Tsang v. Hagedorn

UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
NORTHERN DIVISION
In the Matter of: 	}
}
YASMIN HAGEDORN, 	} CASE NO. 25-81483-CRJ-7
}
}
}
} CHAPTER 7
Debtor(s). 	}
MELINDA TSANG, 	} AP NO. 25-80173-CRJ-7
}
}
Plaintiff(s), 	}
v. 	}
}
}
YASMIN HAGEDORN, 	}
}
Defendant(s). 	}
MEMORANDUM OPINION
This Adversary Proceeding came before the Court for trial on August 12, 2026 on the
Amended Complaint to Determine Dischargeability of Debt, ECF No. 41, filed by Melinda Tsang
(hereinafter the “Plaintiff”), and the Answer to Amended Complaint, ECF No. 46, filed by Yasmin
Hagedorn (hereinafter the “Defendant”). The Plaintiff seeks a determination that the debt owed
by the Defendant to the Plaintiff in the amount of $62,203.00 is excepted from discharge pursuant
to 11 U.S.C. § 523(a)(2)(A) as a debt that was obtained by false pretenses, a false representation,
or actual fraud.
This proceeding involves an emotionally tragic, ill-fated set of facts involving a scheme of
deception and an international con man, the destruction of friendship, and the loss of substantial
sums of money by the Plaintiff and others. The Plaintiff generally alleges that she transferred
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$96,000.00 into the Defendant’s checking account; that the Defendant promised to safeguard the
funds in a separate account that she would personally open for the Plaintiff; and that after the
Plaintiff expressed concerns regarding the safety of the funds, the Defendant repeatedly assured
the Plaintiff that the funds were safe and would be returned to an account designated by the
Plaintiff. The Plaintiff argues that the Defendant’s repeated statements of assurance that the funds
were safe and were in the process of being returned, constitutes “circumstantial proof of the
[Defendant’s] intentional misconduct.”1 The dischargeability issue under § 523(a)(2)(A) requires
proof that the Defendant knew the representations at issue were false and that she made the false
representations with intent to deceive the Plaintiff.
The Defendant admits that the loss occurred, but argues that she, herself, was taken
advantage of by an international con man who took not only the money voluntarily deposited by
the Plaintiff into the Defendant’s checking account, but also thousands of dollars from the
Defendant’s savings account, as well as funds belonging to the Defendant’s sister.
At the conclusion of the trial, the Court directed the parties to submit post-trial briefs
addressing how the testimony and the evidence adduced at trial relates to the Plaintiff’s cause of
action under 11 U.S.C. § 523(a)(2)(A). On September 17, 2026, the parties filed their respective
briefs. 2 The Court has carefully considered the post-trial briefs, the testimony and evidence
presented at trial, and the applicable law, and finds that the Plaintiff failed to prove by a
preponderance of the evidence that the Defendant made false representations with intent to deceive
1 	Id. at p. 4.
2 	See Plaintiff’s Post-Trial Brief, ECF No. 49, and Defendant’s Post-Trial Brief in Support of
Dischargeability, ECF No. 48.
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the Plaintiff, nor that the Defendant made a misrepresentation with reckless indifference to the
truth for purposes of § 523(a)(2)(A).
The Court makes the following findings of fact and conclusions of law pursuant to Rule 52
of the Federal Rules of Civil Procedure as made applicable by Rule 7052 of the Federal Rules of
Bankruptcy Procedure.3
BACKGROUND AND PROCEDURAL HISTORY
On November 3, 2025, the Plaintiff, initially filed this proceeding without the assistance
of legal counsel styled as a Complaint to Determine Non-Dischargeability of a Debt under
11 U.S.C. § 523(a)(4), wherein the Plaintiff alleged that the Defendant engaged in a scheme of
deceit over a period of six months which ended with the Plaintiff transferring her life savings into
the Defendant’s checking account. The Plaintiff alleged that she entrusted the funds to the
Defendant in a fiduciary-like relationship for purposes of § 523(a)(4) and that the Defendant
immediately began withdrawing the funds for her own personal use.4 On December 1, 2025, the
Defendant filed an Answer, generally denying any wrongdoing.5
Following a Status Conference held on January 7, 2026, the Court entered an Order,
requiring the Plaintiff to file a sworn Affidavit clearly setting forth the allegations asserted in her
Complaint, along with supporting documentation, and requiring the Defendant to file a Brief in
support of any defenses asserted.6 On February 27, 2026, the Defendant filed a Brief in Support
3 	To the extent any of the Court’s findings of fact constitute conclusions of law, they are adopted as such.
Further, to the extent any of the Court’s conclusions of law constitute findings of fact, they are adopted as such.
