Court Opinion

ID: 23240
Source: CourtListenerOpinion
Date Created: 2010-04-25 08:07:48+00
Date Added: 2024-06-11T12:43:25.120528
License: Public Domain

UNITED STATES COURT OF APPEALS

                        FOR THE FIFTH CIRCUIT

                          __________________

                             No. 00-20018
                          __________________

     UNITED STATES OF AMERICA,

                                              Plaintiff-Appellee,

                                versus

     ARVELL J. RABE,

                                              Defendant-Appellant.

            ______________________________________________

         Appeal from the United States District Court for the
                      Southern District of Texas
                             H-98-CR-351-1
            ______________________________________________
                           February 21, 2001

Before BARKSDALE, EMILIO M. GARZA, and BENAVIDES, Circuit Judges.

PER CURIAM:*

         Defendant-appellant   Arvell    J.    Rabe   (Rabe)   appeals   his

convictions for bank fraud (18 U.S.C. § 1344) arising out of an

alleged check kiting scheme.    The sole issue Rabe raises on appeal

is whether the district court erred in charging the jury with

respect to “deliberate ignorance.”            Finding that any error was

     *
       Pursuant to 5TH CIR. R. 47.5, the court has determined that this
opinion should not be published and is not precedent except under the
limited circumstances set forth in 5TH CIR. R. 47.5.4.
harmless, we AFFIRM.

       I.    FACTUAL AND PROCEDURAL HISTORY

       The evidence at trial established that, in 1996, Rabe set up

a commercial checking account with Norwest Bank.                   The account was

in the name of A.J. Rabe, Inc., doing business as Eastex Livestock

Company (the “Norwest Account”).                  Rabe also had an account at

Citizens State Bank (“Citizens”) in Marlin, Texas, in the name of

Marlin Livestock Company (the “Marlin Livestock account”).                         Rabe

requested that Citizens authorize a person named Kimberly Truax to

sign checks on the Marlin Livestock account.

       The alleged kiting scheme began in June 1997.                     From June to

September, Rabe deposited checks into the Norwest account drawn on

the Marlin Livestock account.                   Thereafter, he would obtain a

cashier’s check from Norwest against the uncollected deposit and

then   deposit      that    check    into       the   Marlin    Livestock    account.

Overall, Rabe deposited into the Marlin Livestock and Norwest

accounts “kited” checks totaling $2.8 million, while his actual

deposits totaled only $66,000.              During that time, Rabe deposited

into   the   Norwest       account   eleven       checks   drawn    on     the   Marlin

Livestock account, payable to Eastex Livestock or A.J. Rabe, Inc.

Each Marlin Livestock check was purportedly signed by Kimberly

Truax.       Rabe   and     Truax    contradicted        each    other’s    testimony

regarding whether Truax had authorized Rabe to sign her name.

Nevertheless, Rabe admitted that he had signed the checks in

Kimberly Truax’s name, and Truax testified that the signature

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authorization for the Marlin account was not hers.

      Four of the deposits in question were made in person at the

Briarcrest branch, four were made in person at the Rock Prairie

location, and three were mailed to the bank.         On either the day

each deposit was made or on the following day, Rabe would go to

Norwest’s Rock Prairie location, some six to eight miles from the

Briarcrest location, and obtain a cashier’s check in amounts nearly

equal to the amount of the deposit.

      The jury found Rabe guilty of ten counts of bank fraud.          The

district court sentenced him to twenty-one months of imprisonment

as to each count, to run concurrently.

      II. JURY INSTRUCTION

      The only issue Rabe raises on appeal is that the district

court erred by giving a jury instruction on “deliberate ignorance.”

This Court reviews challenged jury instructions for abuse of

discretion and will not reverse if the court’s charge, viewed in

its entirety, is a correct statement of the law which clearly

instructs jurors as to the relevant principles of law applicable to

the   factual   issues   confronting   them.   See   United   States   v.

Hernandez, 92 F.3d 309, 311 (5th Cir. 1996); United States v.

Ojebode, 957 F.2d 1218, 1228 (5th Cir. 1992).          We look to the

entire charge in the context of the trial and will reverse only if

the charge, as a whole, “misled the jury as to the elements of the

offense.”   United States v. Wyly, 193 F.3d 289, 300 (5th Cir. 1999)

(internal quotation marks and citations omitted).

