Court Opinion

ID: 2994778
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:16:35.008126+00
Date Added: 2024-06-11T12:38:07.911610
License: Public Domain

In the
United States Court of Appeals
For the Seventh Circuit

No. 00-1409

United States of America,

Plaintiff-Appellee,

v.

Michael C. Renner,

Defendant-Appellant.

Appeal from the United States District Court
for the Central District of Illinois.
No. 98-10021-001--Michael M. Mihm, Judge.

Argued September 21, 2000--Decided January 2, 2001

  Before Easterbrook, Diane P. Wood, and Williams, Circuit
Judges.

  Diane P. Wood, Circuit Judge. Michael Renner was
convicted by a jury of defrauding the bank at
which he worked, in violation of 18 U.S.C. sec.
1344, and sentenced to 32 months of
incarceration. The fraud involved issuing
unlawful letters of credit for the benefit of
joint ventures of his superiors at the bank. He
now appeals the district court’s denial of
several of his pre-trial motions as well as the
jury instructions, arguing that the district
court’s actions violated his constitutional
rights of due process, compulsory process, and
trial by jury. We find no reversible error with
regard to any of these challenges and therefore
affirm the conviction.

I

  Renner was the senior vice president for
commercial loans at Community Bank of Greater
Peoria ("the Bank"). The Bank was owned by a
holding company, which itself was owned by C.
Raymond Becker and John Dailey. Becker served as
the Bank’s board chairman; Dailey served as its
CEO. Beginning in the mid-1980s, Becker and
Dailey became involved in several joint ventures
for the purpose of developing shopping centers in
Florida and Arizona as well as other commercial
ventures in Iowa.
  In 1986, after these joint ventures reached
their legal borrowing limits, Dailey, Renner, and
others initiated a scheme by which they caused
the Bank to secretly issue unrecorded letters of
credit (LOCs) to help finance their ventures.
Both the issuance of these LOCs and the failure
to book them violated various federal and state
banking laws. Specific irregularities included
the facts that no one ever required any
applications for the LOCs, no promissory notes
were signed, and Becker never paid any fees for
the unrecorded letters of credit.

  The scheme came to an end in June 1993, when in
the process of investigating an unrelated matter
an examiner for the FDIC discovered two
unrecorded LOCs issued by the bank over Renner’s
signature. As that investigation continued,
Dailey confessed to the LOC scheme and
approximately 45 unrecorded LOCs were recovered
from a drawer of Renner’s desk at the Bank. The
FDIC, the IRS, and the FBI began a new
investigation; Dailey and Becker resigned. By
this time, the scheme had resulted in a loss in
excess of $4,900,000 and the demise of the Bank.

  In time, Dailey and Renner were both charged
with knowingly executing a scheme to defraud a
financial institution, in violation of 19 U.S.C.
sec. 1344. Dailey pleaded guilty and testified
for the government at Renner’s trial. Throughout
the trial, Renner argued he was simply an
innocent dupe for Dailey and Becker, who actually
issued the LOCs. He protested that he knew
nothing of the larger scheme. The jury saw things
otherwise and returned a guilty verdict on
September 8, 1999. Renner was later sentenced to
32 months of incarceration. He now argues that
the district court’s jury instructions and its
denial of several of his pre-trial motions denied
him his constitutional rights of due process,
trial by jury, and compulsory process.

II

  Renner was indicted on twelve counts of bank
fraud. Paragraph Eight of the indictment charged
that Renner, "in order to execute and attempt to
execute the scheme, knowingly caused the Bank to
issue letters of credit . . . for the benefit of
the [listed] Businesses . . . , and in violation
of Bank and regulatory policy, caused the
existence of such letters of credit not [to] be
recorded properly on the books and records of the
Bank." The crux of Renner’s argument is that this
language required the government to prove two
distinct things: first, that Renner caused the
Bank to issue the LOCs, and second, that he
failed properly to record them after they were
issued.

  From that premise, Renner first argues that
Jury Instruction No. 4 failed properly to define
this two-part scheme with which he had been
charged. Instruction No. 4, however, told the
jury that "the ’scheme’ mean[t] the illegal
extension of credit by reason of letters of
credit unbooked on the books and records of
Community Bank of Greater Peoria." Renner reasons
that this instruction deprived him of his due
process rights because it allowed the jury to
find guilt based only on his failure to record
the LOCs, regardless of whether he issued the
LOCs. To similar effect, Renner also argues that
the jury instructions impermissibly amended the
indictment, thus depriving him of his right to a
jury trial.

  Although there was some initial confusion about
the point, our review of the trial record
satisfies us that Renner properly preserved his
objections to the jury instructions at the trial
level. Thus, in evaluating the challenged jury
instructions, this court reviews the charge in
its entirety to examine whether the jury was
misled in any way and whether it had an
understanding of the issues and its duty to
determine those issues. United States v.
Lanzotti, 205 F.3d 951, 956 (7th Cir. 2000).
Whether the trial judge amended the indictment is
a matter of law, which is reviewed de novo.
United States v. Pigee, 197 F.3d 879, 885 (7th
Cir. 1999).

