United States v. John G. Gellene

John G. Gellene, a partner at the law firm of Milbank Tweed Hadley & McCloy (“Milbank”) in New York, represented the Bucyrus-Erie Company (“Bucyrus”) in its Chapter 11 bankruptcy. Mr. Gellene filed in the bankruptcy court a sworn declaration that was to include all of his firm’s connections to the debtor, creditors, and any other parties in interest. The declaration failed to list the senior secured creditor and related parties. Mr. Gellene was charged with two counts of knowingly and fraudulently making a false material declaration in the Bucyrus bankruptcy case, in violation of 18 U.S.C. § 152, and one count of using a document while under oath, knowing that it contained a false material declaration, in violation of 18 U.S.C. § 1623. Although Mr. Gellene admitted that he had used bad judgment in concluding that the representations did not need to be disclosed, he asserted that he had no fraudulent intent. After a six-day trial, on March 3, 1998, the jury returned guilty verdicts against Mr. Gellene on all three counts. Mr. Gellene was sentenced to 15 months of imprisonment on each count, to run concurrently, and was fined $15,000.

I

BACKGROUND

A. The Bucyrus Bankruptcy Proceedings

Bucyrus, a manufacturer of mining equipment based in South Milwaukee, Wisconsin, had retained Milbank to represent it in general corporate matters in the *582 1980s. Between 1988 and 1992, Bucyrus’ financial transactions, including a leveraged buy-out, left the company with more than $200 million in debt. During that time, the head of Milbank’s Mergers and Acquisitions Department, Lawrence Led-erman, managed the Bucyrus account. In 1993, Lederman brought in Mr. Gellene, a bankruptcy attorney at Milbank, to work on the financial restructuring of Bucyrus.

At that time, the major parties with an interest in Bucyrus included Goldman Sachs & Co., Bucyrus’ largest equity shareholder, which held 49% of the Bucy-rus stock; Jackson National Life Insurance Company (“JNL”), Bucyrus’ largest creditor, which held approximately $60 million in unsecured notes; and South Street Funds, a group of investment entities, which held approximately $35 million in senior secured notes and leasehold interests. 1 South Street Funds was managed and directed by Greycliff Partners, an investment entity which consisted of financial advisers Mikael Salovaara and Alfred Eckert, former employees of Goldman Sachs.

On February 18, 1994, Bucyrus filed its Chapter 11 bankruptcy petition in the Eastern District of Wisconsin. 2 Because the legal representation of a debtor is subject to court approval, Bucyrus submitted an application requesting that Milbank be appointed to represent it in the bankruptcy. Pursuant to Bankruptcy Rule 2014, the application included the required sworn declaration disclosing “any connection” that Milbank had with “the Debtors, their creditors, or any other party in interest.” 3 Ex. 22, ¶ 5. Mr. Gellene, Milbank’s lead attorney in the Bucyrus bankruptcy, under oath disclosed that his firm had previously represented Goldman Sachs and JNL in “unrelated” matters and would continue to represent Goldman Sachs in non-Bucyrus proceedings. See id. at ¶ 6. Mr. Gellene did not disclose any of Mil-bank’s representations of South Street, Greycliff Partners or Salovaara.

The United States Trustee and JNL filed objections to Mr. Gellene’s Rule 2014 declaration. They sought additional information regarding Milbank’s representation of Goldman Sachs and questioned whether there was a sufficient conflict of interest to bar Milbank’s retention as counsel for the debtor.

On March 23, 1994, the bankruptcy court conducted a hearing on the issue. It requested that Mr. Gellene submit a second declaration containing more detail *583 about possible conflicts of interest. 4 The court specifically commented: “If you represent them [Goldman Sachs] in other matters, then I think it’s important to state precisely what arrangements have been made internally to separate what you’re doing in this matter with the recommendation in other matters.” Tr. 917-18.