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     The district court instructed the jury that in order to find

Rabe guilty they had to find, inter alia, that Rabe executed or

attempted to execute a scheme or artifice to defraud Norwest Bank

and that he acted knowingly.   The court instructed the jury that a

scheme to defraud means a plan involving a false or fraudulent

pretense or promise “intended to deceive others in order to obtain

something of value.”   Further, the court stated that a defendant

acts with “intent to defraud if the defendant acted knowingly and

with the specific intent to deceive, ordinarily for the purpose of

causing some financial loss to another or bringing about some

financial gain to the defendant.” The word “knowingly” was defined

as meaning “that the act was done voluntarily and intentionally and

not because of mistake or accident.”

     The court then gave the following instruction:

     You may find that a defendant had knowledge of a fact if
     you find that the defendant deliberately closed his eyes
     to what otherwise would have been obvious to him. While
     knowledge on the part of the defendant cannot be
     established merely by demonstrating that the defendant
     was negligent, careless, or foolish, knowledge can be
     inferred if the defendant deliberately blinded himself to
     the existence of a fact.

     Rabe objected to this instruction, arguing that there was no

evidence of subjective knowledge of illegality and that he admitted

writing the checks; thus, a deliberate-ignorance instruction was

not appropriate. The Government countered that the instruction was

appropriate because Rabe avoided his account officer, Robert Wood

(Wood), by going to the Rock Prairie branch to obtain the cashier’s

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checks.    The court overruled the objection and, at Rabe’s urging,

added a good-faith instruction.1

     We will assume for purposes of this appeal that the

district       court    erred   by     giving   the    deliberate-ignorance

instruction.       It therefore must be determined whether the

error was harmless.             An erroneous jury instruction that

pertains to an element at issue is harmless “if the evidence

of guilt is so overwhelming that the error could not have

contributed to the jury’s decision to convict.”                    See United

States    v.    Chen,    913 F.2d 183,    188   n.6   (5th   Cir.   1990)

(internal quotation marks and citation omitted).

     Rabe contends that the instruction was not harmless error

because there was evidence that Rabe reasonably could have

believed that Wood had given him a floating loan.                           For

example, on several occasions, Wood approved checks in excess

of the $10-12,000 limit against uncollected funds for Rabe’s

business purposes, and the Rock Prairie personnel authorized

     1
          The court instructed on good faith as follows:
            Good faith is a complete defense to the
            charges in the indictment, since good faith on
            the part of the defendant is inconsistent with
            intent to defraud or willfulness, which is an
            essential part of the charges. The burden of
            proof is not on the defendant to prove good
            faith, of course, since the defendant has no
            burden to prove anything. The government must
            establish, beyond a reasonable doubt that the
            defendant acted with specific intent to
            defraud as charged in the indictment.

                                           5
cashier’s checks in significant amounts.    According to Rabe,

however, the deliberate-ignorance instruction “tipped the

scales,” because it created a risk that the jury would equate

specific intent with deliberate ignorance, and thus allowed

the jury to find Rabe guilty if he “should have known” that

his actions would defraud Norwest, even if he did not intend

to do so.

     A jury may infer intent to defraud from all the facts and

circumstances surrounding the transaction in question.      See

United States v. Aubrey, 878 F.2d 825, 827 (5th Cir. 1989)

(mail-fraud case). Rabe clearly knew that there were no funds

in the Marlin Account to cover the checks he deposited in his

Norwest Account, as there was little to no business activity

for Marlin and he knew that he was writing checks against

other checks rather than against cash deposits.2       He also

signed Kimberly Truax’s name to the checks, although she did

not work for him and was in prison at the time the checks were

signed.    Most significantly, on several occasions, Rabe made

deposits at one branch of his bank and then obtained cashier’s

checks on the same day at another branch, only a few miles

away.    These facts support an inference that Rabe was engaged

in a scheme to defraud Norwest.

     2
       According to FBI financial analyst Ronald Emmert, there was no
evidence of any significant business activity for either Marlin
Livestock or Eastex during 1997.

                                  6
     Finally, the instructions as a whole emphasized that the

Government was required to prove specific intent to defraud,

and Rabe was allowed to argue that he believed that his

actions were authorized by Norwest.    The court told the jury

that good faith was a defense and that the Government had to

prove Rabe’s specific intent to defraud.    The Government did

not mention deliberate ignorance in its cross-examination of

Rabe or in its closing remarks, and there was no evidence

adduced at trial that Rabe deliberately ignored any suspicious

facts.     These factors, combined with the evidence of Rabe’s

guilt, persuade us that the instruction, even if erroneously

given, could not have contributed to the jury’s decision to

convict.

     Accordingly, the district court’s judgment is AFFIRMED.

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