U.S. v. Adkinson

• Citation: 135 F.3d 1363
• Decision Date: 23 February 1998
• Docket Number: Nos. 92-2872,95-2061,s. 92-2872
• Parties: 11 Fla. L. Weekly Fed. C 1081 UNITED STATES of America, Plaintiff-Appellee, Cross-Appellant, v. William Michael ADKINSON, Ann Powell Minks, f.k.a. Ann Powell, et al., Defendants-Appellants, Cross-Appellees. UNITED STATES of America, Plaintiff-Appellee, v. Ronald D. PEEK, Ann Powell Minks, et al., Defendants-Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)

Page 1363

135 F.3d 1363

11 Fla. L. Weekly Fed. C 1081

UNITED STATES of America, Plaintiff-Appellee, Cross-Appellant, v. William Michael ADKINSON, Ann Powell Minks, f.k.a. Ann

Powell, et al., Defendants-Appellants, Cross-Appellees.

UNITED STATES of America, Plaintiff-Appellee, v. Ronald D. PEEK, Ann Powell Minks, et al., Defendants-Appellants.

Nos. 92-2872, 95-2061.

United States Court of Appeals Eleventh Circuit.

Feb. 23, 1998.

Clifford L. Davis, Monticello, FL, for Adkinson.

Samuel J. Buffone, Ropes & Gray, Washington, DC, Michael E. Tigar, Denver, CO, James K. Jenkins, Maloy & Jenkins, Atlanta, GA, Terrance G. Reed, Washington, DC, for Minks and Collins.

Steven Quinnell, Pensacola, FL, Michael E. Tigar, Denver, CO, for Peek.

Richard A. Tinsley, Houston, TX, pro se.

Stanley G. Schneider, Schneider & McKinney, Houston, TX, for Koshkin.

Kenneth R. Ridlehoover, Pensacola, FL, for Dufilho.

Robert Alfert, Jr., Steven Michael Staes, Broad & Cassel, Orlando, FL, for Alligood.

Daniel D. Kistler, Houston, TX, pro se.

Benjamin W. Beard, Asst. U.S. Atty., Pensacola, FL, for United States.

Appeals from the United States District Court for the Northern District of Florida.

Before DUBINA, Circuit Judge, and HILL and GIBSON ^*, Senior Circuit Judges.

HILL, Senior Circuit Judge:

Defendants appeal from the denial of their motion for a new trial and from their convictions and sentences upon multiple counts of conspiracy, bank, mail and wire fraud, interstate transportation of stolen property and money laundering. The government appeals the district court's determination that the sentencing guidelines do not apply to these defendants. For the following reasons, all convictions and sentences WILL BE REVERSED AND VACATED. ¹

I.

Confronted with a situation similar to the one presented here, a judge wisely wrote:

Although there is ample ground for argument that the Supreme court has doubts about Lau's continued vitality, a requiem may be premature and, in any event, should not be sung by this choir.

NAACP v. Medical Center, Inc., 657 F.2d 1322, 1330 (3d Cir.1981) (Judge Joseph Weiss).

Had this admonition been taken to heart at the outset of this case, a most troublesome path would have been avoided.

II. Background

This case began as a basic bank fraud case arising out of alleged false statements and misrepresentations made to procure loans for a land development project and that large amounts of loan proceeds were allegedly diverted for personal use. Somewhere along the line, the case mutated into a broad conspiracy against the government involving wire, mail, and tax fraud, interstate transportation of money taken by fraud and money laundering. ² There was evidence of the following facts.

William Adkinson, a Houston real estate developer, had expanded a modest business of acquiring and renovating foreclosed homes into a complex series of interlocking corporate entities under the umbrella of The Development Group, Inc. (DGI). Adkinson named Ronald Peek president of DGI. During this time, Adkinson met Keith Cox, a London solicitor. Cox represented a group of Kuwatis who invested internationally through a multi-billion dollar company called Compendium Trust. After several successful business ventures with Cox, Adkinson began to engage in large, complex real estate transactions.

In the summer of 1985, Adkinson became interested in purchasing an exceptional piece of beachfront property and contiguous forest land from the St. Joe Paper Company of Jacksonville, Florida (St. Joe). The property is situated in the panhandle of Florida and includes 6.5 miles of sugar white beaches, dense pine forests, fresh water lakes and magnificent sand dunes.

Adkinson employed Robert Alligood, then president of the engineering firm of Reynolds, Smith & Hills (RS & H), to help Peek and him negotiate the purchase from St. Joe. Alligood had a relationship with the principals of St. Joe that Adkinson hoped would help in the negotiations. In addition, RS & H performed engineering studies on the feasibility of developing the property. Alligood and RS & H were to receive a broker's commission of $3 million through its real estate subsidiary, Plantec Realty Corp.

A contract was ultimately negotiated, providing for $50 million in cash for approximately 780 acres, a tax-free property exchange of 18,000 interior acres, and an additional 2,000+ acres purchased on a seller-financed note and mortgage for $132 million. The contract provided for the immediate release of portions of the beach front and a staged release of the other land as mortgage payments were made.

