UNITED STATES CO URT OF APPEALS FOR THE TENTH CIRCUIT

__________________ _______________ UNITED STATES OF AMERICA, Pl aintiff - Appellee,

v. ROY LYNN WESBERRY, De fendant - Appellant. No. 15-7051 (D.C. No. 6:14- CR-00019-RAW-1) (E.D. Okla.)

__________________ _______________ ORDER AND JUDGMENT *

__________________ _______________ Before BRISCOE , BACHARACH , and McHUGH , Circuit Judges.

__________________ _______________ Mr. Roy Lynn Wesberry appeals hi s conviction for bank fraud and conspiracy to commit ba nk fraud, arguing that th e trial evidence was insufficient for a finding of guilt, that the district court should have given his proposed instruction on “advice of counsel,” and that the district court erred in calculating th e guideline sentencing range. We affirm the

* The Court concludes that oral argument would not materially aid our consideration of the appeal. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). Thus, we have decided the appeal based on the briefs. Our order and judgment does not constitute bind ing precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. It may be cited, however , for its persuasive valu e under Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. FILED United States Court of Appeals Tenth Circuit 

### July 12, 2016 Elisabeth A. Shumaker Clerk of Court2 conviction, but we direct the district court to vacate the sentence and resentence Mr. Wesberry. I. Mr. Wesberry committed bank fr aud through a nominee loan scheme. The charges grew out of an alleged scheme involving nominee loans to defraud the First Natio nal Bank of Davis. First National was a smalltown bank in Davis, Okla homa that provided banking services to farmers, business owners, and consumers in the Davis area. First National was insured by the Federal Deposit Insurance Corporation and regulated by the Office of the Comptroller of the Currency (OCC). First National closed on March 11, 2011. By that time, the bank had failed from substantial unp aid loans to Mr. Wesbe rry, his wife, and their affiliated companies. A lthough OCC regulations im posed a legal lending limit of $1.2 million to any one customer, Mr. Wesberry, his wife, and their companies owed Firs t National an estimated $9.6 million. This sum, which dwarfed the ba nk’s loan reserves of sl ightly less th an $1 million, caused First National to fail. The government charged that Mr. Wesb erry and First National’s President and Chief Execut ive Officer, W.A. “Dub ” Moore, attempted to hide Mr. Wesberry’s debts from Firs t National and federal regulators by arranging loans to Mr. We sberry in others’ names. The funds from those loans were used to clear Mr. Wesberry’s unpaid loans from First National’s3 records: the individual s and companies who took out the nominee loans were shown in the loan documents as responsible for th e loans, but the proceeds of the loans were credite d to Mr. Wesberry’s account. The nominee loans were made shortly afte r the OCC’s arrival to inspect the bank. Mr. Wesberry was convicted on four counts of bank fraud and aiding and abetting (in violatio n of 18 U.S.C. §§ 1344 an d 2) and one count of conspiracy to commit ba nk fraud (in violation of 18 U.S.C. § 1349). Mr. Moore pleaded guilty to bank fraud an d testified against Mr. Wesberry. At sentencing, the district court found th at (1) the losses ca used by the fraud exceeded $2.5 million, requiring an 18-level offense enhancement, and (2) the offense “substantial ly jeopardized the safe ty and soundness of a financial institution,” triggering a 4-level offense enhancement. See U.S.S.G. § 2B 1.1(b)(1)(J), (b)(16)(B)(i) (2014). The district court sentenced Mr. Wesberry to concurrent terms of 87 months in prison, which was at the bottom of the guideline range. II. The evidence was suffici ent to support Mr. We sberry’s conviction on each count. Mr. Wesberry argues that the gove rnment presente d insufficient evidence of bank fraud and conspiracy to commit bank fr aud. “We review the denial of a motion fo r judgment of acquittal, and hence the sufficiency of the evidence to support the jury verdict, de