IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

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No. 94-30083

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UNITED STATES OF AMERICA, Plaintiff-Appellee,

versus

THOMAS S. WALDRON, Defendant-Appellant.

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Appeal from the United States District Court for the

Middle District of Louisiana

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(March 18, 1995)

Before REAVLEY, DUHÉ and PARKER, Circuit Judges.

ROBERT M. PARKER, Circuit Judge:

Thomas S. Waldron ("Waldron") appeals his conviction and

sentence on six counts of making a false statement on loan

documents to a bank in violation of 18 U.S.C. § 1014. We affirm.

FACTS AND PROCEDURAL HISTORY

In 1981, Waldron, a real estate developer in Florida,

purchased property near West Palm Beach for $1,850,000.00 through

his corporation Marpalm Ranch and Farm, Inc. ("Marpalm"). When

Waldron began experiencing financial problems, he asked two

business associates, Larry Reger ("Reger") and Harry Williams

("Williams"), if they wanted to buy into the venture and assume the

mortgage payments on the property. 

On March 9, 1982, Waldron signed a Contract for Sale and

Purchase, which was an agreement between Richard Harris ("Harris"),
 

1 Those issues were as follows: (1) a claim asserted by

South Florida Water Management District; (2) a claim from the

Florida Department of Environmental Regulation; (3) a claim from

the United States Department of the Army; and (4) matters set

forth in a final order issued by the Assistant Secretary of the

State of Florida Department of Environmental Regulation.

 

2 In a separate proceeding, Shelton pleaded guilty to

charges arising out of that conduct. Waldron was charged as an

2

Reger and Williams's attorney acting as trustee, and Marpalm to

sell the property. The contract contained an arrangement for a

closing in escrow. On that same day, Waldron also executed a

warranty deed to the trustee and a warranty deed with the grantee

left blank. The contract gave the purchaser sole discretion to

decide which of the two warranty deeds would be recorded. The

contract also disclosed four pending disputes over environmental

issues affecting the property.1

At closing, Waldron's documents were delivered to Harris's law

firm, as escrow agent, to remain in escrow until April 1, 1992.

Waldron received nearly $132,000.00 to compensate Marpalm for

interest it had paid on the note. Sometime after the closing in

1982, Harris prepared an unsigned Land Trust Agreement, which was

referred to in the warranty deed to the trustee. 

In 1985, Waldron was introduced to Wendell Shelton

("Shelton"), the Chairman of the Board of Sun Belt Federal Bank

("Sun Belt"), a federally insured savings bank. Originally,

Shelton proposed a $3,000,000.00 loan to Waldron based upon a

mortgage of the Marpalm property. Shelton falsified Board minutes

to obtain a commitment letter without the approval of the Board of

Directors.2 However, the loan negotiations broke down at closing
accomplice, but was acquitted.

 

3 Each loan agreement contained representations that:

No litigation or governmental proceeding is pending or

threatened against or affecting Borrower or the Land

which may result in any material adverse change in

Borrower's business, operations or the title to the

Land or prevent or alter the use of the Land for any

purposes; (and)

The Land is not subject to any lien, security interest

or other encumbrance except the first mortgage on

Parcel A described in the mortgage title binder.

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because the structure of the loan violated usury laws. Shelton and

Waldron then agreed that Sun Belt would make three separate

$1,000,000.00 loans to three corporations created by Waldron.

Waldron installed three nominees in the three newly formed

corporations to sign the applicable Sun Belt loan documents.

Neither the nominees nor Sun Belt was told of the existence of the

1982 Contract for Sale and Purchase, the two warranty deeds, or the

pending environmental proceedings.

On three successive Fridays in May 1985, each nominee signed

a loan agreement and two affidavits.3 When Harris found out about

the Sun Belt loans involving the Marpalm property, he notified

Clarence Rautenstrauch ("Rautenstrauch"), a representative employee

of Reger. Rautenstrauch instructed Harris to record the deed. 

On June 27, 1985, Harris sent a letter to Waldron informing

Waldron of his clients' concern over the Sun Belt loans. Then on

July 1, 1985, Harris notified Sun Belt by letter of his clients'

intentions to record their 1982 warranty deed. On July 10, 1985,

Harris filed the warranty deed to the trustee. Based upon Harris's
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actions in filing the deed, Sun Belt stopped funding the loans.

Waldron was indicted by a grand jury on February 4, 1993. The

indictment charged one count of bank fraud and aiding and abetting,

one count of aiding and abetting false entry into bank records, and

eight counts of false statements and aiding and abetting. At the

conclusion of a jury trial in October 1993, Waldron was acquitted

on bank fraud, false entry, and two counts of making false

statements. He was convicted on the remaining six counts of making

false statements. The district court denied a post-trial motion

for judgment of acquittal and a new trial on February 2, 1994. On

that same date, Waldron was sentenced to two consecutive 18-month

terms of imprisonment on two counts, fined $2,000,000.00, and

placed on five years probation following his release. His sentence

was suspended on the remaining counts.

