U.S. v. Aubin
Decision Date | 24 June 1996 |
Docket Number | No. 94-10954,94-10954 |
Parties | -5311 UNITED STATES of America, Plaintiff-Appellee, v. George AUBIN, Defendant-Appellant. |
Court | U.S. Court of Appeals — Fifth Circuit |
Samuel J. Buffone, Washington, DC, Gerald H. Goldstein, San Antonio, TX, for appellant.
Karen Quesnel, Robert E. Lindsay, Alan Hechtkopf, Washington, DC, U.S. Department of Justice, Paul E. Coggins, U.S. Atty., Dallas, TX, for appellee.
Appeal from the United States District Court for the Northern District of Texas.
Before WISDOM, EMILIO M. GARZA and PARKER, Circuit Judges.
Defendant Aubin was convicted of conspiracy to defraud the United States, bank fraud, and wire fraud. He appeals his convictions and sentence. Finding no error, we affirm.
In the Summer of 1984, Defendant, George Aubin, decided to buy a horse farm in Kentucky at a cost of approximately 22 million. The charges against Aubin arose out of a scheme to obtain funding from Western Savings and Loan for the purchase of the horse farm. Western was owned by Aubin's friend, Jarrett Woods. Western could not lend money to Aubin directly because of federal regulatory scrutiny of Aubin's activities. Together with James Hague and Louis Reese, Aubin arranged a "land flip"--the purchase and simultaneous resale of the same property at a higher price.
Reese and others sold, for $14 million, a large piece of property near the LBJ Freeway and the Central Expressway in Dallas, Texas to Haft, Inc., which Aubin, Reese, and Hague controlled. Haft immediately sold the property to Hague Enterprises, which was also controlled by Aubin, Reese, and Hague, for $28 million. The profit from the transaction was sent via wire transfer to another corporation set up by the parties to carry-out the purchase of the horse farm.
The land flip was designed to obtain cash for the purchase of the horse farm without disclosing the identity of the parties involved and without disclosing the true purpose of the transaction. None of the loan documents revealed Aubin's interest in the transaction, or the fact that the profit was to be used for the purchase of the horse farm. Haft, the entity that realized profit in the land flip, never filed income tax returns with the Internal Revenue Service. Haft was nominally controlled by Aubin's attorney, Richard Fuqua.
Aubin and co-defendant Fuqua were indicted by a grand jury in February of 1993. They were charged with conspiracy to commit offenses against the United States and to defraud the United States, in violation of 18 U.S.C. § 371 (Count 1); bank fraud, in violation of 18 U.S.C. §§ 1344 & 2 (Count 2); making false entries in the books and records of a federally insured credit institution, in violation of 18 U.S.C. §§ 1006 & 2 (Counts 3 & 4); and wire fraud, in violation of 18 U.S.C. §§ 1343 & 2 (Count 5). Aubin and Fuqua were tried in May and June of 1994. The jury returned verdicts of not-guilty as to Fuqua, but returned verdicts of guilty as to Defendant Aubin on counts 1, 2, and 5.
In October 1994, the district court sentenced Aubin to 60 months imprisonment on Count 1 and 60 months on each of Counts 2 and 5 to be served concurrently with each other and consecutive to the sentence on Count 1. The district court also ordered that Aubin make restitution in the amount of $42,773,552.25 to the Resolution Trust Corporation. Aubin timely filed this appeal.
Among Aubin's numerous arguments on appeal, he challenges the sufficiency of the evidence supporting his convictions. In challenging the sufficiency of the evidence, a defendant "faces an imposing standard of review." United States v. Parekh, 926 F.2d 402, 405 (5th Cir.1991). A court reviewing the sufficiency of the evidence must "determine whether, viewing the evidence and the inferences that may be drawn from it in the light most favorable to the verdict, a rational jury could have found the essential elements of the offenses beyond a reasonable doubt." United States v. Charroux, 3 F.3d 827, 831 (5th Cir.1993) (quoting United States v. Pruneda-Gonzalez, 953 F.2d 190, 193 (5th Cir.), cert. denied, 504 U.S. 978, 112 S.Ct. 2952, 119 L.Ed.2d 575 (1992)).
In the present case, the district court deferred ruling on Aubin's motion for judgment of acquittal until after the jury returned its verdict. Because the defendant was entitled to a ruling on his motion prior to presenting his defense, this Court will only consider the evidence presented in the Government's case-in-chief in assessing the sufficiency of the evidence. United States v. Casilla, 20 F.3d 600, 606 (5th Cir.), cert. denied, --- U.S. ----, 115 S.Ct. 240, 130 L.Ed.2d 163 (1994); United States v. Rhodes, 631 F.2d 43, 44-45 (5th Cir.1980). Although it was error for the district court to defer ruling on Aubin's motion, such an error is harmless where, as here, the evidence presented during the government's case-in-chief is sufficient to support the verdict. Rhodes, 631 F.2d at 45.
