                                                                  [DO NOT PUBLISH]


            IN THE UNITED STATES COURT OF APPEALS

                      FOR THE ELEVENTH CIRCUIT
                                                                            FILED
                      ------------------------------------------- U.S. COURT OF APPEALS
                                                                    ELEVENTH CIRCUIT
                                   No. 06-10672                         January 5, 2007
                             Non-Argument Calendar                   THOMAS K. KAHN
                     --------------------------------------------          CLERK
                          D.C. Docket Nos.
                05-60746-CV-WPD & 99-20146-BKC-PG

In Re: FOREX FIDELITY INTERNATIONAL,

                                         Debtor.
________________________________________________________

MARIKA TOLZ,

                                                      Plaintiff-Appellant,

                                       versus

OLITA CHERSE HARDIN,
JUSTIN S. SALLUSTO,
RONALD C. GEORGE,
E. MICHAEL THOMAS,
MARY HARDIN,

                                                      Defendants-Appellees.

           ----------------------------------------------------------------
                Appeal from the United States District Court
                      for the Southern District of Florida
           ----------------------------------------------------------------
                                (January 5, 2007)
Before EDMONDSON, Chief Judge, DUBINA and CARNES, Circuit Judges.

PER CURIAM:

               This bankruptcy case presents an appeal by the trustee of the debtor, Forex

Fidelity International, Inc. (“Forex”), of an order issued by the district court

affirming the bankruptcy court’s decision not to avoid as preferences certain

payments made to Forex’s creditors.1 No reversible error has been shown; we

affirm.

               Forex, which operated a business for its customers to purchase and trade

foreign currency pursuant to a customer account agreement, filed a voluntary

petition under Chapter 11 of the Bankruptcy Code on 8 January 1999.2 In the fall

of 1998, less than 90 days before Forex filed for bankruptcy, various customers

requested -- and received -- a return of deposits given to Forex. These customers

included Olita Cherese Hardin, Justin S. Sallusto, Ronald C. George, E. Michael

Thomas, and Mary Hardin (the “Hardin defendants”).3 Marika Tolz, the


       1
     We note that Tolz v. Gawlick, No. 06-10771, another appeal by the trustee in this case, is
pending before us. In Gawlick, as in the present appeal, Forex’s trustee appeals the district court’s
decision affirming the bankruptcy court’s conclusion that transfers made by Forex were not
avoidable as preferences. The instant case was not consolidated with the Gawlick case by the district
court; and these cases have not been consolidated on appeal.
   2
       Forex’s bankruptcy case was converted to Chapter 7 on 1 March 1999.
           3
      The Trustee brought a complaint to recover preferential transfers against each creditor
individually; but the bankruptcy court consolidated the cases of the Hardin defendants.

                                                 2
bankruptcy trustee for Forex (the “Trustee”), filed complaints against the Hardin

defendants under 11 U.S.C. § 547(b) to avoid preferential transfers made to them.

       The case proceeded to trial in the bankruptcy court in September 2004.

After a bench trial, the bankruptcy court rejected the argument raised by the

Hardin defendants that the stockbroker defense of 11 U.S.C. § 546(e) applied to

prevent the Trustee from avoiding the transfers in this case. But the bankruptcy

court did find that the Trustee could not avoid payments made to the Hardin

defendants as preferences because the payments were made in the ordinary course

of business pursuant to 11 U.S.C. § 547(c)(2) (the “ordinary-course-of-business-

defense”). In reaching this decision, the bankruptcy court determined that Forex

had not operated a Ponzi scheme, noting in particular that Forex did not offer a

guaranteed high rate of return to investors and that the record lacked evidence that

funds from later investors were used to pay earlier investors. The bankruptcy

court also explained that, at an earlier hearing, the Trustee conceded that Forex did

not operate a Ponzi scheme.4

       The Trustee appealed to the district court, arguing that the bankruptcy court

had erred in finding that Forex had not operated a Ponzi or Ponzi-type scheme and


   4
    At that hearing, the Trustee instead argued that Forex operated a scheme with “some similar
characteristics [of a Ponzi scheme,] but it’s not exactly a Ponzi scheme, like you’d read out of
Black’s Law [D]ictionary.”

                                               3
that the ordinary-course-of-business-defense applied. The district court affirmed

the bankruptcy court on all claims.

      On appeal, the Trustee argues that the ordinary-course-of-business-defense

does not apply to the transactions that Forex conducted with the Hardin

defendants. Because we are the “second court of review of a bankruptcy court’s

judgment,” we examine independently the bankruptcy court’s factual and legal

determinations; and we use the same standards of review as the district court. In

re Issac Leaseco, Inc., 389 F.3d 1205, 1209 (11th Cir. 2004).

      “A determination of ordinary business terms under section [547(c)(2)] is a

question of fact subject to the clearly erroneous standard of review. A conclusion

by the district court that the factual findings of the bankruptcy court are not clearly

erroneous is normally entitled to some persuasive weight.” Id. (internal quotation

and citation omitted). And “[c]lear error is a highly deferential standard of

review.” Holton v. City of Thomasville Sch. Dist., 425 F.3d 1325, 1350 (11th Cir.

2005). A “finding is clearly erroneous when although there is evidence to support

it, the reviewing court on the entire evidence is left with the definite and firm

conviction that a mistake has been committed.” Anderson v. City of Bessemer

City, 105 S.Ct. 1504, 1511 (1985) (internal quotation omitted). “This standard

plainly does not entitle a reviewing court to reverse the finding of the trier of fact

                                           4
simply because it is convinced that it would have decided the case differently.”

Holton, 425 F.3d at 1351 (quotation omitted).