On March 28,1994, Mr. Gellene signed a second sworn Rule 2014 statement providing details about Milbank’s representation of Goldman Sachs and the “Chinese wall” that the firm planned to put in place. It also disclosed its prior representation of two other creditors, Cowen & Co. and Mitsubishi International. The declaration then stated:

Besides the representations disclosed in my declaration dated February 18, 1994, after due inquiry I am unaware of any other current representation by Milbank of an equity security holder or institutional creditor of [Bueyrus].

Ex. 27, ¶7. Mr. Gellene again did not disclose any representation by Milbank of ■South Street, Greycliff Partners or Salo-vaara. However, at the time of both declarations, Milbank was doing their legal work, including the representation of Salo-vaara when his partner, Alfred Eckert, sued him. 5

At Milbank, one partner recognized that there might be a conflict of interest between Milbank’s representation of Salo-vaara in the Salovaara-Eckert dispute and its representation of Bueyrus in its bankruptcy proceedings. At a meeting on December 22, 1993, with Mr. Gellene, Leder-man and Milbank partner Toni Lichstein, all of whom were working on the Bueyrus bankruptcy and the Salovaara-Eckert dispute, Lichstein raised the possibility of conflict. Both Lederman and Mr. Gellene stated it was not a problem. Lichstein raised the issue again in March 1994 after she, representing Salovaara, had attended a South Street investors’ meeting at which South Street’s investment in Bueyrus was discussed. At that time, Mr. Gellene responded that Salovaara was not a creditor of Bueyrus and that all disclosure obligations had been satisfied. However, Led-erman suggested that, if Lichstein had further concerns, Salovaara should obtain other counsel. After that, Milbank’s representation of Salovaara in his dispute with Eckert slowed and eventually ended. By December 1994, Lederman had resigned his representation of South Street/Grey-cliff and had written off the billings generated in a tangential matter, a Colorado bankruptcy 6 (about $16,000), and in the Salovaara-Eckert dispute (more than $300,000). Mr. Gellene also wrote off $13,-000 in fees and expenses on the Bueyrus bankruptcy billings. 7 Mr. Gellene never *584 informed anyone at Bueyrus of the other Milbank representations.

Meanwhile, the Bueyrus bankruptcy creditors’ committee worked through the summer and fall of 1994 to see if it could formulate a plan that would satisfy the major creditors. 8 By late fall, a compromise was reached and all the parties to the Bueyrus bankruptcy agreed to the new plan of reorganization.

Thereafter, Milbank filed a petition requesting compensation for its work on the bankruptcy case. In November 1995, a hearing was held on Milbank’s application for more than $2 million in legal fees and expenses. The United States Trustee and JNL both opposed the application. Mr. Gellene was lead attorney for Milbank at those hearings. However, when he testified in support of his firm’s request for fees, Milbank partner David Gelfand was the attorney who put on Mr. Gellene’s testimony. Gelfand presented Mr. Gel-' lene’s sworn declarations to him on the stand. Mr. Gellene testified that the supplemental Rule 2014 declaration had disclosed Milbank’s relationship with Goldman Sachs and thus that the court had been fully aware of that relationship. However, Mr. Gellene did not testify that his firm had represented and was continuing to represent South Street and Grey-cliff. The United States Trustee did not learn of that representation until the late fall of 1996. The court ultimately awarded Milbank approximately $1.8 million in fees and expenses. 9

In late 1996, JNL discovered that Mil-bank had represented Salovaara in his dispute with Eckert at the same time it was representing Bueyrus. JNL then filed a motion in the bankruptcy court in December 1996 seeking disgorgement of Mil-bank’s fees. Mr. Gellene did not respond to the motion. On February 24, 1997, when his partners became aware of the motion and asked him about it, Mr. Gel-lene responded falsely that the answer was due in a few days. Mr. Gellene even altered the JNL filing to conceal the date it had been signed. When that deception was uncovered, however, Mr. Gellene admitted to Lichstein and Gelfand that he had lied about the response due date.

In March 1997, Mr. Gellene filed a third declaration with the bankruptcy court. In it, he explained that he had made an error in legal judgment by omitting Milbank’s representations of South Street and of Sa-lovaara and took “full personal responsibility for failing to disclose these matters to the court.” Tr. 1247.