4 	See Complaint, ECF No. 1, p. 3.
5 	Answer, ECF No. 5.
6 	See Order Requiring Affidavits and Briefs and Continuing Status Conference, ECF No. 8.
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of Dischargeability, and Affidavit of Yasmin Hagedorn, in which the Defendant generally argued
that she was not acting in a fiduciary capacity for purposes of § 523(a)(4) when the Plaintiff
transferred the funds at issue into the Defendant’s checking account.7 On February 12, 2026, the
Plaintiff also filed an Affidavit in Support of Complaint for Nondischargeability, along with
supporting documentation.8
On March 4, 2026, the Court held a Status Conference in this proceeding and Jason Britt,
Esq., first appeared as counsel on behalf of the Plaintiff. Because the Plaintiff had just obtained
counsel, the Court continued the Status Conference and directed counsel for the Plaintiff to file a
Brief addressing the issue of whether the Defendant was acting in a fiduciary capacity for purposes
of § 523(a)(4) based on the allegations asserted. Prior to the deadline for filing the brief, counsel
for the Plaintiff filed a Motion for Leave to Amend Complaint, requesting leave to drop the
allegations regarding fiduciary responsibility and to amend the Plaintiff’s Complaint to proceed
instead under 11 U.S.C. § 523(a)(2)(A) based on allegations of intentional fraud and deceit.9
Following a hearing held on April 22, 2026, the Court entered an Order Approving Motion
for Leave to Amend Complaint, Requiring Briefs, and Continuing Status Conference, requiring
the parties to file Briefs addressing the applicable law under § 523(a)(2)(A) based on the
allegations asserted which the parties timely filed.10
7 	See Brief in Support of Dischargeability, ECF No. 12, and Affidavit of Yasmin Hagedorn, ECF No. 13.
8 	See, Affidavit in Support of Complaint for Nondischargeability, ECF No. 14.
9 	See Motion for Leave to Amend Complaint, ECF No. 29.
10 	See Order Approving Motion for Leave to Amend Complaint, Requiring Briefs, and Continuing Status
Conference, ECF No. 34.
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Following a Status Conference held on June 17, 2026, the Court entered an Order Fixing
Deadline and Scheduling Pretrial Conference, finding that this Adversary Proceeding should be
scheduled for trial on the limited issue of intent being inserted by the Plaintiff under
§ 523(a)(2)(A), fixing the deadline for the parties to file a Pretrial Order, identifying all stipulated
facts and exhibits and any undisputed conclusions of law.11
FINDING OF FACTS
The facts in this proceeding are largely undisputed as revealed by stipulated facts listed in
the Pretrial Order dated July 24, 2026, in which the parties stipulated as follows: (i) In June of
2023, the Defendant travelled to India and then to Thailand, eventually settling in Cambodia; (ii)
while in Bangkok, Thailand, the Defendant met Joshua Yarwood, also known as Joshua Martyn
(hereinafter “Yarwood”); (iii) Yarwood represented to the Defendant that he worked for the United
Nations (hereinafter the “U.N.”); (iv) Yarwood befriended the Defendant and offered the
Defendant a position with the U.N.; (v) the Defendant advised her friends and family that she was
employed by and was working for the U.N.; (vi) the Defendant and Yarwood stayed in a rented
home in Cambodia; and (vii) the Defendant introduced Yarwood to the Plaintiff.12
The parties further stipulated that in late October of 2023, the Defendant requested a loan
from the Plaintiff for the stated purpose of obtaining Cambodian citizenship.13 Thereafter, the
Defendant informed the Plaintiff that a possible nuclear attack on Huntsville, Alabama was likely
and encouraged her to leave and travel to Cambodia.14 The Plaintiff initially agreed to travel to
11 	See, Order Fixing Deadline and Scheduling Pretrial Conference, ECF No. 39.
12 	See ECF No. 42, Pretrial Order, Stipulated Facts.
13 	Id.
14 	Id.
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Cambodia and subsequently deposited funds from her account into the Defendant’s Redstone
Federal Credit Union account (hereinafter the “Redstone account”).15 The Plaintiff ultimately
transferred a total of approximately $96,000.00 into the Defendant’s Redstone account.16 The
Defendant advised the Plaintiff that a U.N. plane would pick her up and transport her to
Cambodia.17 After a series of events and the Defendant’s return from Cambodia, the Defendant
returned funds in the amount of $33,797.00 to the Plaintiff.18
The Defendant does not deny that she told the Plaintiff that she was employed by the U.N.
and that she offered to arrange transportation for the Plaintiff and her daughter on a U.N. plane.
Nor does the Defendant deny that she encouraged the Plaintiff transfer funds into the Defendant’s
Redstone account which were to be immediately transferred into a separate savings account that
the Defendant offered to open for the Plaintiff’s own use while in Cambodia.19
With hindsight, the undisputed facts in this case are all clearly incredulous as will be seen
in more depth below, but the Plaintiff trusted the Defendant, and the Defendant unfortunately
trusted Yarwood. The Plaintiff testified that she and the Defendant were very close friends, as
close as sisters. The parties met in 2008, attended church together, and even lived together in the
Plaintiff’s home for five and a half years. Then in the summer of 2023, the Defendant decided to
quit her job and move to India, with plans to work for or travel with a church ministry.
15 	Id.
16 	Id.
17 	Id.
18 	Id.
19 	See Plaintiff’s Exhibit 1, lines 669-671.
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The Defendant testified she had always loved India and had hoped to live there
permanently but was unable to do so because she had trouble with her visa. She then traveled to
Bangkok, Thailand which is where she had the misfortune of meeting Yarwood. Shortly after
arriving in Bangkok, the Defendant lost her cellphone. While in her hotel lobby using a computer
to order a new phone, she met Yarwood. He was a younger man, wearing a U.N. badge on his belt.
