          United States Court of Appeals
                        For the First Circuit

No. 15-2269

          IN RE:    PATRICK J. HANNON; ELIZABETH HANNON,

                               Debtors.


                          PATRICK J. HANNON,

                        Plaintiff, Appellant,

                                  v.

              ABCD HOLDINGS, LLC; ABC&D RECYCLING, INC.;
                        WARE REAL ESTATE, LLC,

                        Defendants, Appellees.


          APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF MASSACHUSETTS

          [Hon. Denise J. Casper, U.S. District Judge]


                                Before
                 Kayatta and Barron, Circuit Judges,
                     McAuliffe,* District Judge.


     Matthew R. Johnson, with whom Joshua M. Wyatt and Devine,
Millimet & Branch, P.A. were on brief, for appellant.
     Joel E. Faller, with whom McLaughlin Brothers, P.C. was on
brief, for appellees.


                            October 7, 2016
_____________________

     *Of the District of New Hampshire, sitting by designation.
           McAULIFFE, District Judge.    Patrick J. Hannon ("Hannon")

appeals from the entry of summary judgment denying his petition

for a discharge in bankruptcy.    See 11 U.S.C. § 727(a)(4)(A).   The

bankruptcy court denied the discharge after concluding that Hannon

made false material statements with respect to disbursements made

on his behalf by third parties during the bankruptcy proceeding.

The district court affirmed the bankruptcy court's entry of summary

judgment, and we affirm as well.

                          I.     Background

A.   Factual Background

           In May of 2012, Hannon and his wife, Elizabeth, sought

protection from their creditors by filing a voluntary bankruptcy

petition under Chapter 11 of the Bankruptcy Code.1       The Hannons

reported total assets of about $6 million, and liabilities of

approximately $10.4 million, which included a disputed tax debt of

more than $7 million.

           Hannon owned and operated a recycling and scrap metal

company, ABC&D Recycling, Inc. ("ABC&D Recycling"), as well as a

real estate company, Ware Real Estate, LLC ("Ware Real Estate"),

which held title to the land on which ABC&D Recycling was located.




      1   On January 2, 2013, the case was converted to a
Chapter 7 proceeding, upon motion of the United States Trustee.

                                 - 2 -
The Hannons estimated that monthly expenses necessary to support

their family during the bankruptcy process would average about

$13,180, and noted that the income required to pay those expenses

would come from ABC&D Recycling's ongoing operations while Hannon

served as debtor-in-possession.

ABC&D Recycling and Ware Real Estate

             Hannon bought ABC&D Recycling and Ware Real Estate with

the help of an attorney named George McLaughlin, Esq., who had

previously       represented     Hannon.    McLaughlin    owned   a   financing

company, Bright Horizon Finance, LLC ("Bright Horizon"), which

loaned Hannon the necessary funds.               Bright Horizon's loan terms

included warrant rights, affording it the option to purchase a

50.1 percent interest in each company.               On June 21, 2012, after

the   Hannons      filed   for    bankruptcy     protection,   Bright   Horizon

assigned its warrant to ABCD Holdings, LLC ("ABCD Holdings"),

another company controlled by McLaughlin, and, on July 17, 2012,

ABCD Holdings exercised those warrant rights, thereby obtaining a

50.1 percent ownership interest in both Ware Real Estate and ABC&D

Recycling.

             A    few   weeks    earlier,   on   June 27, 2012,   McLaughlin,

suspecting that business funds were being diverted by Hannon for

unauthorized purposes, obtained an ex parte temporary restraining



                                      - 3 -
order   from     the   Suffolk    County   Superior    Court.    That   order

temporarily barred Hannon from ABC&D Recycling's premises.                 On

July 2, 2012, however, that order was modified to allow Hannon to

resume operational control over the business.             A short time later,

on July 18, 2012, ABCD Holdings removed Hannon as an officer of

Ware Real Estate and appointed McLaughlin to replace him.              Hannon,

however,       continued     to     operate      ABC&D     Recycling     until

February 6, 2013, when ABCD Holdings removed him as an officer and

director    of    that   company    as   well.    On     March 13, 2013,   the

bankruptcy court approved the sale of Hannon's remaining minority

interest in both Ware Real Estate and ABC&D Recycling to ABCD

Holdings.

