Court Opinion

ID: 5433
Source: CourtListenerOpinion
Date Created: 2010-04-25 05:05:52+00
Date Added: 2024-06-11T13:28:02.078781
License: Public Domain

UNITED STATES COURT OF APPEALS
                      For the Fifth Circuit

                             No. 92-5568

                    UNITED STATES OF AMERICA,

                                                 Plaintiff-Appellee,

                               VERSUS

                         BEVERLY A. WALDRIP,

                                                Defendant-Appellant.

          Appeal from the United States District Court
                For the Western District of Texas
                         (January 14, 1993)

Before REAVLEY, SMITH and DeMOSS, Circuit Judges

DeMOSS, Circuit Judge:

     By superseding indictment, Beverly A. Waldrip (Waldrip) was

indicted for executing a scheme to defraud Allied American Bank of

San Antonio and Texas Commerce Bank-San Antonio in violation of 18

U.S.C. § 1344 (counts 1 and 2), and for knowingly making a false

statement for the purpose of influencing the action of Texas

Commerce Bank in violation of 18 U.S.C. § 1014 (count 3).

     A jury found Waldrip guilty on all three counts. The district

court sentenced Waldrip to two years of imprisonment on counts 1

and 2, to run concurrently, and to two years imprisonment on count

3, to run consecutively to the other sentence.    The district court
suspended execution of the sentence on count three, and Waldrip was

placed on probation for five years after she serves the sentence

imposed on counts 1 and 2.        The district court ordered Waldrip to

pay a special assessment of $150, pursuant to 18 U.S.C. § 3580 and

Waldrip was also ordered to pay restitution, $122,461.99 to First

Interstate Bank and $59,213 to Texas Commerce Bank.                    However,

Waldrip did not have the financial means to pay the total amount of

restitution, therefore, she was ordered to pay partial restitution,

$12,246.19 to First Interstate Bank and $5,921.30 to Texas Commerce

Bank.      Waldrip      appeals    her       conviction.       After    careful

consideration, we affirm the conviction.

                                  I.     Facts

      In 1983 three different banks--Texas Commerce Bank (TCB),

Northside State Bank (NSB), and Allied American Bank (AAB) funded

a real estate development project in San Antonio, Texas, known as

the Retreat at Glen Heather (the Project).             The Project involved

the financing and developing of condominiums and raw land.              In late

1985, the borrowers took the Project into bankruptcy because the

loans were past due and the banks were in a position to foreclose.

Although the banks did not foreclose, they sought to refinance the

Project with new investors.        To achieve that end, the banks sold

the   Project   (with    financing)      to   First   Center   of   Texas,   an

investment group headed by Steve Morriss (Morriss).                    Morriss

intended to recruit purchasers of the 32 condominium units and

ultimately to develop the lots.               The banks gave Morriss until

February 15, 1986 to recruit investors. Morriss brought in Waldrip

                                         2
as an investor, who in turn, recruited Doyle Harrell as another

investor.   In connection with the investment, a loan application

was submitted to the banks in the names of Doyle Harrell and his

wife Bernice Harrell. The banks required both Mr. and Mrs. Harrell

to sign the loan documents.   The Harrell loan was approved with the

Harrells as co-borrowers.

     In June 1986, one of the borrowers asked the banks to change

the payment date to a different day of the month.      In complying

with the request, TCB sent a document to the Harrells for them to

sign agreeing to the date change.       In response, Mrs. Harrell

contacted TCB and told them that she knew nothing about the loan

and had not signed the original loan documents.    TCB later learned

that Waldrip had signed both Doyle and Bernice Harrells' names to

the loan documents.1

     Waldrip was indicted for scheming to defraud AAB and TCB in

violation of 18 U.S.C. § 1344 (counts one and two), and for

knowingly making a false statement for the purpose of influencing

the action of TCB in violation of 18 U.S.C. § 1014 (count three).

At trial, Waldrip claimed that she signed the loan documents only

after Doyle Harrell assured her that he would provide her with a

power of attorney for both himself and his wife.    When she learned

that the powers of attorney would not be forthcoming, Waldrip

claimed that she then made a "second set of documents" by whiting

out the signatures on the original documents and making a copy of

    1
       However, Waldrip is only charged with forging the signature
of Bernice Harrell.

                                  3
those original documents. According to Waldrip, Doyle Harrell then

signed his name to the "second set of documents" and she marked out

the name of Bernice Harrell.      Waldrip claimed that she set aside

the original documents on which she signed the Harrells' names, and

left the "second set of documents" to be picked up by a courier.

