                                                                  [DO NOT PUBLISH]


            IN THE UNITED STATES COURT OF APPEALS

                      FOR THE ELEVENTH CIRCUIT
                                                                            FILED
                      ------------------------------------------- U.S. COURT OF APPEALS
                                                                    ELEVENTH CIRCUIT
                                   No. 06-10771                         January 5, 2007
                             Non-Argument Calendar                   THOMAS K. KAHN
                     --------------------------------------------          CLERK

                           D.C. Docket Nos.
                 05-60743-CV-WPD & 99-20146-BKC-PG

In Re: FOREX FIDELITY INTERNATIONAL,

                                                      Debtor,

____________________________________________________

MARIKA TOLZ, TRUSTEE,

                                                      Appellant,

                                       versus

WILLIAM GAWLICK,
and PAUL ANDERSON,

                                                      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 William Gawlick and Paul Anderson.3 Marika Tolz, the bankruptcy




  1
    We note that Tolz v. Hardin, No. 06-10672, another appeal by the trustee in this case, is pending
before us. In Hardin, 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 Hardin 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 Gawlick’s and Anderson’s cases.

                                                 2
trustee for Forex (the “Trustee”), filed complaints against Gawlick and Anderson

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

      In 2000, the bankruptcy court granted summary judgment to Gawlick and

Anderson because they met their burden in presenting the affirmative defenses that

Forex’s payments to them were made in the ordinary course of business under 11

U.S.C. § 547(c)(2) (the “ordinary-course-of-business defense”) and that Forex had

a broker-client relationship with them under 11 U.S.C. § 546(e) (the “stockbroker

defense”). In reaching these conclusions, the bankruptcy court also determined

that it was not necessary to decide whether Forex engaged in a Ponzi scheme with

Gawlick and Anderson.

      The Trustee appealed the bankruptcy court’s decision; and on appeal, the

district court determined that the bankruptcy court erred in not determining

whether Forex had engaged in a Ponzi scheme. The district court explained that

neither the ordinary-course-of-business defense nor the stockbroker defense

applied to Ponzi schemes. The district court remanded the case for the bankruptcy

court to determine in the first instance whether Forex had engaged in a Ponzi

scheme with Gawlick and Anderson.

      In 2004, the bankruptcy court consolidated Gawlick and Anderson’s case

with the case of other transferees (the “Hardin defendants”) for a bench trial.

                                          3
After the trial, the bankruptcy court issued an order in Gawlick and Anderson’s

case that determined Forex had not engaged in a Ponzi scheme because the record

did not show that Forex guaranteed its investors, including Gawlick and

Anderson, a high rate of return on their investment nor that funds from later clients

were used to pay returns to Forex’s earlier investors. Based on this determination,

and the court’s 2000 decision that the ordinary-course-of-business defense and the

stockbroker defense otherwise applied in this case, the bankruptcy court

concluded that the Trustee could not avoid transfers made from Forex to Gawlick

and Anderson.4

       In an appeal to the district court, the Trustee argued that the district court

should reverse the bankruptcy court’s conclusion that the stockbroker defense and

the ordinary-course-of-business defense applied to Gawlick and Anderson. The

Trustee also contended that the bankruptcy court had erred in concluding that

Forex had not operated a Ponzi or Ponzi-type scheme. The district court affirmed

the bankruptcy court on all claims.




  4
     About the Hardin defendants, the bankruptcy court issued an order in their case after the bench
trial explaining that the Hardin defendants had met their burden on the ordinary-course-of-business
defense but not on the stockbroker defense. Based on the ordinary-course-of-business defense, the
bankruptcy court determined that the Trustee could not avoid transfers made to the Hardin
defendants.

                                                 4
      On appeal, the Trustee argues that the ordinary-course-of-business defense

does not apply to the transactions that Forex conducted with Gawlick and

Anderson. 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

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

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

                                           5
       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.

       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




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

                                                6
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 contends that Gawlick and Anderson failed to

produce evidence that Forex’s payments to them -- after they asked for a return of

their account funds -- conformed with industry standards, as is required to satisfy

the third element of the ordinary-course-of-business defense.6 The record in this

case contains an affidavit completed in 2000 by Roderick Hudnell, a certified

securities broker, who stated that standard investment industry practice included

investment clients asking for withdrawal of the funds in their investment account.7

The Trustee has not persuaded us that the district court’s conclusion -- that Forex’s

transactions with Gawlick and Anderson satisfied the requirements of the

ordinary-course-of-business defense -- was clearly erroneous.




   6
     The Trustee also argues that the Hardin defendants did not produce evidence in support of the
first two elements of the ordinary-course-of-business defense because they were investors with Forex
and not creditors of Forex. The Trustee makes no argument that Gawlick and Anderson failed to
produce evidence in support of the first two elements of the ordinary-course-of-business defense.
And we note that, in our Tolz v. Hardin decision, we rejected the Trustee’s claim that the Hardin
defendants did not meet the burden of proof on these elements.
   7
    The Trustee argues that the district court improperly relied on the Hudnell affidavit in this case
because this affidavit was not admitted during the 2004 bankruptcy court trial. This argument is
unavailing because Hudnell’s affidavit was submitted to the bankruptcy court in 2000, when the
court was considering Gawlick and Anderson’s motion for summary judgment based on the
ordinary-course-of-business defense. And the Trustee specified Hudnell’s affidavit in the
designation of items to be included in the record on appeal in Gawlick and Anderson’s case.

                                                  7
      The Trustee next argues that Forex operated a Ponzi or “Ponzi-type” scheme

and that, as a result, the transfers made from Forex to Gawlick and Anderson

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. See In re Club Associates, 951 F.2d 1223, 1228 (11th Cir.

1992)(“Factual findings by the bankruptcy court are reviewed under the 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) (quotation

omitted); 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 Gawlick and Anderson was co-mingled. The Trustee also relies on the trial

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




                                           8
underfunded.8 Even though the record indicates that Forex may not have operated

a well-run business, we cannot say -- based on the record properly before us -- that

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

Ponzi or Ponzi-type scheme.

       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 Gawlick and Anderson.9

       AFFIRMED.




  8
    As she did in the Hardin appeal, the Trustee cites the deposition testimony of N.R. Karve in the
instant case. But Karve’s deposition testimony does not appear in the record on appeal in Gawlick
and Anderson’s case; and we decline to consider it.
  9
   Because we have determined that the ordinary-course-of-business defense -- which prevents the
Trustee from avoiding transfers to Gawlick and Anderson as preferential -- applies in this case, we
need not consider the Trustee’s argument that the bankruptcy court erred in determining that the
stockbroker defense applied.

                                                 9
