U.S. v. Aggarwal

• Decision Date: 17 March 1994
• Docket Number: No. 93-4436,93-4436
• Citation: 17 F.3d 737
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Rattan Lal AGGARWAL, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 737

17 F.3d 737

UNITED STATES of America, Plaintiff-Appellee, v. Rattan Lal AGGARWAL, Defendant-Appellant.

No. 93-4436.

United States Court of Appeals, Fifth Circuit.

March 17, 1994.

Rehearing Denied April 13, 1994.

E.X. Martin, III, Dallas, TX and Mark M. Baker, Slotnick & Baker, New York City, for appellant.

H.S. Garcia, Asst. U.S. Atty. and Bob Wortham, U.S. Atty., Sherman, TX, for appellee.

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

Before JONES and DeMOSS, Circuit Judges, and COBB, ¹ District Judge.

DeMOSS, Circuit Judge:

A jury convicted defendant/appellant Rattan Lal Aggarwal of one count of conspiracy and four counts of wire fraud in connection with his participation in a fraudulent loan scheme. Aggarwal appeals on several grounds. Finding no basis for reversal, we AFFIRM Aggarwal's conviction and sentence.

Aggarwal raises seven points of error, claiming that: (1) there was insufficient evidence to convict him; (2) the trial court erred in denying Aggarwal's motion to depose an unavailable witness; (3) the trial court erred in refusing to dismiss the indictment due to late disclosure of Brady material; (4) the government's expert witnesses violated Federal Rule of Evidence 704 by giving legal definitions and implied opinions on the defendant's state of mind; (5) the trial court erred by refusing to dismiss the indictment for vindictive prosecution; (6) the trial court erred by refusing to give Aggarwal's proposed jury instructions on knowledge, willfulness and intent; and (7) the trial court erred during sentencing by refusing to consider Aggarwal's request for downward departure.

I. DISCUSSION

A: Sufficiency of the Evidence

Aggarwal claims there was insufficient evidence to support his conviction because the government did not prove that he had the required specific intent to commit a fraud.

Aggarwal was convicted of wire fraud under 18 U.S.C. Sec. 1343 ² and of conspiracy under 18 U.S.C. Sec. 371. ³ The government thus had the burden of proving (1) a scheme to defraud that involved use of the wires; and (2) that Aggarwal had the specific intent to commit fraud in furtherance of the scheme. United States v. Rochester, 898 F.2d 971, 976 (5th Cir.1990); United States v. Fagan, 821 F.2d 1002, 1008 (5th Cir.1987), cert. denied, 484 U.S. 1005, 108 S.Ct. 697, 98 L.Ed.2d 649 (1988).

In assessing a challenge to the sufficiency of the evidence, we must consider the evidence in the light most favorable to the verdict and must afford the government the benefit of all reasonable inferences and credibility choices. United States v. Stouffer, 986 F.2d 916, 921-22 (5th Cir.), cert. denied, --- U.S. ----, 114 S.Ct. 115, 126 L.Ed.2d 80 (1993). The evidence is sufficient if a rational trier of fact could have found the essential elements of the offense beyond a reasonable doubt based upon the evidence presented at trial. Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979); United States v. Kim, 884 F.2d 189, 192 (5th Cir.1989). The intent necessary to support a conviction can be demonstrated by direct or circumstantial evidence that allows an inference of an unlawful intent, and not every hypothesis of innocence need be excluded. United States v. McAfee, 8 F.3d 1010, 1014 (5th Cir.1993); United States v. Aubrey, 878 F.2d 825, 827 (5th Cir.), cert. denied, 493 U.S. 922, 110 S.Ct. 289, 107 L.Ed.2d 269 (1989); United States v. Henry, 849 F.2d 1534, 1536 (5th Cir.1988).

According to the indictment, Aggarwal was involved in a scheme in which the conspirators collected "advance fees" of $10,000 to $120,000 from potential borrowers by fraudulently promising to arrange pre-approved multi-million-dollar loans from foreign lending institutions. The conspirators were Aggarwal, who was self-employed as a broker of financial loan packages under the name of RACORP, Inc.; Edwin E. Whitis, II and Deanna J. Whitis, who were officers and directors of Commerce National Exchange Corporation ("CNEC"); and John Brumfield, a CNEC employee. Edwin Whitis pleaded guilty to a lesser charge and testified at trial for the government. Whitis admitted to having sought to defraud the potential borrowers, and testified that Aggarwal was part of the scheme. Other government witnesses, including Deanna Whitis and other former CNEC employees, testified that Aggarwal was the "big boss" who gave Edwin Whitis instructions, and that Whitis could not have come up with such a scheme on his own. CNEC placed advertisements in the Wall Street Journal claiming it could pre-approve 100 percent funding of loans with lending commitments direct from banks via fax or letter. Aggarwal provided a reference letter for CNEC, allowing it to meet the strict requirements of the Wall Street Journal advertisement acceptance policy. Victims were told falsely that the conspirators had been successful in obtaining funding for numerous clients. In reality, no potential borrower ever received a loan. Victims who asked for a reference were directed to call a pre-arranged number, where they talked to a "former client" who was in reality Deanna Whitis using a false name.