Waldrip contended that the courier picked up the wrong set of

documents.

                            II.   Discussion

     A.   The Hill Letter

     Waldrip filed a pre-trial motion to suppress evidence of a

separate transaction in which she signed Accountant Steve Hill's

name to a letter that was subsequently sent to investors.         The

district court elected to carry the motion as a motion in limine.

At trial, Waldrip elected to testify in her own behalf.           The

government was allowed to use the Hill letter in cross-examining

Waldrip pursuant to Federal Rule of Evidence 608(b) as a matter

affecting her character for truthfulness.2

     2
        Specifically, Waldrip complains of the following exchange
that took place during cross-examination:

     GOVERNMENT:    . . . Your various signatures of Bernice
     Harrell's name isn't the first time you've signed somebody's
     name to a document without their permission, is it?

     WALDRIP:   To a document?

     GOVERNMENT:   That's right.    To   a document, a piece of paper.

     WALDRIP: No. I've signed--yeah, I've signed people's names
     to things before.

     GOVERNMENT: In fact, approximately one year before the, one
     year and a few months before the Glen Heather incident, you
     had a partner in one of your companies, yours and your

                                    4
husband's companies, by the name of Jim Cox, did you not?

WALDRIP:   Yes.

GOVERNMENT:   And he was an attorney, wasn't he?

WALDRIP:   Yes.

GOVERNMENT:   And he wanted to get out of the partnership,
didn't he?

WALDRIP: He wasn't actually in the partnership. He had a
right to exercise an option and he wanted to not do that so he
wanted to not be a part of the company.

GOVERNMENT:   He wanted an accounting of partnership matters,
didn't he?

WALDRIP:   Yes.

GOVERNMENT:   He wanted a financial statement from you, didn't
he?

WALDRIP: He wanted an accounting of four months' worth of
activity. Yes.

GOVERNMENT: And you sent him a compiled financial statement
or an informal financial statement, didn't you?

WALDRIP:   Yes.

GOVERNMENT:   And it had a cover letter on it, didn't it?

WALDRIP:   Yes.

GOVERNMENT:   And it was signed by Steve Hill, CPA, was it not?

WALDRIP:   Yes.   It was.

GOVERNMENT:   And in fact, Mr. Hill never signed it.        You
signed it, didn't you?

WALDRIP:   Yes.   I did.

GOVERNMENT:   And you signed it without Mr. Hill's permission,
didn't you?

WALDRIP:   I read it to him first.

                            5
     By testifying, Waldrip put her character for truthfulness in

issue.    United States v. Williams, 822 F.2d 512, 516 (5th Cir.

1987).    "Control over the conduct of a trial, including the scope

of   permissible     cross-examination,        is   squarely     within    the

discretionary powers of the district court, and its rulings will be

disturbed    on   review    only   if   the   district   court   abuses   that

discretion." Id., citing United States v. Viera, 819 F.2d 498, 500

(5th Cir. 1987).           The district court may under Rule 608(b)3

determine if evidence is probative of truthfulness, and under Rule

403 exclude even probative evidence if the prejudicial effect

outweighs the probative value. United States v. Farias-Farias, 925

F.2d 805, 809 (5th Cir. 1991).4

     GOVERNMENT:     Did you sign it without his permission?

     WALDRIP:     Yes.

     3
          Rule 608(b) provides that:

     [s]pecific instances of the conduct of a witness, for the
     purpose of attacking or supporting his credibility, other
     than conviction of crime as provided in rule 609, may not
     be proved by extrinsic evidence. They may, however, in
     the discretion of the court, if probative or truthfulness
     or untruthfulness, be inquired into on cross-examination
     of the witness (1) concerning his character for
     truthfulness or untruthfulness, . . .

     4
         Rule 403 provides:

     [a]lthough relevant, evidence may be excluded if its
     probative value is substantially outweighed by the danger
     of unfair prejudice, confusion of the issues, or
     misleading the jury, or by considerations of undue delay,
     waste of time, or needless presentation of cumulative
     evidence.

                                        6
     Waldrip contends that the district court abused its discretion

in admitting the letter because, even if a forgery, it is not

probative of her character for truthfulness.   However, forgery has

been held to be probative evidence of a witnesses' character for

truthfulness.     United States v. Leake, 642 F.2d 715 (4th Cir.

