Filed: Patrick Fisher
Filed: Patrick Fisher
PUBLISH
OCT 1 1997
PATRICK FISHER
Clerk
v.
MURLEEN KAY KUNZMAN,
Defendant-Appellant.
Defendant Murleen Kay Kunzman appeals from the district courts order
denying her motion to set aside her criminal convictions pursuant to 28 U.S.C.
2255. 1 Her appeal raises issues of subject matter jurisdiction, double jeopardy,
ineffective assistance of counsel, res judicata, and collateral estoppel. Because
none are meritorious we affirm.
Defendant and her husband (Kunzmans) defrauded numerous investors
who purchased limited partnership investments in Real Estate Mortgage
Investment Conduits (REMICs) from them. The Kunzmans conducted a Ponzi
scheme, in which money from later investors was used to pay earlier investors.
After the scheme collapsed, the Kunzmans filed for bankruptcy protection. See
United States v. Kunzman, 54 F.3d 1522, 1525 (10th Cir. 1995) (detailing facts).
A number of the investors filed an adversary proceeding in the Kunzmans
bankruptcy, alleging that the money they had invested in the REMICs constituted
a non-dischargeable debt. The bankruptcy court awarded judgment in favor of
twelve of the plaintiffs, finding that the debts and damages awarded were
non-dischargeable.
Approximately one and one-half years after entry of the judgment in the
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a); 10th Cir. R. 34.1.9. The case is therefore
ordered submitted without oral argument.
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such debts have been discharged in bankruptcy. See United States v. Carson, 669
F.2d 216, 217 (5th Cir. 1982) (conditioning probation on restitution).
Defendant next argues that her prosecution violated the Double Jeopardy
Clause, because she already had been punished by the judgment entered against
her in the bankruptcy proceedings. We agree with the First Circuit that [a]
monetary sanction which has no punitive function, i.e., has no purpose other than
restitution or compensation for the loss engendered by the defendants conduct is
not punishment within the ambit of the double jeopardy clause. United States v.
Kayne, 90 F.3d 7, 11 (1st Cir. 1996), cert. denied, 117 S. Ct. 681 (1997). The
bankruptcy judgment against defendant clearly served the remedial function of
compensating her victims. Because defendant was not punished by the entry of
judgment, the later criminal prosecution was not forbidden by the Double
Jeopardy Clause. See United States v. Ursery, 116 S. Ct. 2135, 2141-42 (1996)
(discussing effect of civil forfeiture action).
Finally, defendant argues that the discharge order precluded the criminal
prosecution on principles of res judicata or collateral estoppel. Res judicata
(claim preclusion) applies only when (1) the parties in the instant action were
parties or in privity with a party in the prior adjudication; (2) the claims are
identical; and (3) there is a final judgment on the merits. See Sil-Flo, Inc. v.
SFHC, Inc., 917 F.2d 1507, 1520 (10th Cir. 1990). The claims raised in
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defendants bankruptcy were not identical to those raised in the criminal case.
See United States v. Tatum, 943 F.2d 370, 381 (4th Cir. 1991) (A bankruptcy
proceeding and a criminal prosecution are fundamentally different proceedings,
both in purpose and procedure, and the causes of action resolved by each are
totally different.). Defendants collateral estoppel (issue preclusion) claim fails
for similar reasons: the issue of whether a discharge should be granted is not
identical to the issue of whether a defendant is criminally liable. See Sil-Flo,
917 F.2d at 1520 (collateral estoppel requires identity of issues).
Defendant has not shown that her counsel was ineffective in failing to raise
the non-meritorious issues she presents. The judgment of the district court is
therefore AFFIRMED. Defendants motion for expedited procedures is DENIED.
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