Hannon's Monthly Operating Reports

            Hannon was required to file monthly operating reports

("MORs") on a standardized form with the United States Trustee's

office.     He did so from May through September of 2012.               Hannon

says that he provided his counsel with bank statements from the

debtor-in-possession accounts and, based on those statements,

counsel completed the necessary forms for him.                   Hannon then

reviewed the forms and signed a certification on each MOR which

declared "under penalty of perjury" that the report was true and

correct "to the best of [his] knowledge and belief."



                                     - 4 -
            The MOR forms require, among other things, that a debtor

affirmatively disclose whether funds have been disbursed for the

debtor's    benefit   from   any   account   other   than    a   debtor-in-

possession account, and, if so, to provide an explanation for such

payments.    Here, that would include disclosure of disbursements

made by ABC&D Recycling and Ware Real Estate for Hannon's benefit.

The MOR form also instructs the debtor to report the amount of

estate disbursements made by outside sources.               On all of the

relevant MORs, Hannon reported that funds had been disbursed for

his and his wife's benefit from an account other than a debtor-

in-possession account.       In May and June of 2012, for example,

Hannon's MORs identified $1,407.24 and $2,830.30, respectively, as

"payments from ABC&D for rent and utilities."        Hannon's September

MOR also disclosed that funds had been disbursed from "ABC&D for

rent and utilities," but reported that no amount ("0") had been

disbursed for the estate's benefit from outside sources.          Hannon's

July and August MORs contained no reference to disclosable payments

from ABC&D Recycling, and reported "0" estate disbursements made

by outside sources.

Companies Object to Discharge

            On July 12, 2013, ABCD Holdings, ABC&D Recycling, and

Ware Real Estate (the "Companies") filed an adversary complaint



                                   - 5 -
against Hannon in the bankruptcy proceeding, objecting to his

discharge    in    bankruptcy.       Based      upon    a   forensic   accounting

analysis of the books and records of ABC&D Recycling and Ware Real

Estate, the Companies alleged that while Hannon was in control of

the businesses, he diverted a substantial amount of business

revenue to his own benefit, without authority.                 According to the

Companies, business funds were diverted by means of:                (1) Hannon's

use   of   business     accounts     to   pay   Hannon's     entirely       personal

expenses; (2) Hannon's withdrawal of funds from business bank

accounts for entirely personal use; and (3) Hannon's and his family

members' use of business debit cards to cover entirely personal

expenses.     The Companies asserted that Hannon did not disclose

receipt of the majority of those diverted funds on his MORs, as

required.    They charged that Hannon diverted approximately $99,000

from ABC&D Recycling and Ware Real Estate between May and September

of 2012, during which period he only identified approximately

$4,200 in disbursements made on his behalf on the MOR forms.

            On November 21, 2013, the Companies moved for partial

summary judgment on their claim that, because Hannon made a false

oath or filed a false account in connection with his bankruptcy

proceeding,       he   should   be   denied      a     discharge.      11    U.S.C.




                                      - 6 -
§ 727(a)(4)(A).   Hannon, acting pro se,2 opposed the motion but

did not deny that the disbursements identified by the Companies

actually occurred.   Instead, he contended that virtually all of

the identified expenditures were made for business purposes, and

not for his personal benefit.     And, he argued, some expenditures

that appeared to be for his personal benefit were actually made

by, or on behalf of, other employees.

Hannon's Proffered Defenses

          A hearing was held in the bankruptcy court on the

Companies' motion.   The bankruptcy court questioned Hannon about

the transactions at issue.       Hannon denied that the identified

disbursements were made for his personal benefit, stating that

nearly all of them ("99.9 percent of them") had a business purpose.

The bankruptcy court took the matter under advisement, but offered

Hannon the opportunity to "spell out in detail" his defenses to

the multiple diversion claims.

          Hannon then retained new legal counsel, who filed a

further brief in opposition to the Companies' motion for partial


     2    Hannon initially had the benefit of retained counsel to
assist him in navigating the bankruptcy process, but was unable to
maintain that representation.      The bankruptcy court allowed
counsel to withdraw by order dated July 13, 2013, after which
Hannon acted pro se. He then retained new counsel after a hearing
on the Companies' motion for partial summary judgment.


                                 - 7 -
summary judgment.     Hannon retreated from his earlier claim that

99.9 percent of the disbursements had a business purpose, but

included an affidavit in which he declared that many of the

disbursements and withdrawals from business accounts actually had

a business purpose.        He also filed an affidavit by Jeffrey M.

