Opinion ID: 534183
Heading Depth: 2
Heading Rank: 2

Heading: Travel Act--Conspiracy Evidence

Text: 7 In the spring of 1981 Fitzpatrick made it clear to Finley that he wanted a J-24 sailboat. Finley agreed to get him one. On March 25, 1981, Romeyn made out a check for $1,000 to Pirate's Cove Marina as a down payment on a J-24. On April 15, 1981, a sales contract was entered into between Pirate's Cove and Romeyn for a J-24. On June 10, 1981, Romeyn issued a check for $16,253.00 to Pirate's Cove; this was the balance due on the purchase of the J-24. A short time later, Fitzpatrick picked up the boat at Portsmouth, Rhode Island and took it to his home on City Island, New York. Finley testified that the J-24 was given to defendant in the hope that it would result in favorable financial arrangements for future projects. 8 In the summer of 1981, Finley and Romeyn were approached by Perry Harris, an old friend of Finley and a limited partner in the Brenton's Cove project. Harris wanted to buy the Landing and the Long Wharf properties and convert the planned condominium hotels into time-share resorts. He proposed forming a limited partnership called Inn Group Associates (Inn Group) to buy the properties. The principals of Landing and Long Wharf were to have fifty percent ownership of Inn Group. Finley and Romeyn testified that a lot more money could be made with time-shares; a unit which would have sold to one person for $100,000 under the original plan could be sold as a time-share to 25 people for $400,000. For the time-share conversion to go through, the Bank would have to approve the sale of the Landing and Long Wharf properties and approve the assumption of the mortgage and commitments by Inn Group. In addition, the Bank would have to modify the repayment terms of the existing construction loan to Landing. Landing's loan called for a payback to the Bank on the basis of roughly 95 percent of the net proceeds from the sale of each condominium hotel unit. When one unit was sold, the Bank was to receive what it was owed on that unit. Under the time-share arrangement, there would have to be several sales of the unit before Inn Group would have enough proceeds to pay the Bank what was owed on the unit. 9 Finley spoke to Fitzpatrick about the proposed sale of the two properties and their conversion into time-shares. Fitzpatrick's initial response was that the Bank would not agree to the sale and conversion. Finley persisted, however, and persuaded Fitzpatrick to agree to the conversion by cutting him in on the profits. 10 James Hamilton, a former Bank employee who had been the vice president of construction loans and Fitzpatrick's supervisor at the time, testified that any major modification to an existing loan had to have the approval of the Bank's credit committee. He also testified that a Bank attorney and the loan officer should be present at any closing; the attorney's presence was to assure compliance with the loan documents. On August 3, 1982, a memo from the Bank's senior executive vice president stated that the actual loan closing documents must comport with what the credit committee approved and that a group head would have to certify such compliance on the closing of all loans. Hamilton was a group head. He did not become aware of the modified terms in the Landing and Long Wharf loans authorized by Fitzpatrick until November or December of 1982, long after the fact. 11 On December 17, 1981, Inn Group was created for the purpose of acquiring the Landing and Long Wharf properties and converting them to time-shares. The purchase price for both properties was $10,000,000. Finley, Romeyn, Wing, and Dwyer were made 50 percent owners and general partners of Inn Group. Upon the execution of the purchase and sale agreement, a $1,000,000 nonrefundable deposit was paid by Inn Group to Landing. Within a day or two following Landing's receipt of that deposit, Finley and Romeyn each withdrew $250,000 from that account. Fitzpatrick received a pay-off of $200,000. He instructed Finley to make the payments to the order of R & S Corp., a Panamanian company that Fitzpatrick had set up to hide income from the IRS. Finley relayed that instruction to Romeyn, and on December 18, 1981, Romeyn wrote a Landing check payable to R & S in the amount of $50,000. On January 5, 1982, Romeyn wrote another Landing check payable to R & S in the amount of $150,000. 12 On August 19, 1982, the closing on the sale of Inn on the Harbor from Landing to Inn Group took place in Newport. Fitzpatrick was present, but there was no attorney representing the Bank. Acting on behalf of the Bank, Fitzpatrick assented to the sale from Landing to Inn Group of the property and to Landing's assignment of the mortgage and the other documents to Inn Group. He executed, on behalf of the Bank, a release agreement which restructured the repayment terms of the Landing loan and also signed an assignment and estoppel agreement. 13 The closing on the loan for Long Wharf had not yet taken place. Long Wharf had not satisfied the requirements of the Bank's commitment letter that it obtain approval from Coastal Resources, 2 and a building permit, prior to closing. On September 16, 1982, Romeyn, Finley, and Fitzpatrick met at Fitzpatrick's home on City Island, New York and reviewed documents for the Long Wharf loan. There was no attorney present for the Bank. Finley and Romeyn signed the construction loan agreement between Long Wharf and the Bank. Despite the fact that Coastal Resources had not approved construction and a building permit had not been obtained by Long Wharf, Fitzpatrick approved the loan for the Bank. 14 At some point during this meeting, Fitzpatrick requested that Romeyn send a construction crew from Rhode Island to work on his house on City Island. Finley testified that this work was done for business purposes. Romeyn testified that the home improvements were a quid pro quo for Fitzpatrick's bypassing the requirements of the Bank's commitment letter and approving the loan. Renovations to Fitzpatrick's home began in October of 1982. Romeyn drew four checks on the Landing account between October 6 and November 10, 1982, to pay for material and labor. One crew was sent from Rhode Island to New York on the second weekend in October to build a widow's watch and install a Jacuzzi at Fitzpatrick's City Island home. Shortly thereafter, a carpenter spent two and a half weeks on City Island extending a deck on Fitzpatrick's home. The evidence was that the renovations done at Fitzpatrick's home cost at least $6,086.81. 15 On or around September 17, 1982, Fitzpatrick told Finley to send him a check for $50,000 and to leave the payee space blank. Finley relayed that instruction to Romeyn who drew a Landing check with no payee, dated September 27, 1982, in the amount of $50,000. Finley then mailed the check to Fitzpatrick. Fitzpatrick filled in the payee space with the words, Pares Y Nones, (Spanish for evens and odds). The check was deposited in a Panamanian account on October 1, 1982. On October 4, 1982, it cleared Bankers Trust Company, New York. On October 5, 1982, it cleared the Federal Reserve Bank in Boston and the Newport National Old Colony Bank. Finley testified that the check was given to Fitzpatrick for authorizing the loan modifications and the sale of Landing and Long Wharf to Inn Group. 3