ANALYSIS

Disclosure of a Valid Claim or Interest

Waldron contends that his statements on the Sun Belt loan

documents were true because under Florida law, neither Harris nor

his clients had any valid claims or interests, recorded or

unrecorded, in the Marpalm property. He argues that the language

of the unsigned Land Trust Agreement left no doubt that the

conveyance of the property was tied to execution of that agreement.

Therefore, the 1982 Contract for Sale and Purchase and the two

warranty deeds, in absence of the execution of the Land Trust

Agreement, did not constitute a claim, encumbrance, or adverse
 

4 Waldron's argument that a literally true answer is not a

criminally false statement relies heavily on United States v.

Chapman, 7 F.3d 66 (5th Cir. 1993), cert. denied, ___U.S.___, 114

S.Ct. 2713, 129 L.Ed.2d 839 (1994). In Chapman, the defendant

appealed a conviction of making false statements in connection

with the acquisition of firearms. While he was appealing another

criminal conviction, the defendant purchased a pistol, answering

that he was not a "convicted felon" on the ATF forms. This Court

reversed in part on the ground that under Texas law, the

defendant was not a "convicted felon" during the pendency of his

appeal. The Court concluded, therefore, that the defendant's

statement was actually true. We find, however, that Chapman does

not control in this case because the existence of the 1982

contract and two warranty deeds had an effect on the Sun Belt

loans.

 

5 To sustain a conviction under 18 U.S.C. § 1014, the

Government must prove that defendant knowingly and willfully made

a false statement to a financial institution for the purpose of

influencing the financial institution's action. See United States

v. Bowman, 783 F.2d 1192, 1197-98 (5th Cir. 1986). 

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interest.4

We will reverse the district court's denial of a motion for

judgment of acquittal only if no rational finder of fact could have

found sufficient evidence, whether direct or circumstantial, to

support a conviction, with all reasonable inferences drawn in the

light most favorable to the verdict. United States v. Faulkner, 17

F.3d 745, 768 (5th Cir.), ___U.S.___, 115 S.Ct. 193, 130 L.Ed.2d

125 (1994).5

Even assuming the 1982 Contract for Sale and Purchase and two

warranty deeds were contingent upon the unexecuted Land Trust

Agreement, we find that their existence was material to whether Sun

Belt would risk extending the three $1,000,000.00 loans. The 1982

Contract for Sale and Purchase specifically states that conveyance

of title shall be by "recordable Warranty Deed" and that

"[p]ossession of the premises shall be delivered on April 1, 1982."
 

6 Waldron did disclose the environmental litigation to

Harris and his clients in the 1982 Contract for Sale and

Purchase.

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It also states that at closing in escrow, "seller shall execute any

and all...documents reasonably required to be executed in

connection with the transfer of title to the property." The

contract makes no mention of the Land Trust Agreement, which was

never executed, but specifically gives the purchaser the discretion

of filing either warranty deed. Once Harris became aware of the

Sun Belt loans and notified his clients, he was instructed to and

filed the warranty deed to the trustee. Therefore, the jury could

reasonably find the contract and warranty deeds constituted a

claim, encumbrance, or adverse interest in the Marpalm property

that Waldron was required to reveal to Sun Belt.

Disclosure of Environmental Proceedings

Waldron contends that no reasonable jury could conclude that

he knowingly made a false statement with regard to the ongoing

environmental proceedings because the Government failed to present

any evidence that Waldron knew that the loan statements prepared by

his attorney, George Bailey, would omit the information.6

Our review of the record reveals that Waldron was present at

the Sun Belt loan proceedings, giving him the opportunity to read

the loan applications and discover the omitted information. In

addition, in reviewing the loan documents, Waldron would have read

the representation, which was in all three loan agreements, that

"no litigation or governmental proceeding [was] pending."

Therefore, we find a reasonable jury could have inferred that he
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had knowledge that the ongoing environmental proceedings were

omitted from the loan documents and failed to disclose that

omission to Sun Belt.

Opinion Testimony and Exclusion of Documentary Evidence

Waldron contends that the district court erroneously allowed

Harris to testify as to his legal opinion on the ultimate fact in

this case (whether, in light of the contract and deeds, Waldron's

answers were false), and that the court did not cure the error by

instruction because the judge failed to tell the jury to disregard

Harris's testimony. Waldron also argues that the court abused its

discretion when it admitted an unsigned, undated copy of the Land

Trust Agreement that was central to his defense and then eliminated

it the very next day.

Our review of the record reveals that Harris did not testify

as to the ultimate issue of whether Waldron knowingly made false

statements. Even if his testimony was erroneously admitted, the

district judge cured the error by instructing the jury that Harris

was not the judge of the law; the judge was. As for the court's

admittance and subsequent exclusion of the unexecuted Land Trust

Agreement, again, we find no abuse of discretion in light of the

court's explanation and instruction given to the jury for his

decision to exclude the evidence at a later time.

Our review of Waldron's remaining issues on appeal reveals no

reversible error on the part of the district court. Therefore, we

find that Waldron's remaining claims have no merit.

CONCLUSION
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For the reasons articulated above, Waldron's conviction and

sentence are AFFIRMED.