U.S. v. Sirang

Citation70 F.3d 588
Decision Date12 December 1995
Docket NumberNo. 94-8782,94-8782
PartiesUNITED STATES of America, Plaintiff-Appellee, v. Saeed SIRANG, a/k/a Steve Sirang, Defendant-Appellant.
CourtU.S. Court of Appeals — Eleventh Circuit

Bobby Lee Cook, Cook & Palmour, Summerville, GA, Charles Michael Abbott, Atlanta, GA, Bruce S. Rogow, Beverly A. Pohl, Ft. Lauderdale, FL, for appellant.

Kent Alexander, U.S. Atty., Robert Francis Schroeder, Amy Levin Weil, Asst. U.S. Attys., Atlanta, GA, for appellee.

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

Before HATCHETT and EDMONDSON, Circuit Judges, and GIBSON, * Senior Circuit Judge.

JOHN R. GIBSON, Senior Circuit Judge:

Saeed Sirang appeals his conviction on one count of wire fraud, 18 U.S.C. Sec. 1343 (1988), amended by 18 U.S.C. Sec. 1343 (Supp. V 1993), and six counts of bank fraud, 18 U.S.C. Sec. 1344 (1988), amended by 18 U.S.C. Sec. 1344 (Supp. V 1993), in connection with checks he wrote and funds he transferred around the time of Black Monday, October 19, 1987, the day the stock market crashed. Sirang argues that the district court erred in failing to give several good faith defense instructions, and that the eleven-count indictment was multiplicitous. We affirm the convictions.

The facts are not in dispute, except insofar as they bear on Sirang's belief that his friend Michael Wallace would cover the various checks Sirang drew.

Sirang had become an active trader in the stock market in 1979 when he was twenty-five years old. By 1987 Sirang managed the investments of Willow Development Company, his own company, and Wallace Trading Company, which was owned by Sirang's wealthy college friend, Michael Wallace. Wallace had lent Sirang $700,000 to establish Willow Development and had begun Wallace Trading with $1 million of his own funds. The business purpose of Wallace Trading was to buy and sell securities on margin. Wallace had no background in this business and relied on Sirang to do the trading.

Willow and Wallace Trading maintained margin accounts at several brokerage houses. Under these accounts, Sirang was permitted to buy stocks without paying immediately. He was required to pay fifty percent of the purchase price within five business days of the purchase, but could wait to pay the other fifty percent until he sold the stock. At times he failed to pay by the fifth day or improperly sold the stock without ever having paid for it. Accordingly, the brokerages had placed restrictions on Willow's and Wallace Trading's brokerage accounts, and had closed some of the accounts.

On October 9, 1987, Sirang bought $4.4 million worth of stock through E.F. Hutton on margin for the Wallace Trading Account. The initial fifty-percent payment of $2.2 million was due on Monday, October 19. Wallace Trading also had margin calls to make at Smith, Barney (about $200,000) and at Holmans, McGraw ($2.75 million) on that Monday morning. On Friday, October 16, Sirang wrote a National Bank of Georgia (NBG) check from Willow to Wallace Trading for $600,000, depositing it in the Wallace Trading account at C & S Bank. Once the $600,000 check was credited to Wallace Trading's account, the balance in the account was $47,000. (However, there was also $600,000 in other outstanding checks on the C & S account, see page 5, infra ). The Willow account did not have the money to cover the check, and Sirang testified that he intended to cover the Willow check with proceeds from selling stock on Monday.

On Friday the market had fluctuated dramatically. Early Monday morning Sirang went to E.F. Hutton. It was already apparent that the market was very unstable. While at E.F. Hutton, Sirang talked to Wallace in California. He told Wallace that Wallace Trading faced substantial losses and that it had margin calls to meet. Sirang asked if Wallace was prepared to send money to meet the margin calls. He testified that Wallace told him to call late in the afternoon and report the exact loss.

Before talking with Wallace again, Sirang wrote four checks to E.F. Hutton from the Wallace Trading account at C & S totalling $2.2 million, even though he admitted, "[W]hen I wrote the checks I didn't have the money at C & S." Instead of writing one check for the whole $2.2 million amount, Sirang testified that he used four separate checks so that if he could not cover the entire amount, at least some of the checks would clear. As soon as Sirang had ostensibly paid the E.F. Hutton margin call (though with checks drawn on insufficient funds), he gave orders to liquidate Wallace Trading's E.F. Hutton account. E.F. Hutton informed him that he would have about $1,665,000 after his account was liquidated. Sirang had the ability to write checks on Wallace Trading's E.F. Hutton account, so he drew three checks on the account, totalling $1.6 million, and deposited those checks in Willow's account at NBG. He also stopped payment on the $600,000 check drawn on Willow's account at NBG, which he had deposited to Wallace's account at C & S.