They struck up a conversation, and he offered to help her log into her T-Mobile account to order
a new phone. Thereafter, while the Defendant waited for more than two weeks for a new SIM card
to be delivered, she and Yarwood became close companions and inseparable, spending every day
together exploring the city from early in the morning to late at night. The Defendant testified that
Yarwood explained that he worked as a senior officer for the U.N. and that he had just finished an
assignment in India. The Defendant believed that he was on leave, exploring the area before
deciding whether to accept a new assignment in Bangkok.
After spending two weeks together, Yarwood offered to hire the Defendant as his assistant.
The Defendant testified that Yarwood explained that his former assistant had recently retired and
that he wanted to hire another assistant who was older, like the Defendant, because a young
assistant closer to his own age would be more likely to flirt or be a back-stabbing climber. While
the Defendant stated that she initially did not feel qualified to work as an assistant to a U.N. officer,
she eventually agreed to accept the position. The Defendant also testified that she and Yarwood
never had a romantic relationship, but it appears from her demeanor at trial and testimony that she
was emotionally smitten with the senior U.N. officer. The Plaintiff testified that the Defendant
loved him.
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Soon thereafter, the Defendant traveled to Siem Reap, Cambodia with Yarwood and fell in
love with the area. After she expressed her love of Cambodia, Yarwood soon received an offer
from the U.N. to take control of their office in the capital of Cambodia, Phnom Penh. Yarwood
and the Defendant then started searching for and found a house in which they could both live in
separate quarters and set up what the Defendant described as a “U.N. satellite office.”20 While in
Bangkok, the Defendant testified that she and Yarwood paid their own expenses, but once in
Cambodia the Defendant began paying for their combined living and office expenses. She
understood that she would be reimbursed by the U.N. for covering these expenses. It was at this
point that Yarwood appears to have gained access to the Defendant’s Redstone account in which
the Defendant had approximately $39,000.00 when she first traveled to India. Yarwood apparently
began making transfers out of the account using Western Union.
The Defendant testified that by mid-July of 2023 she believed that Yarwood had negotiated
a salary of $64,000.00 for her as his assistant, more than double the amount that she had requested
when Yarwood asked her what she hoped to earn. Yarwood explained, however, that her paycheck
would need to be deposited into a U.N. checking account. The Defendant testified that it had been
difficult to access her Redstone account while traveling overseas because Redstone had blocked
transactions that she made on several occasions. Yarwood explained that he had a friend named
Julie, a U.N. banker, who could help the Defendant not only establish a U.N. account, but also
transfer all of the funds in her Redstone account into the U.N. account. Yarwood also warned the
20 	See Defendant’s Exhibit 1, photograph.
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Defendant not to log into the Redstone account to avoid complications that would arise from
logging into the account from multiple locations.
Yarwood and the Defendant then began furnishing and setting up the “U.N. satellite
office,” purchasing office future, computers, and even a U.N. flag which the authorities later
directed Yarwood to remove because he did not have a permit to display the flag outside the
“satellite office.”
In addition to setting up the office, the Defendant testified that Yarwood had her place
telephone calls to look for medical supplies for the Ukrainian war. Otherwise, the Defendant
admitted that she knew that she was not actually doing much work as Yarwood’s assistant given
the salary that she believed she was being paid. She eventually, however, decided not to worry
because she was doing whatever he directed her to do and figured that if anyone got into trouble it
would be her boss, Yarwood.
In October of 2023, the Defendant testified that Yarwood suggested that she needed to
increase her Redstone Visa credit limit and apply for an American Express credit card because it
would enable the Defendant to obtain future loans, if needed. The Defendant testified that she did
not really want to increase her credit limit, but she thought Yarwood was smart, so she agreed.
By this point, the Defendant testified that she never carried cash or had access to any funds and
had given Yarwood her passport for safekeeping. When a problem later arose with her American
Express card, the Defendant testified that Yarwood told her that it had something to do with a
previous transfer and offered to start paying for everything because he was receiving a housing
and living stipend from the U.N.
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While the Defendant was overseas living an exciting new life as Yarwood’s assistant, she
and the Plaintiff remained close friends, communicating often through WhatsApp, a private
messaging app. It is undisputed that the Defendant told the Plaintiff that she was working for the
U.N. and that she sent several photographs of herself standing outside various U.N. buildings as
proof of her employment.21 As it turns out, the Defendant never actually entered any of the U.N.
buildings in the photographs.
In October of 2023, the Defendant asked the Plaintiff to loan her $6,000.00 so she could
obtain her Cambodian citizenship. The Defendant testified that Yarwood told her that she qualified
for citizenship, and that a U.N. attorney named Tim could help her with the documentation, but
Tim was only going to be in the area for a short period of time. The Defendant further testified
that Yarwood explained that the money required to establish her citizenship had to come from an
outside source of funds, it could not come from her U.N. account because it would create a conflict
of interest. Accordingly, the Defendant reached out to the Plaintiff who agreed to loan the money
to the Defendant by transferring $6,000.00 into the Defendant’s Redstone account. Both parties
agree that the transaction was a loan that was to be repaid immediately. It appears that the
Defendant believed that she had the funds in her U.N. account to immediately repay the loan so
on November 5, 2023, the Defendant asked the Plaintiff for her bank transfer information to repay
the loan. 22 When the funds were not transferred as expected, the Plaintiff testified that the
Defendant told her she would just give her the money when she arrived in Cambodia.
