Source: http://openjurist.org/79/f3d/223
Timestamp: 2015-07-29 18:12:53
Document Index: 472809017

Matched Legal Cases: ['§ 371', '§ 1343', '§ 1344', '§ 1956', '§ 225', '§ 1014', '§ 982', '§ 1956']

79 F3d 223 United States v. Harris | OpenJurist
79 F. 3d 223 - United States v. Harris Home
79 F3d 223 United States v. Harris 79 F.3d 223
UNITED STATES of America, Appellee,v.Roy William HARRIS, also known as "Will Harris," Defendant-Appellant.
No. 117, Docket 94-1707.
Argued Sept. 18, 1995.Decided Feb. 28, 1996.
David L. Lewis, New York City (Allison Miller, Lewis & Fiore, New York City, of counsel), for Defendant-Appellant.
Howard M. Shapiro, Special Assistant United States Attorney, New York City, (Mary Jo White, United States Attorney for the Southern District of New York, Eleni P. Kalisch, Special Assistant United States Attorney, Reid M. Figel, Nancy J. Northup, Assistant United States Attorneys, of counsel), for Appellee.
On September 9, 1992, a 24-count superseding indictment was filed charging defendant-appellant Roy William Harris with conspiracy to commit wire and bank fraud in violation of 18 U.S.C. § 371, wire fraud in violation of 18 U.S.C. § 1343, bank fraud in violation of 18 U.S.C. § 1344, money laundering in violation of 18 U.S.C. § 1956(a)(2), conducting a continuing financial crimes enterprise ("CFCE") in violation of 18 U.S.C. § 225, and making a false statement on a loan application in violation of 18 U.S.C. § 1014. The government also sought the forfeiture of Harris' assets pursuant to 18 U.S.C. § 982. Prior to trial, Harris moved to dismiss certain counts of the indictment and to sever Count 23, which charged him with making a false statement on a loan application. The district court granted Harris' motion to sever Count 23, but denied his motion to dismiss those counts charging him with wire fraud, bank fraud, and engaging in a continuing financial crimes enterprise. United States v. Harris, 805 F.Supp. 166 (S.D.N.Y.1992). On December 14, 1992, a jury found Harris guilty on all counts tried. On the same day, Harris and the government entered into a stipulation settling the forfeiture count.
On March 26, 1993, Harris filed motions for a judgment of acquittal, pursuant to Fed.R.Crim.P. 29, and for a new trial, pursuant to Fed.R.Crim.P. 33, raising many of the same claims he now raises on appeal. On July 30, 1993, the district court denied Harris' motions in their entirety. United States v. Harris, No. S1 92 Cr. 455 (CSH), 1993 WL 300052 (S.D.N.Y. July 30, 1993). On December 22, 1994, the district court sentenced Harris to a 188-month term of imprisonment, a five-year term of supervised release, and a special assessment of $1100. The district court also ordered Harris to pay $200 million in restitution.
On this appeal, Harris contends that the district court erred in: (1) failing to instruct the jury, in relation to the CFCE violation, that it must find that his conduct occurred after the CFCE statute was enacted; (2) rejecting his claim that he was wrongly convicted for money laundering under 18 U.S.C. § 1956(a)(2); (3) rejecting his contention that his bank fraud convictions were multiplicitous and thus violated the Fifth Amendment; (4) imposing a $200 million restitution order in favor of the lending banks; (5) rejecting his argument that he was wrongly convicted for a CFCE violation because the statute was not meant to apply to his conduct; (6) denying his motion for a new trial because new evidence was discovered that would have led to his acquittal; and (7) declining to depart downward from the United States Sentencing Guidelines on the basis that he had a gambling disorder. For the following reasons, we affirm in part, vacate in part, and remand for further proceedings consistent with this opinion.
Also discussed at this meeting was the upcoming Ernst & Young year-end audit of the Companies' books. It was understood by the Companies' officers that unless the Companies earned "$40 or so million dollars" by the end of the fiscal year, May 31, 1990, the Companies would not pass the audit. Dispenza claims that Harris then directed Sheperd and him to become more "creative" in assisting in the preparation of the financial statements.
Even after this "creative" accounting, Seniff informed Dispenza and Harris that the Companies still showed a $25 million loss and that the only way to conceal the loss was through "outright fraud." Not to be deterred, Seniff, with Dispenza and Harris' knowledge, removed from the Companies' accounts payable register several pages that revealed that the Companies owed $25 million in payables. During the course of its audit, Ernst & Young sought evidence of payment for oil inventory valued at $25 million, and Dispenza asked Harris what should be done. According to Dispenza, Harris replied, "[D]o whatever you can." Dispenza and Seniff responded by altering documents to indicate that the $25 million in oil purchases had been paid before the end of the prior fiscal year. As a result, the Companies' year-end income was increased by $25 million.
In its 1990 year-end financials, the Arochem Companies showed retained earnings of $13 million and a profit of $3.3 million. These numbers overrepresented the Companies' financial health by approximately $60 million. In September of 1990, Ernst & Young concluded its audit and provided the Arochem Companies with an unqualified opinion of financial condition based on the incorrect information supplied by the Companies. The audit then was provided by the Companies to the banks.
By March of 1991, it again became apparent to the Companies' officers that the Companies were going to have difficulty passing the 1991 year-end audit because of the Companies' $60 to $65 million deficit.1 During this time, Dispenza claims that he began to receive from Harris by e-mail fraudulent contract documents, including three sham contracts (the "sham contracts"). According to Dispenza, Harris told him that he should use the sham contracts for the 1991 audit. Dispenza included additional documents, such as copies of fictitious letters of credit, with the sham contracts, to make it appear as if the Companies had paid $48 million for oil cargoes, when, in fact, the Companies had not paid any money. The sham contracts added approximately $47 million to the assets of the Companies, and an additional $11 million was reflected as profits arising from the fictitious inventory. Relying on the false contracts, Ernst & Young again issued an unqualified opinion of financial condition to the Arochem Companies at the end of the 1991 audit. This opinion also was supplied to the banks.