United States Court of Appeals,

Eleventh Circuit.

No. 95-3335.

UNITED STATES of America, Plaintiff-Appellee,

v.

Steven Dennis GOLDSMITH, Defendant-Appellant.

April 8, 1997.

Appeal from the United States District Court for the Northern

District of Florida. (No. 95-03025-RV), Roger Vinson, District

Judge. 

Before EDMONDSON and BLACK, Circuit Judges, and RONEY, Senior

Circuit Judge.

PER CURIAM:

On this appeal, the defendant argues that his conduct—proven

by the Government and to which he admits—did not violate the

federal bank fraud criminal statute. We hold that it did, and

therefore affirm the judgment of conviction based on a jury

verdict.

Defendant Steven Dennis Goldsmith was convicted by a jury on

all counts of a 23-count indictment charging him with a violation

of 18 U.S.C. § 1344, which makes it a crime to knowingly execute a

scheme to defraud a financial institution or to obtain money from

a financial institution by means of false or fraudulent pretenses

or representations. The "scheme" in this case involved 23 vehicles

that Goldsmith purchased with bank financing and then sold without

remitting the proceeds to the bank. Defendant admits that he was

wrong in commingling these funds but has consistently denied any

intent to defraud the bank, arguing that his conduct was at worst

a breach of contract, a business transaction gone bad. Thus, the
 1

The version of 18 U.S.C. § 1344 in effect when the

defendant was indicted states in pertinent part:

(a) Whoever knowingly executes, or attempts to execute,

a scheme or artifice—

(1) to defraud a financial institution; or

(2) to obtain any of the moneys, funds, credits,

assets, securities, or other property owned by, or

under the custody or control of, a financial

institution, by means of false or fraudulent

pretenses, representations, or promises shall be

fined not more than $10,000 or imprisoned not more

than five years, or both. 

facts, uncontroverted on this appeal, must be examined in light of

the meaning of bank fraud under section 1344.

 The bank fraud statute has two parts. 1

 Section 1344(a)(1)

requires the Government to prove that the defendant (1)

intentionally participated in a scheme or artifice to defraud

another of money or property; and (2) that the victim of the

scheme or artifice was an insured financial institution. United

States v. Stavroulakis, 952 F.2d 686, 694 (2d Cir.1992). Section

1344(a)(2) requires the Government to establish three elements:

(1) that a scheme existed in order to obtain moneys, funds or

credit in the custody of the federally insured financial

institution; (2) that the defendant participated in the scheme by

means of false pretenses, representations or promises, which were

material; and (3) that the defendant acted knowingly. United

States v. Falcone, 934 F.2d 1528, 1539-40 (11th Cir.1991), modified

in part, 960 F.2d 988 (11th Cir.), cert. denied, 506 U.S. 902, 113

S.Ct. 292, 121 L.Ed.2d 216 (1992); United States v. Swearingen,

858 F.2d 1555, 1556 (11th Cir.1988), cert. denied, 489 U.S. 1083,

109 S.Ct. 1540, 103 L.Ed.2d 844 (1989).
 To satisfy either of these two subsections, the Government

must prove specific intent to defraud. See United States v.

Medeles, 916 F.2d 195, 198 (5th Cir.1990). Under subsection

(a)(1), however, the Government is not required to establish

misrepresentation on the part of the defendant. Medeles, 916 F.2d

at 198.

 The indictment charged Goldsmith under both provisions of

section 1334(a), so we must determine if his conduct amounts to a

violation under either subsection. United States v. Briggs, 939

F.2d 222, 225 (5th Cir.1991), cert. denied, 506 U.S. 1067, 113

S.Ct. 1016, 122 L.Ed.2d 163 (1993). If evidence presented at trial

is sufficient to prove either theory of bank fraud, the case may be

submitted to the jury. Where the indictment and instructions to

the jury charge both clauses of the statute, as was done in this

case, the defendant's conviction may be sustained under either

clause. Briggs, 939 F.2d at 225.

