177 F.3d 272 (5th Cir. 1999), 96-50958, United States v. Morrow

Docket Nº:96-50958.
Citation:177 F.3d 272
Party Name:UNITED STATES of America, Plaintiff-Appellee, v. Tammy Denise MORROW; Larry Wayne Meinzer; Alice Marie Barber, also known as Alice Marie Turner, also known as Alice Marie Rogers; Samantha Graham Davis, also known as Sammie Davis, also known as Samantha L. Davis, also known as Sammie L. Davis; Arnold Gene Trout, also known as Gene Trout; Mason Long;
Case Date:May 25, 1999
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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177 F.3d 272 (5th Cir. 1999)

UNITED STATES of America, Plaintiff-Appellee,

v.

Tammy Denise MORROW; Larry Wayne Meinzer; Alice Marie

Barber, also known as Alice Marie Turner, also known as

Alice Marie Rogers; Samantha Graham Davis, also known as

Sammie Davis, also known as Samantha L. Davis, also known as

Sammie L. Davis; Arnold Gene Trout, also known as Gene

Trout; Mason Long; Darrell Paul Freeman, also known as

Paul Freeman; James Michael Caldwell, also known as Mike

Caldwell; Patrick Gene Malmstrom, also known as Rick

Malmstrom; Billy Wayne Cox, Jr., also known as Billy Cox;

Max Waylan Cain, Sr., Defendants-Appellants.

No. 96-50958.

United States Court of Appeals, Fifth Circuit

May 25, 1999

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Joseph H. Gay, Jr., United States Attorney, San Antonio, TX, for Plaintiff-Appellee.

Eric L. Lindstrom, Midland, TX, for Tammy Denise Morrow.

Clifford James Hardwick, Midland, TX, for Larry Wayne Meinzer.

Allen R. Stroder, H. Thomas Hirsch, Hirsch, Stroder and Hobbs, Odessa, TX, for Alice Marie Barber.

Bruce Evan Foster, Midland, TX, for Samantha Graham Davis.

Thomas S. Morgan, Law Office of Thomas S. Morgan, Midland, TX, for Arnold Gene Trout.

Amy Lee, Scott, Douglass & McConnico, Austin, TX, for Mason Long.

Robert Felton Freeman, David Glenn Rogers, Brockett & Lindemood, Midland, TX, for Darrell Paul Freeman.

Robert Victor Garcia, Jr., Odessa, TX, for James Michael Caldwell.

Samuel A. Perroni, Perroni Law Firm, Little Rock, AR, for Patrick Gene Malmstrom.

James Webb James, III, Bryan, TX, for Billy Wayne Cox, Jr.

John Kuchera, Waco, TX, for Max Waylan Cain, Sr.

Appeals from the United States District Court for the Western District of Texas.

Before HIGGINBOTHAM, JONES and WIENER, Circuit Judges.

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PER CURIAM:

Eleven defendants appeal convictions of conspiring and aiding and abetting bank fraud in the financing of A-1 mobile homes. The central purpose of the scheme was to obtain bank financing for customers who had not made adequate cost down payments. We affirm all the judgments of conviction but vacate the sentence of eight defendants and remand for resentencing.

I

Count 1 of the indictment charged that from about November 3, 1986 until about February 1, 1990 the defendants conspired to commit bank fraud in violation of 18 U.S.C. §§ 371 and 1344(2). The indictment listed 43 overt acts relating to various mobile home sales transactions by the defendants. These overt acts were also alleged under Counts 2 through 13 in the indictment as substantive counts of bank fraud against each of the defendants. Count 14 alleged that Mason Long committed bank fraud in an effort to obtain financing for the purchase of mobile homes, in violation of 18 U.S.C. §§ 371 and 1344(2). Count 15 alleged that Mason Long, Billy Cox, and Max Cain participated in the financing bank fraud scheme in violation of 18 U.S.C. §§ 371 and 1344(2). Count 16 alleged that Billy Cox and Max Cain defrauded a bank of $15,000 to start a company called "Slow and Easy," in violation of 18 U.S.C. §§ 371 and 1344(1).

The defendants were tried together and all were convicted of one or more counts. We summarize the convictions:

Alice Barber, an A-1 sales representative and manager in Bryan, Texas, was convicted of conspiracy to commit bank fraud (Count 1) and aiding and abetting bank fraud (Count 4).

Max Cain, the vice-president of Home Savings, Banc Home, and HSA Mortgage Company, was convicted of bank fraud (Count 1) and two counts of bank fraud and aiding and abetting bank fraud (Counts 2 and 15).

James Caldwell, an A-1 sales representative in Nacogdoches, Texas, was convicted of conspiracy to commit bank fraud (Count 1) and aiding and abetting bank fraud (Count 10).

