Opinion ID: 781313
Heading Depth: 3
Heading Rank: 2

Heading: Exclusion of lack of intent evidence.

Text: 36 Next, Lane contends that the district court improperly prevented him from presenting evidence that he lacked the specific intent required by 18 U.S.C. § 1014. Specifically, Lane argues that the district court erroneously prevented him from introducing: (1) evidence relating to Loyola's involvement in the refinancing of the ANB loan and the fact that the alleged victim—ANB—actually benefitted from the refinancing; (2) evidence that ANB had already determined that Lane had a negative net worth, and had further determined from this that it would not have done the deal without Loyola's Put Agreement, which Lane knew; (3) evidence relating to a post-closing conversation that Lane had with ANB bankers and lawyers on February 16, 1994; and (4) testimony from the drafter of the Amendment to Lease that the language in the Amendment did not prohibit Lane or anyone else from advancing the security deposit on behalf of the supermarket tenant. This court reviews the exclusion of evidence for abuse of discretion. United States v. Foster, 30 F.3d 65, 67 (7th Cir.1994). 3 37 Lane first contends that if the court had allowed him to introduce evidence of Loyola's involvement with the shopping center refinancing scheme and ANB's determination of his net worth, it would have proven the overwhelming importance of Loyola's Put Agreement in ANB's decision to refinance. Essentially he claims that ANB did not rely on his net worth in the refinancing but instead only relied on Loyola to repay the debt in case of a default. Because his guarantee was immaterial to the deal, he argues, he had no motivation to misstate his finances. 38 However, the materiality of Lane's guarantee and ANB's reliance thereon is irrelevant. Section 1014 does not require that a false statement must be material or even mention materiality. Specifically § 1014 only criminalizes knowingly mak[ing] any false statement or report ... for the purpose of influencing in any way the action of a Federal Deposit Insurance Corporation (FDIC) insured bank upon any application, advance,... commitment, or loan. Wells, 519 U.S. at 490, 117 S.Ct. 921 (citing 18 U.S.C. § 1014), cf. United States v. Erskine, 588 F.2d 721, 722 (9th Cir.1978) (holding that the elements of a section 1014 violation include these requisite mental states: knowledge of falsity, and the intent to influence action by the financial institution concerning a loan or one of the other transactions listed in the statute). We have previously and repeatedly interpreted § 1014 to exclude any element of materiality. See United States v. Swanquist, 161 F.3d 1064, 1075 (7th Cir.1998) (citing Wells, 519 U.S. at 490-91, 117 S.Ct. 921) ([M]ateriality is not, and never was, an element of the crime of knowingly making a false statement to a federally-insured bank under § 1014.); see also United States v. Reynolds, 189 F.3d 521, 525-26 (7th Cir.1999); United States v. Krilich, 159 F.3d 1020, 1028 (7th Cir.1998). 39 Based on this line of case law, the district court excluded any evidence that tended to show that ANB and Loyola did not rely on Lane's financial condition in deciding to participate in the refinancing. Because this evidence was irrelevant to the crimes charged and therefore had limited probative value, we find that by excluding it, the district court did not abuse its discretion. See United States v. Adames, 56 F.3d 737, 746 (7th Cir.1995) (stating that a district court's balancing of probative value versus prejudice is a highly discretionary function which is afforded great deference by this Court). 40 Lane also contends that the district court erred in excluding evidence of Loyola's involvement with the shopping center refinancing scheme because the manner in which ANB and Loyola structured the deal prevented losses to either party in the transaction. In turn Lane reasons that the evidence that neither the bank nor ANB sustained a loss would have tended to show that he did not have the requisite intent to defraud ANB. However, much like materiality, loss is not an element under § 1014. Because the lack of loss is not a defense, evidence regarding the lack of loss is irrelevant. See United States v. Waldrip, 981 F.2d 799, 806 (5th Cir.1993). 41 In response, Lane cites United States v. Copple, 24 F.3d 535, 545 (3d Cir.1994), for the proposition that when the contested issue is intent, whether or not victims lost money can be a substantial factor in the jury's determination of guilt or innocence. Copple, 24 F.3d at 545. See also United States v. Foshee, 569 F.2d 401, 403-04 (5th Cir.1978) (superseded on other grounds by United States v. Foshee, 578 F.2d 629 (5th Cir.1978)). Copple and Foshee both involve mail fraud under 18 U.S.C. § 1344. Section 1344 proscribes any scheme to defraud or obtain money or property from a financial institution by means of false and fraudulent pretenses, representations or promises. 