                                                                                                                           Opinions of the United
2007 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


9-21-2007

USA v. Chang
Precedential or Non-Precedential: Non-Precedential

Docket No. 06-3630




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Recommended Citation
"USA v. Chang" (2007). 2007 Decisions. Paper 399.
http://digitalcommons.law.villanova.edu/thirdcircuit_2007/399


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                                            NOT PRECEDENTIAL

      UNITED STATES COURT OF APPEALS
           FOR THE THIRD CIRCUIT
                 __________

                     No. 06-3630
                     __________

       JOYCE P. CHANG, ELAINE Y. CHANG
  a/k/a ELAINE Y. DARER, MICHAEL T. CHANG,
             and CHERYL A. CHERNE,
                               Defendants - Appellants,

                          vs.

          UNITED STATES OF AMERICA,
                             Plaintiff - Appellee.
                  __________

    On Appeal from the United States District Court
              for the District of New Jersey
                 (D.C. Civ. No. 02-4834)
    District Judge: Honorable Garrett E. Brown, Jr.
                       __________

     Submitted Under Third Circuit L.A.R. 34.1(a)
                September 20, 2007


Before: SLOVITER, SMITH, and GARTH, Circuit Judges.

         (Opinion Filed: September 21, 2007)
                     __________

                      OPINION
                     __________
Re:    GARTH, Circuit Judge

       This appeal essentially involved a fraudulent transfer of monies where no

consideration was paid by the recipients. The facts, which are somewhat convoluted, are

taken primarily from the District Court’s opinion, inasmuch as the briefs of the parties

were not helpful in this respect. However, inasmuch as we write only for the parties, we

will not describe the facts in detail but only in summary fashion.



       The defendant, David Chang, the father of the three Chang children, and a close

friend, Cheryl Cherne, received a total of $525,000 from David Chang through his two

alter ego corporations, “Saska Corporation” and “Dakota Management, Inc.”



       The defendant, David Chang, through his alter ego company, “River Road Realty

Development Corp.,” had generated over $17 million from the sale of a property. After

the payment of various costs, liens and expenses, the defendant, David Chang, paid

$441,750 into “Dakota”and $1,630,832.99 into “Saska.” Thereafter, “Saska” sent

$150,000 to Joyce Chang and $120,000 to Michael Chang. Later “Saska” paid $120,000

to Elaine Chang and “Dakota” paid $75,000 to Cheryl Cherne. “Dakota” also paid

$60,000 to Elaine Chang. No consideration was given for any of these transfers which

total the sum of $525,000 noted above. At the time of the transfers, David Chang was

insolvent.



                                            -1-
       The Small Business Administration holds two judgments against the defendant,

David Chang. One in the amount of 2.1 million dollars and the second in the aggregate

amount of approximately $995,000. The government, on behalf of the Small Business

Administration to whom David Chang owed monies, sought to recover the $525,000 as

fraudulent transfers under New Jersey law. Various defenses were raised by the

defendants, largely centered on the fact that David Chang was not the alter ego of his

entities; that David Chang’s payments were to satisfy financial obligations to his

children; that David Chang had a debt obligation to Cheryl Cherne, that David Chang

was not insolvent; etc., etc.



       In a reasoned and well crafted opinion the District Court rejected all of David

Chang’s defenses and granted summary judgment in favor of the United States. In our

review, we applied the same plenary standard that the District Court applied. Having

independently examined the record and the briefs, we are satisfied that the District

Court’s opinion and Judgment should be affirmed substantially for the reasons stated in

the District Court’s opinion.



       The Order granting summary judgment in favor of the United States will be

affirmed.




                                            -2-