21 	Plaintiff’s Exhibit 2.
22 	See Plaintiff’s Exhibit 1, lines 157 -160.
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Soon thereafter, the Defendant told the Plaintiff that she had highly confidential
information about a possible nuclear attack on Huntsville, Alabama, warning her that the “missiles
were in the silo” and there was only one way they come out. The Defendant even sent the Plaintiff
a picture of herself wearing a gas mask.23
The Defendant testified that she believed that Yarwood had classified U.N. information
involving a dispute between the United States and Russia. She also saw a document with a U.N.
seal, showing that Huntsville, Alabama and Germany, where her sister lived, were both the targets
of an upcoming nuclear attack. With Yarwood’s permission and encouragement, the Defendant
admits that she contacted the Plaintiff and encouraged her to come to Cambodia with her daughter.
The Defendant testified that Yarwood also encouraged her to warn her sister, who like the Plaintiff
transferred funds which Yarwood gained control over under similar circumstances.
The Plaintiff testified that she was sick and did not want to travel for a variety of reasons,
including work and certain church obligations. The Plaintiff is a real estate broker with over forty
years of experience. She owns a business called Sunbelt Business Brokers and a property
management company which she was concerned about leaving for an extended period of time.
However, the Plaintiff’s daughter was going through a messy divorce, and the Plaintiff was very
concerned that she might commit suicide. The Plaintiff testified that the Defendant told her that
the Cambodian real estate market was an untapped market and encouraged her to bring her
daughter to Cambodia to open a real estate office there. Concerned about her daughter, the Plaintiff
eventually agreed to travel to Cambodia, with the understanding and assurance from the Defendant
23 	Plaintiff’s Exhibit 4.
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and Yarwood that she could return to Huntsville if the nuclear attack did not occur. While she
wanted to help her daughter and was apparently concerned about the possible nuclear attack, the
Plaintiff had business matters that she could not just abandon.
According to the Plaintiff, the Defendant and Yarwood assured her that they would arrange
for her return to Huntsville when it was safe so she could take care of her business and clients. The
Plaintiff testified that Yarwood was always on speaker phone and in the room with the Defendant
when they talked on telephone making arrangements for the Plaintiff to travel to Cambodia. The
Plaintiff talked to Yarwood about what she could pack to bring on the airplane and discussed where
the Plaintiff would stay, but her main point of contact was her friend, the Defendant.
On November 18, 2023, the Defendant sent the Plaintiff a picture of the type of airplane
that the “U.N. was working on getting” for the Plaintiff, her daughter, and the Plaintiff’s four
dogs.24 On November 22, 2023, the Plaintiff sent the Defendant a message asking her to confirm
with Yarwood that if nothing catastrophic happened, that Yarwood would order a plane to bring
the Plaintiff home after three weeks. The Defendant replied “Absolutely, we will get you back
whenever you are ready to go back. No worries, we’ve got you. :-)”.25 With her fears alleviated,
the Plaintiff agreed to travel to Cambodia and to transfer funds into the Plaintiff’s Redstone
account with the initial understanding that the Defendant would immediately open an account for
the Plaintiff in Cambodia and transfer the funds into the Plaintiff’s account. The Plaintiff testified
that she transferred the funds because she was concerned about the potential nuclear attack and
because she wanted to help her daughter open a real estate business and start a new life.
24 	See Plaintiff’s Exhibit 1, lines 337-340.
25 	See Plaintiff’s Exhibit 1, line 597.
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On November 27, 2023, the Plaintiff transferred $90,000.00 into the Defendant’s Redstone
account and the Defendant responded by confirming that she was setting up a separate savings
account for the Plaintiff to hold the Plaintiff’s funds until she arrived in Cambodia.26
The following day, on November 28, 2023, the Plaintiff went to Redstone and spoke to a
bank manager and discovered that the Defendant’s account was “red flagged.” She became
alarmed and asked the Defendant to freeze her Redstone account but was told by the Defendant
that her money was safe. The Defendant testified that when the Plaintiff contacted her about the
account, Yarwood logged into the Defendant’s account and told her that $8,000 or $9,000 had
been transferred out of the account, but the Defendant thought that Julie, the U.N. banker, must
have started the transfer to the separate account set up for the Plaintiff. She agreed with the
Plaintiff to have Julie transfer the money back into the Redstone account, but then Yarwood took
the telephone out of her hands and talked to the Plaintiff for approximately half an hour. After
further discussions that day, it appears that the Plaintiff agreed to leave the money in the
Defendant’s Redstone account, stating to the Defendant via WhatsApp “we KNOW who it is that
tried to cause a ‘breach’ . . . Sorry for the confusion.”27 After the initial confusion with the account,
the Defendant testified that she told Yarwood that she did not want to keep the Plaintiff’s money
in her account anymore.
