U.S. v. Payne

• Decision Date: 15 January 1985
• Docket Number: No. 83-7177,83-7177
• Citation: 750 F.2d 844
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Weldon Rushing PAYNE, Lloyd Earl Taylor, Defendants-Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 844

750 F.2d 844

UNITED STATES of America, Plaintiff-Appellee, v. Weldon Rushing PAYNE, Lloyd Earl Taylor, Defendants-Appellants.

No. 83-7177.

United States Court of Appeals Eleventh Circuit.

Jan. 15, 1985.

Frederick G. Helmsing, Mobile, Ala., for Payne.

W. Kenneth Gibson, Fairhope, Ala., for Taylor.

J.B. Sessions, III, Asst. U.S. Atty., Mobile, Ala., Mervyn Hamburg, Dept. of Justice, Washington, D.C., for plaintiff-appellee.

Appeals from the United States District Court for the Southern District of Alabama.

Before RONEY and KRAVITCH, Circuit Judges, and ALLGOOD ^*, District Judge.

KRAVITCH, Circuit Judge:

Appellants Weldon Rushing Payne and Lloyd Earl Taylor appeal their respective convictions on charges arising from loans made by the Federal Land Bank Association of Robertsdale, Alabama, between 1977 and 1980. The jury found both appellants guilty on five counts of misapplication of Federal Land Bank funds (18 U.S.C. Sec. 657 ¹), four counts of unlawful participation in the proceeds of Federal Land Bank loans, or aiding and abetting the same (18 U.S.C. Secs. 1006 ² and 2 ³), and one count of conspiracy to violate various false statement, misapplication, and unlawful participation statutes (18 U.S.C. Sec. 371 ⁴). In addition, the jury found Payne guilty on one additional count of unlawful participation in the proceeds of Federal Land Bank loans, or aiding and abetting the same (18 U.S.C. Secs. 1006 and 2), and three counts of making false statements on Federal Land Bank forms (18 U.S.C. Sec. 1006).

On appeal, Taylor contends that (1) he was not "connected in any capacity with" the Federal Land Bank for purposes of 18 U.S.C. Secs. 657 and 1006, (2) the evidence of misapplication was insufficient, (3) the evidence of unlawful participation was insufficient, (4) the trial court abused its discretion by refusing to grant a severance, (5) the trial court denied him the right of cross-examination, and (6) the trial court should have provided him with a complete trial transcript for purposes of his appeal. Payne contends that (1) the evidence of misapplication was insufficient, (2) the evidence that he aided and abetted Taylor's unlawful participation was insufficient, (3) the "exculpatory no" doctrine requires the reversal of his false statement convictions, (4) the questions on the Federal Land Bank forms were "vague and ambiguous," (5) the evidence of conspiracy was insufficient, and (6) the trial court abused its discretion by refusing to grant a severance.

We hold that the evidence introduced at trial was insufficient to establish that either Taylor or Payne misapplied Federal Land Bank funds, and we therefore reverse the appellants' misapplication convictions. We reject the appellants' remaining claims, however, and we affirm all of their remaining convictions.

I. FACTS

The Federal Land Bank of New Orleans (FLBNO) is one of twelve Federal Land Banks created by Congress to handle the special credit needs of farmers. The FLBNO provides loan funds to borrowers through thirty-three Federal Land Bank Associations, including the Federal Land Bank Association of Robertsdale, Alabama (FLBAR). Appellant Weldon Payne began working for the FLBAR in 1974, and became its president in 1978. Appellant Lloyd Taylor, a real estate lawyer, was placed on the FLBNO list of "approved loan closing attorneys" in 1974. Taylor became the "retained counsel" for the FLBAR on December 30, 1977, a position he held until February 22, 1980. A third codefendant, Robert Gulledge, president of the Baldwin National Bank in Baldwin County, Alabama, borrowed money from the FLBAR in 1977 and 1980. ⁵

A. The Relevant Transactions

The charges in this case stemmed from several transactions involving farm land in Baldwin County, Alabama, between 1977 and 1980. The transactions were financed, in large part, by loans arranged through the FLBAR and the FLBNO. The transactions relevant to this appeal include the following:

(1) The Bonner-Dale Taylor-Thead Transactions

In 1975, Jerry and Merrill Bonner borrowed $200,000 from the FLBAR, using 400 acres of land in Baldwin County, Alabama, as security for the loan. The annual payments on the loan were due each May 1. On May 1, 1979, the Bonners failed to make the scheduled loan payment. On May 15, Jerry Bonner told Payne that he was thinking about selling a portion of the 400 acres to help make the overdue loan payment. Payne suggested to Bonner that Lloyd Taylor might be interested in buying the property. The Bonners met with Lloyd Taylor and his brother, Dale Taylor, to discuss a possible sale. On June 28, 1979, Lloyd Taylor (as secretary of T & T Farms, a partnership consisting of Lloyd and Dale Taylor) and the Bonners executed a purchase agreement for a 140-acre portion of the property for $290,000. On September 3, 1979, the right to purchase the 140 acres was assigned to Dale Taylor.