B. The Federal Criminal Charges

On December 9, 1997, a federal grand jury returned a three-count indictment against. Mr. Gellene, charging him with two counts of bankruptcy fraud and with one count of perjury. It alleged that Mr. Gellene had lied three times in the course of a bankruptcy case: twice when he filed *585 the Rule 2014 declarations knowing that they were false and once when he used the supplemental declaration, while under oath at a bankruptcy hearing, knowing that it contained a false material declaration.

At Mr. Gellene’s trial, the government produced evidence of other false representations by the defendant, evidence that was admitted under Rule 404(b) of the Federal Rules of Evidence. The first concerned Mr. Gellene’s bar status. He joined the New York State Bar in 1990; however, between 1981 and 1990 he represented himself to be a member of that bar in court filings and in legal publications. Mr. Gellene also represented himself to be a member of the federal bar in the Southern District of New York, both by repeatedly appearing in that court and by claiming that membership when applying for membership in the Eastern District of Wisconsin to represent Bucyrus in its bankruptcy proceedings.

The second category of evidence admitted at trial concerned Milbank’s relationship with Lotus Cab Company: Mr. Gel-lene had included his charges to the cab company in the itemized expenses of the Milbank fee request but had failed to disclose to the court the ownership interest of some law firm partners in that company. The third false representation admitted at Mr. Gellene’s trial under Rule 404(b) was made to the Colorado bankruptcy court. After South Street, Milbank’s client, failed to produce discovery documents in the bankruptcy case of George Gillett, the bankruptcy court dismissed the South Street claim. Mr. Gellene moved for reconsideration; he stated that the delay in producing the documents was caused by the winding-up of South Street and by the ongoing dispute between Eckert, the managing partner of South Street, and the Funds’ portfolio advisor, Greycliff Partners, regarding control of the funds. At Mr. Gellene’s trial, however, Eckert testified that Mr. Gellene’s explanation was not true and that he had produced the documents shortly after Mr. Gellene had requested them — which was after the deadline for production of the documents.

Mr. Gellene testified as the only defense witness at his trial. He stated that he began work at Milbank in 1980 and developed a bankruptcy practice. He testified that Lederman gave him the Bucyrus work and the South Street/Greycliff representation. He also admitted being aware in December 1993 of his firm’s representation of Salovaara in the Eckert dispute. He testified that he failed to disclose these representations in the Bucyrus bankruptcy because he did not consider Salovaara to be a creditor, did not distinguish South Street/Greycliff from Salovaara, and thus did not think the representations needed to be disclosed. He also testified that the matters involving Salovaara, South Street and Greycliff were unrelated to the Bucy-rus matter and that an agreement with Salovaara had already been reached. He called these conclusions “bad judgment” and “stupid, but not criminal.” The jury did not agree; it convicted him on all three counts.

II

DISCUSSION

A. Bankruptcy Fraud under 18 U.S.C. § 152(3)

1.

Mr. Gellene was found guilty of two counts of making false oaths in a bankruptcy proceeding, in violation of 18 U.S.C. § 152(3). 10 He was convicted specifically of “knowingly and fraudulently” making *586 false declarations under oath in two Rule 2014 bankruptcy applications. 11 Twice he applied for an order approving his employment as attorney for the debtor; first, on February 18, 1994, the day he filed Buey-rus’ Chapter 11 bankruptcy, and second, on March 28, 1994, after the hearing on his application, when he elaborated on potential conflicts of interest, as the bankruptcy court had requested. Those applications failed to list the senior secured creditor and related parties.

