U.S. v. Bowman, 85-1361

Citation783 F.2d 1192
Decision Date24 February 1986
Docket NumberNo. 85-1361,85-1361
PartiesUNITED STATES of America, Plaintiff-Appellee, v. Albert B. BOWMAN, Defendant-Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

Ronald J. Waska, Houston, Tex., for defendant-appellant.

James A. Rolfe, U.S. Atty., James T. Jacks, Asst. U.S. Atty., Dallas, Tex., for plaintiff-appellee.

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

Before JOHNSON and JOLLY, Circuit Judges and MITCHELL *, District Judge.

JOHNSON, Circuit Judge:

Albert B. Bowman appeals from his conviction by a jury of three counts 1 of mail fraud in violation of 18 U.S.C. Secs. 1341 2 and 2, 3 and three counts of making false statements in connection with loan applications to federally insured banks in violation of 18 U.S.C. Secs. 1014 4 and 2. The charges stemmed from multiple sales and lease-backs of Bowman's medical office equipment. The convictions are affirmed.

I. FACTS

The sale/lease-back scheme worked in the following manner. Bowman's co-defendant Charles Alexander, 5 contacted medical doctors by means of direct mail solicitations which offered substantial loans to the doctors. Upon return of a postcard by the doctor, Alexander made a personal visit to the doctor's office. Primarily, Alexander offered these doctors (like Dr. Bowman) the opportunity to participate in a sale/lease-back transaction involving the doctor's own medical office equipment. If a doctor was in need of cash, Alexander offered to arrange for that doctor to sell his office equipment to an investor doctor and then, as a part of the same transaction, lease the equipment back. Accordingly, the seller-lessee obtained the cash proceeds of the sale and reaped a tax deduction from the lease payments. On the other hand, if a doctor was interested in an investment opportunity, Alexander offered to arrange for that doctor to become the purchaser of another doctor's office medical equipment and to lease it back to the selling doctor. The purchaser-lessor was able to depreciate the equipment purchased and possibly obtain an investment tax credit. In addition, if the purchasing doctor borrowed the funds for the transaction, the interest payments were deductible. In this simple form, the sale/lease-back transaction did not violate federal law.

The scheme involving Bowman, however, was not so simple. Bowman responded to a direct mail solicitation from Alexander who then personally contacted Bowman. Bowman decided to sell his medical office equipment and lease it back in order to obtain funds to invest in another venture. Halco Financial Services of Kansas City (Halco of Kansas City), the initial purchaser-lessor of Bowman's equipment, was an investment corporation formed by Doctors John Collins and Harold West. Alexander solicited Doctors Collins and West in the described manner, and they determined to participate in a sale/lease-back transaction as a purchaser-lessor. At the suggestion of Alexander, they formed the corporation, Halco of Kansas City, to facilitate their participation in sale/lease-back transactions. Halco of Kansas City borrowed $115,000.00 to purchase Bowman's equipment.

Subsequently, unbeknownst to Halco of Kansas City, Alexander formed a Tennessee corporation titled Halco Financial Services (Halco of Tennessee). 6 Halco of Tennessee, through Charles Alexander, arranged three additional sales of Bowman's office medical equipment. In each case, Bowman executed a lease agreement and a bill of sale warranting clear title to the same equipment. In the second transaction, Halco of Tennessee assigned a lease to F & W Leasing, a partnership formed by Doctors Walters and Flory, who borrowed $115,000.00 in order to fund the transaction. The third sale was to Dr. Muckleroy, who purchased Bowman's office medical equipment with $100,000.00 borrowed from a bank. Finally, in April of 1982, Bowman's office equipment was sold for the fourth time to Financial Services and Systems, Inc., a previously existing investment corporation that handled the investments of approximately twelve Dallas, Texas area doctors. Financial Services and Systems also borrowed the $110,000.00 purchase price from a bank.

In each transaction, the purchaser-lessor presented the warranty bill of sale, the lease, and a list of Bowman's equipment to a federally insured financial institution. The bill of sale did not disclose the existence of the other sales or the existence of prior security interests covering the equipment. Based on this information and the financial statements of the borrowing doctors, all the purchaser-lessors were able to obtain loans to fund the purchase of Bowman's medical equipment.

Bowman was unable to meet the combined obligations under all the lease agreements and the purchaser-lessors eventually became aware of the multiple sales. Bowman was subsequently convicted on charges of mail fraud and making false statements, as noted, and he appeals.