Dennis, CPA, in which Dennis opined that laypersons (like Hannon,

who had a high school education) typically lack the necessary

training to accurately complete MORs.        Finally, Hannon provided

the court with an unsworn attachment to his memorandum, in the

form of a spreadsheet, detailing his explanations for each of the

disbursements challenged by the Companies.         Hannon's explanations

were divided into three categories:        1) those expenditures that

Hannon "believe[d] were incurred for his benefit," 2) those that

he "believe[d were] incurred for legitimate business purposes,"

and 3) those that he claimed were incurred for both a personal and

a business purpose.

           Hannon     conceded    that     $19,323.22     in      business

disbursements were "incurred for his benefit."        Those transactions

included   eleven   cash    withdrawals,   which    Hannon     labeled   as

"Stipends to Joint Debtor" (his wife); two paychecks to Hannon

from ABC&D Recycling; $7,500 in rent payments made to Hannon's

landlord; $1,500 in payments to a boat storage facility in Maine;



                                  - 8 -
retail purchases for groceries, clothing, and entertainment; and

video game and music purchases made by Hannon's daughters on a

business debit card.3

           Hannon      identified     $77,155.91     of     the     challenged

disbursements as having a business purpose, including substantial

cash withdrawals used to make cash payments for scrap metal,

expenses related to business travel, and expenses associated with

transporting and feeding ABC&D Recycling employees.4              He included

within that category costs associated with two of his homes, one

in Wells, Maine, and another in Truro, Massachusetts.               According

to   Hannon,   those   vacation     homes   were   used    for    entertaining

potential ABC&D clients, so costs associated with maintaining

those homes, as well as monies spent entertaining clients while in

residence, qualified as business expenses.                Disbursements were

made to cover costs for utilities, landscaping, local hardware and

liquor store purchases, and meals at nearby restaurants.


      3   Hannon stated that he "believe[d]" the stipends to the
Joint Debtor and his paychecks were reported on the MORs.
     4    The bankruptcy court pointed out that Hannon included
within the "business expense" category three disbursements he had
previously listed on his Addendum to the May and June MORs as paid
by ABC&D Recycling: a $97.84 payment to Dish Network, a $355.76
payment to NSTAR Electric, and a $178.89 payment to a Hannaford
grocery store.   Hannon cryptically described those payments as
business expenses relating to "client guest house," "company
utility," and "ABC&D grocery," respectively.


                                    - 9 -
           Finally, Hannon identified $2,849.99 of the questioned

disbursements as having both a personal and a business purpose.

He included within that final category utility payments related to

his Wells and Truro homes.

           Hannon had previously given testimony concerning his

Wells and Truro homes at a June 6, 2012, meeting of creditors.   In

response to questioning by counsel to the United States Trustee,

Hannon said that he and his family used the Wells home only

occasionally and during the day, and that it needed significant

work (as a result of major leaks and a dysfunctional heating

system) to make it rentable.    The Truro vacation home, he said,

was used only "once in a while" and otherwise remained unoccupied.

He did not mention any marketing or other business entertainment

uses of either property.

B.   Procedural History

           On June 10, 2014, after fully considering the matter,

the bankruptcy judge granted summary judgment in favor of the

Companies and declined to grant Hannon a discharge in bankruptcy.

11 U.S.C. § 727(a)(4)(A).    The court found, as Hannon admitted,

that over $19,000 in payments by ABC&D Recycling or Ware Real

Estate were made for Hannon's personal benefit, and that the

majority of those payments were not disclosed on the MORs, as



                               - 10 -
required.     The bankruptcy court found that Hannon's affidavit

explanations for the claimed business expenditures related to his

Wells and Truro homes were directly contradicted by his earlier

testimony at the creditors' meeting, and that Hannon provided no

explanation       for   the     substantive    change.         Accordingly,     the

bankruptcy court determined that Hannon failed to raise a genuine

issue of material fact with respect to whether the business

payments relating to his Wells and Truro houses were "in fact

incurred solely for his personal benefit."

            The    bankruptcy      court   took    note   of    the    extent   and

frequency of Hannon's omissions, as well as the fact that Hannon

had partially disclosed payments made for his benefit by ABC&D

Recycling in his May and June MORs.               From the undisputed facts,

the   bankruptcy        court    determined    that   the      "only     plausible

conclusion is that [Hannon] acted with reckless indifference to

the truth when filing his MORs."              The court decided that it was

unnecessary to consider the additional disbursements at issue,

because Hannon admitted sufficient unreported payments made on his

behalf to resolve the motion for summary judgment.

