Opinion ID: 23933
Heading Depth: 2
Heading Rank: 1

Heading: sufficiency of the evidence

Text: 19 McClatchy argues that the jury's verdict and the judgment of conviction against him were against the overwhelming weight of the evidence and insufficient as a matter of law to establish guilt beyond a reasonable doubt. As he moved for a judgment of acquittal at the close of the government's case, the standard of review in assessing McClatchy's sufficiency of evidence challenge is whether, considering all the evidence in the light most favorable to the verdict, a reasonable trier of fact could have found that the evidence established guilt beyond a reasonable doubt. United States v. Mendoza, 226 F.3d 340, 343 (5th Cir. 2000). 20 McClatchy claims that the basic intent of Form 1962-1 was to allow the farmer to sell crops in the regular course of business, pay essential family living expenses and farm operating expenses, pay anyone with a security interest in the proceeds that had priority over the FmHA, and then pay the FmHA note. McClatchy argues that the other expenses were prior liens with respect to the FmHA lien. Thus, he reasons that after totaling the amounts due on the loan from the Bank of Ruleville, rent for the tracts of land on which the company operated the farm, family living expenses, 1994 operating expenses, and costs of production, there was simply no money left for the FmHA lien. 21 McClatchy also points out that the FmHA lien did not apply to farm No. 2827, which is also operated by McClatchy Planting, but only to farm No. 2237. Thus, he argues, production on farm No. 2827 cannot be the subject matter of a conversion charge. He further claims that it is common practice for a farmer to maintain one or more bank accounts for a farm and that he did not draw off or siphon money from the farm's operations. 22 With respect to the crop conversion convictions in counts one and two, the government argues that McClatchy's intent to defraud was demonstrated by his handling of the soybean and cotton crops. The government points out that McClatchy followed the procedure required by the security agreement with respect to one sale of each crop but failed to obtain a release by the FmHA for the other sales. Also, the government challenges McClatchy's claim regarding the FmHA's standing with respect to other creditors. It asserts that McClatchy's theory that the subordination agreement somehow affected the government's standing to prosecute him for the conversion of the pledged crops is meritless. 23 Regarding the money laundering charges in counts three, four, and five, the government urges that the evidence presented at trial proved McClatchy's guilt beyond a reasonable doubt and that the record is complete as to each element of those offenses. As to the crop insurance fraud charges in count seven, the government argues that the evidence presented was sufficient for the jury to find that McClatchy knowingly falsified his soybean production on his crop insurance claim. The government asserts that McClatchy's testimony attempting to challenge this evidence was completely discredited by testimony from his nephew. 24 As an initial matter, we conclude that the vast majority of the crops involved in the charges against McClatchy were from farm No. 2237, not farm No. 2827, to which the FmHA lien did not apply. McClatchy's own testimony indicates that the 800 bushels of soybeans produced from farm No. 2827 were all retained for seed. Moreover, only 19 bales of the 823 bales of cotton produced by McClatchy Planting came from farm No. 2827. 25 We further find that there was more than sufficient evidence to support the jury's verdict against McClatchy. McClatchy's criminal purpose is evidenced by his taking two checks to the FmHA to be recorded and released but failing to follow the same procedure with the other checks. The jury could have easily inferred that he properly handled two of the checks so that he would not arouse the FmHA's suspicion and then simply converted the rest of the crop proceeds. 26 More importantly, the totality of the evidence presented demonstrates that McClatchy carried out an elaborate scheme whereby he converted and concealed funds that he had pledged to the FmHA. Using the name of his brother-in-law, who had no knowledge of McClatchy's scheme, McClatchy deposited and withdrew the pledged proceeds from a bank account for a company that he controlled and that consisted of only a bank account and a post office box. Compounding his scheme to beat the system, McClatchy then made false statements to the crop insurance agent so that he could recover insurance money to which he was not entitled. 27 The record is replete with evidence regarding the elements of each of the crimes of which McClatchy was convicted. 18 U.S.C. 658, the crop conversion statute under which McClatchy was convicted, criminalizes the knowing concealment, removal, disposal, or conversion, with intent to defraud, of any property mortgaged or pledged to, or held by . . . the Secretary of Agriculture acting through the Farmers Home Administration. 18 U.S.C. 658. The government presented evidence that McClatchy took only two of the crop sales checks, which were pledged to the FmHA, to be released and that he put forth much effort to hide the other checks. 28 18 U.S.C. 1956(a)(1)(B)(i), the money laundering statute, criminalizes the knowing concealment or disguising of the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity. 18 U.S.C. 1956 (a)(1)(B)(i). The government demonstrated that McClatchy concealed the converted crop proceeds in the Valley Supply checking account and withdrew those funds by forging his brother-in-law's name. 18 U.S.C. 1957(a) provides that [w]hoever . . . knowingly engages or attempts to engage in a monetary transaction in criminally derived property that is of a value greater than $10,000 and is derived from specified unlawful activity shall be subject to criminal penalties. 18 U.S.C. 1957(a). The government showed that one of the transactions in McClatchy's scheme involved $13,000. 29 18 U.S.C. 1001 criminalizes the making of a materially false, fictitious, or fraudulent statement or representation to a government agency. 18 U.S.C. 1001. The government presented evidence that McClatchy Planting sold 7,059.88 bushels of soybean to Bunge but that McClatchy reported to a crop insurance agent that McClatchy Planting had produced only 5,149.6 bushels of soybean in 1994. Thus, McClatchy received insurance money to which he was not entitled. 30 Also, it is important to note that, in this appeal, McClatchy does not attempt to refute the evidence that the government presented at trial, which is overwhelming. Instead, he cites various Mississippi lien statutes and defends his actions by merely asserting that he legitimately exhausted the crop proceeds, leaving nothing for the FmHA's lien. We find McClatchy's reliance on the state lien statutes unavailing. These state statutes in no way provide a defense to the federal crimes of which McClatchy was convicted. None of the federal statutes under which McClatchy was convicted indicates that provisions of state lien statutes create a defense to these federal crimes. 31 Arguably, McClatchy's reliance on the state statutes at the time he converted the pledged crops may raise a question regarding his intent to defraud. However, as noted above, the prosecution presented evidence to the jury that McClatchy properly handled two of the proceeds checks and converted and concealed the others. This is a fact from which the jury could have concluded that McClatchy intended to defraud the FmHA. Furthermore, as noted above, McClatchy has wholly failed to address any of the evidence presented regarding the other elements of the crimes of which he was convicted. Much of that evidence also belies any argument that McClatchy acted without the intent to defraud the FmHA. 32 Moreover, McClatchy's assertion that he spent the crop proceeds on farm and family expenses is of no consequence. McClatchy converted funds pledged to the FmHA. He simply did as he pleased with the crop proceeds, on which the FmHA had a lien. Furthermore, given the self-dealing involved in McClatchy's operations-he pays rent to himself and his family-his argument that he used some of the money for rent seems specious. 33 Accordingly, considering all of the evidence in the light most favorable to the verdict, we are unable to conclude that there was insufficient evidence on which to convict McClatchy.