                           NONPRECEDENTIAL DISPOSITION
                            To be cited only in accordance with
                                     Fed. R. App. P. 32.1




              United States Court of Appeals
                                  For the Seventh Circuit
                                  Chicago, Illinois 60604

                                  Submitted July 29, 2009*
                                   Decided July 29, 2009

                                           Before

                             RICHARD A. POSNER, Circuit Judge

                             JOHN L. COFFEY, Circuit Judge

                             DANIEL A. MANION, Circuit Judge

No. 08-4089

CHRISTOPHER HOLLY,                                  Appeal from the United States District
    Plaintiff-Appellant,                            Court for the Central District of Illinois.

       v.                                           No. 07-CV-03196

WEXFORD HEALTH SERVICES, INC.,                      Harold A. Baker,
et al.,                                             Judge.
        Defendants-Appellees.



                                         ORDER

       Former Illinois inmate Christopher Holly claims in this lawsuit under 42 U.S.C.
§ 1983 that during his incarceration he was denied necessary cataract surgery. The district
court granted Holly leave to proceed in forma pauperis, but when it came to light that




       *
          After examining the briefs and the record, we have concluded that oral argument is
unnecessary. Thus, the appeal is submitted on the briefs and the record. See FED. R. A PP. P.
34(a)(2).
No. 08-4089                                                                              Page 2

Holly had understated his assets in his petition, the court dismissed the case with
prejudice. We affirm.

         Holly is no stranger to filing lawsuits without having to foot the bill up front. While
in prison, he took full advantage of the privilege afforded the indigent to litigate in federal
court without prepaying filing and docketing fees in full. See 28 U.S.C. § 1915(a)(1). But
after bringing too many frivolous claims, he lost this privilege in accordance with the
Prison Litigation Reform Act, see id. § 1915(g). Holly v. Anton, No. 03-1653 (7th Cir. Jan. 22,
2004); Holly v. Woolfolk, No. 03 C 2563 (N.D. Ill. May 15, 2003). Once Holly was released
from prison in June 2007, however, the PLRA no longer applied to him, and he continued
to file lawsuits, pleading indigence and asking the district courts to waive prepayment of
the statutory fees.

       On July 19, 2007, Holly filed the complaint in this case and petitioned the district
court to proceed in forma pauperis. In an affidavit he signed on July 17 and attached to
that petition, Holly averred under penalty of perjury that as of July 15, 2007, he had a
balance of $166.20 in his business checking account and a negative balance of $73.94 in his
personal checking account. He represented that he lived with his mother and that she was
paying all of his living expenses. He also attested that he did “not receive any additional
income and/or financial resources.” On July 27, 2007, the district court granted the petition
and allowed Holly to proceed without prepaying the filing and docketing fees.

        The next month, in August 2007, Holly filed another § 1983 suit. He again
represented that he was impoverished and asked the district court allow him to litigate
without first paying the required fees. The court denied the motion and ordered Holly to
pay the fees. Holly then sought to take an interlocutory appeal, and in September 2007 he
moved to proceed in forma pauperis in this court. On the form he completed as part of his
fee petition, he averred that he was self-employed and had been receiving an average of
$1,534 per month for the past 12 months. He also stated that he had invested much of the
money that he received over the preceding three months to start a business. Bank records
attached to the petition show that Holly’s bank accounts were receiving a steady flow of
funds, including two deposits totaling $539.25 on July 16, 2007—the day before he signed
the financial affidavit in this case.

        The defendants in this case got hold of the September 2007 fee petition and moved
to dismiss on the basis that Holly had lied about his assets to avoid prepaying the fees.
Holly responded by arguing that the motion was untimely, that any funds received after he
filed the fee petition were irrelevant, and that he qualified for pauper status even
considering the additional funds. He did not dispute the defendants’ contention that he
No. 08-4089                                                                               Page 3

had lied about his financial condition. The district court found that, in light of Holly’s
admission in the September 2007 petition that he had been earning approximately $1,500
per month over the preceding 12 months, Holly had committed perjury by claiming to be
indigent when he filed this lawsuit. The court dismissed the case with prejudice,
explaining that a lesser sanction, such as requiring Holly to pay the fees or dismissing
without prejudice, would constitute “no real sanction” and would be “insufficient to deter
future deception and would be unfair to the defendants.”