            Hannon appealed to the district court.                    The district

court affirmed the bankruptcy court's order on September 22, 2015.

This appeal followed.



                                      - 11 -
                             II.   Standard of Review

               As recently noted in Rok Builders, LLC v. 2010-1 SFG

Venture, LLC, (In re Moultonborough Hotel Group, LLC), "[a]lthough

we constitute the second tier of appellate review in this case

arising out of a decision by the bankruptcy court in an adversary

proceeding, 'we cede no special deference to the determinations

made    by    the    . . .   district     court'    and   instead    'assess   the

bankruptcy court's decision directly.'"               726 F.3d 1, 4 (1st Cir.

2013) (quoting City Sanitation, LLC v. Allied Waste Servs. of

Mass., LLC (In re Am. Cartage, Inc.), 656 F.3d 82, 87 (1st Cir.

2011)).        Our review of the bankruptcy court's order granting

summary judgment is de novo.            Desmond v. Varrasso (In re Varrasso)

37 F.3d 760, 763 (1st Cir. 1994) (citations omitted); see also

Daniels v. Agin, 736 F.3d 70, 78 (1st Cir. 2013).

               The bankruptcy court entered summary judgment under

Federal       Rule    of   Bankruptcy     Procedure    7056,   which   expressly

"incorporates into bankruptcy practice the standards of Rule 56 of

the Federal Rules of Civil Procedure."                In re Varrasso, 37 F.3d

at     762.         Accordingly,    the    "legal     standards     traditionally

applicable to motions for summary judgment . . . apply without

change in bankruptcy proceedings."                 In re Moultonborough Hotel

Grp., LLC, 726 F.3d at 4 (citations omitted).                  Summary judgment



                                        - 12 -
in bankruptcy proceedings, then, should be granted "only when no

genuine    issue     of   material    fact    exists      and    the   movant    has

successfully demonstrated an entitlement to judgment as a matter

of law."      In re Varrasso, 37 F.3d at 763.                   "[A]ll reasonable

inferences    from    the   facts    must    be   drawn   in    the    manner   most

favorable to the nonmovant."          Id.

                              III.    Discussion

             We begin with a basic principle.               "Under [11 U.S.C.]

§ 727(a)(4)(A), [a] debtor can be refused his discharge only if he

(i) knowingly and fraudulently made a false oath, (ii) relating to

a material fact."         Boroff v. Tully (In re Tully), 818 F.2d 106,

110 (1st Cir. 1987).         As the moving parties, the Companies must

establish that there is no genuine dispute about any material fact,

and that they are entitled to judgment as a matter of law, because:

(1) Hannon made a false statement under oath in the course of his

bankruptcy proceeding; (2) he did so knowingly and fraudulently;

and (3) the false statement related to a material fact.                   Perry v.

Warner (In re Warner), 247 B.R. 24, 26 (B.A.P. 1st Cir. 2000).                   As

we have previously recognized:

          [11 U.S.C. § 727], by its very nature, invokes
     competing considerations. On the one hand, bankruptcy
     is an essentially equitable remedy. As the [Supreme]
     Court has said, it is an "overriding consideration that
     equitable principles govern the exercise of bankruptcy



                                     - 13 -
      jurisdiction." Bank of Marin v. England, 385 U.S. 99,
      103 (1966).    In that vein, the statutory right to a
      discharge should ordinarily be construed liberally in
      favor of the debtor. Matter of Vickers, 577 F.2d 683,
      687 (10th Cir. 1978); In re Leichter, 197 F.2d 955, 959
      (3d Cir. 1952), cert. denied, 344 U.S. 914 (1953);
      Roberts v. W.P. Ford & Son, Inc., 169 F.2d 151, 152 (4th
      Cir. 1948). "The reasons for denying a discharge to a
      bankrupt must be real and substantial, not merely
      technical and conjectural." Dilworth v. Boothe, 69 F.2d
      621, 624 (5th Cir. 1934).