novo.” United States v.4 Vernon , 814 F.3d 1091, 1098-99 (10th Ci r.) (internal quotation marks omitted), petition for cert. filed , (U.S. May 9, 2016) (No. 15-1368). In engaging in de novo review , we consider th e evidence in the light most favorable to th e government. Id. at 1099. Because a rati onal trier of fact could have found Mr. Wesberry guilty beyond a reas onable doubt, his challenge fails. To obtain a convicti on for defrauding a financial institution under § 1344(1), the government had to prove three elements: 1. The defendant knowi ngly executed or atte mpted to execute a scheme or artifice to defraud a financial institution. 2. The defendant had th e intent to defraud a financial in stitution. 3. The bank involved wa s federally insured. United States v. Bowling , 619 F.3d 1175, 1181 (10th Cir. 2010). To prove a conspiracy under § 1349, the government ha d to show that 1. two or more persons agreed to violate the law, 2. the defendant knew the essential objectives of the conspiracy, 3. the defendant knowingly and voluntarily participated in the conspiracy, and 4. the alleged coconspirators were interdependent. United States v. Fishman , 645 F.3d 1175, 1186 (10th Cir. 2011). Mr. Wesberry makes f our arguments to support his challe nge to the jury verdict: 1. Nominee loans are no t per se illegal.5 2. He participated in the loans at Firs t National’s request. 3. He was “fully transparent” in seeking the loan proceeds. 4. He did not participate in the nominee loan underlying Court 4. These arguments lack merit. First, although nominee loans are not inherently il legal, they can constitute a crime when “used to deceive a financ ial institution about the true identity of a borrower.” United States v. Waldroop , 431 F.3d 736, 741 (10th Cir. 2005). When t hose loans are knowingly used to flout regulations designed to protect a bank’s financial in tegrity, a jury can find an intent to defraud the bank. United States v. Weidner , 437 F.3d 1023, 1034 (10th Cir. 2006). There was ample evidence of Mr. Wesberry’s agreement to take funds from nominee loans to con ceal his remaining debts from OCC regulators and First National. Second, Mr. Moore’s alleged appr oval of the nomi nee loans would not excuse Mr. Wesb erry’s guilt. “It is the fina ncial institution itself—not its officers or agents—tha t is the victim of the fr aud . . . § 1344 proscribes. It follows that bank customers who co llude with bank officers to defraud banks may also be held criminally acc ountable either as principals or as aiders and abettors.” Waldroop , 431 F.3d at 742 (bra ckets, ellipsis, and internal quotation marks omitted). Third, the jury could reasonably conclude that Mr. Wesberry and Mr. Moore had not acted with transparen cy. Mr. Moore admitted that he and6 Mr. Wesberry had conspired to pay off Mr. Moore’s account overdraft 1 and “get[] his loans current fo r the regulators.” Appell ant’s App’x Vol. 2, at 363. And Mr. Moore did no t inform First National ’s Board of Directors that the money from the nominee loans was going to Mr. Wesberry; if Mr. Moore had made this disclosure, the Board would not have approved the loans. Id. at 382-83. Mr. Wesberry adds that there wa s no real deception because the OCC ultimately figured out that he was the real benefi ciary of the loans. He points to Mr. Moore’s te stimony that the proceeds of the loans could be traced from the loan file. Id. at 370-71. But Mr. Moore also testified that the loans were made to trick OCC examiners in to thinking that Mr. Wesberry’s account was not overdrawn and that his lo ans were cu rrent. The OCC discovered the loans only af ter it obtained an overdraft report reflecting the overnight disappearance of some of the overdrafts on Mr. Wesberry’s accounts. The test for bank fr aud is not whether OCC bank examiners were ultimately decei ved by the fraudulent scheme , but whether Mr. Wesberry executed or attempted to execute a scheme to conc eal his debt through the use of nominee loans. See United States v. Doke , 171 F.3d 240 , 245 (5th Cir. 1999) (holding that th e fact that a bank officer could have discovered

