U.S. v. Tokoph

• Decision Date: 24 April 1975
• Docket Number: No. 74-1449,74-1449
• Citation: 514 F.2d 597
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. David P. TOKOPH, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 597

514 F.2d 597

UNITED STATES of America, Plaintiff-Appellee, v. David P. TOKOPH, Defendant-Appellant.

No. 74-1449.

United States Court of Appeals, Tenth Circuit.

Submitted on Briefs Jan. 22, 1975.

Decided April 24, 1975.

Alfred M. Carvajal, Albuquerque, N. M., for defendant-appellant.

Victor R. Ortega, U. S. Atty., Harris L. Hartz, Asst. U. S. Atty., Albuquerque, N. M., for plaintiff-appellee.

Before HILL, SETH and HOLLOWAY, Circuit Judges.

HILL, Circuit Judge.

This is a direct appeal from appellant's conviction of violating 18 U.S.C. § 1014 (two counts), 18 U.S.C. § 656 and 18 U.S.C. § 2 (five counts), 18 U.S.C. § 215 and 18 U.S.C. § 2 (five counts), and 18 U.S.C. § 371 ¹ (one count). All counts involve violations surrounding the making of loans by Harry Weil, at all material times a branch manager of the Albuquerque National Bank (hereinafter Bank), to appellant, appellant's corporation First Southwest Corporation (hereinafter First Southwest) or persons appellant brought to Weil.

Viewing the evidence in the light most favorable to the government, the following are the relevant facts. Appellant began borrowing money from the Bank in April, 1972; he always dealt with Weil until Weil resigned. Although appellant and First Southwest made about 17 loans with the Bank, only loans involved in the alleged misapplications of bank funds and kickbacks are detailed.

In June, 1972, appellant told Weil a business concern, Montgomery Apartments (which appellant's father, Richard Tokoph, was involved in), needed $90,000. Weil testified that he agreed to make the loan for $100,000 and then have Montgomery Apartments return $10,000 to appellant and him. The loan was signed by appellant and two persons connected with Montgomery Apartments. The loan was not approved by the Bank's loan committee, and a Bank officer testified the committee would not have approved the loan. The collateral was apparently Montgomery Apartments' stock and no statement on that entity was provided. Weil testified that he suggested to appellant that appellant have the $10,000 check made out to Walter Rencehausen, an acquaintance of Weil. Appellant apparently told his father and his father's partner, Waldo Wiest, that Rencehausen was the broker who had arranged the financing. Appellant brought the $10,000 check to the Bank; Weil had Rencehausen endorse it. ² Weil gave Rencehausen $1,000 to purchase an interest in Rencehausen's bicycle shop and kept $4,000. Weil testified $5,000 was used to purchase a cashier's check made out to Thomas Fallon, one of appellant's brothers; appellant forged Fallon's endorsement and endorsed his own name under the Fallon forgery. Appellant used the $5,000 to pay off a note, open an account for First Southwest, and get some cash.

On July 10, 1972, Weil loaned First Southwest $25,000 (appellant also personally signed the note). Collateral for the loan was the assignment of a $25,000 note from John Grossman (a relative of appellant), of Arizona, to First Southwest; the Grossman note was secured by the assignment of 25,000 shares of Aaron Industries stock. Weil did not attempt to determine that stock's value before making the loan or submit the matter to the loan committee (it was reported to the committee). Weil testified he and appellant were to receive $2,500 for granting the loan. Grossman received only $21,250 of the proceeds. On July 18, 1972, Weil loaned First Southwest $35,500. This money was used to purchase land costing approximately $22,500 and to pay off another loan (Weil had previously loaned First Southwest $2,500 presumably for a deposit on this property). Weil testified appellant promised Weil half of any profit obtained from the land's resale. Collateral was the land itself and certificates of deposit which were later used to cross-collateralize other loans.

First Southwest issued two checks to Rencehausen: one dated July 12, 1972, for $1,525, and another dated July 20, 1972, for $1,250. Rencehausen apparently deposited $250 at the Bank, used $1,400 to open an account at another bank, and loaned Weil $1,000.

The largest loan was made on July 24; Weil loaned First Southwest $200,000 with collateral being a McDonnell 220 jet. First Southwest paid approximately $75,000 for the jet; the rest of the funds were to be used to refurbish this one-of-a-kind plane. The loan proceeds were delivered all at once; normally they would have been disbursed as the work was performed. This loan was reported to the loan committee after it was made. Weil testified that the intent was for appellant to take out $5,000 and for Weil to receive $5,000, and that they also agreed Weil was to receive $25,000 of the proceeds from the aircraft's sale. First Southwest subsequently issued a $5,000 check to Rencehausen. Weil testified $4,000 was applied to a note of Rencehausen's and he (Weil) kept $1,000.

