882 F.2d 250 (7th Cir. 1989), 89-1280, United States v. White

Docket Nº:89-1280.
Citation:882 F.2d 250
Party Name:UNITED STATES of America, Plaintiff-Appellee, v. Phillip R. WHITE, Defendant-Appellant.
Case Date:August 14, 1989
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

Page 250

882 F.2d 250 (7th Cir. 1989)

UNITED STATES of America, Plaintiff-Appellee,


Phillip R. WHITE, Defendant-Appellant.

No. 89-1280.

United States Court of Appeals, Seventh Circuit

August 14, 1989

Argued June 2, 1989.

Linda Chapman, Asst. U.S. Atty., Indianapolis, Ind., for plaintiff-appellee.

David W. Mernitz, Colleen E. Tonn, Stark, Doninger, Mernitz & Smith, Indianapolis, Ind., for defendant-appellant.

Before POSNER and MANION, Circuit Judges, and ESCHBACH, Senior Circuit Judge.

POSNER, Circuit Judge.

Section 1014 of the federal criminal code provides so far as relevant to this case that "whoever knowingly makes any false statement ... for the purpose of influencing in any way the action of ... any bank

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the deposits of which are insured by the Federal Deposit Insurance Corporation" shall be guilty of a felony. 18 U.S.C. Sec. 1014. Phillip White was convicted of having violated this statute by making knowingly false statements to American Fletcher Leasing Corporation, a wholly owned subsidiary of American Fletcher National Bank, which is a bank whose deposits are insured by the FDIC. The question is whether the subsidiary is also an FDIC-insured bank within the meaning of section 1014. True, the statute does not require that the false statement be made to the insured bank; it is enough that the statement, to whomever made, was intended to influence the bank's action. United States v. Lentz, 524 F.2d 69, 71 (5th Cir.1975). But the indictment in this case does not charge, and the government does not argue, that White made statements to the leasing corporation intending to influence its parent, the national bank, as in United States v. Maalouf, 514 F.Supp. 851 (E.D.N.Y.1981). The only entity he sought to influence, so far as the government is concerned, is the leasing corporation. It is therefore crucial to determine whether the leasing corporation is a federally insured bank within the statute's meaning.

The evidence on this question is sparse, but a negative answer seems inevitable. The leasing corporation was incorporated pursuant to Indiana's general corporation law, which at the time the false statements were made expressly prohibited corporations incorporated under it from engaging in the banking business. Ind.Code Sec. 23-1-2-1 (repealed, effective August 1, 1987, by P.L. 149-1986, Sec. 65). This prohibition is repeated in the leasing corporation's articles of incorporation, and there is no suggestion that it was violated. The leasing corporation not only could not lawfully accept deposits; it did not accept deposits. The record is (otherwise) silent on the source of its funds. We know only that the leasing corporation was engaged in equipment financing for the transportation industry and that it did not file a separate financial statement; instead, its assets, liabilities, and earnings were consolidated with those of the parent bank. The government is unable to say whether, should the leasing corporation go broke, its creditors would be able to pierce the corporate veil and reach the bank's assets. The government does point out however that because the Comptroller of the Currency, who regulates national banks, regards the business of the leasing corporation as "incidental to the business of banking," the leasing corporation comes within a regulation of the Comptroller that subjects subsidiaries so engaged to all laws and regulations applicable to national banks. 12 C.F.R. Secs. 5.34(c), (d)(2).

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