       Under 11 U.S.C. § 547(b), a trustee may avoid preferential transfers made

“to or for the benefit of a creditor” by the debtor on or within 90 days before the

debtor filed his bankruptcy petition. But a trustee may not avoid some transfers:

       (A) in payment of a debt incurred by the debtor in the ordinary course

       of business or financial affairs of the debtor and the transferee;

       (B) made in the ordinary course of business or financial affairs of the

       debtor and the transferee; and

       (C) made according to ordinary business terms.



11 U.S.C. § 547(c)(2) (1999).5 The purpose of the ordinary-course-of-business

defense is “to leave undisturbed normal financial relations.” In re Craig Oil Co.,

785 F.2d 1563, 1566 (11th Cir. 1986) (internal quotation omitted). The defense

“should protect those payments which do not result from unusual debt collection

or payment practices.” Id.




  5
   Like the bankruptcy court and district court, we apply the version of section 547 in effect when
Forex filed its bankruptcy petition.

                                                5
      A creditor who asserts the ordinary-course-of-business defense has the

burden of showing each of the three elements of 11 U.S.C. § 547(c)(2). “Although

the first two elements of the defense pertain to the conduct of the parties toward

one another, the third element involves a broader inquiry.” Issac Leaseco, 389

F.3d at 1210. Therefore, about the third element, “[a] creditor must show that the

disputed transaction was made both in the course of regular dealings between the

parties and in accordance with the standards of the relevant industry.” Id.

      In this case, the Trustee argues that the Hardin defendants did not produce

evidence in support of the first two elements of the ordinary-course-of-business

defense because the defendants were investors with Forex instead of creditors who

received money from Forex in payment of a debt. But, as the district court

explained, the Trustee only can seek to avoid a preferential transfer made “to or

for the benefit of a creditor.” See 11 U.S.C. § 547(b)(1). And the Trustee does

not point us -- in our review of the bankruptcy’s court factual findings for clear

error -- to evidence that supports the claim that the payments made by Forex to the

Hardin defendants were not in regular dealings between the parties.

      The Trustee also contends that the Hardin defendants failed to produce

evidence that Forex’s payments to them conformed with industry standards, which

is required to satisfy the third element of the ordinary-course-of-business defense.

                                          6
The record contains deposition testimony of N.R. Karve, who gave $10,000 to

Forex to buy foreign currency. After conducting only a few trades, Karve

requested -- and received -- the balance of funds invested with Forex. Therefore,

the record contains evidence that returning invested funds to its customers was

part of the ordinary course of Forex’s business. The Trustee has not persuaded us

that the bankruptcy court’s finding -- that Forex’s transactions with the Hardin

defendants satisfied the requirements of the ordinary-course-of-business defense --

was clearly erroneous.6

       The Trustee next contends that Forex operated a Ponzi or “Ponzi-type”

scheme and that, as a result, the transfers made from Forex to the Hardin

defendants could not have been made in the ordinary-course-of-business. We

review the bankruptcy court’s factual determination that Forex did not operate a

Ponzi scheme for clear error.7 See In re Club Associates, 951 F.2d 1223, 1228

(11th Cir. 1992) (“Factual findings by the bankruptcy court are reviewed under the

   6
     The Trustee asserts that the district court improperly relied on Roderick Hudnell’s affidavit,
which was submitted as part of the Gawlick case, in determining that Forex’s transactions with the
Hardin defendants occurred in the ordinary-course-of-business. Although the Trustee included
Hudnell’s affidavit and a transcript of his deposition testimony in the designation of items to be
included in the record on appeal in the case of Ronald George, one of the Hardin defendants, we
conclude that, even without consideration of the Hudnell affidavit, the bankruptcy court did not
clearly err in deciding that the ordinary-course-of-business defense applied.
   7
     We note that the Trustee does not argue that the district court applied the wrong standard in
reviewing for clear error the bankruptcy court’s determination that Forex did not operate a Ponzi
scheme.

                                                7
limited and deferential clearly erroneous standard.”). “[A] Ponzi scheme is a

phony investment plan in which monies paid by later investors are used to pay

artificially high returns to the initial investors, with the goal of attracting more

investors.” United States v. Silvestri, 409 F.3d 1311, 1317 n.6 (11th Cir. 2005);

see also Cunningham v. Brown, 44 S.Ct. 424 (1924) (providing origin for “Ponzi

scheme”).

      The Trustee cites the affidavit of Bruce Prestin, an accountant who reviewed

Forex’s books and records for the Trustee before the 2004 bankruptcy court trial.

In his affidavit, Prestin stated, among other things, that money received by Forex

from the Hardin defendants was co-mingled. The Trustee also relies on the trial

testimony of Mark Singer, who worked for Forex and testified that Forex was

underfunded. In addition, the Trustee cites Karve’s testimony that a Forex

representative told him that he would receive large profits on his investments with

the company. But, as the district court noted, it is not clear that these statements to

Karve were anything more than marketing puffery. Even though the record

indicates that Forex may not have operated a well-run business, the record

contains account statements showing that trades in foreign currency were made on

Karve’s account; and when Karve asked Forex for the balance of the funds in his

account, he received that payment. Based on the record before us, we cannot say

                                           8
that the bankruptcy court clearly erred in determining that Forex did not operate a

Ponzi or Ponzi-type scheme.8

       Therefore, we conclude that the bankruptcy court did not clearly err in

determining that the ordinary-course-of-business defense applied in this case; and

we affirm the denial of the Trustee’s complaints to avoid preferential transfers

made to the Hardin defendants.

       AFFIRMED.




   8
     As a result, we need not decide whether a debtor who operates a Ponzi scheme can make
transfers in the ordinary-course-of-business under 11 U.S.C. § 547.

                                            9