1 Mr. Moore allowed Mr. Wesberry to overdraft his First National checking account by $1.6 million.7 the principal’s involvement in a nomine e loan did not requ ire a reasonable jury to conclude that the principa l and nominee had not attempted to conceal that involvem ent). The evidence was suffic ient to satisfy that test. Finally, Mr. Wesberry argues that there was insufficient evidence to hold him responsi ble for the nomin ee loan underlying Count 4. That nominee loan was ma de to Mr. John Cundiff. Mr . Cundiff testified that he had not met Mr. Wesberry until after obtaining the loan. Mr. Wesberry testified that he did not know Mr. Cund iff and did not dir ect him to obtain a loan from First National. The nominee loan to Mr. Cundiff formed part of the scheme or artifice designed to defraud First Nati onal. Mr. Cundiff learned of the possibility of a lo an through his contact with an individual, Chris Johnson, whom Mr. Wesberry had recruited. Mr. Moore testified that Mr. Cundiff said he had come for a loan at Mr. Wesberry’s request. 2 Most of the funds from Mr. Cundiff’s loan we re credited to the acc ount of a company owned by Mr. Wesberry. Thus, th e jury could reasonably infer Mr. Wesberry’s

2 Mr. Moore’s testimony on this point was equivocal. Mr. Moore initially testified that he had “guess[ed]” that Mr. Wesberry sent Mr. Cundiff to him. Appellant’s App’x Vo l. 1, at 299-300. Later, Mr. Moore stated that Mr. Cundiff had “said he was coming in in response to Mr. Wesberry’s request.” Id. Vol. 2, at 369. But i mmediately thereafter Mr. Moore admitted that he could not reca ll specifically what Mr. Cundiff had said. Id.8 participation in the nomi nee loan to Mr. Cundiff. In these circumstances, we conclude that the evidence was suffi cient for the convic tion on Count 4. III. The district court did not err in refusing to give an advice-ofcounsel jury instruction. Mr. Wesberry requested the following advice-o f-counsel instruction: One element that the government mu st prove beyond a reasonable doubt is th at the defendant had the unlawful intent to Commit Bank Fraud and/or Conspire to Commit Bank Fraud. Evidence that the defendant in good faith foll owed the advice of counsel would be in consistent with such an unlawful intent. Unlawful intent has no t been proved if th e defendant, before acting, made full disclosure of a ll material facts to an attorney, received the attorney’s advice as to the specific course of conduct that was followed, and re asonably relied on that advice in good faith. Appellant’s App’x Vol. 3, at 900. According to Mr. Wesberry, this instruction should have been given. We reject this challenge. “A defendant is entitle d to an instruction as to any recognized defense for which there exists evidence sufficient for a reas onable jury to find in [his] favor.” United States v. Rampton , 762 F.3d 1152, 1156 (10th Cir. 2014) (internal quota tion marks omitted). Ordi narily, we review for abuse of discretion a district cour t’s refusal to give a requested theory-of-defense instruction. Id. But when the district court concludes that there was insufficient evidence to justify the instructio n, our review is de novo. Id. “In the Tenth Circuit, to establish a good fa ith reliance on counsel defense, the defendant must show (1) a requ est for advice of counsel on the9 legality of a proposed action, (2) full disclo sure of the relevant facts to counsel, (3) receipt of ad vice from counsel that th e action to be taken will be legal, and (4) reliance in good faith on counsel’s advice.” United States v. Wenger , 427 F.3d 840, 853 ( 10th Cir. 2005) (internal quotation marks omitted). The district court declined to give Mr. Wesberry’s proposed instruction because it regarded the ev idence insufficient on the third element (advice from his counsel that use of the nominee loans would be legal). Mr. Wesberry argues that he presented sufficient evidence concerning his counsel’s advice. The at torney involved di d not testify, but Mr. Wesberry points to pa rts of his own testimony: Q. Did you think there was anything wrong [with] this [nominee] loan? A. No. Q. Did you consu lt anybody about it? A. . . . [W]hen [Mr. Moore] firs t asked me about the [nominee] loans and I’d went and talked to [accountant] Robert Clark about it, and then we called an attorney from his office and put him on a speaker phone. Q. And who was the attorney? A. Steve Tolson. Q. And what did you te ll Mr. Tolson that you were going to do . . . [?] A. I told Mr. Tolson my banker wanted me to bring in some friends and do some [nominee] loans, and I just wanted to make sure that everybody was covered in this deal and10 . . . I didn’t know if it woul d be right or wrong. I was trying to get out of them. Appellant’s App’x Vol. 3, at 635. Q. Now, you indicated . . . earl ier, that when [Mr. Moore] made this proposal, you went back and you talked to your attorney; is that right? A. Yes, sir. Q. And when you talked to your attorney, di d you reveal everything that you’ve told . . . the jury a bout what he said on this? A. . . . I told him everythi ng I knew at that point. Q. Okay. And what advice did your attorney give you? MR. WRIGHT [Government’ s Counsel]: Objection. Hearsay. THE COURT: Exception? MR. GOTCHER [Mr. Wesberry ’s Counsel]: I don’t know if there is one on th is, Your Honor, so I’ll go to the next question. THE COURT: I’ll su stain the objection. Q. (BY MR. GOTCHER) Based on his advice, did you then go and do the nominee loans? A. Yes, sir. Q. And you relied upon hi s advice to do that? A. Yes, sir. Id. at 652-53. Q. Did you think there was anything wrong with these nominee loans? A. No, sir. Id. at 661.11 Mr. Wesberry’s testimony was insu fficient to demonstrate that his attorney actually advised him the use of the nominee loan s was legal. At most, it showed that Mr. Wesberry had relied on advice from his counsel in agreeing to the loans. The prob lem for Mr. Wesberry is that he never said what his attorney had advised. Unde r these circumstance s, the district court did not err in refusing to gi ve an advice-of-counsel instruction. 3
IV. We remand to the distri ct court for resentencing. In calculating Mr. Wesberry’s guide line range, the district court enhanced the offense level by four levels for “jeopa rdiz[ing] the safety and soundness of a financial in stitution.” U.S.S. G. § 2B1.1(b)( 16)(B)(i) (2014). Mr. Wesberry challenges this ruling on the ground that “the bank was doomed from the overdraf t and [other, non-nominee loans] that [Mr.] Moore [had] approved.” Appellant’s Op ening Br. at 26. According to Mr. Wesberry, “the nominee loan s . . . did not affect th e viability of the bank”