At trial, the district court instructed the jury on the elements of bankruptcy fraud 12 and specifically instructed that “[a] statement is fraudulent if known to be untrue and made with intent to deceive.” Jury Instructions at 18. Mr. Gellene submits that the court’s definition of “fraudulent” as “with intent to deceive” is erroneous. In his view, the statute requires that the statement be made not simply with the intent to deceive but with the intent to defraud. He further claims that, because the government misapprehended the statutory requirement, it failed to present evidence that he made his declarations with an intent to defraud because it believed it needed to prove merely an intent to deceive. He submits that the distinction between the two terms is significant: To deceive is to cause to believe the false or to mislead; to defraud is to deprive of some right, interest or property by deceit. Therefore, under § 152 of the Bankruptcy Code, he contends, the defendant must have a specific intent to alter or to impact the distribution of a debtor’s assets and not merely to impact the integrity of the legal system, as the government argued.

We cannot accept Mr. Gellene’s narrowly circumscribed definition of “intent to defraud” or “fraudulently.” Mr. Gellene would limit exclusively the statute’s scope to false statements that deprive the debtor of his property or the bankruptcy estate of its assets. In our view, such a parsimonious interpretation was not intended by Congress. 13

First, the plain wording of the statute suggests no such limited scope. Rather, the plain wording of the statute punishes making a false statement “knowingly and fraudulently.” The common understanding of the term “fraudulently” includes the intent to deceive. 14 Indeed, our case law has long acknowledged a broader scope for the statutory language than Mr. Gellene suggests. We have held that the section is designed to reach statements made “with intent to defraud the bankruptcy court.” United States v. Key, 859 F.2d 1257, 1260 (7th Cir.1988). In United States v. Ellis, 50 F.3d 419 (7th Cir.), cert. denied, 516 U.S. 849, 116 S.Ct. 143, 133 L.Ed.2d 89 (1995), we commented that § 152 has long been recognized as the Congress’ attempt to criminalize all the possible methods by which a debtor or any other person may attempt to defeat the intent and effect of *587 the Bankruptcy Code and that the expansive scope of the statute “reaches beyond the wrongful sequestration of a debtor’s property and also encompasses the knowing and fraudulent making of false oaths or declarations in the context of a bankruptcy proceeding.” Id. at 423 (citing Key, 859 F.2d at 1259-60).

In addition, Ellis commented that the omission of material information in a bankruptcy filing “impedes a bankruptcy court’s fulfilling of its responsibilities just as much as an explicitly false statement.” Id. (affirming § 152 conviction of debtor for omission of prior bankruptcies from petition); see also United States v. Cherek, 734 F.2d 1248, 1254 (7th Cir.1984) (holding that failure by corporation president to list asset on corporation’s bankruptcy petition was omission of material information supporting a § 152 conviction), cert. denied, 471 U.S. 1014, 105 S.Ct. 2016, 85 L.Ed.2d 299 (1985); United States v. Lindholm, 24 F.3d 1078, 1083 (9th Cir.1994) (affirming § 152 conviction of debtor for omission of prior bankruptcy filings). Thus, whether the deception at issue is aimed at thwarting the bankruptcy court or the parties to the bankruptcy, § 152 is designed to protect the integrity of the administration of a bankruptcy case. As one commentator has put it:

The orientation of title 11 toward debtors’ rehabilitation and equitable distribution to creditors relies heavily upon the participants’ honesty. When honesty is absent, the goals of the civil side of the system become more expensive and more illusive. To protect the civil system, bankruptcy crimes are not concerned with individual loss or even whether certain acts caused anyone particularized harm. Instead, the statutes establishing the federal bankruptcy crimes seek to prevent and redress abuses of the bankruptcy system. Thus, most of the crimes do not require that the acts proscribed be material in the grand scheme of things, that the defendant benefit in any way nor that any creditor be injured.

1 Collier on Bankruptcy, ¶ 7.01[l][a] at 7-15 (Lawrence P. King ed., 15th ed. rev. 1999) (emphasis added).

2.

Mr. Gellene’s narrow reading of the statute leads him to take a narrow view of the provision’s materiality requirement. In his view, the statute criminalizes only fraud that is intended to frustrate the equitable distribution of assets in the bankruptcy estate. As counsel explained at oral argument, the fraud ought to be considered material only when it is related to the estate’s assets, to pecuniary and property distribution issues. Under this narrow interpretation, his failure to divulge his representation of a major secured creditor of the debtor was not material, he asserts, because it was not intended to impact on the equitable distribution of assets in the bankruptcy.