        A district court may allow an indigent plaintiff to file a lawsuit without prepaying
the required fees if the plaintiff submits an affidavit with a statement of his assets and
attests that he is too poor to pay. See 28 U.S.C. § 1915(a)(1). The district court is required to
dismiss the case, however, if at any time the court learns that the allegation of poverty is
untrue. 28 U.S.C. § 1915(e)(2)(A). We review for clear error the district court’s finding that
Holly falsely insisted that he was indigent. See Thomas v. Gen. Motors Acceptance Corp., 288
F.3d 305, 306, 308 (7th Cir. 2002). The court’s choice to dismiss with prejudice—instead of
without—constitutes a sanction for the filing of a false application, and we review that
decision for abuse of discretion. See id.

        Holly first argues, as he did in the district court, that the defendants moved to
dismiss too late because the court-ordered deadline for submitting dispositive motions had
already passed. But the timing of the defendants’ motion, and indeed the motion itself, is
irrelevant. Section 1915(e)(2)(A) requires a court to dismiss the complaint “at any time” if it
determines that the plaintiff’s assertion of poverty is untrue. Thus, a court confronted with
a false allegation of poverty need not wait for a motion to dismiss and can apply
§ 1915(e)(2)(A) sua sponte. See In re Prison Litigation Reform Act, 105 F.3d 1131, 1138 (6th
Cir. 1997); see also Thomas, 288 F.3d at 306 (explaining that where the “allegation of poverty
was false, the suit had to be dismissed; the judge had no choice”). Once the district court
learned that Holly’s fee petition in another lawsuit contradicted his assertion of poverty in
this case, the court had the responsibility to determine whether Holly accurately reported
that he is too poor to prepay the fees, and if Holly lied, to dismiss the case.

        Holly also argues that, in fact, he could not afford to pay the fees when he submitted
his financial affidavit and that assets he received later are irrelevant. But Holly’s blanket
assertion that he was indigent when he filed his fee petition ignores the issue at the heart of
the district court’s decision: two months after stating under oath in this case that he had no
source of income or financial resources, Holly admitted that, at the time he filed the
petition, he was receiving substantial funds. Holly has never squared his statement in the
September 2007 petition that he had been earning roughly $1,500 monthly for the past 12
months and had accumulated enough over three months to start a business with his
No. 08-4089                                                                               Page 4

assertion that he was receiving no income in July 2007. Moreover, Holly never explained
why he failed to tell the district court about the $539.25 that was deposited into his account
the day before he signed his financial affidavit in this case. And contrary to Holly’s
contention that he had no obligation to tell the court about income he received after he filed
his petition, he did have a duty to inform the court when his financial situation improved.
See Thomas, 288 F.3d at 306 (upholding district court’s decision to dismiss with prejudice in
part because plaintiff had failed to update his pauper application after receiving retirement
benefits). Thus the district court’s finding that Holly falsely claimed to be indigent is not
clearly erroneous.

       That brings us to whether the district court acted within its discretion in dismissing
the case with prejudice. Holly contends that the record is devoid of evidence that he acted
in bad faith, so, he says, the district court’s sanction is too harsh, or, at the very least, the
court should have granted him an evidentiary hearing before imposing it. But there is
plenty of evidence that Holly intentionally hid from the court the fact that he was receiving
income. And we cannot say that the court abused its discretion in concluding that this was
the most appropriate sanction for Holly’s mendacity. Furthermore, Holly had no right to
an evidentiary hearing. He had the opportunity in his brief to the district court to explain
the discrepancies between the two fee petitions, but he did not identify any material factual
dispute warranting an evidentiary hearing. See Wozniak v. Conry, 236 F.3d 888, 890 (7th Cir.
2001). We therefore AFFIRM the district court’s judgment. Holly’s motion for
appointment of counsel is DENIED.