           On the other hand, the very purpose of certain
      sections of the law, like 11 U.S.C. § 727(a)(4)(A), is
      to make certain that those who seek the shelter of the
      bankruptcy code do not play fast and loose with their
      assets or with the reality of their affairs.         The
      statutes are designed to insure that complete, truthful,
      and reliable information is put forward at the outset of
      the proceedings, so that decisions can be made by the
      parties in interest based on fact rather than fiction.
      As we have stated, "[t]he successful functioning of the
      bankruptcy act hinges both upon the bankrupt's veracity
      and his willingness to make a full disclosure." [Matter
      of] Mascolo, 505 F.2d [274,] 278 [(1st Cir. 1974)].

In re Tully, 818 F.2d at 110 (parallel citations omitted).       With

these principles in mind, we turn to Hannon's arguments on appeal.

A.   False Oath

           The bankruptcy court, invoking the principle that "an

unsworn declaration made under penalty of perjury is the equivalent

of a verification under oath," determined that, because Hannon

signed the MORs under penalty of perjury, his statements on those

forms were made under oath.    28 U.S.C. § 1746; Smith v. Grondin

(In re Grondin), 232 B.R. 274, 276 (B.A.P. 1st Cir. 1999).   Hannon



                              - 14 -
challenges       that   determination       on        appeal,    arguing       that    the

certification required by MORs is not the type of certification

covered by § 1746, which contemplates a certification as "true and

correct,"      and   not   one    based    on     a    subjective      understanding.

Therefore, he argues, his MOR certifications were not made under

"oath," as necessary to support a false oath claim.

               Hannon concedes that he presents the argument for the

first time on appeal.        "[T]herefore, we can consider the argument

waived."       Hoover v. Harrington (In re Hoover), 828 F.3d 5, 11 (1st

Cir. 2016) (quoting Net-Velazquez v. Wiscovitch-Rentas (In re Net-

Velazquez), 625 F.3d 34, 40 (1st Cir. 2010) ("[A]bsent the most

extraordinary circumstances, legal theories not raised squarely in

the    lower    court    cannot     be    broached      for     the    first    time    on

appeal.")).       However, even if Hannon had presented the argument

to    the   bankruptcy     court,    it   would       have    likely    failed.        The

verification language used on the MOR is nearly identical to the

verification language used on debtor bankruptcy schedules.5                           Other


       5  The MOR certification reads: "I declare under penalty
of perjury (28 U.S.C. Section 1746) that this report and all
attachments are true and correct to the best of my knowledge and
belief."

     The "Declaration Concerning Debtor's Schedules" reads:     "I
declare under penalty of perjury that I have read the foregoing
summary and schedules, consisting of ___ sheets, and that they are


                                         - 15 -
circuit courts that have addressed the point have consistently

found the language used on the debtor schedules sufficient to

constitute        a        verification        under        oath    for    purposes       of

§ 727(a)(4)(A).            See, e.g., Retz v. Samson (In re Retz), 606 F.3d

1189, 1196 (9th Cir. 2010) ("A false statement or an omission in

the   debtor's        bankruptcy     schedules         or    statement     of    financial

affairs     can       constitute     a    false    oath.")         (quoting     Khalil    v.

Developers Sur. & Indem. Co. (In re Khalil), 379 B.R. 163, 172

(B.A.P.    9th    Cir.       2007));     Beaubouef      v.     Beaubouef      (Matter     of

Beaubouef), 966 F.2d 174, 178 (5th Cir. 1992) ("False oaths

sufficient to justify the denial of discharge include . . . a false

statement    or       omission      in   the    debtor's       schedules")       (internal

quotations omitted) (quoting 4 Collier on Bankruptcy ¶ 727.01[1],

at 727–59 (15th ed. 1992); Chalik v. Moorefield (In re Chalik),

748 F.2d 616, 618 n.3 (11th Cir. 1984) ("A knowing and fraudulent

omission    from       a    sworn   Statement      of       Affairs   or   schedule      may




true and correct to the best of my knowledge, information and
belief."


                                          - 16 -
constitute a false oath.") (citing Farmers Coop. Ass'n v. Strunk,

671 F.2d 391, 395 (10th Cir. 1982)).6

            We do not discern any principled basis upon which to

draw a meaningful distinction between the certification language

used on the MOR form from that used on a debtor's schedules, and

think the nearly identical language used on the MOR form would

likely constitute a verification under oath for § 727(a)(4)(A)

purposes.    "Sworn statements filed in any court must be regarded

as serious business.      In bankruptcy administration, the system

will collapse if debtors are not forthcoming."          In re Tully, 818

F.2d at 112.   So, while it is unlikely that Hannon would prevail,

the issue is forfeited in this case due to Hannon's failure to

raise it below.