We agree that § 152 requires that materiality be an element of the crime of bankruptcy fraud and, indeed, we have incorporated such a requirement in our analysis of § 152 fraud. See Key, 859 F.2d at 1261. The statute is therefore construed to require that the false oath be in relation to some material matter. See United States v. Jackson, 836 F.2d 324, 329 (7th Cir.1987) (citing cases). That material matter about which the misrepresentation was made could of course be the debtor’s business transactions, the debtor’s estate assets, the discovery of those assets, or the history of the debtor’s financial transactions. See id. (holding that the debtor’s false statements about the location of assets of the estate were material to the proceedings). However, we have never accepted Mr. Gellene’s view that only misrepresentations that relate to the assets of the bankruptcy estate are material. Indeed, we, like other circuits, have rejected expressly such a reading. See Key, 859 F.2d at 1261 (stating that materiality does not re *588 quire showing that creditors were harmed by the false statements). 15 The same commentator, addressing the materiality element, likewise has explained why a broader view of materiality than the one urged by Mr. Gellene is compatible with the purpose of the bankruptcy laws:

Materiality in this context does not require harm to or adverse reliance by a creditor, nor does it require a realization of a gain by the defendant. Rather, it requires that the false oath or account relate to some significant aspect of the bankruptcy case or proceeding in which it was given, or that it pertain to the discovery of assets or to the debtor’s financial transactions. Just what is significant is difficult to say for the general case: failing to disclose ownership of a ream of paper in a multi-million dollar bankruptcy is probably not material, but in many cases a false social security number or a false prior address may be. Statements given by individuals in order to secure a particular adjudication carry their own reliable index of materiality; the person giving the statement believed it sufficiently important — and hence, material — to the goal of obtaining the desired action.

Collier on Bankruptcy, ¶ 7.02[2][a][iv] at 7-46 to 7-47. We conclude that the materiality element does not require proof of the potential impact on the disposition of assets.

We have no doubt that a misstatement in a Rule 2014 statement by an attorney about other affiliations constitutes a material misstatement. The Bankruptcy Code requires that attorneys who seek to be employed as counsel for a debtor apply for the bankruptcy court’s approval of that employment. See In re Crivello, 134 F.3d 831, 835-36 (7th Cir.1998). Bankruptcy Rule 2014 requires the potential attorney for the debtor to set forth under oath any “connections with the debtor, creditors, [and] any other party in interest.” Fed. R. Bankr.P. 2014(a). The disclosure requirements apply to all professionals and are not discretionary. The professionals “cannot pick and choose which connections are irrelevant or trivial.” In re EWC, Inc., 138 B.R. 276, 280 (Bankr.W.D.Okl.1992). “[C]ounsel who fail to disclose timely and completely their connections proceed at their own risk because failure to disclose is sufficient grounds to revoke an employment order and deny compensation.” Crivello, 134 F.3d at 836; see also Rome v. Braunstein, 19 F.3d 54, 59 (1st Cir.1994). As Judge Kanne pointed out in Crivello, this procedure is designed to ensure that a “disinterested person” is chosen to represent the debtor. This requirement goes to the heart of the integrity of the administration of the bankruptcy estate. The Code reflects Congress’ concern that any person who might possess or assert an interest or have a predisposition that would reduce the value of the estate or delay its administration ought not have a professional relationship with the estate. See Crivello, 134 F.3d at 835.

3.

We now consider whether there was sufficient evidence of Mr. Gellene’s guilt. We therefore must determine, after viewing the evidence in the light most favorable to the government, whether a rational trier of fact could have found the essential elements of the offense of bank *589 ruptcy fraud beyond a reasonable doubt. See United States v. Webster, 125 F.3d 1024, 1034 (7th Cir.1997), cert. denied, — U.S. -, 118 S.Ct. 698, 139 L.Ed.2d 642 (1998). “Circumstantial evidence is sufficient to prove fraudulent intent and to support a conviction.” Id.