18 U.S.C. § 1344. However, the district court properly observed that the intent described by § 1014 is different from the intent delineated in § 1344. Section 1344 requires the showing of an intent to deceive a bank in order to obtain from it money or other property. See United States v. Kenrick, 221 F.3d 19, 26-27 (1st Cir.2000). On the other hand, § 1014 proscribes false statements made for the purpose of influencing in any way the action of the lending institution. 18 U.S.C. § 1014 (emphasis added). See also United States v. Madsen, 620 F.2d 233, 235 (10th Cir.1980) ((T)he only intent necessary (is) an intent to influence the bank, and not an intent to harm the bank or to profit.). Therefore, even if this evidence may have tended to show that Lane did not intend to cause ANB or Loyola a loss, it would not necessarily have been probative on the issue of whether he intended to influence the banks to issue the loan with his own false statements. Even if the court had considered whether the victims suffered a loss as relevant to the issue of intent, the court did not improperly exclude this evidence, considering its lack of probative value and the possibility that the jury would consider the evidence for irrelevant purposes. Therefore the district court did not abuse its discretion in excluding the evidence of ANB's and Loyola's losses on the refinancing. 42 Lane also contests the district court's exclusion of a conversation in February 1994, and a related memo, where he and his attorney advised ANB that Lane had forestalled the opening of Shopper's Lane, and that he was negotiating with other tenants for the anchor tenant space. Lane claims that this evidence demonstrated for the jury that [defendant] was communicating to ANB in good faith about the status of the grocery store tenant, and that ANB knew about the uncertainty of the anchor tenant. 43 The district court properly excluded this evidence for several reasons. First, the evidence was properly categorized by the district court as inadmissible hearsay because, even under Lane's theory of the case, the statements of Lane and his attorney were relevant only if true. Fed.R.Evid. 801, 802. Lane relies on United States v. McClure, 546 F.2d 670, 672-73 (5th Cir.1977), for the proposition that this evidence was not offered for the truth of the matter asserted but instead was admissible as non-hearsay evidence to prove his lack of intent to defraud. McClure does not support this position. In that case, evidence of a series of threats made by the government's confidential informant was admitted to show that the informant had entrapped other drug dealers. The evidence was not admitted to prove the defendant's intent, but rather to show that he was entrapped. Id. 44 Second, it is not clear how a conversation on February 16, 1994 is relevant to the statements made on November 1, 1993, when the refinancing, including the fraudulent leasing agreement, was executed. This is especially so when those statements were not admissions of fraudulent activity or attempts to cure the fraud, but instead were explanations of delays caused by the fraud and requests for more time to find a qualified tenant. 45 Even if we were to assume that the evidence would have shown that Lane was acting in good faith in February 1994, the fact that he may have been communicating to the bank in good faith in February 1994 has no bearing on whether he was honest with the bank in November 1993. See United States v. Winograd, 656 F.2d 279, 284 (7th Cir.1981) (defendant may not seek to establish his innocence through proof of the absence of criminal acts on other specific occasions). Due to these concerns, we find that the district court did not abuse its discretion in excluding Lane's post-offense statements. 46 Lane also contends that the district court erred by precluding Keith Moore, the attorney for the Seventh Day Adventists and Continental Partners, from testifying that the Amendment to Lease did not prohibit Lane from advancing the deposit on behalf of the supermarket tenant. The district court excluded this testimony, finding that the document adequately spoke for itself. The district court's ruling was proper under Rule 403 because the meaning of the Lease Amendment was plain from the face of the document, and hence the probative value of Moore's testimony was minimal. Second, any such testimony from one of Lane's own attorneys would be self-serving and certainly extrinsic absent any ambiguity in the document. Additionally, Lane's counsel was able to, and did, make this point during closing argument. Moreover, any probative value was substantially outweighed by the dangers of unfair prejudice and juror confusion. Therefore the court did not abuse its discretion in excluding Moore's testimony. 47 Considering the district court's evidentiary rulings under the standard that an [a]buse of discretion only occurs when no reasonable person could take the view of the trial court. United States v. Hilgeford, 7 F.3d 1340, 1345 (7th Cir.1993), we find that the district court did not abuse its discretion in the admission or exclusion of evidence at trial. 48 To the extent that any errors were made, they were harmless considering the wealth of evidence presented against Lane as to his debt to NIRT and knowledge of the falsity of the financial statements he provided to ANB. Rehling, at 1017.