Thereafter, it appears that the Plaintiff and the Defendant continued to discuss travel plans
and the Plaintiff’s arrival in Cambodia while also discussing transferring the Plaintiff’s funds back
26 	See Plaintiff’s Exhibit 1, lines 663-671.
27 	See Plaintiff’s Exhibit 1, lines 690-693.
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to the Plaintiff. On December 4, 2023, the Defendant requested additional bank routing
information from the Defendant, stating “We are sending $96,000 to you.”28
On December 5, 2023, after the funds had not been received, the Plaintiff testified that she
contacted the Defendant and asked her to place a hold on the Redstone account and to keep the
hold a secret from both Julie and Yarwood. The same day the Plaintiff sent the Defendant an urgent
message stating that she had spoken with Redstone and had been told that the transfer of funds
from account to account was an instant transaction.29
The Defendant testified that she felt that it would be disrespectful to put a hold on the
account without telling Yarwood, but eventually agreed to go to the American Embassy in Phnom
Penh to request assistance after the Plaintiff told her additional money was missing. Unfortunately,
the Defendant testified that someone at the Embassy merely told her to talk to Yarwood about the
missing money. Yarwood then met the Defendant in Phnom Penh and gave her back her passport
but also convinced her to return to Siem Reap with him.
At some point on December 5, 2023, the Plaintiff was able to place a freeze on the
Defendant’s Redstone account, authorized by friend of the Defendant named Bethany whom the
Defendant had given financial power of attorney before leaving for India. There was $47,000.00
remaining when the Plaintiff froze the account.
On December 6, 2023, after the Defendant learned that the Plaintiff had frozen the
Redstone account without her permission, the Defendant unfroze the account by video conference
call and sent the Plaintiff a text stating that she was in complete control of her life in Cambodia
28 	See Plaintiff’s Exhibit 1, lines 792-796.
29 	See Plaintiff’s Exhibit 1, lines 827- 835.
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and that the American Embassy did not perceive any danger for her. She then reaffirmed once
again that she would have the $96,000 transferred to a Redstone account owned by a mutual friend
named Tijuana Russsel.30 This was apparently necessary or believed by the parties to be necessary
because the Plaintiff did not have an active account at Redstone.
The Defendant’s faith in Yarwood and belief that she had full control over her own life
quickly ended the following day after she spoke with her pastor from home at the Plaintiff’s
request. On December 7, 2023, Yarwood assured the Defendant that Julie had wired the funds to
the Plaintiff, but for the first time she noted that the document he showed her looked fake. At some
point that day, the Defendant’s pastor called her and asked Yarwood to leave the room so he could
speak with the Defendant privately. It was at this point that the Defendant’s pastor convinced her
that she had fallen victim to a common scam and told her to leave Cambodia and return home.
The Defendant testified that she was afraid that Yarwood would not let her leave, so she pretended
everything was okay and told him she was going to bed.
On December 8, 2023, the Defendant called another friend and asked her to purchase a
ticket for her to fly to Bangkok so she could seek help from the American Embassy. She left Siem
Reap, at first on foot early in the morning, and then caught a ride to the airport where she flew to
Bangkok. Once in Bangkok, her pastor was able to help arrange a flight home for her.
The Defendant did not have access to her cellphone while traveling home because the SIM
card she had obtained in Cambodia no longer worked. It appears that Yarwood still had access to
her Redstone account during this time and continued to syphon the Plaintiff’s money from the
30 	See Plaintiff’s Exhibit 1, lines 853-859.
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account but could only do so in limited daily increments. Once the Defendant arrived in Huntsville,
her pastor took her to Redstone where she closed her account.
At some point, the Defendant discovered that there was still $33,797.02 in a savings
account at Redstone. Although the Defendant had $39,000 in savings before she left for India, she
testified that she knew that any money in the account belonged to the Plaintiff. The Defendant
eventually returned all of the remaining funds in the account to the Plaintiff by writing a check out
of the account and giving it to their pastor to return to the Plaintiff, despite having no money left
herself.
CONCLUSIONS OF LAW AND FINDINGS
“A Chapter 7 debtor is generally entitled to a discharge of all debts that arose prior to the
filing of the bankruptcy petition. But this ‘fresh start’ policy is only available to the ‘honest but
unfortunate debtor.’”31 The statutory exceptions to discharge under § 523(a) of the Bankruptcy
Code reflect Congress’s decision “to exclude from the general policy of discharge certain
categories of debts,’ on the theory that some categories of debt [such as fraud] ‘outweigh[] the
debtors’ interest in a complete fresh start.”32 As a court of equity, this Court is mindful of the
fundamental objectives of the Bankruptcy Code and the delicate balance the statutory exceptions
to discharge are intended to achieve. The Court has carefully considered the evidence adduced at
trial and the credibility of the witnesses who testified at trial in making this decision while keeping
this intended balance in mind.
31 	Monson v. Galaz (In re Monson), 661 Fed. Appx. 675, 682 (11th Cir. 2016).
32 	Harris v. Jayo (In re Harris), 3 F.4th 1339, 1345 (11th Cir.. 2021)(quoting In re Bilzerian, 153 F.3d 1278,
1281 (11th Cir. 1998)).
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In her Amended Complaint, the Plaintiff argues that the Defendant made numerous false
representations of material fact regarding her employment with the U.N., having access to
classified national security information related to an impending nuclear attack, the necessity of
transferring the Plaintiff’s funds for safekeeping with assurances of security and control of the
Plaintiff’s funds, and that the Defendant knew these representations were false when made and
were made with intent to deceive the Plaintiff. The Plaintiff further argues that the Defendant
engaged in a course of conduct designed to create a false and misleading impression which
included fabricated narratives and ongoing deceptive communication and that the Defendant
engaged in a scheme to defraud the Plaintiff which resulted in the Plaintiff’s loss of $62,203.00.