B.   "Knowingly and Fraudulently"

            Hannon's   main   argument    on   appeal   relates   to   the

bankruptcy court's determination that there was no genuine issue

of material fact with respect to his state of mind when he filed

the MORs.    Hannon asserts that the bankruptcy court incorrectly




      6   While the point seems not to have been directly
confronted by this court, it has been assumed, for purposes of
§ 727(a)(4)(A), that omissions and false statements on a debtor's
schedules constitute statements made under oath. See, e.g., In
re Tully, 818 F.2d at 110.


                                 - 17 -
concluded that the undisputed facts established his knowing and

fraudulent state of mind as a matter of law.     Relying upon our

decision in In re Varrasso, 37 F.3d at 764, he argues that the

undisputed facts here--as in In re Varrasso--do not point to only

one conclusion about his state of mind, but instead support

"conflicting yet plausible inferences--inferences that are capable

of leading a rational factfinder to different outcomes in a

litigated matter depending on which of them the factfinder draws."

Id.   Because the undisputed facts require a choice between two

plausible, and conflicting, inferences (reckless conduct or merely

careless conduct), he argues, summary judgment was improper.

          Hannon says the undisputed facts support an inference

that he acted carelessly, but not recklessly.    He stresses that

he had no reason to conceal the business disbursements made for

his personal benefit because, even including those disbursements,

his actual monthly expenses were still significantly lower than

the monthly support amount he estimated would be needed at the

outset of the bankruptcy proceeding.   So, no harm, and no intent,

given no evident reason for him to conceal those disbursements.

He also notes that his formal education ended with high school,

and he could well have misinterpreted the complicated bankruptcy

forms.   Moreover, he points out that he relied on legal counsel



                             - 18 -
to prepare the forms.        Those facts should render a culpable mental

state doubtful, he contends.

            Hannon also points to his "good faith" participation in

the bankruptcy process, and his improved reporting practices over

time, which also should tend to negate any inference of an intent

to deceive.     Finally, Hannon argues that accurate MOR reporting

was necessarily hampered by his lack of access to underlying

financial documentation about the businesses.             Files and records

were missing, he says, after the brief hiatus between the issuance

of the temporary restraining order and his resumption of control

over ABC&D's operations when the restraining order was modified.

All   of   which,   Hannon    argues,   would   readily   support   a   legal

conclusion that he acted carelessly, but did not act with reckless

indifference to the truth.

            A debtor "knowingly and fraudulently" makes a false oath

if he "knows the truth and nonetheless willfully and intentionally

swears to what is false."        Lussier v. Sullivan (In re Sullivan),

455 B.R. 829, 837 (B.A.P. 1st Cir. 2011) (internal quotation marks

and citations omitted).         "[R]eckless indifference to the truth"

has "consistently been treated as the functional equivalent of

fraud for purposes of § 727(a)(4)(A)."          In re Tully, 818 F.2d at

112 (citations omitted); accord In re Grondin, 232 B.R. at 277.



                                   - 19 -
          We of course recognize that it has been repeatedly

emphasized, and remains true today, that "[c]ourts use special

caution in granting summary judgment as to intent.      Intent is

often proved by inference, after all, and on a motion for summary

judgment, all reasonable inferences must be drawn in favor of the

nonmoving party."   Daniels, 736 F.3d at 83.      But, "[s]ummary

judgment may be warranted even as to such elusive elements as a

defendant's motive or intent where the non-moving party rests

merely upon conclusory allegations, improbable inferences, and

unsupported speculation."   Santiago v. Canon U.S.A., Inc., 138

F.3d 1, 5 (1st Cir. 1998) (quotations and citations omitted).

Here, there are no genuine disputes regarding material facts, and

construing the undisputed facts and all reasonable inferences

arising from those facts in favor of Hannon, it is still clear

that the entry of summary judgment was proper.

