is no credible explanation as to why Sheehan could not sign his own name after that call, except that he did not want to be associated in writing with the Defendant Property. Finally, the address used by LMC for the motor vehicle registration of the Defendant Property was and continues to be at an address in Portland, Oregon that has no connection to LMC or its business. USA Ex. 320. LMC never has explained this unorthodox conduct.

Sheehan and Jean Adkinson had exclusive possession of the Defendant Property from the time it was purchased in November 1989 until its seizure in April 1993. Sheehan, Ross, and M. Sheehan Testimony. Ross estimated at trial that he has been a guest of Sheehan’s on the Motor Coach for three or four days on several occasions, usually when he visited Sheehan. Ross Testimony. Likewise, Michelle Sheehan estimated at trial that she had seen the Motor Coach on only one or two occasions

C. Compensation by Sheehan for Use of the Motor Coach: Reimbursement of Expenses

LMC’s position in this lawsuit is that the Defendant Property was leased to Sheehan in exchange for his paying the insurance, maintenance, and expenses associated with the Defendant Property. LMC therefore maintains that this was an arm’s length transaction and it is an “innocent owner” of the Defendant Property.. The “lease” to which LMC refers was an oral agreement between LMC and Sheehan concerning use of the Defendant Property. Ross stated that he agreed to allow Sheehan to use the motor coach in exchange for covering all insurance and expenses, since the coach otherwise would lay idle and LMC could not pay the maintenance and storage expenses. The evidence does not bear out the contention that Sheehan was leasing the Defendant Motor Coach in a commercially reasonable arrangement. Sheehan and others testified that he paid an imputed rent for use of the Defendant Property of $1,000 or $1,200 per month. Yates, Ross, Cully and Sheehan Testimony.

Ross and Sheehan explained the oral lease by stating that prior to late November 1989, LMC had income in the form of installment payments on one or more promissory notes from BRANSCO, Inc. and its owners Andrew Bray and Ed Wall. However, on January 4, 1990, BRANSCO filed for Chapter 11 bankruptcy. At or about that time, Bray and Wall ceased payments as well. Therefore LMC’s sole sources of income terminated, leaving LMC without revenue of any sort. In addition, in mid-December 1989, Ross learned that he had cancer, which caused him to lose all interest in LMC.

In or about December 1989, Sheehan took delivery of the Defendant Property from Marathon Coach. LMC introduced no evidence as to why it did not take the obvious step of selling or at least listing the Defendant Property, the Motor Coach, for sale while it was still new and in excellent, indeed mint, condition. Instead, Ross stated that he, as LMC’s representative, decided to let Sheehan use the Motor Coach in exchange for payment of all its expenses.

The only documentation provided to the Government, or to LMC’s accountant for tax preparation, concerning the terms of the so-called “lease” are two handwritten pieces of paper, one of which is labeled “Bus Lease” and one of which is labeled “Expenses,” both of which were prepared by Larry Sheehan. USA Ex. 249, 250; Yates and Sheehan Testimony.

The “lease payments” allegedly made by Sheehan were exclusively disbursements for expenses associated with the operation of the Defendant Property, the Motor Coach. USA Ex. 249, 250; Sheehan, Ross and Yates Testimony. There is no dispute that Sheehan (possibly with Jean Adkdnson’s help) paid expenses associated with the Defendant Property from the time LMC acquired it until it was seized by the Government. Sheehan, Ross and Yates Testimony; USA Ex. 250; see USA Ex. 307, 307.1. The issue is how much in fact was paid by Sheehan and Adkinson. According to the only documentation provided by Sheehan to LMC’s tax preparer, Yates, for his proof of payment of rent and expenses, Sheehan made “lease payments” totaling $20,200 at the rate of $1200 per month for several months per year, in the following amounts: $3,600 in 1990; $4,600 in 1991; $8,200 in 1992; and $3,800 in 1993. USA Ex. 249. Sheehan claims that he incurred expenses of $21,410 for the Defendant Property on behalf of LMC. USA Ex. 250.

The two documents prepared by Sheehan first were provided to LMC’s accountant and tax preparer, Yates, several years after most of the expenses were incurred. Prior to that time, Yates did not know that LMC claimed to own the Defendant Property. LMC failed to file any tax returns for the years 1987 through 1992 until after this lawsuit was commenced. LMC filed its 1987 tax return on November 27, 1994, and returns for 1988 through 1992 were filed on December 22, 1994. USA Ex. 262-267. Yates was not provided with Ex. 249 and 250 until 1994, when he belatedly prepared LMC’s, Banner’s, and B & B’s tax returns. Yates Testimony. These- returns were not prepared until after this action was commenced. In addition, there is slim documentary back-up for Sheehan’s handwritten notes. USA Ex. 249 and 250. While claiming to have paid $20,000 in expenses over a four year period, LMC (and Sheehan) submitted a mere $7,000 in receipts. Moreover, the veracity of some of these receipts and their connection to this case is questionable. There appear to be duplicates and some have no indication that they pertain to the Defendant Property.

