Opinion ID: 714125
Heading Depth: 3
Heading Rank: 4

Heading: False Statements to a Federally Insured Institution (counts 30-31 (Ross only))

Text: 69 In counts 30 and 31, Ross was convicted under 18 U.S.C. § 1014 for submitting a false personal financial statement and loan application to Harris Bank in order to procure an $87,000 loan to refinance his yacht debt. Specifically, Ross understated his liabilities on both documents by omitting a $749,000 debt he owed to ISC. The bank relied on Ross's false statements in approving his application for the loan, and it lost $37,000 when he subsequently defaulted. Ross claims on appeal that the government presented insufficient evidence to establish either (1) that the documents were false or (2) that Harris Bank had been federally insured. 70 As to the documents' falsity, Ross concedes that the $749,000 debt did not appear on either the financial statement or the loan application. However, Ross points to the fact that ISC financial statements were submitted along with these documents. He maintains that after the bank reviewed his total loan application package, it approved the loan with full knowledge of Ross's financial position. His argument is not supported by the record. At trial, the government presented a great deal of evidence that Ross had materially altered the ISC financial statements prior to submitting them to the bank. When the statements were prepared by J.V. Springer, the $749,000 entry in ISC's notes receivable had been accompanied by a footnote explaining that this debt was owed by Ross. When submitted to Harris Bank, this footnote and the reference to the footnote had been deleted, and the reader was left only to guess at the holder of the note. Clearly, this evidence was sufficient for a rational jury to have determined that the documents Ross submitted falsely described his debts. 71 As to Harris Bank's federally insured status, this court has held that the government must prove not only that the bank has been federally insured at some point in time, but that the bank was federally insured at the time the false statement was made. United States v. Shively, 715 F.2d 260, 264-65 (7th Cir.1983), cert. denied, 465 U.S. 1007, 104 S.Ct. 1001, 79 L.Ed.2d 233 (1984). At trial, government witness Lawrence Mizera, vice president and collection manager for Harris Bank, was asked and responded as follows: 72 Q: And are deposits in the Harris Bank federally insured? 73 A: Yes, they are. 74 Are is temporally distinct from were, and Ross argues that such present-tense testimony is insufficient to prove that the bank was federally insured at the time he filed his loan application. 75 In United States v. Knop, this court was faced with almost identical testimony at trial and held: Taken woodenly and literally the testimony might seem to refer only to the time of the trial. In context it could plausibly have been taken by the jury as referring to the time of the commission of the offenses.... 701 F.2d 670, 673 (7th Cir.1983) (footnote omitted). As in Knop, in this case additional testimony formed a context against which Mizera's statement could reasonably be interpreted as referring to the bank's insured status at the time of the false statements. Specifically, on cross-examination, Ross's counsel pressed Mizera about whether the bank had in fact been insured, and Mizera gave the following testimony: 76 Q: Sir, you said the bank took a loss. The bank was insured, weren't they? 77 A: For a loan like this, no, we weren't. 78 Q: You were not? I thought you said you were insured? 79 A: The bank is federally insured. That does not cover loan losses. 80 Here, defendant's counsel interpreted Mizera's answer on direct testimony as stating that the bank was insured at the time of the application and attempted to impeach that. Mizera insisted that the bank did possess insurance, but clarified the extent of its coverage. This colloquy could reasonably be interpreted to mean that although Harris was in fact insured at the time of Ross's wrongdoing, such insurance covers deposits, not loans, and thus did not relieve the bank of its loss when Ross defaulted. Given the whole of Mizera's testimony, and viewing this testimony in the light most favorable to the government, the evidence was sufficient for a rational jury to have found beyond a reasonable doubt that Harris Bank had been federally insured when Ross submitted the false documents. 81