U.S. v. Lentz

• Decision Date: 04 December 1975
• Docket Number: No. 74-3833,74-3833
• Citation: 524 F.2d 69
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. David Calvin LENTZ, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 69

524 F.2d 69

UNITED STATES of America, Plaintiff-Appellee, v. David Calvin LENTZ, Defendant-Appellant.

No. 74-3833.

United States Court of Appeals, Fifth Circuit.

Dec. 4, 1975.

Harvey A. Monroe, Jonesboro, Ga. (Court-appointed. Not Under Act), Paul McGee, Atlanta, Ga., for defendant-appellant.

John W. Stokes, U. S. Atty., Dorothy T. Beasley, Asst. U. S. Atty., Atlanta, Ga., for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of Georgia.

Before BELL, THORNBERRY and MORGAN, Circuit Judges.

BELL, Circuit Judge:

This is an appeal from a conviction on each of six counts in an indictment charging violations of 18 U.S.C.A. § 1014, ¹ making false statements on mobile home loan applications for the purpose of influencing Federal Savings and Loan Associations whose accounts were insured by the Federal Savings and Loan Insurance Corporation.

We find no error in the claim that the district court unduly participated in the trial, or that there was a breakdown in the judicial function due to the large amount of documentary evidence and the difficulty encountered by the government in introducing that evidence.

It is urged also that the evidence was insufficient to warrant the convictions, and that the court erred in charging the jury that it was not necessary for the government to show that the statements were presented directly to the savings and loan associations. These assignments of error present questions of substance but, after careful review of the evidence and the appertaining law, we affirm.

Four of the counts involve the Peachtree Federal Savings and Loan Association (Peachtree Federal), and two involve the Newnan Federal Savings and Loan Association (Newnan Federal). The proof demonstrates that each count involves a fictitious sales contract and note, fabricated by defendant, a dealer in mobile homes. These loan packages were discounted through a loan servicing company, American Mobile Mortgage Company (AMMCO), to the two savings and loan associations. Defendant had entered into a dealer agreement with AMMCO. This dealer agreement was executed by defendant in blank but in three instances it refers to AMMCO discounting the mobile home loan to "Bank," with "Bank" being used as a generic term.

It developed that the names of Peachtree Federal and Newnan Federal were added to the dealer agreement by AMMCO at a later time, and there was no proof that defendant ever received a copy with the names added. Indeed, there is no direct proof that he knew that the paper was to be discounted to those particular institutions or to any particular institution covered by § 1014. The assignments by defendant of the loans underlying the six counts in the indictment were executed in blank, with the names of Peachtree or Newnan Federal being inserted subsequently by AMMCO.

We will consider first the alleged error in the charge. The resolution of this question goes also to the standard of proof required on the part of the government.

Section 1014 provides that a defendant must "knowingly" make a false statement or report "for the purpose of influencing in any way the action" of a covered institution. The trial court charged the jury that ". . . it is not necessary to show that the statement or statements were presented directly to such institutions." Defendant urges that § 1014 requires a direct presentation of false statements to a specific covered institution, a situation which, as stated, did not occur due to the presence and function of the loan service agent, AMMCO. As we perceive his position, he argues that proof of direct presentation is necessary as well as proof that he had knowledge that the particular institution was covered by the statute.

We consider this question in the frame of reference that one policy behind § 1014 is to protect specific financial institutions from fraudulent loan applications. Given this, the acceptance of defendant's theory would emasculate the purpose of the statute. The statutory purpose could be avoided simply by insulating the presentation of false statements by the use of a third party conduit.

The Mens rea required in the statute is that proof be adduced that defendant acted "with knowledge," United States v. Mekjian, 5 Cir., 1975,505 F.2d 1320, that the statement was false and was made for the purpose of influencing the action of a covered institution. See United States v. Trexler, 5 Cir., 1973, 474 F.2d 369.

In our view, it is sufficient to establish that the false statement was made for the purpose of influencing the action of a covered institution, if the proof shows that the defendant received notice sufficient to create a reasonable expectation that the statement would reach an institution of the type included in the statute. The proof need not show that it was presented directly to a covered institution. As will be seen, the proof was sufficient in this regard and we find no error in the charge. It was adjusted to the evidence and not contrary to law. ²

Our view is supported by United States v. Sabatino, 2 Cir., 1973, 485 F.2d 540, which holds the government to proof that the defendant must at least have known that the statement was made to "a bank" as distinguished from "a bank insured by the F.D.I.C." We construe the rationale of that decision as reaching a defendant's knowledge of the statement's presentation to banks generally as distinguished from a particular bank. The court said:

To have "the purpose of influencing" such a bank, the defendant must have known that it was a bank that he intended to influence. We do not determine that he must know that the bank is insured by the F.D.I.C., but, at least,...