Our review of the record verifies that the government established Mr. Gellene’s knowledge of his duty to disclose. It set forth Mr. Gellene’s expertise in bankruptcy and the bankruptcy court’s statements alerting him to the importance of full disclosures. Mr. Gellene was fully apprised of the importance of the information that had been excluded. He had been questioned by his law partner, Toni Lichstein, several times about whether there might be a conflict of interest and whether all necessary disclosures had been made. Yet Mr. Gellene continued to withhold the information over a two-year period; he simultaneously worked on the Bueyrus bankruptcy and represented South Street, Greycliff and Salovaara without informing his client Bueyrus of the other representations.

In addition to the direct evidence of Mr. Gellene’s intentional fraudulent omission of information from the Rule 2014 applications, the government offered evidence that he had committed deceptions on the bankruptcy court and other courts with respect to (1) his failure to disclose his law firm partners’ interest in the Lotus Cab Company, from whom he had submitted a bill; (2) his failure to file documents in a Colorado bankruptcy court; and (3) the status of his bar memberships. Moreover, Mr. Gellene himself testified regarding his mental state; therefore, the jury had an opportunity to judge in detail his innocent explanations regarding his conduct. After viewing the evidence in the light most favorable to the government, we conclude that there was evidence from which a jury reasonably could have found beyond a reasonable doubt that Mr. Gellene knowingly and fraudulently made two false material declarations in the Bueyrus bankruptcy case.

4.

Mr. Gellene claims that the court’s definition of “fraudulent,” which was set forth in the instructions, was erroneous. We therefore have considered the jury instructions, viewing them as a whole and acknowledging that we may overturn Mr. Gellene’s conviction only if those instructions failed to treat the contested issues fairly and adequately. See United States v. Lerch, 996 F.2d 158, 161 (7th Cir.1993), cert. denied, 510 U.S. 1047, 114 S.Ct. 697, 126 L.Ed.2d 664 (1994).

The district court instructed the jury that a “statement or representation is fraudulent if known to be untrue, and made with intent to deceive.” This instruction, given the facts of the case, adequately presented the issue to the jury. The defendant’s conduct was to make a fraudulent statement. Because he is the attorney for the debtor rather than the debtor, his use of false statements defrauded the entire bankruptcy process when he withheld the name of a client that was the debtor’s major secured creditor and of other related entities. We conclude that the instruction given in this case, which notably was given along with an instruction stating the elements of § 152 that must be proven beyond a reasonable doubt, adequately addressed the issue of intent. We hold that the district court treated all elements of the offense fairly and accurately, and accordingly we affirm the use of the jury instruction defining “fraudulent.”

B. Perjury under 18 U.S.C. § 1623

1.

Mr. Gellene was convicted on Count 3 of using a document, while under oath, knowing that it contained a material falsehood, in violation of 18 U.S.C. § 1623. 16 This *590 charge arose from the bankruptcy court’s hearing in November 1995 to consider Mil-bank’s fee application. JNL opposed the application on the ground that Milbank had conflicts of interest in its representation of the debtor Bucyrus. Specifically, JNL challenged Milbank’s relationship with Goldman Sachs.

At the fee hearing, Mr. Gellene testified on direct examination that he previously had disclosed to the bankruptcy court Mil-bank’s representation of Goldman Sachs; in the course of his testimony, he referred to the two sworn declarations as exhibits to establish that disclosure. The second declaration in particular demonstrated that Milbank had divulged its relationship with Goldman Sachs and had put in place a “Chinese wall” to keep separate the Goldman Sachs legal representation and the Bucyrus bankruptcy work. That second declaration then made this concluding statement, alleged to be false in Count 3:

Besides the representations disclosed in my declaration dated February 18, 1994, after due inquiry, I am unaware of any other current representation by Mil-bank of an equity security holder or institutional creditor of the Debtors.

Indictment, Count 3, ¶ 2.