          First, Hannon's reliance on In re Varrasso, 37 F.3d 760,

is misplaced, because the undisputed facts here do not support

plausible opposing inferences.   Hannon concedes that he did not

report at least $8,500 in business payments made for his personal

benefit on the MORs he filed in May through September of 2012.7


     7    Hannon takes issue with the bankruptcy court's
categorization of some of the questioned expenditures as personal


                             - 20 -
His explanation for those omissions amounted to little more than

assertions that, either he did not understand his obligation to

truthfully report those disbursements, or he failed to accurately




and unreported on the MORs. He argues that the bankruptcy court
calculated the undisputed and unreported personal expenditures as
totaling $23,555.54, but $10,092.98 of that amount was factually
disputed. Actually, the bankruptcy court recognized that Hannon
reported $4,237.54 of ABC&D Recycling's payments on his MORs, so
the amount unreported on the MORs was "over $19,000." Hannon says
he believed that $4,037 in cash stipends to Elizabeth Hannon were
reported on the MORs, because they were included in deposits to
Elizabeth Hannon's bank account, and so were recorded in bank
statements attached to the MORs.      The MORs, however, do not
identify any such deposits as "stipends" or income from the
business.

     Hannon further argues that the expenditures of $3,205.09 and
$2,849.99 relating to his Wells and Truro homes were "business" or
"business and personal" expenses.       That argument is equally
unavailing. Hannon's affidavit is plainly inconsistent with his
prior testimony at the creditors' meeting, and he offers no
adequate explanation for the dramatic change. See Colantuoni v.
Alfred Calcagni & Sons, Inc., 44 F. 3d, 1, 4–5 (1st Cir. 1994)
("When an interested witness has given clear answers to unambiguous
questions, he cannot create a conflict and resist summary judgment
with an affidavit that is clearly contradictory, but does not give
a satisfactory explanation of why the testimony is changed.").

     But, even if we accepted Hannon's contentions, he cannot
escape the fact that he admitted to receiving at least $12,830.97
from ABC&D Recycling and Ware Real Estate between May and September
of 2012. He reported only $4,237.54 on his MORs. Hannon cannot,
and does not, dispute that he failed to report over $8,500 in
reportable payments that ABC&D Recycling and Ware Real Estate made
for his personal benefit on the MORs he submitted between May and
September 2012.



                              - 21 -
report them because he was merely careless.               Neither explanation

is supported by the factual record.

            To be sure, "a debtor's honest confusion or lack of

understanding       may   weigh   against    an     inference    of    fraudulent

intent."         Robin Singh Educ. Servs., Inc. v. McCarthy (In re

McCarthy), 488 B.R. 814, 827 (B.A.P. 1st Cir. 2013).                  But, Hannon

did properly report some business disbursements made for his

personal benefit in May and June of 2012.             As the bankruptcy court

recognized, those May and June disclosures "demonstrate[] that

[Hannon] understood his duty to report such transactions, and was

able to obtain the necessary information to do so."                       As the

bankruptcy court also recognized, the "magnitude of the omissions

belies     the    Debtor's   assertions      that    he   merely      overlooked"

reporting a few small personal transactions.              In this case Hannon

reported a few modest personal transactions; it was the multiple

and substantial disbursements made for his benefit that did not

make it to the MORs.         Moreover, unlike the debtors in Varrasso,

Hannon did not rectify the omissions as soon as the creditors'

questioning brought them to light.             In re Varrasso, 37 F.3d at

764.

            At issue here is not a simple failure to report minor

expenditures        for   miscellaneous     expenses.           Rather,    Hannon



                                    - 22 -
repeatedly failed to report thousands of dollars diverted from the

businesses for his benefit, while he controlled those businesses.

He   cannot    plausibly   contend    that    he   did   not   know   that   the

businesses paid for his personal rent, clothing, and groceries, as

well as his daughters' clothing and entertainment, over a five-

month period.      Considered in context, "[t]he amounts here render

reckless errors that arguably may have been only negligent if they

had concerned less significant items."             Daniels, 736 F.3d at 85.

              Hannon's claim that he relied in good faith on legal

counsel to accurately prepare the forms also founders.                As Hannon

himself concedes, "reliance on the advice of counsel is no defense

when the deficiency 'should have been evident to the debtor.'"

Appellant's Br. at 20 (quoting Tully, 818 F.2d at 111).               Hannon's

argument is undermined both by his demonstrated knowledge of what

was required to be disclosed, and his undeniable knowledge that

substantial sums spent on his behalf were not disclosed on the

forms filled out by counsel--forms that he reviewed and signed

under oath.