1981).     In Leake, the court stated "Rule 608 authorizes inquiry

only into instances of misconduct that are clearly probative of

truthfulness or untruthfulness, such as perjury, fraud, swindling,

forgery, bribery, and embezzlement." Id. at 718-719 (emphasis

added).     We hold that the district court did not abuse its

discretion when it allowed the government to cross-examine Waldrip

concerning the letter because such misconduct was probative of

Waldrip's character for truthfulness.5

     Waldrip also argues that the probative value of the Hill

letter is substantially outweighed by its prejudicial effect and

is, therefore, inadmissible under Rule 403.    She asserts that this

prior conduct was so similar to the transaction for which she was

charged that the jury could easily infer that she was a forger in

general.    This court has stated in United States v. Beechum, 582

F.2d 898 (5th Cir. 1978), cert. denied, 440 U.S. 920 (1979):

    5
      In a related argument, Waldrip contends that the Hill letter
was not forged because the government failed to prove that she
intended to defraud someone. This argument misses the point. The
government is not required, and in fact, is not allowed under Rule
608(b), to prove with extrinsic evidence the criminal intent behind
the conduct. United States v. Cohen, 631 F. 2d 1223, 1226-27 (5th
Cir. 1980); United States v. Cole, 617 F.2d 151, 154 n. 3 (5th Cir.
1980).

                                 7
        It is true as well that the more closely the extrinsic
        offense resembles the charged offense, the greater the
        prejudice to the defendant. The likelihood that the jury
        will convict the defendant because he is the kind of
        person who commits this particular type of crime or
        because he was not punished for the extrinsic offense
        increases with the increasing likeness of the offenses.
        Id. at 915 n. 20.

We agree with Waldrip that the conduct is very similar to the

conduct for which she was on trial.       Here, however, even if the

prejudicial effect substantially outweighed the extrinsic act's

probative value, any error in admitting it was harmless, given the

overwhelming evidence of guilt.6

        B.   Bribery

        Waldrip contends that the district court abused its discretion

in allowing the government during cross-examination to introduce

evidence that she had committed bank bribery.       Waldrip similarly

contends that evidence of bank bribery is not admissible under Rule

608(b) for impeaching her character for truthfulness and under Rule

    6
        The other evidence against Waldrip is summarized as follows:

        (1) Waldrip signed Bernice Harrell's name to Glen Heather
        documents on three occasions after she testified that she was
        aware that Bernice Harrell would not be participating in the
        Glen Heather project;
        (2) the government's handwriting expert testified that Waldrip
        intentionally attempted to retrace and copy Mrs. Harrell's
        signature;
        (3) Waldrip used different color ink to sign the signatures of
        Doyle and Bernice Harrell to the same document;
        (4) Waldrip failed to sign the document in a way that would
        indicate that she was signing under the authority of a power-
        of-attorney;
        (5) Doyle Harrell testified that he did not tell Waldrip that
        he would be able to get a power-of-attorney for his wife
        Bernice Harrell; and
        (6) the notary whose signature appears on the loan documents
        testified that she did not notarize those documents.

                                   8
403 because its prejudicial effect substantially outweighs its

probative    value.      During   the       government's   cross-examination,

Waldrip     testified    that   she     paid    Doyle   Harrell   $5,000     for

introducing her to a banker and presenting a loan package to a bank

on her behalf.    At that time, Harrell was on the board of directors

of the bank.

     Specifically, Waldrip complains of the following exchange that

took place at trial:

     GOVERNMENT:  And Mrs. Waldrip, you know that that's bank
     bribery? That's a federal crime?

     WALDRIP: No. It isn't because any board director can present
     a project and sponsor someone in there. They just are not
     allowed to vote on the loan being approved, and Mr. Harrell
     did not vote on my project in that board meeting.

Waldrip did not object to this line of questioning until the

government attempted to read the elements of bank bribery from the

United States Code. Waldrip's objection consisted of the following

exchange:

     WALDRIP: May it please the court, your honor. I object to
     this line of questioning of the witness. She's not a lawyer,
     number one. The government is--if the government had a case
     and thought that she had committed some crime--this alludes to
     a period of time four years ago.

     Waldrip     did    not   timely    and    specifically    object   to   the

introduction of the bribery evidence.              Federal Rule of Evidence

103(a)(1) requires a "timely objection or motion to strike . . .

stating the specific ground of objection, if the specific ground is

not apparent from the context. . . . "           A trial court judge must be

fully apprised of the grounds of an objection.                United States v.

Jimenez Lopez, 873 F.2d 769, 773 (5th Cir. 1989).                   A loosely

                                        9
formulated and imprecise objection will not preserve error.                Id.

We would stretch too far to find a specific objection here.                The

objection was not made, and the issue is not before us on appeal,

therefore, this court should review admission of the evidence for

plain error. United States v. Martinez, 962 F.2d 1161, 1166 (5th

Cir. 1992).

