Opinion ID: 3010610
Heading Depth: 1
Heading Rank: 1

Heading: The Houran Trading Company (HTC) Loans. In July

Text: 1990 Steve Houran obtained a $350,000 line of credit at BBV for HTC, representing that the loan proceeds would finance HTC's international business in shoes and providing fictitious financial statements and tax returns to substantiate this fraudulent representation. HTC was little more than a shell used to circumvent the limits on loans to a single borrower. The fraud is undisputed. Tony's share in it was an issue at trial. 2 The government contended that Tony's past work in helping Steve get fraudulent loans from other banks, together with the closeness of the brothers in business and at home, showed that Tony must have been aware that Steve was supplying BBV with the false assurance that Tony would guarantee the loan and a false financial statement showing Tony's net worth as $2,262,922. Nonetheless, no one at BBV testified to dealing with Tony on the line of credit, and the government conceded that the note acknowledging the HTC loan carried Tony's forged signature. The jury, or part of it, seems to have been in doubt, for, during its deliberations, the jury asked the judge if, to convict of aiding and abetting, the jury should consider only July 1990 when the line of credit was applied for or whether the jury could consider the time charged in the indictment ranging from July 1990 to February 1992. The judge replied that the jury could consider whether the defendant knew of the crime at any time the scheme to defraud was underway and its participants intended its promotion. That instruction is challenged on appeal as an amendment of the indictment. The indictment did indeed list as acts performed by Tony only acts in July 1990 relating to the application for credit. What Tony had done in February 1992, which inferentially the jury had in mind, was to lie in a deposition in a civil suit brought by BBV to recover the proceeds of the loan. In this deposition Tony stated that HTC was a bona fide international trading company and implied that he had signed the note which purported to carry his signature. The government argues that his ready participation in this tale in 1992 shows that he had knowledge of the fraud in 1990. If that inference is a good deal less than certain, the government has a fallback position: that Tony's lies in 1992 were meant to keep the fraud from being discovered and were a part of the continuing scheme to defraud. This contention is convincing. The indictment did charge a scheme to defraud, not a single act of fraud. The indictment did say that the scheme lasted until February 1992. The indictment did not have to list every single act by which the scheme was carried out. The indictment did specify that it was only enumerating in part the actions taken to effectuate the 3 scheme. The government argued to the jury that the lies in the deposition were part of the scheme. The defendant had the opportunity to rebut this contention. Tony Houran was properly convicted of aiding and abetting bank fraud in violation of 18 U.S.C. S 1344 and S 2. II. The Loans To The HCC Subsidiaries. A s econd scheme to defraud, beginning in April 1991 and running through February 1992, involved the creation of five subsidiaries of the construction company, HCC. The subsidiaries had no purpose but to borrow from BBV. Tony Houran guaranteed a loan of $90,000 from BBV to Diversified Carpentry, Inc., one of these new creations, and he guaranteed a loan of $90,000 from BBV to Masonry Construction Company, a second subsidiary. The misrepresentation of hisfinances that accompanied the guarantees is not disputed on appeal. Bank fraud is established.