At this point Sirang "knew I had 1.6 million dollars approximately in NBG, and I knew I had nothing anywhere else. I had no money coming to me from anywhere else." He knew that Wallace Trading's C & S account was overdrawn by $2.8 million, being the $2.2 million he had written to E.F. Hutton and the approximately $600,000 by which it had been overdrawn before he deposited the $600,000 check drawn on Willow's NBG account, upon which he had now stopped payment. As we have said, there was also another outstanding check on the account for about $600,000, see page 5, infra.

Sirang testified that he called Michael Wallace and notified him about the losses Wallace Trading had sustained and that $2.8 million in checks were about to be presented to the Wallace Trading account at C & S, which did not have the money to pay them. Sirang said he told Wallace that he would transfer $2.8 million from his account at NBG to cover Wallace Trading's account at C & S if Wallace would wire him the $2.8 million in time to cover the NBG checks when presented. According to Sirang, Wallace promised to wire the money.

On Tuesday, October 20, C & S discovered a check had been presented for payment from the Wallace Trading account which would have caused the account to be overdrawn by about $600,000. (This was before C & S discovered that Sirang had stopped payment on the $600,000 check from Willow or that Sirang had given E.F. Hutton $2.2 million in checks drawn on the C & S account). C & S asked Sirang to deposit $600,000 in the form of a cashier's check before C & S would honor the check that had already been presented. Accordingly, Sirang withdrew $600,000 from Willow's NBG account to buy a cashier's check, which he deposited in the Wallace Trading C & S account. C & S then paid the check that had been presented. This left Sirang $1 million at NBG.

Later the same day Sirang deposited four checks, totalling $2.8 million, from the NBG Willow account into the C & S Wallace Trading account. C & S treated those checks as available funds in the account, even though it had not yet collected payment on the checks. On October 20 and October 21 C & S paid the $2.2 million worth of checks Sirang had written E.F. Hutton to make his margin call.

Despite having just written $2.8 million in checks on the NBG account (which only contained $1 million), Sirang then transferred the money remaining in the NBG account to his relatives. On October 21, he withdrew $750,000 from the Willow NBG account and wire-transferred it to his father-in-law. Sirang claims he owed his father-in-law money for an apartment in Teheran. The same day he used $202,000 from NBG to pay off two loans he had at NBG. Both loans were secured with certificates of deposit belonging to Sirang's wife. After Sirang paid the loans, NBG released the certificates of deposit.

Sirang testified that he again talked to Wallace late that same afternoon (Wednesday, October 21). Wallace told Sirang he would need to meet with him and review the documentation showing Wallace Trading's losses before transferring money to cover the losses.

The next morning, Thursday, October 22, Sirang's banker at NBG discovered that four checks worth a total of $2.8 million had been presented for payment against the now-empty Willow account at NBG. Sirang came into NBG and met with his banker, who advised him that NBG would not cover the checks. Sirang asked for advice and his banker advised him to stop payment on the checks, which were then returned to C & S.

Wallace never sent the money. C & S lost approximately $2.8 million on the checks it paid for Wallace Trading on the strength of the uncollected NBG checks. C & S sued Sirang, and he negotiated a settlement under which he paid half of the losses incurred for a full release of C & S's claims. (This money included the return of the $750,000 Sirang had wired to his father-in-law.)

A grand jury indicted Sirang on ten counts of bank fraud, 18 U.S.C. Sec. 1344, and one count of wire fraud, 18 U.S.C. Sec. 1343. The first count was based on the deposit of the $600,000 cashier's check at C & S. The second through fifth counts were based on Sirang's deposits at C & S of the four checks totalling $2.8 million to make it appear that the E.F. Hutton checks were covered. The sixth count was based on Sirang's withdrawal of the $202,000 used to pay off the NBG loans that were secured by Sirang's wife's property. The seventh through tenth counts were the stop payment orders on the checks written on NBG and deposited in the C & S account. Finally, the eleventh count was the wire fraud count, based on the wire transfer of $750,000 to Sirang's father-in-law.

Sirang moved to dismiss the indictment for multiplicity, and the district court denied his motion.

The main issue at trial was whether Sirang acted with fraudulent intent or whether he believed he could cover the checks. The government produced witnesses from banks and...

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