Aggarwal was in charge of arranging the loan commitments from European banks through the ExportFinazierungsBank ("Export Bank") in Vienna, Austria. ⁴ Aggarwal also gave Edwin Whitis instructions on drafting the contracts to be signed by the victims. The contracts obligated the borrower to acquire an irrevocable letter of credit or prime bank guarantee to serve as collateral. The conspirators did not help the victims obtain the guarantees; they wanted the victims to default in this obligation, because then the victims would lose the advance fee. The government, in its arguments to the jury, characterized the scheme as a "chicken-and-egg" situation. Edwin Whitis testified that Aggarwal told him that the guarantee companies "couldn't deliver the collateral in the first place." According to trial testimony, funding was highly unlikely because the required collateral/guarantee was virtually impossible to obtain for the required terms. Several government witnesses testified that if a borrower had the credit to obtain that kind of collateral, he or she would have no reason to purchase one of CNEC's "loan commitments." The government's expert witness on international banking, Robert Rendell, put it this way:

"[T]his security provision was something impossible for [the victim] to meet, because she could not obtain the letter of credit without the funds, and she could not get the funds without the letter of credit, so she was sort of stuck in limbo. And therefore, this [loan] commitment was of no use to her because she could never draw down the funds."

Whitis said he and Aggarwal had an agreement to split the advance fees, which amounted to more than $3 million. Aggarwal admitted having received at least $1.5 million in transfers from CNEC. Whitis and Aggarwal spoke daily and Aggarwal gave instructions on how to handle disgruntled victims. The business plans taken from the victims by CNEC were placed in a file cabinet and never sent to Aggarwal, and thus never sent to any source of funding. Whitis testified that the only purpose for taking the business plans was to lend the scheme an air of legitimacy. The government's expert Rendell stated that no legitimate institution would lend or commit the millions of dollars contemplated in this scheme without a detailed business plan setting out how the money would be used. Another government expert, John Shockey, called the scheme "a typical advance fee scam."

Aggarwal testified in his own defense and claimed that he was unaware of the scheme to defraud committed by Whitis, and that he earned whatever fees he received because he was ready and willing to provide the loan commitment if the borrower would obtain the required collateral.

The government argued that Aggarwal's intent to defraud the potential borrowers can be inferred from the evidence, including the facts that Aggarwal received $1.5 million in transfers from CNEC, that he was in contact with Whitis daily, and that, of the dozens of "clients," not one ever received the promised loan.

Considering the evidence in light most favorable to the verdict, we hold that a rational jury could have found the required elements of wire fraud and conspiracy, including the most contested element, namely Aggarwal's intent to join the conspiracy and defraud the potential borrowers. Therefore, we hold that the evidence is sufficient to support Aggarwal's conviction.

B: Denial of Rule 15(a) Motion to Take Deposition

Aggarwal claims the trial court erred by denying his motion under Federal Rule of Criminal Procedure 15(a) to depose an unavailable witness. The rule allows such depositions when "due to exceptional circumstances of the case it is in the interest of justice that the testimony of a prospective witness of a party be taken and preserved for use at trial." Fed.R.Crim.P. 15. The district court decides when "exceptional circumstances" exist, subject to appellate review for abuse of discretion. United States v. Allie, 978 F.2d 1401, 1405 (5th Cir.1992), cert. denied, --- U.S. ----, 113 S.Ct. 1662, 123 L.Ed.2d 281 (1993).

In this case, the trial court denied Aggarwal's motion to depose Charles Zani, a consultant of the Export Bank, regarding the status of the Export Bank's license. ⁵ The court refused to allow the deposition on the basis that Aggarwal's motion was untimely, that the testimony would be hearsay, and that the issue was "not essential to the defense of this case." Aggarwal argues that exceptional circumstances existed because Zani, a citizen of France, would not voluntarily enter the United States because he feared arrest. He also contends that the Export Bank's ability or inability to do business was "crucial to the government's case."

The district court did not abuse its discretion in finding that there were no exceptional...