The final loan involving a kickback was made by Weil to First Southwest on September 11, 1972. This loan in the amount of $75,000 was very similar to the Grossman transaction. First Southwest used the proceeds to make a loan to Diversified Natural Resources Corporation (Diversified). Diversified received only $62,500. The Bank received as collateral a note in the amount of $75,000 from Diversified, Aaron Industries, and three individuals to First Southwest; 75,000 Aaron Industries shares; and a security interest in some oil well rigging equipment. Weil did not submit or report this loan to the loan committee. Testimony indicated banking practices would have prevented granting this loan. First Southwest issued a $3,525 check to Rencehausen; Rencehausen deposited the check and $3,000 was used to pay off a $3,000 note of Rencehausen which had been used to buy stock in Weil's name for both Rencehausen and Weil.

During the course of the transactions, Weil requested financial statements from appellant. Appellant's personal statement dated August 31, 1971, showed a net worth of $88,421. The financial statement of First Southwest dated June 30, 1972, showed a net worth of $254,175. There was evidence that appellant bought Weil a $150 coat and paid for Weil's accommodations on some pleasure trips. Weil resigned from his position in September, 1972, when asked to do so.

A grand jury indictment of 23 counts was filed against Weil and appellant on October 23, 1973. Weil pleaded guilty to the conspiracy count and not guilty to the other counts. At appellant's trial, Weil testified for the government. The government offered lengthy testimony and voluminous exhibits to trace the funds appellant used for himself, First Southwest, and McDonnell 220 (another corporation appellant controlled). Most of the funds were traced to bank loans. Evidence also was presented to show the small amount of business conducted by appellant's corporations. The "bookkeeper" of appellant's operations prepared a summary of the total proceeds of checks drawn on the corporate accounts. This summary indicated $61,587.84 had gone to appellant as cash loans and draws. By trial time, $60,000 had been paid on the loan for Montgomery Apartments, and no payments had been made on the other four loans involving kickbacks.

The jury returned a verdict finding appellant guilty of thirteen counts.

Appellant first argues that his conviction for five counts of aiding and abetting in the commission of violations of 18 U.S.C. § 215 must be reversed because the indictment fails to state an offense under the United States Code. Section 215 prohibits, inter alia, bank officers, directors, employees, agents or attorneys from receiving any fee, commission, gift or thing of value for procuring any loan (except as provided by law). Appellant contends he cannot be found guilty of aiding and abetting because he was not a bank officer, director, employee, agent or attorney, and also because § 215 does not condemn the giving of a gift or commission but only the receiving of a gift or commission.

This argument ignores the clear intent of 18 U.S.C. § 2 to reach appellant's acts. Congress laid this argument to rest when it amended § 2 in 1951. In describing the amendment, Senate Report No. 1020 stated:

"This section is intended to clarify and make certain the intent to punish aiders and abettors regardless of the fact that they may be incapable of committing the specific violation which they are charged to have aided and abetted." 1951 U.S.Code Congressional and Administrative Service, pp. 2578, 2583.

This report specifically mentions the statutory forerunner of § 215. Thus, we believe Congress' intent to reach appellant's conduct is clear; the use of § 2 here does not distort congressional intent in enacting § 215 but merely effectuates the clear intent of Congress in amending § 2.

It has long been recognized that although " 'a defendant was incompetent to commit the offense as principal by reason of not being of a particular age, sex, condition, or class, he may, nevertheless, be punished as procurer or abettor.' " United States v. Lester, 363 F.2d 68 (6th Cir. 1966), cert. den'd, 385 U.S. 1002, 87 S.Ct. 705, 17 L.Ed.2d 542 (1967), quoting, United States v. Snyder, 14 F. 554, 556 (C.C.Minn.1882).

The appellant was not a mere innocent borrower when the evidence is viewed in the light most favorable to the government. This is a critical difference between this case and the examples appellant gives where criminal sanctions are imposed only upon one party to an activity, e. g., the usurious lender (not the usurious borrower), the employer not paying the minimum wage (not the employee accepting the illegal wage). The conduct punished here is not appellant's giving commissions for the loans but his aiding and abetting Weil, the bank officer, in the receipt of the commissions. Thus, the fact Congress has specifically prohibited both giving and receiving in several statutes, e. g., bribes (18 U.S.C. § 201), compensation to congressmen and government officers and employees (18 U.S.C....