Opinion ID: 426997
Heading Depth: 1
Heading Rank: 3

Heading: The Extension of Credit

Text: 21 All three defendants contend that they should be acquitted on the ground that there was no extension of credit to White within the meaning of 18 U.S.C. Sec. 891(1). Sedlak argues that although the jury was instructed, and the case was tried, on the theory that extortionate means were used to collect a loan, the evidence does not warrant the conclusion that a loan ever existed. Greenwood and Lombard assert that no debtor-creditor relationship was ever created between Sedlak and White, but rather the arrangement was in the nature of a bailment. All of the defendants further insist that there must be an existing debt at the time the extortionate means are used in order to convict under the statute, and that in this case the financial arrangement between White and Sedlak had been terminated prior to the time of the alleged extortionate acts. 22 The defendants' contentions in this regard are in reality attacks on the sufficiency of the evidence. It is well established that we must view the evidence in the light most favorable to the government. United States v. Cincotta, 689 F.2d 238, 241 (1st Cir.), cert. denied, --- U.S. ----, 103 S.Ct. 347, 74 L.Ed.2d 387 (1982). 23 Section 891(1), defining extension of credit, is very broad in its application and is not confined to what is commonly known as a loan. See United States v. Bufalino, 576 F.2d 446 (2nd Cir.), cert. denied, 439 U.S. 928, 99 S.Ct. 314, 58 L.Ed.2d 321 (1978); United States v. Briola, 465 F.2d 1018 (10th Cir.1972), cert. denied, 409 U.S. 1108, 93 S.Ct. 908, 34 L.Ed.2d 688 (1973). However, because the trial court apparently instructed the jury in terms of a loan, we will review the record to determine whether there was sufficient evidence to permit the jury to find that there was a loan. As noted above, Sedlak sued White in June 1977, for the Balance due April 23, 1975, for money loaned. Government exhibits show that Sedlak's lawyers in that case were provided with the names of people who had knowledge of this loan. In addition, the search of Sedlak's mobile home produced documents referring to a 1975 loan to White. Sedlak, by stating at various times that he had turned the debt over to collection agents, implied that he viewed the debt as assignable, thus negating the idea that it was a bailment. This evidence tends to prove that the parties themselves considered the transaction to be a loan, a fact which the jury was entitled to give great weight. Viewed in the light most favorable to the government, we hold that there was sufficient evidence for the jury to find that Sedlak had made a loan to White which defendants still regarded as outstanding. 24 As to the continued existence of the debt when the offense was committed, we note that while Sedlak often stated that White owed him nothing, his actions belied his words. Sedlak stated in August 1976, for example, that White owed him no money, and yet he sued White on the loan in July 1977. On May 1, 1981, after White's first encounter with Greenwood and Lombard, Sedlak again asserted that he did not have anything to do with the debt. However, he did admit that he had assigned the matter to others, but thereafter he suggested a way that White could pay the debt that would be satisfactory to Sedlak; e.g., White could convince his mother to sell her adjoining land along with Sedlak's land-locked acreage, which would increase the value of his land. There was ample evidence from which the jury could conclude that Sedlak treated the loan as a continuing debt. The fact that White did not believe that he owed Sedlak any money is not dispositive of the issue. See United States v. Cheiman, 578 F.2d 160 (6th Cir.1978), cert. denied, 439 U.S. 1068, 99 S.Ct. 834, 59 L.Ed.2d 33 (1979), where the court found an extension of credit existed even when the victim was forced to sign an agreement to pay a false claim. We hold that there was sufficient evidence for the jury to conclude that an extension of credit in the form of a loan existed between Sedlak and White at the time the extortionate acts occurred. 25