     Waldrip attempts to show that the court committed plain error

because    bank    bribery   is   not   probative   of   her   character   for

truthfulness, citing United States v. Rosa, 891 F.2d 1063 (3rd Cir.

1989).     In Rosa, the court stated that "bribery, however, is not

the kind of conduct which bears on truthfulness or untruthfulness.

Moreover, even if we regarded bribery as minimally probative of

those matters . . . we could not say that the trial judge abused

its discretion in limiting cross-examination with respect . . . to

bribery."    On the other hand, in United States v. Hurst, 951 F.2d

1490, 1500-01 (6th Cir.), cert. denied, 112 S. Ct. 1952 (1992), the

court held that the trial court did not abuse its discretion in

concluding that the defendant's misconduct in attempting to bribe

a police officer was probative of truthfulness.           The court went on

to state "[t]o the extent that . . . Rosa . . ., might be read to

suggest that bribery-related offenses are not probative of a

witness' truthfulness in all cases, we disagree."

     Plain error is an error so obvious that failure to notice it

would     seriously    affect     the   fairness,   integrity,    or   public

reputation of the judicial proceedings and results in a miscarriage

of justice.       Martinez, 962 F.2d at 1166 n. 10.       We agree with the

                                        10
Fourth     and   Sixth   Circuits     that     bribery   is   probative   of

truthfulness.      See, Hurst, 951 F.2d at 1500-01; Leake, 642 F.2d at

718-19.    Waldrip has not shown how the admission of the bribery

evidence affected the fairness of the judicial proceedings or would

result in a miscarriage of justice.            Thus, we do not find plain

error. Cf, Martinez, 962 F.2d at 1166 (holding that no plain error

occurred    when   district   court   allowed     admission   of   extrinsic

evidence that defense witness was gang member to show bias).

     3.    Limiting Instruction

     Waldrip contends that the district court erred by not giving

a limiting instruction to the jury informing them that the evidence

of the Hill letter and the bank bribery could be used only to

impeach Waldrip's character for truthfulness and could not be used

as evidence of Waldrip's guilt.            Since Waldrip did not request a

limiting instruction, the question, therefore, is whether the

district court committed plain error in failing sua sponte to give

the instruction.     See, United States v. Prati, 861 F.2d 82, 86 (5th

Cir. 1988); United States v. Barnes, 586 F.2d 1052, 1058 (5th Cir.

1978); United States v. Diaz, 585 F.2d 116, 117 (5th Cir. 1978).

Under the plain error standard, the defendant "must demonstrate

that the charge, considered as a whole, is so clearly erroneous as

to result in a likelihood of a grave miscarriage of justice."

Prati, 861 F.2d at 86, citing United States v. Varkonyi, 645 F.2d

453, 460 (5th Cir. 1981).       Our inquiry on appeal is limited to

analyzing whether, "the need for the instruction is obvious and the

failure to give it so prejudicial as to affect substantial rights

                                      11
of the accused." United States v. Garcia, 530 F.2d 650, 656 (5th

Cir. 1976).         Waldrip contends that under Diaz the district court

committed     plain    error     when    it    failed    to    give    a    limiting

instruction, especially when the extrinsic act evidence is very

similar to the crimes for which the defendant is charged.                   In Diaz,

this court held that the district court committed plain error in

failing to     give    a   limiting     instruction     when   a   defendant         was

questioned about a prior conviction for an offense similar to the

offense of which he was charged. 585 F.2d at 117; see also United

States v. Garner, 471 F.2d 212, 214-215 (5th Cir. 1972) (full

discussion of the controversy concerning impeachment through use of

defendant's prior convictions and dilemma defendant faces as to

whether to testify on his own behalf).                   As in Diaz, Waldrip

contends that the jury was free to consider the evidence of the

Hill letter and the bank bribery as actual evidence of her guilt,

not just as evidence of her character for truthfulness.

     "Although the Diaz opinion found plain error in the trial

judge's failure sua sponte to instruct the jury as to the limited

use of evidence of other offenses, it did not establish a per se

rule.   Just as in the case of impeachment evidence, our inquiry

will focus and depend on the particular facts of each case."

Barnes, 586 F.2d at 1058 n. 7.           "Plain error appears only when the

impeaching testimony is extremely damaging, the need for the

instruction    is     obvious,    and    the   failure    to    give       it   is    so

prejudicial as to affect the substantial rights of the accused."

Id. at 1058.