The Court also is unpersuaded by LMC’s claim that it used Defendant Property for public commercial purposes. The evidence simply does not support this contention. The balance sheets filed by LMC with the Missouri Department of Revenue for the years 1989,1990 and 1991 do not list the Defendant Property as a corporate asset. USA Ex. 255-257; Yates Testimony. In addition, even assuming that the Defendant Motor Coach was leased to Sheehan at the rate of $1,000 to $1,200 per month, as Sheehan testified, the daily rate of such a rental would be only $35-$40 per day. Sheehan, Yates and Ross Testimony. In contrast, the Government established through its motor coach expert that the fair market rental of Defendant Property during the time period in issue, 1990 through 1992, was approximately $400 to $550 per day. Middaugh Testimony. Thus, there is no basis on which to conclude that there in fact was a rental arrangement between LMC and Sheehan.

Rather, the Court finds that there was never any truth or economic substance to the claim that LMC was in the business of leasing the Defendant Property to the public. LMC received no revenue, invited no public use, advertised to no one about the Motor Coach’s availability, paid no expenses, and maintained no records in connection with the Motor Coach’s use. The Defendant Property never was leased to the public and was not used in pursuit of any trade or business by LMC. Moreover, for the annual periods commencing December 1, 1990, December 1, 1991, and December 1,1992, the only insured driver with respect to the Defendant Property was Jean Adldnson, USA Ex. 245-248, and in a “Motor Home Renewal Questionnaire,” completed on or about December 3, 1990, Adldnson represented that the Defendant Property was not used for business purposes. USA Ex. 245. In fact, the Motor Coach was used solely for the convenience of Sheehan.

The Court finds, based on the foregoing, that LMC and Sheehan concealed Sheehan’s links to the Defendant Property in numerous ways. Nothing in the trial record gives rise to the inference that LMC had the right to take commercial business deductions or to depreciate the value of the Defendant Property.

Sheehan’s use of Defendant Property was further illustration of his attempt to hide his property from his creditors.

12. LMC’s Witnesses Lack Credibility or Are Not Disinterested

The Court carefully observed the demean- or and testimony of all the witnesses in this trial and the foregoing represents the Court’s considered judgment of their credibility. To the extent any witness’s testimony is inconsistent with the foregoing findings, the Court has rejected that testimony as lacking credibility or as inconsistent with the documents created at the time of the events in issue.

As stated above and indicated throughout the foregoing, the Court finds that Sheehan lacks credibility as to the reasons for his creation of and his involvement in LMC, Banner and B & B. The Court does not credit the timing on his purported May 1, 1989 resignation as an officer of all these companies. The Court finds incredible Sheehan’s supposed lack of knowledge as to the use of the proceeds of the sale of the lake house and the farm, as well as the proceeds of the Glenstone Property, which was sold immediately before Sheehan’s bankruptcy filing. The Court is entirely unpersuaded by Sheehan’s testimony that he did not intend to secret or conceal his assets from the Bankruptcy trustee, the Bankruptcy Court and the estate’s creditors. The Court finds that the preponderance of the evidence establishes that Sheehan did intend to hide his assets from these entities. Finally, the Court finds that Sheehan knowingly converted the lake house and the farm, a portion of the concealed assets, to negotiable instruments or funds for the purpose of acquiring the Defendant Property and for maintaining it.

The Court also finds some of Ross’ testimony to lack credibility as discussed in the foregoing sections of this opinion. The Court notes that at trial, Ross at first represented that he prepared a seven-page document outlining the history of LMC, Banner, and B & B. Upon further questioning, he admitted that the document had in fact been prepared by Sheehan. Ross Testimony; USA Ex. 258. Other evidence reveals that Ross did not know or care to know about the details of the business matters in which Sheehan and LMC were involved. His testimony that he was doing a favor for a friend, Sheehan, by serving as president and shareholder of LMC is consistent with the Court’s view that LMC was created as a tool for Sheehan’s personal purposes. Ross simply went along, signing whatever Sheehan, through Cully, requested.

The Court finds that Michelle Sheehan was basically truthful in her testimony that she was involved only to a limited extent, that she knew little if anything about what LMC did during the years 1986 through 1993, and that she did not care to know at the time. Her willingness to sign whatever she was asked and her basic lack of concern continued after she reached the age of majority. Her testimony on substantive matters evidenced a clear desire to help her ailing father, despite her lack of knowledge of the facts. Her lack of substantive involvement in LMC’s affairs and those of its subsidiaries fully supports the Court’s conclusion that LMC and its subsidiaries were not created to benefit her, but were designed to satisfy the personal financial goals of her father, Sheehan, vis a vis his own creditors.

Cully, counsel for Sheehan, LMC, Banner and B & B, is not a disinterested witness in this case. He (like Jean Adkinson, Sheehan’s current wife) is a shareholder in Bo James Co. and possibly other businesses started by Sheehan. Cully’s lack of disinterestedness is evide