However, when Mr. Gellene drafted this Rule 2014 disclosure statement (around March 28, 1994) and when he used it at the fee hearing (November 29, 1995), he and his firm were actively representing South Street and Greycliff. Notably, Milbank’s representation of those entities was not known at the time of the fee hearing to anyone involved in the Bucyrus bankruptcy.

2.

Section 1623(a), often called the “false swearing statute” to distinguish it from its older sibling, the general federal perjury statute, see United States v. Sherman, 150 F.3d 306, 310 (3d Cir.1998), punishes anyone who “knowingly makes any false material declaration” under oath in a court proceeding. 18 U.S.C. § 1623(a). 17 A material statement is one that has “a natural tendency to influence, or was capable of influencing, the decision of’ the decisionmaker to which the statement was addressed. Kungys v. United States, 485 U.S. 759, 770, 108 S.Ct. 1537, 99 L.Ed.2d 839 (1988) (citing cases as examples). Materiality is an element of the offense; it must be proven by the government and decided by the jury. See United States v. Gaudin, 515 U.S. 506, 509, 115 S.Ct. 2310, 132 L.Ed.2d 444 (1995); United States v. Akram, 152 F.3d 698, 700 (7th Cir.1998) (“Since Johnson v. United States, 520 U.S. 461, 117 S.Ct. 1544, 137 L.Ed.2d 718 (1997), it has been clear that materiality under § 1623(a) is an element of the prosecution’s case and must therefore be submitted to the jury and proven beyond a reasonable doubt.”).

*591 Mr. Gellene challenges his conviction on several grounds. First, he claims that the evidence was not sufficient to prove his guilt beyond a reasonable doubt because his testimony at the fee hearing did not constitute a knowing “use” of a “false material” document. Second, he asserts (for the first time on appeal) that, because the document was literally true, his statement based on the declaration cannot form the basis for a perjury conviction. And, third, he submits that the district court should have granted the motion for judgment of acquittal. We shall address the first two contentions in some detail and, in the course of our analysis, also discuss the sufficiency of the evidence.

a.

The false swearing statute, as the government seeks to apply it here, requires the “use” of a false statement. Mr. Gellene claims that his testimony at the fee hearing was entirely and historically accurate. In his view, the focus of the inquiry was on another paragraph of his March 1994 declaration, the paragraph that disclosed his relationship with Goldman Sachs. Mr. Gellene contends that he did not “use” the paragraph mentioned in the indictment because he never referred to that paragraph or used that paragraph to bolster his testimony; the inquiry was limited to Milbank’s relationship with Goldman Sachs, and he made no mention at the fee hearing of the paragraph set forth in the indictment.

We cannot accept this argument. The thrust of JNL’s challenge to the fee petition was a challenge to Milbank’s divided loyalty. Although its allegation was limited to Milbank’s association with Goldman Sachs, a fair interpretation of the record — and one the jury was certainly entitled to accept — was that JNL’s foundational concern was that Milbank’s divided loyalties might jeopardize the position of the creditors. The statement at issue in the indictment informed, and assured, the bankruptcy court that, beyond the area of acknowledged concern (Milbank’s relationship with Goldman Sachs), there were no other areas of representation of which Mr. Gellene was aware. The statement conveyed the message that, once he met JNL’s concern about Goldman Sachs, there was no other cause for concern about Milbank’s divided loyalties and the fee petition could be approved.

We believe that the district court was correct in its determination that Mr. Gel-lene “used” 18 the designated paragraph of the supplemental statement in his 2014 application during his testimony. His reference to — and his reliance upon — the application allowed him to demonstrate not only that he had disclosed the representation of Goldman Sachs but also that he had examined other possible areas of concern and had determined that there were no other similar representations that warranted the court’s scrutiny before awarding fees.

For essentially the same reasons, we believe that the use of the application was material. The district court noted that a document “is material if it has a natural tendency to influence or is capable of influencing the decision of the person to whom it was addressed.” R.50 at 6 (citing United States v. Gaudin, 515 U.S. 506, 509, 115 S.Ct. 2310, 132 L.Ed.2d 444 (1995), and United States v. Ross, 77 F.3d 1525, 1545 (7th Cir.1996)). According to the district court, the testimony of David Gelfand, Mr. Gellene’s partner at Milbank who examined Mr. Gellene at the fee hearing, was sufficient evidence of materiality; Mr. Gelfand testified that the document was introduced to convince the bankruptcy court to award attorney’s fees.