On appeal, Bowman makes numerous contentions. First, Bowman asserts that the evidence was insufficient to support his three convictions for mail fraud or aiding and abetting mail fraud. Second, Bowman asserts that the evidence is insufficient to support his convictions for making or causing to be made false statements to a federally insured financial institution or aiding and abetting such crime. Third, Bowman asserts that the district court erroneously denied Bowman's motion for a mistrial or alternative motion for a hearing based on Bowman's allegation that the Government failed to produce an alleged recorded statement of Bowman's, see Fed.R.Crim.P. 16(a)(1)(A), or material covered by Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963). Bowman's arguments are unavailing, and the convictions are affirmed.

II. DISCUSSION
A. Sufficiency of the Evidence

Bowman argues that the evidence is insufficient to support his three mail fraud convictions and his three false statement convictions. This Court applies the following standard of review.

It is not necessary that the evidence exclude every reasonable hypothesis of innocence or be wholly inconsistent with every conclusion except that of guilt, provided a reasonable trier of fact could find that the evidence establishes guilt beyond a reasonable doubt. A jury is free to choose among reasonable constructions of the evidence.

United States v. Bell, 678 F.2d 547, 549 (5th Cir.1982) (en banc) (footnote omitted). In making this review, this Court views the evidence presented and the reasonable inferences to be drawn from it in the light most favorable to the Government. Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed. 680 (1942).

1. The mail fraud convictions

Bowman makes numerous arguments in support of his contention that the evidence does not support his three mail fraud convictions. First, Bowman argues that the evidence was insufficient to demonstrate that he knowingly participated in a scheme to defraud banks. The Government did not need to prove an intent to defraud banks in order to demonstrate mail fraud. Rather, it only needed to demonstrate an intent to defraud some one person. Here, the record amply demonstrates that Bowman knowingly joined a scheme to defraud F & W Leasing, Dr. Muckleroy, and Financial Services and Systems. See Pereira v. United States, 347 U.S. 1, 74 S.Ct. 358, 98 L.Ed.2d 435 (1954) (elements of mail fraud include (1) the existence of a scheme or artifice to defraud and (2) the use of the mails in furtherance of the scheme).

Bowman contends that fatal variances existed between the evidence and the specific allegations in the indictment. First, Bowman asserts that the Government failed to present evidence of the envelopes in which the items were allegedly mailed. Second, Count I alleged the mailing of a check made out to F & W Leasing when the evidence demonstrated that the check was made out to Halco Financial Services and endorsed over to F & W Leasing. These arguments, and others like them asserted by Bowman, fall within the category of surplussage. The Government was not required to prove each detail or description of the alleged mailings so long as the evidence demonstrated that the mails were used in furtherance of the scheme to defraud. See United States v. Hughes, 766 F.2d 875, 879 (5th Cir.1985); United States v. Goodman, 605 F.2d 870, 886-87 (5th Cir.1979).

Bowman next argues that the mailed items specified in Counts I and IV were mailed a substantial time after completion of the fraudulent scheme. Bowman's argument is unavailing. "[I]t is a well-established principle of mail fraud law that use of the mails after the money is obtained may nevertheless be 'for the purpose of executing' the fraud." United States v. Ashdown, 509 F.2d 793, 799 (5th Cir.), cert. denied, 423 U.S. 829, 96 S.Ct. 48, 46 L.Ed.2d 47 (1975); see United States v. Shaid, 730 F.2d 225, 229-30 (5th Cir.), cert. denied, --- U.S. ----, 105 S.Ct. 151, 83 L.Ed.2d 89 (1984). In this case, the scheme as a whole is properly characterized as a lulling scheme, and the Government amply demonstrated that the mailings were in furtherance of the scheme to defraud. Shaid, 730 F.2d at 230.

Bowman next contends that the evidence failed to demonstrate that he mailed Dr. Muckleroy a list of medical equipment. Dr. Muckleroy's business manager-wife testified that the list of medical equipment was indeed received through the mail. That evidence sufficiently supports the conviction. Bowman further contends that there was a fatal variance between the date of mailing alleged in the indictment (January 15, 1982) and the date on which Mrs. Muckleroy testified the list was received (October 22, 1981). The Government need not prove an exact date. It is sufficient if the evidence demonstrates a date reasonably near the date alleged in the indictment. The time of the offense is not an essential element of the offense charged and, generally speaking, proof of any date...

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