On October 3, 1985, the contract was entered into by St. Joe and Panhandle Coast Investors, Inc. (Panhandle), a Florida corporation, formed at the request of Cox who had joined the deal. ³ Adkinson's attorney, Robert Collins, had arranged for Panhandle to be formed.

The contract required a deposit of $2.1 million in earnest money with Imperial Title Company, a title company owned by Collins and Ann Powell Minks. Adkinson sent two DGI checks to Minks, totaling $2.1 million, to establish the escrow account. On October 7, 1985, Minks communicated to St. Joe receipt of the deposit. On October 9, 1985, Panhandle assigned its interest in the land purchase contract to DGI.

Funding for the land purchase was originally to be provided by a bank with which Adkinson had done business over several years. That bank, however, backed out. In order to cover the DGI checks, Adkinson moved the escrow account to West Belt National Bank (Bank) and that bank honored the checks based upon an agreement by Sandsend Financial Consultants, Ltd. (Sandsend), the lending arm of Cox' Compendium Trust, to fund the escrow from a certificate of deposit. The Bank confirmed that the total escrow was on deposit as of March 12, 1986, and Minks and Collins communicated this fact to St. Joe. ⁴ The certificate of deposit had a maturity date of March 19, 1986. Sandsend redeemed the certificate on March 21, 1986.

In April of 1986, Adkinson secured a purchase money loan from Hill Financial Savings Association (Hill) of Red Hill, Pennsylvania. As structured by Hill, the loan would be to a joint venture comprising a DGI subsidiary, FSD Group, Inc. (FSD), and a subsidiary of Hill. The joint venture would be called Emerald Coast Joint Venture (Emerald Coast), which would take the property in its name and execute the loan document. Ronald D. Peek, president of DGI, was also president of FSD. ⁵

Subsequently, Hill became concerned that the loan might be considered an investment, which by law it was not permitted to make. Hill retained the accounting firm of KPMG Peat Marwick to perform an accounting investigation of the loan, which included a close examination of the borrower, DGI, and its principal, Adkinson. Richard Sundheim, of Main Hurdman now Peat Marwick, performed the audit.

Consequently, as one of the conditions of the loan, Hill required Emerald Coast to pre-sell approximately 130 acres of the property. In order to satisfy this requirement, Adkinson approached his friend, Robert Corson, who had recently purchased a Texas savings association, Kleberg County Savings Association of Kingsville, Texas, later known as Vision Banc. Vision Banc agreed to make loans to four entities for the purpose of purchasing the 130 acres.

Adkinson and Cox chose Crossview Development Company, owned by a Kuwati investor, a client of Cox, as one of the entities. Two others were former DGI subsidiaries, First Western Equity, Inc. and Development Mortgage Group, Inc. (DMG), which were in the process of being sold off to their respective presidents, Barney Van Huss and Gilbert G. Dufilho. Both Van Huss and Dufilho agreed on behalf of their respective companies to participate in the transactions. The fourth company, suggested by Corson, was Ferguson/C & D, Inc., owned by Robert Ferguson.

On May 26, 1986, a new brokerage agreement was executed between Adkinson and Plantec in which Plantec and Koshkin would share one-third and two-thirds, respectively, in a 5% or $9.1 million brokerage commission. The agreement was backdated to August, 13, 1985, by Plantec's president.

On June 1, 1986, Cox and Adkinson entered into an agreement that Sandsend would lend DGI $30 million to be used to purchase the contract rights to approximately 268 acres of the Walton County land purchase from Panhandle. In consideration for the loan, DGI would arrange for St. Joe to deed those acres to Sandestin Investors, Inc., a wholly owned subsidiary of Sandsend.

On June 2, 1986, the four loans from Vision Banc to the above-named entities were closed in Houston. Adkinson's lawyers, Robert Collins and Daniel Kistler, were present. A newly formed Florida corporation, Walton County Investors, Inc. (Walton) acted as the initial purchaser of the 130 acres from St. Joe. It then sold off tracts of the 130 acres to the four entities for an aggregate price of $48 million, of which $20.4 million was provided by Vision Banc.

On June 3 through June 5, 1986, the Hill loan transaction closed in Jacksonville, Florida. At closing, however, Hill demanded material changes in the structure of the loan transaction. Hill required Adkinson to purchase certain real estate owned by Hill, cede a greater equity share (75%) of the Florida purchase to it, and transfer to Hill 7,300 acres of the most valuable property as a loan fee. Adkinson objected, but chose to close.

The land was conveyed by four separate deeds. Crossview took 260 acres directly; a second deed went to Emerald Coast; a third to Hill for the 7,300 acres it had demanded at the last minute; and the fourth deed was to Walton for the 130 acres. The escrow funds were paid by Imperial to St. Joe upon closing. ⁶ Plantec received a commission of $9.1 million by way of checks in the amounts of $1, $2 and $6.1 million. Plantec had agreed to lend $1 million to DGI so it could close, so the $1 million check was endorsed by the president...