Our study of the record convinces us of the correctness of the district court’s rul *592 ing. The jury was entitled to believe that the statement was designed to lull the bankruptcy court and the parties into believing that there were no other Milbank relationships deserving of scrutiny before the award of fees. The jury was entitled to conclude that the sequence of events established that Mr. Gellene had knowingly used the document to convey such an impression to the bankruptcy court. Indeed, Mr. Gellene stated prior to the hearing that he intended to use the declarations in response to JNL’s allegation that Milbank had conflicts of interest. David Gelfand, who examined Mr. Gellene at that hearing, later testified that Mr. Gellene had chosen to proffer his sworn declarations as exhibits and had orchestrated the subsequent questioning of his own sworn testimony. According to Gelfand, the purpose in presenting the documents was to establish that Milbank was entitled to the $2 million in fees because all potential conflicts had been disclosed and considered by the bankruptcy court. There is no question that his proffer of the statement constituted use of a material document under § 1623.

The record permitted the jury to conclude that Mr. Gellene knowingly introduced the false document in order to gain approval of Milbank’s $2 million fee request. Evaluating the testimony presented to it, the jury was entitled to conclude that Mr. Gellene had virtually bragged about the forthrightness of Milbank’s disclosure of its representation of Goldman Sachs, all the while knowing that no one involved in the bankruptcy proceedings was aware of Milbank’s undisclosed representations of South Street and the other entities. It was not until the next year that the falsity of that disclosure information was discovered. Only then could the United States Trustee seek return of the fees and an order of sanctions against Milbank.

Accordingly, we believe that sufficient evidence existed for the district court to find that materiality has been established.

b.

Mr. Gellene contends that his conviction under § 1623 cannot stand because the statement made in the paragraph set forth in the indictment is literally true. The government made no effort to prove, he contends, that Milbank’s undisclosed clients' — South Street, Greycliff and Salovaara — were “institutional creditors” or “equity security holders” of Bucyrus. Because there was nothing “materially false” about that paragraph of Mr. Gellene’s declaration, he claims, the government could not have proven those necessary elements of the crime of perjury under § 1623. Therefore, he submits, his perjury conviction cannot be sustained. 19

*593 The government points out that, because Mr. Gellene has raised this issue for the first time on appeal, he may obtain a reversal only if he can demonstrate a “manifest miscarriage of justice.” United States v. Hickok, 77 F.3d 992, 1002 (7th Cir.), cert. denied, 517 U.S. 1200, 116 S.Ct. 1701, 134 L.Ed.2d 800 (1996). It further argues that a reviewing court should uphold the conviction as long as the falsity is established by a “common sense reading” of the language used. United States v. Yasak, 884 F.2d 996, 1001 (7th Cir.1989). The government then submits that South Street and Greycliff were “institutional creditors” and that Mr. Gellene was fully aware that these entities were represented by Milbank at the time he stated that he was “unaware” of such creditors. 20

The jury was entitled to credit the testimony of Alfred Eckert, partner of Mikael Salovaara and half-owner of South Street and Greycliff, who stated that South Street’s first investment was a secured loan to Bucyrus in the summer of 1992. As Eckert explained, South Street had loaned $35 million to Bucyrus “and we were collateralized by all the assets of the company so that ... we would be paid off first if there was a problem.” Tr. 573. Eckert also testified that the interest of South Street certainly was affected by the Bucyrus bankruptcy. It is obvious from this testimony that, whether or not Mr. Gellene defines it as an “institutional creditor,” South Street was a party in interest in the Bucyrus bankruptcy, one that should have been identified and disclosed by Mr. Gellene on his Rule 2014 declaration as long as he or his firm had any connection with it.

Because it is clear that South Street and Greycliff were institutions that had le