 The evidence supports the Government's argument that

defendant violated the first section of the bank fraud statute with

the scheme to defraud the bank and to obtain money that rightfully

belonged to the bank for his own account.

For the basic facts, we can look at the indictment. The

defendant essentially concedes on this appeal that the Government

proved the basic facts alleged in the indictment, but argues that

those facts do not prove a violation of either subsection of

1344(a). Paraphrasing the indictment, it alleges as follows:

1. Goldsmith was president of both Sunbelt Assurance Corporation

(SAC), which provided purchaser's automobile financing, and

The Auto Bank, which sold automobiles repossessed by SAC.
2. Goldsmith, doing business as SAC, obtained a line-of-credit from

Citizens and Builders (C & B), a federally insured financial

institution, to fund automobile loans. Citizens and Southern

Trust Company served as escrow agent on behalf of C & B and

SAC for the disbursement of funds against the line of credit

and for the deposit of money collected on the automobile

loans.

3. After the loan was established, SAC would be listed as the

lienholder, would maintain insurance on the collateral, and

would service the loans by collecting the monthly loan

payments and depositing them in the Citizens and Southern

escrow account. SAC would then cause the escrow funds to be

paid to C & B to apply to the line-of-credit. SAC was paid a

fee for servicing the loans.

4. SAC was responsible for reporting to C & B the status of the

individual automobile loans through a "Portfolio Remittance

Report."

The indictment then alleged that Goldsmith executed the

following scheme to defraud the C & B:

5. Goldsmith, through SAC, repossessed 23 automobiles on defaulted

loans, sold the automobiles through the Auto Bank, and

converted the proceeds to his own use without informing C & B

of the defaults or forwarding the proceeds to the bank.

6. To conceal the loan default, repossession, subsequent sale, and

conversion of the proceeds, Goldsmith falsified the "Portfolio

Remittance Report" to make it appear that the automobile loans

were merely delinquent and not yet the subject of

repossession.

7. The indictment then contained a chart of each individual

borrower, and the date each vehicle was sold, and the amount

received by Auto Bank/SAC and converted to Goldsmith's

personal use. The 23 separate dates went from April 1989 to

October 1990, with no sales some months, and one month with 5

sales. Two months intervened between the first sale, and the

second.

Defendant argues on appeal that "the conduct of which

defendant stands convicted, at worst, constitutes a breach of

contract, not a violation of 18 U.S.C. section 1344(a)." He

contends that he had no fraudulent intent, and that the "government

has impermissibly obtained defendant's conviction by

misrepresenting the evidence in its argument and, thus, convincing
the jury to convict him because his business plan failed, not

because he defrauded the bank."

This argument overlooks the significance of the falsification

of the "Portfolio Remittance Report." If, along with the

conversion as recited above, he had honestly reported to the bank

that the collateral had been sold and he simply failed to pay the

bank the proceeds, it would be difficult to infer fraudulent

intent. But that is not what he did. As alleged in the

indictment, he falsely reported that the loan was still

collateralized, thus enabling him to repeatedly sell automobiles

and pocket the proceeds without detection by the bank. This

evidence was sufficient to support a finding by the jury that

Goldsmith intentionally pursued a scheme to defraud the bank to

obtain funds for his own use that rightfully belonged to the bank.

The jury may well have been unable to establish a reason for the

false reports other than that Goldsmith intended to defraud the

bank.

In his brief, the defendant attempts to disconnect himself

from the reports, but a review of the record reflects sufficient

evidence for the jury to find that he was knowingly responsible for

furnishing the bank with false information.

The defendant cites United States v. Briggs, 939 F.2d 222 (5th

Cir.1991), as the best case that supports his position. But in

Briggs, the defendant was not accused, the Government did not

argue, and the court did not decide whether the scheme in question

violated subsection (a)(1). 939 F.2d at 225 n. 7. Thus, Briggs is

inapplicable to this case. Defendant has provided us with no case
that supports his argument on this appeal.

AFFIRMED.