The Plaintiff seeks an order excepting the debt from discharge pursuant to § 523(a)(2)(A) of the
Bankruptcy Code which states as follows:
(a) A discharge under section 727 . . . does not discharge an individual debtor from any
debt –
. . .
(2) for money, property, services, or an extension, renewal, or refinancing of credit,
to the extent obtained by –
(A) false pretenses, a false representation, or actual fraud, other than a statement
respecting the debtor’s or an insider’s financial condition[.]33
Courts generally interpret Ҥ 523(a)(2)(A) to require the traditional elements of common
law fraud.”34 Thus, to prevail on the question of dischargeability under § 523(a)(2)(A), a creditor
must show that “(1) the debtor made a false representation with the intention of deceiving the
creditor, (2) the creditor relied on the false representation, (3) the reliance was justified, and (4)
33 	11 U.S.C. § 523(a)(2)(A).
34 	In re Harris, 3 F.4th at 1345 (quoting In re Hudson, 107 F.3d 355, 356 (5th Cir. 1997)).
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the creditor sustained a loss as a result of the false representation.”35 Creditors must prove each
element under § 523(a)(2)(A) by a preponderance of the evidence.36 “Intertwined with this burden
is the basic principle of bankruptcy that exceptions to discharge must be strictly construed against
a creditor and liberally construed in favor of a debtor so that the debtor may be afforded a fresh
start.”37
In the case of Harris v. Jayo (In re Harris), 3 F.4th 1339 (11th Cir. 2021), the Eleventh
Circuit explained that “[t]he actual fraud prong ‘encompasses forms of fraud, like fraudulent
conveyance schemes, that can be effected without a false representation. . . . [A]nything that counts
as ‘fraud’ and is done with wrongful intent is ‘actual fraud.’”38 A false representation is not
required for a finding of actual fraud. The Eleventh Circuit further explained “that the false
pretense and false representation prongs of § 523(a)(2)(A) each requires an ‘intentional wrong’ -
the false pretense or false representation ‘must have been knowingly and fraudulently made.’”39
The Eleventh Circuit stated that “[s]uch construction ... is consonant with equity, and consistent
with the object and intention of Congress in enacting a general law by which the honest citizen
may be relieved from the burden of hopeless insolvency.”40
For purposes of § 523(a)(2)(A), the Eleventh Circuit has explained that the term ‘false
pretenses’ is expansive, stating:
35 	Taylor v. Wood (In re Wood), 245 Fed. Appx. 916, 917 (11th Cir. 2007)(citing In re Bilzerian, 153 F.3d
1278, 1281 (11th Cir. 1998)).
36 	Grogan v. Garner, 498 U.S. 279 (1991).
37 	In re Harris, 3 F.4th at 1345 (11th Cir. 2021)(quoting In re Bilzerian, 153 F.3d 1278, 1281 (11th Cir.
1998)).
38 	Id. (quoting Husky Int’l Elecs., Inc. v. Ritz, 578 U.S. 356, 136 S. Ct. 1581 (2016).
39 	Id. (quoting 4 Collier on Bankruptcy, ¶ 523.08[1][d](16th ed. 2018)).
40 	Id. (quoting Neal v. Clark, 95 U.S. 704, 709, 24 L.Ed. 586 (1877)).
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The concept of false pretenses is especially broad. It includes any intentional fraud
or deceit practiced by whatever method in whatever manner. False pretenses may
be implied from conduct or may consists of any acts, work, symbol, or token
calculated and intended to deceive . . . It is a series of events, activities, or
communications which, when considered collectively, create a false and misleading
set of circumstances, or a false and misleading understanding of a transaction, by
which a creditor is wrongfully induced by a debtor to transfer property or extend
credit to the debtor . . . . Silence or concealment as to a material fact can constitute
false pretenses.41
The Eleventh Circuit further explained that “false pretenses contemplates a misrepresentation that
is intentional or made with reckless indifference to the truth.”42
Negligence does not suffice under § 523(a)(2). In the Harris case, the Eleventh Circuit held
that a general default judgment entered against a Chapter 7 debtor in a state court action could not
be given collateral estoppel effect where the judgment creditor’s negligent misrepresentation claim
under state law did not require the debtor’s knowledge that the misrepresentation was false.43
Rather, in his negligent misrepresentation claim, the creditor alleged that the debtor “was negligent
in making [certain] representations because he knew or should have known [they] were false.”44
While the creditor’s claim satisfied the elements of negligent misrepresentation under state law,
“the complaint did not allege an intentional misrepresentation, as required by the Bankruptcy
Code.”45 The Eleventh Circuit held that a “negligent misrepresentation does not equate to false
pretenses, a false representation[,] or actual fraud for purposes of nondischargeability under [§]
41 	In re Wood, 245 Fed. Appx. 916, 918 (quoting In re Gilmore, 221 B.R. 864 (Bankr. N.D. Ala. 1998)).
42 	Id.
43 	In re Harris, 3 F.4th at 1350.
44 	Id.
45 	Id.
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523(a)(2)(A).”46 Rather, “[a] ‘false pretense’ is established or fostered willfully, knowingly, and
by design; it is not the result of inadvertence.”47
Given that § 523(a)(2)(A) generally “contemplates a debtor’s specific intent to mislead,
trick, or cheat” and that human nature makes it unlikely that a debtor will admit intent to deceive,
the bankruptcy court “is permitted to infer such fraudulent intent from the facts and circumstances
of the case.”48 To determine whether a debtor has the requisite fraudulent intent to deceive based
on the totality of the circumstances, the Court must make an assessment of the debtor’s
credibility.49 While the facts in this proceeding are largely undisputed, the parties diverge on the
issue of intent which is what this Court must now decide after having assessed the Defendant’s
credibility and demeanor at trial.
