Source: https://law.justia.com/cases/federal/appellate-courts/F3/61/317/492964/
Timestamp: 2020-03-31 13:48:49
Document Index: 239024531

Matched Legal Cases: ['§ 1344', '§ 657', '§ 1006', '§ 371', '§ 1344', '§ 657', '§ 1006', '§ 1006', '§ 3293']

United States of America, Plaintiff-appellee, v. John "jay" F. Baker, Jr., James A. Gilbert, and Trenton L.torregrossa, Jr., Defendants-appellants, 61 F.3d 317 (5th Cir. 1995) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Fifth Circuit › 1995 › United States of America, Plaintiff-appellee, v. John "jay" F. Baker, Jr., James A. Gilbert, and Tre...
United States of America, Plaintiff-appellee, v. John "jay" F. Baker, Jr., James A. Gilbert, and Trenton L.torregrossa, Jr., Defendants-appellants, 61 F.3d 317 (5th Cir. 1995)
US Court of Appeals for the Fifth Circuit - 61 F.3d 317 (5th Cir. 1995) Aug. 2, 1995
Baker, Gilbert and Torregrossa were indicted on charges of bank fraud in violation of 18 U.S.C. § 1344 (Count Two), misapplication of funds in violation of 18 U.S.C. § 657 (Counts Three-Twelve), knowingly making false entries in the books and reports of a savings and loan, and unlawfully participating in loan proceeds in violation of 18 U.S.C. § 1006 (Counts Thirteen-Sixteen), and conspiracy to violate these statutes in violation of 18 U.S.C. § 371 (Count One). The indictment concerned conduct that began in December 1985, and continued through October 1987. After a two week trial the jury returned its verdict, finding Gilbert and Baker guilty on all charges, and finding Torregrossa guilty on Counts One, Two, Three, Four, Eight, Ten, Twelve, Fourteen, Fifteen and Sixteen.
All three defendants challenge the sufficiency of the evidence to support their convictions. We must decide whether a rational jury could find that the evidence established guilt beyond a reasonable doubt on each count of conviction. United States v. Frydenlund, 990 F.2d 822, 824 (5th Cir. 1993). Every reasonable hypothesis of innocence need not be excluded by the evidence. Id. We view all reasonable inferences and credibility choices in the light most favorable to the jury's verdict. Id.
Sufficiency of the evidence in this case is not so much a question of credibility determinations, which are constitutionally entrusted to the jury and entitled to great deference, see Jackson v. Virginia, 443 U.S. 307, 319, 99 S. Ct. 2781, 2789, 61 L. Ed. 2d 560 (1979), as a mixture of fact and law: whether the actions and choices of defendants surrounding this real estate venture were proscribed by criminal statutes.
Appellants were charged in Count Two of the indictment with Bank Fraud in violation of 18 U.S.C. § 1344 and in Counts Three through Twelve with Misapplication of Funds in violation of 18 U.S.C. § 657. Count Two charged Appellants with executing a scheme to defraud Cornerstone by "causing Cornerstone Savings to purchase 1224.5 residential lots and giving away 249 of the residential lots without compensation to Cornerstone Savings." Similarly, each of the misapplication counts charged Appellants with causing Cornerstone to pay for lots in a specific subdivision, which lots "were given to various builders without compensation to Cornerstone Savings." Accordingly, all eleven of these counts require proof that Cornerstone purchased and then disposed of the lots deeded directly from the developers/sellers to the builders without compensation. Appellants ask us to reverse their convictions because proof at trial established that the lots passed to the builders only in combination with transactions where the builders purchased other lots at substantial profit to Cornerstone. They dispute the Government's contention that Cornerstone's assets were given away, because the overall effect of the transactions was a substantial profit to Cornerstone. We agree.
Citing United States v. Saks, 964 F.2d 1514 (5th Cir. 1992), the Government contends that the evidence supports the convictions because Appellants had a specific intent to deceive, for the purpose of causing some financial loss to another or bringing about some financial gain to themselves. See id., at 1518. In Saks we affirmed a conviction under Sec. 1344 based on evidence that the defendants, who were loan customers of the banks involved, defrauded federal regulators by concealing the involvement of another party in the loan transaction, as well as defrauding the banks of their money. The bank officers were not only aware of the scheme, but devised it in order to satisfy the regulators' insistence on their need for capital infusion, then convinced the defendant/loan customers to go along. The defendants claimed that there was insufficient evidence of a scheme to defraud the banks, because the bank officers knew about the plan, and the intent was to deceive the regulators. We rejected that argument, holding that the financial institution itself--not its officers--was the victim of the fraudulent scheme and that the officers' collusion in the crime did not excuse the defendants' fraudulent act of executing loan papers that concealed the true parties to the transaction.
To secure a conviction under 18 U.S.C. § 1006, the government must prove that (1) the defendant made a false entry in any book, report, or statement; (2) with intent to injure or defraud that bank or to deceive an officer of the bank or the regulators. See United States v. Cordell, 912 F.2d 769, 773 (5th Cir. 1990). The manifest purpose of this provision is to ensure that an inspection of a bank's books will yield an accurate picture of the bank's condition. Thus, an omission of material information qualifies as a false entry. Id. at 773. To be material, the omission must have the capacity to impair or pervert the functioning of a government agency. United States v. Beuttenmuller, 29 F.3d 973, 982 (5th Cir. 1994).
Count Sixteen charged that Appellants, with intent to defraud Cornerstone, the United States and the FHLBB, knowingly participated, shared and received money, profit and benefits of Cornerstone in that "each received a portion of the commissions paid on the purchase and sale of 1224.5 lots by Cornerstone," in violation of 18 U.S.C. § 1006. There was no dispute at trial that Baker and Torregrossa received commissions from the lot transactions. The record is sufficient to support the conclusion that Gilbert received compensation from Amstar for his role in the lot transaction, although Gilbert testified that that compensation was not a commission but a fee for officer services.
Count One of the indictment charged Appellants with conspiracy to commit the various crimes charged in the remainder of the indictment. In order to convict Appellants of conspiracy, the Government must prove that (1) two or more people agreed to pursue an unlawful objective; (2) the individual defendant voluntarily agreed to join the conspiracy; and (3) one or more of the members of the conspiracy performed an overt act to further the objectives of the conspiracy. United States v. Beuttenmuller, 29 F.3d 973, 978-79 (5th Cir. 1994). The record is sufficient to sustain the conspiracy convictions of Gilbert and Baker, based on their agreement and overt acts relating to the illegal participation in profits alleged in Count Sixteen.
Appellants argue that the retroactive effect of 18 U.S.C. § 3293, which Congress enacted in 1989 to provide a new ten year statute of limitations on certain financial institution offenses, violates the Ex Post Facto Clause of the United States Constitution. This issue was settled against Appellants in United States v. Brechtel, 997 F.2d 1108 (5th Cir.), cert. denied, --- U.S. ----, 114 S. Ct. 605, 126 L. Ed. 2d 570 (1993).