§ 727. Discharge
(a) The court shall grant the debtor a discharge, unless—
(2) the debtor, with intent to hinder, delay, or defraud a
creditor or an officer of the estate charged with custody of property under
this title, has transferred, removed, destroyed, mutilated, or concealed, or
has permitted to be transferred, removed, destroyed, mutilated, or concealed—
(A) property of the debtor, within one year before the date
of the filing of the petition; or
(B) property of the estate, after the date of the filing of
the petition;
(3) the debtor has concealed, destroyed, mutilated,
falsified, or failed to keep or preserve any recorded information, including
books, documents, records, and papers, from which the debtor’s financial
condition or business transactions might be ascertained, unless such act or
failure to act was justified under all of the
circumstances of the case;
(4) the debtor knowingly and fraudulently, in or in
connection with the case—
(A) made a false oath or account;
(5) the debtor has failed to explain satisfactorily, before
determination of denial of discharge under this paragraph, any loss of assets
or deficiency of assets to meet the debtor’s liabilities[.]
Section 727(a)(4)(A)
denies a discharge to a debtor who “knowingly and fraudulently” makes a false
oath or account in the course of the bankruptcy case. § 727(a)(4)(A). A
false statement or an omission in the debtor’s bankruptcy schedules or
statement of financial affairs can constitute a false oath.[2]
“The fundamental purpose of § 727(a)(4)(A) is to
insure that the trustee and creditors have accurate information without having
to conduct costly investigations.” Fogal Legware of Switz., Inc. v.
Wills (In re Wills), 243 B.R. 58, 63
(9th Cir. BAP 1999) (citing Aubrey v. Thomas (In re Aubrey), 111 B.R. 268, 274 (9th Cir. BAP
1990)). That said, a false statement or omission that has no impact on
a bankruptcy case is not material and does not provide grounds for denial of a
discharge under § 727(a)(4)(A). Id.
Plaintiffs
must show by a preponderance of the evidence that: (1) Debtor made such a false
statement or omission, (2) regarding a material fact, and (3) did so knowingly
and fraudulently. See Searles, 317 B.R. at 377; Roberts, 331 B.R. at 882 (same
test, broken down into four elements).