Here, the Plaintiff argues that she does not rely on single misrepresentation nor on the
Defendant’s mere carelessness. Rather, she argues that the cumulative force of the Defendant’s
own false statements, her assurances that the Plaintiff’s funds were safe, and her decisions after
the Plaintiff froze the Redstone account, satisfy the intentional misconduct requirement. It is
undisputed that the Defendant told the Plaintiff that she worked for the U.N. as Yarwood’s
assistant, that she warned the Plaintiff of a possible nuclear attack on Huntsville, and that she
represented that a U.N. plane would transport the Plaintiff, along with her daughter and four dogs,
to Cambodia. The Plaintiff argues that whatever Yarwood “may have falsely told [the Defendant]
46 	Id. (quoting Dare v. Jenkins (In re Jenkins), 607 B.R. 270, 286 (Bankr. N.D. Tex. 2019)).
47 	Robb v. Gividen (In re Gividen), 667 B.R. 171, 181 (Bankr. N.D. Ga. 2025)(Baiser, J.).
48 	In re Gividen, 667 B.R. at 181.
49 	Id. at 182.
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about the future, he could not make her believe that she had received pay she had not received, or
that she physically possessed [U.N.] credentials [that] she did not possess.”50
Unfortunately, it appears that the Defendant did in fact naively believe that she worked for
the U.N. as Yarwood’s assistant and all of the other stories fabricated by Yarwood. Indeed, it
appears that the Defendant was deceived by Yarwood about opening an “U.N. account” which
never existed and transferring all of the funds in her Redstone account into the account which
Yarwood controlled. More regrettably, she then encouraged her friend and her sister to do the
same.
Yarwood devised a scheme to gain control over the Plaintiff’s funds, and others, by
telling the Defendant that he had confidential information involving a planned nuclear attack on
Huntsville, Alabama which she should share with her friends so they could join the Defendant
and travel to safety in Cambodia. The Defendant shared this information not only with the
Plaintiff but also her sister, but there is no evidence that the Defendant shared the information
with intent to deceive either the Plaintiff nor her sister.
The Plaintiff further argues that the Defendant personally induced her to transfer money
into the Defendant’s Redstone account and personally assured the Plaintiff that she would create
a separate savings account to hold the Plaintiff’s funds until she arrived in Cambodia on the U.N.
plane. Then, after the Plaintiff requested that the funds be returned, the Plaintiff alleges that the
Defendant assured her that the funds were safe and were in the process of being transferred back
to the Plaintiff.
50 	Plaintiff’s Post-Trial Brief, ECF No. 49, p. 2-3.
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While the Defendant does not dispute that she offered to open an account for the Plaintiff’s
own use while she was in Cambodia, nor that she requested repeated wiring instructions to return
the funds, it appears that she actually relied upon Yarwood and his friend Julie, the “U.N. banker”
to both open an account for the Plaintiff and to wire the funds back to the Plaintiff. On December
4, 2023, the Defendant sent the Plaintiff a message on WhatsApp, stating “We are sending $96,000
to you.” She trusted Yarwood with the Plaintiff’s funds and trusted him to wire them back to the
Plaintiff just as she had trusted him with her own funds. During the trial, the Defendant testified
that Yarwood offered to have his friend, Julie the “U.N. banker” open a U.N. account for the
Defendant into which her U.N. paychecks would be deposited. She also allowed Yarwood and
Julie to transfer the funds from her Redstone account into the U.N. account because she had
encountered trouble using the Redstone account internationally. The Defendant further testified
that she never carried cash and that Yarwood began “paying” for everything when she had trouble
with her credit card, which Yarwood assured her was due to a prior transfer. The Defendant never
logged into her Redstone account because Yarwood had told her that it would create a problem if
the account was logged into from more than one location, presumably while the funds from the
Redstone account were being transferred to her “U.N. account.”51
While the Plaintiff argues that the Defendant made several statements asking her for
additional wiring instructions and that these statements constitute false explanations for why the
$96,000 had not been returned, there is simply no evidence that the Defendant knowingly and
fraudulently made the statements with intent to deceive the Plaintiff. The Defendant trusted
51 	See Plaintiff’s Exhibit 1, lines 792-796.
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Yarwood to transfer the Plaintiff’s funds back to her just as she trusted him with all of her own
money. So it appears that she requested additional wiring instructions every time the Plaintiff told
her the funds had still not been transferred, naively relying on Yarwood’s explanations for the
delays.
