Opinion ID: 702318
Heading Depth: 2
Heading Rank: 2

Heading: bank fraud convictions

Text: 18 Dobbs contends that there was insufficient evidence to convict him in Counts 2 and 3 of devising a scheme to defraud the Honey Grove Branch of Farmer's and Merchants Bank (F & M) of bank fraud. In order for the government to convict Dobbs of bank fraud, it must prove that Dobbs knowingly executed or attempted to execute a scheme or artifice to defraud a federally chartered or insured financial institution. 18 U.S.C. Sec. 1344(1). Dobbs argues that there is insufficient evidence in the record to prove that he had the intent to defraud. 19 The term scheme to defraud is not readily defined, see United States v. Goldblatt, 813 F.2d 619, 624 (3rd Cir.1987), but it includes any false or fraudulent pretenses or representations intended to deceive others in order to obtain something of value, such as money, from the institution to be deceived. United States v. Lemons, 941 F.2d 309, 314-15 (5th Cir.1991); United States v. Church, 888 F.2d 20, 23 (5th Cir.1989). The requisite intent to defraud is established if the defendant acted knowingly and with the specific intent to deceive, ordinarily for the purpose of causing some financial loss to another or bringing about some financial gain to himself. United States v. Gunter, 876 F.2d 1113, 1120 (5th Cir.), cert. denied, 493 U.S. 871, 110 S.Ct. 198, 107 L.Ed.2d 152 (1989); United States v. St. Gelais, 952 F.2d 90, 96 (5th Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 439, 121 L.Ed.2d 358 (1992) (wire fraud). 20 In count two of the indictment, the government alleged that between June 1991 and August 1992, Dobbs committed bank fraud by selling the cattle securing the F & M's loans without F & M's knowledge or authority. Dobbs argues that, by custom, he did not need the F & M's permission to sell the cattle. Over a twenty-year period, Dobbs had obtained numerous loans and apparently sold cattle without first notifying the bank of his intent to do so. He argues that because he did not need the bank's permission to sell the cattle, there was insufficient evidence to prove that he had the requisite intent to defraud. We disagree. 21 At trial, Alvin Fields, who was the president of the Farmer's and Merchants Bank, testified that Dobbs only told him that he had sold the bank's collateral cattle when F & M was about to inspect the collateral. He also testified that Dobbs told him that he didn't have any of the money from the cattle sales because he had used the money to pay operational expenses. Fields admitted that, despite written agreements to the contrary, F & M had never insisted that Dobbs obtain the bank's permission to sell the cattle which served as collateral. He did, however, testify that his arrangement with Dobbs was that when he did sell cattle he would pay off F & M's loans with the proceeds. 22 Toni Gould testified that Dobbs had been buying and selling cattle continuously from January of 1991 until August of 1992, as if he was gambling. She also testified that Dobbs had sold large portions of the bank's cattle at sales barns outside of the Honey Grove area. Robert Love testified, at trial, that Dobbs had agreed, in writing in 1990, not to incur debt from anyone other than the FmHA. 23 We find that a reasonable jury could conclude from this evidence that Dobbs committed bank fraud by selling the cattle which secured the bank's loan to Dobbs. The FmHA's prohibition on the incurrence of other debt made Dobbs' actions in securing more debt suspect. The jury could conclude from the testimony of Fields and Gould that, in selling the cattle, Dobbs was diverting funds that properly belonged to bank into his own ranch operation. By selling the cattle outside the Honey Grove area, Dobbs sought to conceal his actions from the bank. Dobbs placed the bank at risk that its loans would not be repaid in order that he might use the proceeds as a personal stream of income. In fact, the bank lost approximately $89,000 as a result of Dobbs' unauthorized cattle sales. These actions permit the inference of intent to defraud. Intent to defraud is established if the defendant acted with the intent to deceive in order to cause financial loss to another or bring about financial gain to himself. Gunter, 876 F.2d at 1120. In this case, Dobbs acted with intent to deceive in order to bring about financial gain to himself at someone else's risk. 24 In count three of the indictment, the government alleges that Dobbs committed bank fraud by selling cattle which he knew was security for F & M loans to his children, Clint, Ashley, and Melanie Dobbs. Dobbs again makes the same argument that: because he was not required to seek the bank's permission to sell the cattle in the past, there is insufficient evidence from which the jury could find that he had the intent to defraud. Again, we disagree. 25 In addition to his testimony regarding count two, Alvin Fields testified that he personally made loans in 1991 to Dobbs' adult children to buy approximately 120 head of cattle. The purpose of the loans was to fund the children's college expenses. He said that each child came to the bank and signed for the loans and that the bank looked to them for repayment. Fields stated that he knew that Dobbs would be managing the cattle. He testified that in October of 1992, he inspected the children's collateral and found only 112 head of cattle and each of those appeared to have been recently purchased. He also discovered that even the replacement cattle had been sold to pay ranch operational expenses. The failure to use the cattle sale proceeds to pay off the children's debt left the bank facing a loss of approximately $40,000. 3 26 A part of Clint Dobbs' grand jury testimony was also read to the jury. In it, Clint Dobbs testified that, in one instance when his father sold some of his cattle in Oklahoma City, Oklahoma, he thought that his father was going to use the proceeds to pay off his bank note. He later found out that Dobbs had kept the money. Clint Dobbs' father later testified that he used the cattle proceeds to pay ranch and family expenses. 27 A reasonable jury could find from the evidence presented at trial that Dobbs committed bank fraud by selling his children's collateral cattle. As with his own cattle, Dobbs surreptitiously used money from the sale of the children's cattle to pay for ranch and family expenses. As we stated above, Dobbs' diversions put the bank at risk of loss in return for his own financial gain. From these actions, a reasonable juror could find that Dobbs had the requisite intent to defraud.