On this charge, under 18 U.S.C. § 371, the Government bore the burden of proving beyond a reasonable doubt that Aubin agreed with at least one other conspirator to defraud the United States by obstructing the tax collecting function of the IRS, and one overt act in furtherance of the conspiracy. United States v. Chesson, 933 F.2d 298, 306 (5th Cir.), cert. denied, 502 U.S. 981, 112 S.Ct. 583, 116 L.Ed.2d 608 (1991). Because Aubin claimed that the statute of limitations barred this prosecution, the Government was also required to show that an overt act was committed within the six years preceding the date of the indictment.
For the evidence to sustain the conviction, it is not necessary that the evidence show an express or formal agreement; evidence of "a tacit understanding is sufficient." Iannelli v. United States, 420 U.S. 770, 777 n. 10, 95 S.Ct. 1284, 1289 n. 10, 43 L.Ed.2d 616 (1975); United States v. Hopkins, 916 F.2d 207, 212 (5th Cir.1990). Louis Reese testified that one of the purposes of structuring the transaction as a land flip through Haft, Inc., was to "impede the IRS from collecting taxes by making the deals so complicated that ... it was impossible to tell who owed taxes, what taxes might be owed and what the amount was." Reese also testified that he thought it was a part of the plan from the beginning that Haft would disappear. James Hague testified that filing tax returns for Haft would have been inconsistent with the secrecy necessary for the arrangement to succeed. Both Reese and Hague provided ample testimony regarding Aubin's central role in the transaction. This evidence is more than sufficient to allow a reasonable jury to find at least a "tacit understanding" that the parties would conceal Haft's profit from the IRS.
The government also presented sufficient evidence of an overt act in furtherance of the conspiracy within the statute of limitations period. The statute of limitations under the tax code for a conspiracy to defraud the United States in violation of 18 U.S.C. § 371 is six years. 26 U.S.C. § 6531(1). The grand jury returned the indictment in this case on February 24, 1993. Therefore, to sustain the conviction, there must be evidence of an overt act after February 23, 1987.
The evidence showed that the profit from the LBJ land flip was transferred to Slew Farms, a Cayman corporation set up by Hague, Reese, and Aubin. Hague, Reese, and Aubin, in turn, set up Cayman corporations to own their respective shares in Slew Farms. The corporation set up to hold Aubin's share was Sigma Group. The evidence also showed that Slew Farms owned a Kentucky corporation, Warrenton Farms, that was formed to own the horse farm. Aubin was the sole shareholder of Warrenton Farms.
On August 26, 1988, after federal regulators had made a criminal referral relating to the LBJ transaction, and after foreclosure had been ordered on the horse farm, Aubin caused Warrenton Farms to file for bankruptcy. The bankruptcy petition listed the IRS as a creditor having a priority in an unknown amount. However, the bankruptcy petition also falsely reported that Sigma Group had a secured claim against the property of Warrenton Farms in the amount of $15,614,691. Warrenton Farms supposedly incurred this debt on October 23, 1984, the date the profit from the LBJ land flip was wired to Kentucky and the purchase of the horse farm was closed. The government presented evidence that this loan was a fiction, and that the supporting documentation had been backdated well after the fact to create the appearance of a loan. The government also presented evidence that Aubin directed that the loan documentation be created. Thus, the bankruptcy petition indicated that a fictional loan, rather than the unreported profit from the LBJ land flip, was the source of the horse farm purchase money. From this evidence, a reasonable jury could conclude that the bankruptcy petition was designed to conceal from the IRS the transfer of Haft's unreported profit to Warrenton Farms, and therefore constituted an overt act in furtherance of the conspiracy to defraud the United States.
Aubin contends that there is no evidence that he intended to defraud Western Savings and Loan in violation of 18 U.S.C. § 1344. However, the very structure of the transaction would allow a reasonable inference of an intent to defraud. The evidence clearly indicates that the parties deliberately structured the transaction so that the loan documents would not reveal that Aubin or Reese were involved in the deal. The transaction was also designed to hide the fact that proceeds from the loan to Hague Enterprises were to be used to purchase the horse farm. Despite this evidence, Aubin contends that given Jarrett Woods' involvement in the transaction, and the full disclosure made to him, full disclosure was, in effect, made to Western.
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