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Note: On 30 March 2001, Mr. Dwayne Bodrick (Fraudster) persuaded Mr. Dwayne Jennings (Victim) to make an investment of USD 28,500 that Broker promised would yield a guaranteed 50 percent rate of return by raising "money to pay taxes to release funds from an account". Prior to the investment, Fraudster gave Victim a telefax, purportedly from Union Bank in Nigeria, which provided: "this document will act as an official letter of guarantee to pay you the sum of US$42,750.00 on or before April 15th 2001. [Fraudster] has assigned power of Attorney [sic] of the US$9,000,000.00 to ensure all investors will be paid through Bank One NA." At some point in time, Victim also received other documents referring to different investments with different returns, including a letter referencing a USD 16.3 million account that Fraudster referred to as a "guarantee".

After Fraudster filed a Chapter 13 bankruptcy petition on 6 January 2011, Victim filed an adversary proceeding in the U.S. Bankruptcy Court for the Southern District of Ohio. The Bankruptcy Court, Buchanan J., dismissed Victim's adversary proceeding, finding that the debt of Victim's USD 28,500 investment was not excepted from discharge.

The Judge found that Victim did not justifiably rely on Fraudster's false representation under 11 U.S.C. 523(a)(2)(A) because Victim failed to show that he made even a cursory investigation prior to making the investment. Further, Victim did not share the "close personal relationship" or have "previous business dealings" with Fraudster as required for excepting debt for money obtained by the use of materially false writings under 11 U.S.C. 523(a) (2)(B), nor was there express or technical trust to establish a fiduciary relationship under 11 U.S.C. 523(a)(4). While a debtor normally may not discharge debt "for willful and malicious injury", a debtor may do so under 11 U.S.C. 523(a)(6) if it completes all payments required by its bankruptcy plan and receives a discharge.

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This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.