In Re Sammy G. Daily, Debtor. Federal Deposit Insurance Corp., Receiver for Indian Springs State Bank v. Sammy G. Daily

This is an appeal from an order of the district court holding that a debt owed by Sammy G. Daily to the Federal Deposit Insurance Corporation (“FDIC”), as receiver for Indian Springs State Bank, was for money obtained by fraud and, therefore, not dis-chargeable in bankruptcy. We affirm.

I

Daily filed a petition for relief in the United States Bankruptcy Court for the District of Hawaii. The FDIC filed an adversary complaint to determine the dischargeability of a debt allegedly owed the FDIC by Daily (“dischargeability complaint”). The FDIC alleged it had filed a civil action in the United States District Court for the District of Kansas (“the RICO suit”) under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), asserting that defendants had obtained money from Indian Springs State Bank by various fraudulent acts. The FDIC noted that Daily had not been named as a defendant in the RICO suit because of the automatic stay in effect in Daily’s bankruptcy proceeding. The FDIC asked the Hawaii bankruptcy court to modify the automatic stay to permit the FDIC to join Daily as a defendant in the RICO suit. The FDIC asserted that any money judgment that might be entered…