                                         12
     When the particular facts of this case are examined, we find

that unlike Diaz, the trial court did not commit plain error.             In

view of the other evidence against Waldrip, the evidence of her

previous acts    of   forgery   and   bank   bribery    was   not   extremely

damaging.    The government clearly established all the elements of

the charged offenses.       In addition, the need for a limiting

instruction was not obvious.      Counsel may refrain from requesting

an instruction in order not to emphasize potentially damaging

evidence, and for other strategic reasons.             Barnes, 586 F.2d at

1059.    Finally, although we cannot fairly say that the evidence of

prior conduct was not damaging, it was not so damaging as to

require us to reverse on the basis of plain error.

     Although the district court should have cautioned the jury to

consider the extrinsic act evidence only as it related to Waldrip's

character for truthfulness, it did warn the jury

     The defendant is not on trial for any act, conduct or
     offense not alleged in the superseding indictment.

Record Vol. 11 at 23.    We are therefore unable to conclude that the

district court's jury instructions were so deficient that they

significantly prejudiced Waldrip's rights.         While it is a better

practice for the court to give a limiting instruction at the time

the prejudicial evidence is introduced, no reversible error exists

here when the court gives a cautionary instruction in its general

charge.     See, United States v. Prati, 861 F.2d 82, 86 (5th Cir.

1988).

                                      13
     4.    Exclusion of Loss Evidence

     Waldrip contends that the district court erred in refusing to

allow her to introduce evidence that she and other investors in the

Project sued the bank, and as a result of that suit, received a

favorable settlement. At trial, the government introduced evidence

that the banks had sustained losses as a result of Waldrip's

actions.   TCB claimed a $59,200 loss and FIB claimed a loss of over

$80,000. Additionally, the banks claimed losses for costs incurred

in clearing title to the property as a result of Waldrip's actions.

     Loss need not be proven to convict a defendant for bank fraud

or making a false statement to a bank and evidence that there was

no loss is not a defense to either of those crimes.            See United

States v. Lemons, 941 F.2d 309, 315-16 (5th Cir. 1991), United

States v. Trexler, 474 F.2d 369, 372 (5th Cir.), cert. denied, 412

U.S. 929    (1973).   At   trial,   after   the   government   introduced

evidence that the banks had sustained losses, Waldrip sought to

introduce evidence that she and other investors sued the banks in

civil court and received a favorable settlement.           The district

court, however, refused to allow Waldrip to present such evidence.

     Waldrip contends that the district court erred in excluding

the evidence for three reasons.      First, Waldrip contends that the

evidence directly refutes the government's assertions that Waldrip

was responsible for loss in this case.      Waldrip contends that this

evidence shows that even without her conduct, the banks would have

lost the same amount on the Harrell lots.          While this is not a

defense to the action, Waldrip contends that it is admissible to

                                    14
refute the false impression created by the government that Waldrip

caused a loss.   Second, Waldrip contends that the evidence impugns

the credibility of the bank officials, who told the jurors that

Waldrip was the cause of loss to the banks.               Third, Waldrip

contends that it corroborates her explanation that she believed she

had not done anything inappropriate.

     The district court was correct in refusing to admit evidence

of the settlement because the evidence was not relevant to the

offenses charged.    The trial judge has broad discretion in ruling

on questions of relevancy.      Hamling v. United States, 418 U.S. 87,

124-25, 94 S. Ct. 2887, 41 L. Ed. 2d 590 (1974).          Federal Rule of

Evidence 401 states that relevant evidence is "evidence having any

tendency to make the existence of any fact that is of consequence

to the determination of the action more or less probable than it

would be without the evidence."         Implicit in that definition are

two distinct requirements: (1) the evidence must tend to prove the

matter sought to be proved; and (2) the matter sought to be proved

must be one that is of consequence to the determination of the

action.    United States v. Hall, 653 F.2d 1002, 1005 (5th Cir.

1981).    Moreover, the matter sought to be proved must be part of

the hypothesis governing the case.           In a criminal case, the

governing hypothesis consists of the elements of the offense

charged and    the   relevant   defenses   (if   any)   raised   to   defeat

criminal liability.     Id.     The evidence regarding the settlement

agreement reached between the bank and the investors is relevant

only to the issue of loss and the amount of loss.            Because loss

                                   15
need not be proven to convict a defendant for bank fraud or making

a   false       statement   to   a   bank,    the   district   court   correctly

determined that the evidence was not relevant.                   Moreover, the

settlement agreement is not relevant to Waldrip's good faith

defense that she believed that she had the authority to sign the

loan documents.

AFFIRMED

c:br:opin:92-5568:es                     16