3 Had the advice-of-counsel instruction been given, the government would likely have sought to call Mr. Tolson to expl ore the actual advice he gave Mr. Wesberry. Mr. Wesberry suggests that the district court refused the instruction because the court was uncomfortable with an email from Mr. Tolson that might ha ve been presented if he had been called as a rebuttal witness. In the email, Mr. Tolson stated that he had formerly worked in the same law firm with the district judge and that he was going to refer the Wesbe rrys to that firm. But in a colloquy with the court, Mr. Wesberry’s attorney ag reed that the portions of the email referring to the district court judge could be reda cted. Appellant’s App’x Vol. 2, at 558. We fail to discern any reversible error here, particularly because our de novo review convinces us that the district court properly refused the instruction based on insufficient evidence.12 because they “did not worsen the bank’s position.” Id. at 27-28. We agree and remand for resentencing on this basis. In addressing Mr. Wesberry’s argument, we en gage in de novo review of the district court’s legal conclusions and clear -error review of the findings. United States v. Evans , 782 F.3d 1115, 1117 (10th Cir.) (internal quotation marks omitted), cert. denied , __ U.S. __, 136 S. Ct. 171 (2015). “We review de novo the application of a Guidelines enhancement to the extent the defendant asks us to interpret the Guidelin es or hold that the facts found by the dist rict court are insufficien t as a matter of law to warrant an enhancement.” United States v. Craig , 808 F.3d 1249, 1259 (10th Cir. 2015) (internal quotation marks omitted). Section 2B1.1(b)(16)(B )(i) provides a four-l evel increase if “the offense . . . substantia lly jeopardized the safe ty and soundness of a financial institution. . . .” The commentary to § 2B1.1 provides a nonexhaustive list of factors for the cour t to consider in determining whether the safety and soundness of a financial institution was substantially jeopardized, including whether the financial in stitution had become insolvent. U.S.S.G. § 2B1.1, cmt. n. 13(A)(i) (2014). An OCC examiner testif ied that earlier loans to Mr. Wesberry and his companies—loans that were not nomine e loans and were not charged in the indictment—caused First Na tional to fail. Appellan t’s App’x Vol. 1, at 225-26. The OCC examiner also testified that use of the nominee loans did13 not affect the viability of First National becaus e the bank would have failed from the prior loans to Mr. Wesberry and his companies: Q. . . . Those four [nominee] loans did not affect the viability, or the continuing existence of the bank in and of themselves, did [they]? A. Those four loans, in and of [themselves] did not better the bank’s position, no, [they] did not. Q. Or worsen it? A. [They] did not make it worse, either, no, [they] did not. Q. Okay. Basically it was a su m zero type deal. . . . [Mr.] Moore was doing the loans, bu t it didn’t really matter, did it? A. The amount that was outgoi ng as far as combining for legal lending limit purposes was still the same, and he – and I think that was his goal . And, no, he did not alter that at all. Id. at 227-28. The sentencing enhancement under § 2B1.1(b)(16)(B)(i) is appropriate in circ umstances where “ as a result of the offense, the safety and soundness of a financ ial institution was subs tantially jeopardized.” U.S.S.G. § 2B1.1, cmt. n. 13(A) (e mphasis added). The offense charged here involved the use of nominee lo ans to defraud First National. The government has not shown that th ese nominee loans substantially jeopardized the safety and soundness of First National, which failed from the excessive loans it made to Mr. Wesberry rather than the scheme to conceal these loans.14 Nor does the releva nt conduct cited by th e government, which involves other nominee loan s not charged in the indictment, change this analysis. The government fails to show that the nominee loans, rath er than prior loans to Mr. Wesberry and his co mpanies, jeopardized the safety and soundness of First National. Accordin gly, the sentencing enhancement was not supported by the evidence. V. Disposition We affirm Mr. Wesberry ’s conviction, direct the district court to vacate the sentence, and remand to the district court for resentencing.

Entered for the Court

Robert E. Bacharach Circuit Judge