Opinion ID: 476836
Heading Depth: 2
Heading Rank: 12

Heading: Extension-Of-Credit Instruction

Text: 80 Matranga contends that the trial court erred in instructing the jury that an extension of credit, a requisite for finding a violation of 18 U.S.C. Sec. 894, includes any agreement deferring the satisfaction of any debt or claim, even a debt created when the debtor defrauds or swindles the creditor. Matranga contends that he was prejudiced by this instruction because Hall's debt arose, not because Matranga loaned him money, but because Hall swindled Matranga on the surplus TV deal. Matranga requested the following additional instruction, based on United States v. Boulahanis, 677 F.2d 586, 590 (7th Cir.), cert. denied, 459 U.S. 1016, 103 S.Ct. 375, 74 L.Ed.2d 509 (1982): 81 The extension of credit is a deliberate act by a creditor. It does not occur merely because a customer defaults. Section 894 does not make it a crime to use extortion to collect debt but only to exact repayment of credit previously extended. There must be proof of an agreement to defer payment of a debt. 82 Matranga's argument is without merit. Section 891(1) defines an extension of credit as any agreement, tacit or express, whereby the repayment or satisfaction of any debt or claim, whether acknowledged or disputed, valid or invalid, and however arising, may or will be deferred. The district court so instructed the jury. We have previously held that gambling debts, United States v. Andrino, 501 F.2d 1373, 1377 (9th Cir.1974), and even investments in drug smuggling operations, United States v. Bonanno, 467 F.2d 14, 16-17 (9th Cir.1972), cert. denied, 410 U.S. 909, 93 S.Ct. 964, 35 L.Ed.2d 271 (1973), constitute debts or claims, however arising. Thus, whether the Matranga-Hall transaction involved a simple loan, an investment in an illegal scheme, or outright embezzlement, there was an extension of credit as long as there was at least a tacit agreement to defer repayment. The district court's instruction required the jury to find such an agreement and was therefore not erroneous. 83 Matranga's reliance on the language of Boulahanis for the proper wording of an extension of credit instruction is misplaced. In Boulahanis, the Seventh Circuit reversed the defendants' section 894 convictions because it held that there had been no extension of credit. Boulahanis, 677 F.2d at 590-91. The Boulahanis defendants attempted to extort protection payments from a nightclub owner; there was no underlying debt or claim involved, only a simple demand for money, backed up by violence and threats. Id. at 587. Because there was no underlying transaction in which money changed hands, there was nothing to defer and, therefore, there could be no extension of credit. United States v. McMahan, 744 F.2d 647, 650 (8th Cir.1984). 84 By contrast, in Bonanno, we found an extension of credit where the victim was told that $2,500 of his $5,000 debt, which arose when a drug smuggling scheme went awry, had to be repaid immediately and the victim made repeated assurances ... that the balance would be paid. Bonanno, 467 F.2d at 15. In Andrino, we found extensions of credit where victims lost to the defendant at cards, refused to pay their losses the next day, and then suffered violence and threats. Andrino, 501 F.2d at 1375-77. In these cases, there were underlying debts or claims that could be made the subject of tacit agreements deferring repayment. 85 The district court's instruction gave the jury an adequate definition of an extension of credit, a definition that would have enabled the jury to find extensions of credit in the Bonanno and Andrino situations, and to find no extension of credit in the Boulahanis situation.