Opinion ID: 1820486
Heading Depth: 1
Heading Rank: 4

Heading: specification number four duty to avoid insider borrowing

Text: 1. The general allegations hereinabove recited are incorporated herein as if set forth verbatim; 2. During 1979, Marvin Copple was an officer or Director of Commonwealth Savings Company; 3. On or about August 28, 1979, Marvin Copple borrowed from Commonwealth Savings Company, directly or indirectly, without first having secured the approval of the Board of Directors of such industrial loan and investment company, the sum of $100,500.00, and Paul L. Douglas aided, abetted or assisted in such borrowing; 4. As a consequence of the foregoing, Paul L. Douglas violated the provisions of Neb.Rev.Stat. § 8-409.06. Although there may be some doubt whether this specification as phrased would support a criminal charge, it is sufficient in this impeachment proceeding considering the full impeachment resolution. Douglas is informed that he was charged with aiding and abetting Marvin Copple to borrow funds from Commonwealth Savings Company in violation of Nebraska statutes, Neb.Rev.Stat. §§ 8-409.01 and 8-409.06 (Reissue 1983), and that such conduct was a misdemeanor in office, Neb. Const. art. IV, § 5. The following is a summary of the evidence relevant to this specification. In 1977 Paul Douglas and Paul Galter, as partners, purchased 26 residential lots from Marvin Copple for $241,774; the deeds of conveyance were executed in favor of Douglas as grantee; Douglas borrowed all of the purchase price, $241,774, from Commonwealth Savings Company, and immediately paid this sum to Marvin Copple. This paid Copple in full for the 26 lots. The Douglas loan was paid in full with accrued interest on August 30, 1979. On or about August 28, 1979, Douglas sold eight of these lots to Judith Driscoll for $100,500, which sum she borrowed from Commonwealth, represented by its check dated August 30, 1979. On August 30, 1979, Driscoll paid Douglas $100,500 by her check, which he deposited in the P.P. S.S. partnership account; those funds, with some additional partnership money, were paid that date to Commonwealth to pay the balance of the $241,774 loan with all accrued interest. The evidence before us, including records of Commonwealth, is silent as to any fact that Marvin Copple either (1) originated, approved, or benefited from this Driscoll loan, or (2) directly or indirectly obtained any proceeds from this loan, or (3) directly or indirectly borrowed all or any part of this Driscoll loan. Marvin Copple had been paid in full for any interest he had in these eight lots on April 20, 1977. The State argues that this loan transaction must be viewed in the light of all of the previous real estate transactions wherein Douglas was involved with either Marvin Copple, Driscoll, or Commonwealth, claiming that from these it is clear that both Douglas and Copple benefited from this Driscoll loan and that the borrowing statutes were violated. The insider borrowing statutes involved here became law on August 24, 1979. They provide: 8-409.01. Industrial loan and investment company; loan to director, officer, or employee; requirements. No director, officer, or employee of an industrial loan and investment company, no corporation in which an officer of the industrial loan and investment company is the owner of a controlling interest, and no partnership in which an officer of the industrial loan and investment company is a member, shall borrow any of the funds of the industrial loan and investment company, directly or indirectly, without first having secured the approval of the board of directors of such industrial loan and investment company. The approval shall be made at a meeting of the board and a record of such approval shall be made and kept as part of the records of such company. The amount of any loan shall be limited as provided in sections 8-409 and 8-409.02. 