Finally, the Plaintiff argues that once the Defendant knew that the Plaintiff’s funds were
being withdrawn from her Redstone account, the Defendant’s continued assurances that the funds
were safe and being transferred back to the Plaintiff “became incompatible with an innocent-
conduit explanation.”52 After the Plaintiff expressly directed the Defendant to freeze the Redstone
account and to not involve Yarwood or Julie, the Defendant admits that she refused to freeze the
account without talking to Yarwood because she felt she was being disloyal to him. Then, when
the Plaintiff was able to freeze the account, the Defendant further admits that she unfroze the
account “because Yarwood told her that it was necessary to return the money” in a lump sum.53
The following day, December 7, 2023, the Defendant continued to assure the Plaintiff that the
funds were being transferred to her, stating “The banker has initiated the transfer.”54
The Plaintiff insists that the Defendant’s repeated statements of assurance that the funds
were safe and were being returned constitute evidence of the Defendant’s fraudulent state of mind.
However, the Defendant testified that it was not until December 7, 2023, when she first suspected
that something was wrong after Yarwood gave her a document purporting to show that the U.N.
banker, Julie, had wired the funds to the Plaintiff because the document looked fake. Later that
52 	See Plaintiff’s Post-Trial Brief, ECF No. 49, p. 3.
53 	Id.
54 	Id. at p. 4.
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day, the Defendant’s pastor called her and insisted on talking to her without Yarwood in the room.
It was at this point, after talking to her pastor, that she finally realized that she had fallen victim to
a scam and decided to return home at her pastor’s insistence without telling Yarwood her plan to
suddenly leave.
While the largely undisputed facts in this case are astounding and sad, the Court carefully
observed the demeanor of the Defendant during her testimony at the trial and found her testimony
to be credible. The Court finds that the Defendant in fact believed that she was working for the
U.N. as Yarwood’s assistant, that Huntsville, Alabama was the target of a potential nuclear attack,
and that Yarwood could arrange transportation for the Plaintiff on a U.N. plane that just happened
to be leaving Alabama for Cambodia. The Plaintiff argues that the Court need not decide the
precise moment at which the Defendant first understood the full scope of Yarwood’s fraud, but
instead whether the Defendant acted with intent to deceive which the Court simply does not find.
Intent to deceive can be inferred and determined based upon a number of facts and
circumstances in a case. In this case, the Plaintiff asks the Court to find that the Defendant
intended to deceive and to defraud the Plaintiff based upon many statements made by the
Defendant at various times regarding bank accounts, proposed transfer of funds and other issues
regarding which the Defendant testified that she told the Plaintiff based upon what Yarwood told
her. However, the Court finds that the many statements made by the Defendant to the Plaintiff
which the Plaintiff argues circumstantially evidence the Defendant’s intent are outweighed on the
scale of justice by certain undisputed actions taken by or that happened to the Defendant which
clearly show that she did not intend to deceive or to defraud the Plaintiff.
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The Defendant made statements to her sister which we now know were false, and her own
sister lost money and became a victim of the Yarwood scam. In addition, the Defendant herself
was a victim of Yarwood’s fraud. When the Defendant met Yarwood she had approximately
$39,000.00 in her Redstone account and unknowingly lost everything to Yarwood in a matter of
months. However, the most telling action taken by the Defendant when she returned home from
Cambodia penniless is that when she discovered that there was $33,797.02 in a Redstone account
with her name on it, she insisted that the money was not hers and gave the money to the Plaintiff.
A person intent on deceiving another to her benefit would not have taken such action. The
Defendant testified that she knew that the money was not hers and did not belong to her even
though she could have argued that she was entitled to these funds because of the $39,000.00 that
she lost in the scam by Yarwood. If the Defendant had ever intended to deceive the Plaintiff, and
personally benefit from deceiving the Plaintiff, she would not have given the newly discovered
funds to the Plaintiff once she returned from Cambodia.
Based upon the totality of the circumstances and the testimony and evidence presented at
trial, the Court concludes that the Plaintiff failed to establish by a preponderance of the evidence
that the Defendant engaged in any intentional wrongdoing in this case for purpose of
§ 523(a)(2)(A), nor engaged in false pretenses or false representations with reckless indifference
to the truth. The Court does not find that the Defendant intentionally engaged in a scheme to
defraud the Plaintiff. While the Defendant was clearly gullible and with hindsight should have
known that Yarwood’s tales were fabricated, the Court does not find that the Defendant committed
actual fraud nor knowingly made misrepresentations with intent to deceive the Plaintiff, nor with
reckless indifference to the truth. The Defendant was herself the victim of a fraudulent scheme
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perpetrated by Yarwood, just as Defendant’s sister and the Plaintiff were victims of the
international con man.
CONCLUSION
After carefully weighing all of the evidence and testimony adduced at trial, the Court finds
that the Plaintiff failed to establish by a preponderance of the evidence that the Defendant used
false pretenses or made a false representation with deceptive intent, nor committed actual fraud
done with wrongful intent for purposes of § 523(a)(2)(A). Accordingly, the debt owed by the
Defendant to the Plaintiff in the amount of $62,203.00 is discharged.
A separate judgment will be entered consistent with this Memorandum Opinion.
IT IS SO ORDERED.
Dated this the 24th day of September, 2026.
/s/ Clifton R. Jessup, Jr.
Clifton R. Jessup, Jr.
United States Bankruptcy Judge
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