              Hannon also asserts that a reasonable factfinder could

well conclude that he lacked the financial acumen to understand

and appreciate the MORs deficiencies.              But, as discussed above,

in May and June of 2012 Hannon did properly report disbursements



                                     - 23 -
made for his benefit.             He plainly demonstrated personal awareness

of what disclosures were required, and clearly was not unaware

that       business       disbursements      made     for   his     benefit      had   to    be

reported.          It, therefore, "should have been evident" to Hannon

that       the    July,    August,     and    September      MORs    did   not     disclose

substantial            business     expenditures           made   for      his     benefit.

Appellant's Br. at 20 (quoting In re Tully, 818 F.2d at 111).                               As

we have warned, "[a] debtor cannot, merely by playing ostrich and

burying          his   head   deeply    enough        in    the   sand,    disclaim         all

responsibility for statements which he has made under oath."                                In

re Tully, 818 F.2d at 111.8

                  While    Hannon    has     no    formal     training     in      financial

reporting, still, he is hardly unsophisticated.                         Until recently,

he owned and successfully operated two businesses.                               He entered

bankruptcy         having     accumulated         assets    of    nearly      $6   million.

Moreover, this is not Hannon's first experience with bankruptcy

filings and reports.              Hannon acknowledges that he was "previously




       8  As the bankruptcy court pointed out, Hannon testified
that he "provid[ed] counsel with statements from [his] debtor-in-
possession accounts, and then reviewed the report prepared by
counsel." But no evidence suggests that he provided counsel with
full access to relevant financial information, including
information regarding payments made by the businesses on his
behalf.


                                             - 24 -
the principal of Embassy Realty, LLC, which had operated as a

debtor-in-possession."          Hannon's business experience and his past

experience     with    the    bankruptcy     process   undermine   his    claimed

inability to accurately and truthfully complete the MORs due to a

lack of financial sophistication.

             Finally, Hannon's passing contention that his ability to

accurately and truthfully disclose all business expenditures made

for his benefit was hampered by missing financial documentation is

also implausible.           Hannon did not provide any explanation as to

how   access    to    the    allegedly     missing   business   records    was   a

necessary      predicate      to   his    truthfully   reporting   substantial

disbursements made on his behalf.                 Hannon, of course, did have

access to all the financial records of ABC&D Recycling and Ware

Real Estate through at least the end of June, 2012, yet still did

not accurately and truthfully report disbursements made for his

benefit on the May and June MORs.            "The record in this case shows,

at the very least, cavalier indifference and a pattern of disdain

for the truth.        Meaningful disclosure was accorded much too low a

priority."     In re Tully, 818 F.2d at 112.

             Reviewing the matter de novo, we recognize this case as

one of those uncommon situations in which summary judgment is

appropriate notwithstanding that intent, or state of mind, is at



                                         - 25 -
issue.    We concur in the bankruptcy court's determination that

Hannon's proffered explanations for his significant omissions are

so implausible that they do not give rise to a genuine dispute of

material fact with respect to his intent.9

C.   Materiality

            The final critical element, that the debtor's statement

be materially related to the bankruptcy case, is "satisfied if the

statement    bears   a   relationship         to   the   debtor's   business

transactions or estate, or concerns the discovery of assets,

business dealings, or the existence and disposition of property."

In re Sullivan, 455 B.R. at 829 (quotations omitted).

            Neither party disputes on appeal that Hannon's omissions

were material.     We agree.    As the bankruptcy court noted, because

Hannon's omissions "prevented parties in interest from accurately

assessing the viability of a reorganization or understanding the

Debtor's true financial condition," they were material.

                               IV.   Conclusion




      9   On these same grounds, we reject Hannon's argument that
the bankruptcy court should not have granted summary judgment
because the MORs were verified "to the best of his knowledge and
belief," and the record would support a finding that he
subjectively believed that the information was accurate.       As
discussed above, the record does not support that inference.


                                     - 26 -
            Summary judgment is not commonly available in cases

featuring   intent   as   a   necessary    element,   but,   as   this   case

illustrates, there are exceptions.          Material statements made in

the course of judicial proceedings implicate serious interests,

and must be as complete and reliable as studied caution will allow.

Reckless indifference cannot be countenanced and will provide no

protection from sanctions imposed for making false statements

under oath.

            For the reasons stated above, we affirm the bankruptcy

court's denial of Hannon's discharge pursuant to § 723(a)(4)(A).




                                  - 27 -