Meanwhile, sometime in May or June, 1979, Payne suggested to Edward Ronald Thead that Thead purchase the 140 acres from Lloyd Taylor. On July 3, 1979, Thead and Lloyd Taylor (as secretary of T & T Farms) executed an option for the 140 acres for $363,000. Thead paid $2,000 for the option. In July or August, 1979, Thead told Payne that he did not intend to exercise the option. Payne encouraged Thead to complete the purchase and offered to defer or make the loan payments for Thead in the event Thead could not make those payments himself.

On September 26, 1979, Dale Taylor completed the purchase of 60 acres (out of the total of 140 acres) from the Bonners for $110,000. Immediately thereafter, Dale Taylor resold the 60 acres to Thead for $135,000. Thead financed his purchase with a portion of the proceeds of a $297,000 loan from the FLBAR. At the closing, Payne instructed Thead to set aside and save $38,990.44 out of the loan proceeds. Lloyd Taylor served as the loan closing attorney for Thead.

The $135,000 paid to Dale Taylor by Thead on September 26, 1979, was deposited in the partnership account of T & T Farms. The same day, a $110,000 check was written from the partnership account to pay the Bonners. A second check, for $11,000, was written from the partnership account to the trust account of Lloyd Taylor's law firm. The deposit in the trust account was credited to Dale Taylor. On September 27, Lloyd Taylor wrote a $4,500 check, payable to cash, from the trust account. On September 28, Lloyd Taylor again wrote a $4,500 check, payable to cash, from the trust account. Lloyd Taylor cashed both of the $4,500 checks, which were debited to Dale Taylor on the trust account ledger card.

On October 3, 1979, Dale Taylor completed the purchase of the remaining 80 acres from the Bonners for $180,000. Immediately thereafter, Dale Taylor resold the 80 acres to Thead for $226,450. Thead financed his purchase, in part, with the proceeds of a $195,000 loan from the FLBAR. Thead also wrote two checks to Dale Taylor, one for $38,900 and one for $3,100. The $38,900 check represented the remainder of the proceeds of the earlier FLBAR loan that Thead had set aside at the direction of Payne. Lloyd Taylor again served as the loan closing attorney for Thead.

The $226,450 paid to Dale Taylor by Thead on October 3, 1979, was deposited in the trust account of Lloyd Taylor's law firm and credited to Dale Taylor. The same day, a $175,000 check was written from the trust account to pay the Bonners. A second check, for $4,500, payable to cash, was written from the trust account and was cashed by Lloyd Taylor. A third check, for $20,000, was written from the trust account to Dale Taylor. Lloyd Taylor endorsed the $20,000 check and deposited it in the partnership account of T & T Farms. Between October 5 and October 13, Lloyd Taylor wrote three checks from the partnership account, payable to cash, in the amounts of $4,500, $9,000, and $8,000. Lloyd Taylor cashed the three checks.

These transactions formed the basis for Counts Four and Five (charging Lloyd Taylor and Payne with unlawful participation in the proceeds of Federal Land Bank loans, or aiding and abetting the same, in violation of 18 U.S.C. Secs. 1006 and 2) and Counts Six and Seven (charging Lloyd Taylor and Payne with misapplication of Federal Land Bank funds in violation of 18 U.S.C. Sec. 657). ⁶ In addition, six of the twenty-five overt acts listed in Count One (charging Lloyd Taylor, Payne, and Gulledge with conspiracy in violation of 18 U.S.C. Sec. 371) were related to these transactions. Lloyd Taylor and Payne both were convicted on Counts Four, Five, Six, and Seven.

(2) The Dial & Lipscomb-Dale Taylor-Daugherty Transactions

In August, 1979, Payne encouraged William Daugherty to purchase a 60-acre tract of land owned by Matthew Dial and Lawrence Lipscomb. On one occasion, Payne indicated that Daugherty would have to pay only $1,000 out of the purchase price for the 60 acres; the balance would be paid in part by the FLBAR, which would receive a first mortgage, and in part by Lloyd Taylor, who would receive a second mortgage.

On August 20, 1979, Lloyd Taylor paid Dial and Lipscomb $100 for an option to purchase the 60 acres for $102,000. On August 24, Daugherty executed an offer to purchase the 60 acres from Lloyd Taylor for $132,000 and made a $1,000 down payment on the purchase price. On October 18, 1979, Dial and Lipscomb conveyed the 60 acres directly to Daugherty. On October 19, Daugherty obtained a $110,000 loan from the FLBAR and paid $104,125 out of the loan proceeds to Dale Taylor. Daugherty also executed a second mortgage to Dale Taylor for $27,000. Lloyd Taylor served as the loan closing attorney for Daugherty.

In December, 1979, Payne told Daugherty, who also held an earlier FLBAR loan, that his two outstanding FLBAR loans would have to be consolidated. On January 14, 1980, Daugherty obtained an FLBAR loan for $250,000. Out of the proceeds remaining after the two outstanding FLBAR loans were paid off, $27,500 was paid to Dale Taylor. Lloyd...