Billy Cox, owner of A-1 mobile home franchises, was convicted of bank fraud (Count 1) and two counts of bank fraud and aiding and abetting bank fraud (Counts 3 and 15).

Sammy Davis, an A-1 sales representative in Bryan, Texas, was convicted of aiding and abetting bank fraud (Count 7).

David Freeman, an A-1 sales representative in Bryan, Texas, was convicted of conspiracy to commit bank fraud (Count 1) and aiding and abetting bank fraud (Count 8).

Mason Long, partner to Billy Cox, was convicted of bank fraud (Count 1) and two counts of bank fraud and aiding and abetting bank fraud (Counts 14 and 15).

Pat Malmstrom, an A-1 sales representative in Waco, Texas, was convicted of conspiracy to commit bank fraud (Count 1) and aiding and abetting bank fraud (Count 12).

Tammy Morrow, an A-1 sales representative in Nacogdoches, Texas, was convicted of aiding and abetting bank fraud (Count 11).

Larry Meinzer, an A-1 sales representative in Waco, Texas, was convicted of aiding and abetting bank fraud (Count 13).

Gene Trout, an A-1 sales representative in Bryan, Texas, was convicted of conspiracy to commit bank fraud (Count 1) and aiding and abetting bank fraud (Count 9).

II

Bank fraud under 18 U.S.C. § 1344 requires proof beyond a reasonable doubt that the defendants knowingly executed or attempted to execute "a scheme or artifice--(1) to defraud a financial institution;

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or (2) to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations or promises." To establish a conspiracy violation under 18 U.S.C. § 371, the Government had to prove beyond a reasonable doubt: "(1) an agreement between two or more people, (2) to commit a crime against the United States, and (3) an overt act by one of the conspirators to further the objectives of the conspiracy." United States v. Dupre, 117 F.3d 810, 820 (5th Cir.1997) (holding evidence of cooperative effort sufficient to support convictions for conspiracy to commit bank fraud), cert. denied, --- U.S.----, 118 S.Ct. 857, 139 L.Ed.2d 756 (1998). A defendant may be convicted for aiding and abetting the commission of a crime if he was " 'associated with a criminal venture, participated in the venture, and sought by his action to make the venture succeed.' " United States v. Parekh, 926 F.2d 402, 406 (5th Cir.1991) (quoting United States v. Holcomb, 797 F.2d 1320, 1328 (5th Cir.1986)).

III

The Government urges that it proved that Cox, Long, and Cain directed a "far reaching scheme to fraudulently obtain the funds of the Bank." Billy Cox directed the activities at the various A-1 lots, and Max Cain worked to keep the fraudulent loan practices hidden. Mason Long delivered the mobile homes and instructed customers not to tell the bank that their reported down payments had been inflated. The other defendants, managers and sales representatives from different lots, collected information from customers with the knowledge that the information would be used to prepare fraudulent loan packages for the sale of mobile homes.

Defendants Max Cain, James Caldwell, Samantha Davis, David Freeman, Mason Long, Pat Malmstrom, Tammy Morrow, Larry Meinzer, and Gene Trout argue insufficiency of the evidence. We apply the familiar standard, asking whether a "reasonable trier of fact could have found that the evidence established guilt beyond a reasonable doubt." United States v. Mergerson, 4 F.3d 337, 341 (5th Cir.1993).

Max Cain argues that there is insufficient evidence to support his conviction of Count 2; that while he may have violated 18 U.S.C. § 656 (theft, embezzlement, or misapplication by a bank officer) by selling mobile homes out of trust (pocketing the loan repayment), there was no evidence that he defrauded the bank or misrepresented any facts to it. Cain also argues that the evidence was insufficient to support his conviction to aid and abet bank fraud in Counts 2 and 15 because the Government did not prove that he shared any criminal intent with Richard White or Billy Cox, purchasers of trailers.

The Government produced evidence showing that Cain actively and knowingly participated in the scheme to defraud the bank by hiding A-1's fraudulent practices. It urges that Max Cain instructed Richard White to falsely complete various financing forms used in sales of mobile homes. The evidence also showed that Cox, Cain, and Long worked together to obtain money to purchase a set of mobile homes under a floor plan. The request for funds exceeded the actual cost of the homes. The three split the excess money. Viewing this evidence in the light most favorable to the Government, a rational jury could conclude beyond a reasonable doubt that Max Cain conspired and aided and abetted the commission of such fraud.

James Caldwell was a sales representative in Nacogdoches from February 4, 1988 until September 1, 1988. He argues that the evidence against him was insufficient to support his convictions; that the Government failed to prove a single conspiracy as alleged in the indictment, or that he joined any conspiracy.

The Government presented evidence showing that Caldwell participated in the

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preparation of false down payments and credit applications. For instance, Tim Howard, the sales manager at the lot at which Caldwell worked, testified that Caldwell...

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