  We are unpersuaded by Renner’s challenge to
Instruction No. 4 for two reasons: first, his
reading of that instruction is too narrow, and
more importantly, he has ignored the cardinal
rule in this area, which is that the jury
instructions must be examined as a whole. The
indictment charges that Renner "knowingly caused"
the Bank to issue unrecorded and illegal letters
of credit. It does not charge that he actually
made the initial underwriting decision, nor that
he was the sole person with the power to
authorize an extension of credit. It states only
that he knowingly caused at least some part of
the scheme to take place.

  In the end, of course, neither Renner nor any
other individual person actually issued the LOCs;
they were issued by the Bank as an institution.
LOCs are commitments by a bank that are
specifically designed to facilitate commercial
transactions by putting the bank’s credit on the
line either for payment (with documentary
credits) or for a guarantee (with standby
credits, as these appeared to be). Before the LOC
could be issued by the Bank, the signature of
some official of the Bank had to be on the
document. Here, it is undisputed that Renner
signed the LOCs in question. To that extent,
therefore, he caused the Bank to extend its
credit to the beneficiaries of the LOCs.
Furthermore, he also failed to book the LOCs
properly. Instruction 4 mentions both these
points--the illegal extension of credit by reason
of letters of credit, and the failure to book
those same letters of credit. It is also worth
noting that the jury was expressly instructed
that the phrase "to extend credit" meant "’to
make or renew any loan’ (including letters of
credit)." In short, even if the instruction was
not a model of clarity, it was not inconsistent
with the indictment.

  Furthermore, Instruction No. 4 was only a
description of the alleged "scheme." Even if
Renner is correct that Instruction No. 4 by
itself either inadequately or confusingly
describes his role in the scheme, other
instructions cure that problem. The jury was
instructed that the government had to prove the
following elements beyond a reasonable doubt:

First, that there was a scheme to defraud a bank
as charged in the indictment;

Second, that the defendant executed or aided the
execution of the scheme;

Third, that the defendant did so knowingly and
with the intent to defraud.

The jury was also told about the required mental
state:

You are further instructed that for the Defendant
Michael Renner to have acted with the intent to
defraud means that he acted knowingly and with
the intention or the purpose to deceive or to
cheat.

Finally, the court defined knowledge for them:

When the word "knowingly" is used in these
instructions, it means that the defendant
realized what he was doing and was aware of the
nature of his conduct, and did not act through
ignorance, mistake or accident. Knowledge may be
proved by the defendant’s conduct, and by all the
facts and circumstances surrounding the case.

You may infer knowledge from a combination of
suspicion and indifference to the truth. If you
find the defendant had a strong suspicion that
things were not what they seemed or a strong
suspicion that someone had withheld some
important facts, yet shut his eyes for fear that
he would learn, you may conclude he acted
knowingly. You may not conclude that the
defendant had knowledge if he was merely
negligent in not discovering the truth.

  Taken as a whole, these instructions properly
informed the jury that it had to find (1) a
scheme in which illegal credit was extended by
means of unrecorded LOCs and (2) that Renner
knowingly participated in the execution of this
scheme. See Lanzotti, 205 F.3d at 956 (appeals
court should review the jury charge in its
entirety to determine error). Whether Renner
"knowingly executed or aided" the scheme, as
stated in the instructions, is functionally the
same question as whether he "knowingly caused"
the scheme, as stated in the indictment. The jury
instructions do not have to mirror the words of
the indictment--the concern is that the defendant
be able to rely on the indictment in making his
defense. See United States v. Miller, 471 U.S.
130, 136 (1985).

  Renner has emphasized his objection to
Instruction No. 4 so strongly because his entire
defense focused on the fact that he personally
did not make the initial decision to extend the
credit. But the government’s case did not depend
on proof that he did so. The indictment did not
charge him with actually making the initial
decision to issue the credit, but instead merely
with playing a part in the scheme. By signing the
LOCs before they were issued, failing to book
them in order to promote the fraud, and hiding
them in his desk drawer, he knowingly caused the
extension of credit just as much as if he had
taken the first step or two in the process that
led to their issuance.

  For the sake of completeness, we add that
Renner’s concession in his brief that, had the
indictment charged him with aiding and abetting,
the jury instructions would have been proper, was
fatal in any event to his appeal. Every
indictment implicitly includes an aiding and
abetting charge; it is unnecessary for an
indictment specifically to mention 18 U.S.C. sec.
2. See United States v. Gooch, 120 F.3d 78, 81
(7th Cir. 1997). Accordingly, the jury was
instructed that, in order to sustain the charges,
it had to find a scheme to defraud and that the
defendant executed or aided in the extension of
the scheme knowingly and with the intent to
defraud. The jury was also given a separate
aiding and abetting instruction.

  Thus, we find that the district court’s jury
instructions did not mislead the jury on the
government’s burden of proof or otherwise
impermissibly amend the indictment.
III

  Renner filed several unsuccessful pre-trial
motions regarding immunity of two defense
witnesses and their later invocation of the Fifth
Amendment privilege against self-incrimination.
He also unsuccessfully sought the introduction of
a statement made by an Assistant U.S. Attorney at
a pre-trial hearing that seemed to vouch for
Renner’s own truthfulness. He now argues that the
district court’s denial of these motions violated
his rights to compulsory process. We disagree;
the district court did not abuse its discretion
in denying any of these motions.

IV

  For these reasons, we hold that the procedures
followed by the district court did not deny
Renner his rights to due process, trial by jury,
or compulsory process. Accordingly, the judgment
of conviction is

Affirmed.