8-409.06. Violations; penalty. Any officer, director, or employee of an industrial loan and investment company, or any other person who shall violate sections 8-409.01 to 8-409.05, or who shall aid, abet, or assist in such violation shall be guilty of a Class IV felony. The terms borrow and indirectly are not defined in the statutes; however, they have been considered in our prior decisions involving similar banking situations: (1) Lending by the bank involved to the borrowing official, either directly or indirectly. (2) On the part of the delinquent officer, it implies making himself indebted for; to appropriate; to take, receive or derive, funds of the bank lending to him, either directly or indirectly. (3) It involves the diminishment of the funds of the loaning bank to the extent of the loan made. It must, in other words, amount to a debtor and creditor transaction in which the delinquent officer is the ultimate debtor, and the bank involved the ultimate and real creditor. Hinds v. State, 121 Neb. 508, 512, 237 N.W. 617, 619 (1931). Indirectly signifies the doing by an obscure circuitous method something which is prohibited from being done directly, and includes all methods of doing the thing prohibited except the direct one. State v. Pielsticker, 118 Neb. 419, 423, 225 N.W. 51, 52 (1929). Since the statutes do not define a person who shall ... aid, abet, or assist, we look to the applicable statutes, enacted in 1977. 28-205. Aiding consummation of felony; penalty. (1) A person is guilty of aiding consummation of felony if he intentionally aids another to secrete, disguise, or convert the proceeds of a felony or otherwise profit from a felony. (2) If the crime involved is a felony of any class, aiding consummation of crime is a Class IV felony. 28-206. Prosecuting for aiding and abetting. A person who aids, abets, procures, or causes another to commit any offense may be prosecuted and punished as if he were the principal offender. Aiding and abetting involves some participation in the criminal act or involves some conscious sharing in the criminal act, as in something that accused wishes to bring about, in furtherance of the common design, either before or at the time that the criminal act is committed, and it is necessary that he seeks by his action to make it succeed.... State v. Alvarez, 189 Neb. 276, 280, 202 N.W.2d 600, 603 (1972). Where a crime requires the existence of a particular intent, an alleged aider or abettor cannot be held as a principal unless it is established that the aider knew that the perpetrator of the act had the required intent, or that the aider himself possessed the required felonious intent. State v. Dittrich, 191 Neb. 475, 480, 215 N.W.2d 637, 640 (1974). Where in an impeachment proceeding the act of official delinquency consists in the violation of some positive provision of the constitution or statute which is denounced as a crime or misdemeanor... it is a misdemeanor in office within the meaning of section 5, article 5, of the constitution. (Syllabus of the court.) State v. Hastings, 37 Neb. 96, 55 N.W. 774 (1893). The State had the burden to prove beyond a reasonable doubt each of these elements: That on or about August 28, 1979, (1) Marvin Copple was a director, officer, or employee of Commonwealth Savings Company; (2) Marvin Copple did directly or indirectly borrow funds from Commonwealth Savings Company; (3) such borrowing was done without his first having secured the approval of the board of directors of Commonwealth Savings Company at a meeting of that board wherein a record of the approval was made and kept; (4) Paul Douglas did intentionally aid and abet Marvin Copple to violate § 8-409.01 in that he did secrete, disguise, or convert the proceeds of a felony or otherwise profit from a felony; and (5) such acts or omissions of Paul Douglas constituted a misdemeanor in office warranting his impeachment. We review the record as to these elements. The evidence lacks depth on the issue of Copple's official business association with Commonwealth; however, the reports filed by Commonwealth with the Nebraska Department of Banking and Finance show that in 1978 and 1979 Marvin Copple was a member of the board of directors of Commonwealth. The State met its burden in this impeachment proceeding as to element (1). On the element of borrowing there is no direct evidence in the record before us that Marvin Copple was the ultimate debtor and that he either directly or indirectly had any legal obligation as a debtor to pay the $100,500 Driscoll loan to Commonwealth. The circumstantial evidence previously suggested by the State includes the personal and business relationships between Copple and Douglas, Douglas' loans with Commonwealth, and the sale of the lots to Judith Driscoll, Copple's private secretary, who borrowed all of the purchase price of the lots from Commonwealth. Such circumstantial evidence is entirely speculative; it falls far short of the required proof. See State v. Buchanan, 210 Neb. 20, 312 N.W.2d 684 (1981). The State failed to prove element (2) beyond a reasonable doubt, and therefore we need not discuss the remaining elements. Specification No. 4 must fail.