U.S. v. Ballis
| Citation | 28 F.3d 1399 |
| Decision Date | 08 August 1994 |
| Docket Number | No. 93-2145,93-2145 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. John Addison BALLIS, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Gerald H. Goldstein, John J. Fahle, Goldstein, Goldstein & Hilley, San Antonio, TX, for appellant.
Katherine L. Haden, Paula C. Offenhauser, Asst. U.S. Attys., Ronald G. Woods, U.S. Atty., Houston, TX, for appellant.
Appeal from the United States District Court for the Southern District of Texas.
Before KING and SMITH, Circuit Judges, and KENT, 1 District Judge.
John Ballis appeals his conviction on six counts of bank fraud and conspiracy to defraud and four counts of obstructing the investigation of that fraud. Ballis asserts that the district court erred in (1) excluding certain evidence of his discussions with federal agents pursuant to a prior plea agreement; (2) refusing to sever the fraud counts from the obstruction counts; and (3) refusing to enforce the plea agreement. We affirm in part, and reverse in part.
In late 1986, the FBI began an investigation of transactions involving Roy Dailey, the Chief Executive Officer and Chairman of the Board at First Savings Association of East Texas ("FSAET"), a federally insured savings institution in Houston, Texas. In the course of the investigation, FBI Special Agent Tim Lauzon began focusing on FSAET loans to Ballis or persons affiliated with Ballis. The investigation revealed that from March to December 1984 Ballis and Dailey had arranged for FSAET to lend approximately $21.3 million to nominee borrowers acting on Ballis's behalf. To support these loans, Ballis and Dailey had submitted financial statements which falsely inflated the value of collateral and the ability of the nominees to service the loans. The loans were never repaid and resulted in foreclosures.
In particular, Agent Lauzon discovered that in December 1984 Ballis had asked Dailey to arrange for FSAET to loan $4.1 million to Archie Wood, Ballis' ranch foreman, for the purchase of raw land from M.F. Developers, a shell corporation created by Ballis and one Lance Winchester. In return, Dailey asked Ballis to pay him a portion of the loan proceeds. FSAET made the loan on December 27, 1984, from which Ballis paid the underlying debt on the property and still had $1,821,092.64 left over.
Ballis deposited the excess at First State Bank of Liberty, Texas ("FSBL") on December 28, 1984. That afternoon, he instructed Suzanne Fairchild, vice president at FSBL, to withdraw $300,000 in cash from the $1.8 million deposit and deliver it to one John Adger. Adger then delivered the money to Dailey. From the remaining loan proceeds, Fairchild made a number of additional disbursements to Ballis, Wood, and Winchester, some of which ended up in Dailey's hands.
Eventually, the investigation led to a grand jury subpoena for Fairchild. Prior to her appearance, however, Ballis met with Fairchild and instructed her not to provide any documents to the grand jury that would show that he had paid money to Dailey from the Wood loan proceeds. Fairchild complied, providing copies of falsified and fictitious documents to the grand jury in May 1987 and May 1988, after showing the documents to Ballis and receiving his approval for their submission. Among other misdeeds, Fairchild created a fictitious certificate of deposit for $305,000 and fictitious documents making it appear that loan proceeds had been reinvested, rather than paid to Dailey. She also furnished altered copies of Ballis's bank statements which omitted his certificate of deposit activity.
From the FSBL records Fairchild submitted to the grand jury, the government could not find any cash withdrawals from the disbursement of the $1.8 million deposit which would have indicated a bribery payment from Ballis to Dailey. Thus, while investigators could establish that Dailey received large amounts of cash shortly after the Wood loan, they could not determine the source. Subsequently, Ballis's attorney, Thomas Royce, told investigators that a bribe to Dailey could not be established without Ballis's cooperation and testimony.
On July 13, 1988, the government entered an agreement with Ballis, wherein Ballis agreed to give the government complete and truthful information about all participants and events involving the suspect loans and Roy Dailey. In return, Ballis would plead guilty to a criminal information charging only one count of making a false statement to a financial institution in violation of 18 U.S.C. Sec. 1014.
Pursuant to this agreement, FBI Agents Tim Lauzon and Randy Durney and AUSA Mitchell Lansden interviewed Ballis on July 27 and 28. These agents asked Ballis to explain the events surrounding the loan to Archie Wood, including the method, source and total amount of payment to Dailey for making the loan to Wood. During the interviews, Ballis stated that, consistent with the falsified documents Fairchild had furnished to the grand jury, the $300,000 payment to Dailey was made by cashing in a $305,000 certificate of deposit. In fact, this certificate had been manufactured after the cash had been shipped to Dailey directly from the $1.8 million excess loan proceeds. Moreover, in this meeting Ballis did not mention his conspiracy with Fairchild to provide false and fictitious documents to the grand jury, or the additional $200,000 he had later paid Dailey from the excess loan proceeds.
On January 2, 1990, Ballis pled guilty to a criminal information pursuant to his written agreement with the government. The information charged Ballis with submitting a false invoice to FSAET to obtain an advance on a construction loan. Judge Lynn Hughes of the Southern District of Texas sentenced Ballis to two years' probation.
In April, 1990, agent Durney reviewed the contents of a safe deposit box that had been drilled open by the Federal Deposit Insurance Corporation. He found the original $305,000 certificate of deposit of which Fairchild had provided a copy to the grand jury, and discovered that the certificate was the product of a "cut and tape job." Durney later examined the contents of another safe deposit box that had been drilled open and found microfiche copies of Ballis's bank statements which also had been provided to the grand jury. He found that the bank statements had been folded over and taped to conceal the certificate of deposit activity on Ballis's accounts.
Fairchild became the target of a federal grand jury investigation in August 1990. She subsequently entered into a proffer agreement with the government, and told investigators that Ballis had been untruthful in the debriefings by concealing the additional bribe to Dailey and his ongoing conspiracy with Fairchild to obstruct the federal grand jury investigation and Dailey's trial.
A ten-count indictment issued against Ballis on March 27, 1992, charging him with conspiracy to commit offenses against a savings and loan in violation of 18 U.S.C. Sec. 371 (count one); conspiracy to obstruct justice and make false statements to federal agents in violation of 18 U.S.C. Sec. 371 (count seven); and aiding and abetting the following offenses: bank fraud in violation of 18 U.S.C. Sec. 1344 (count two), bribing a savings and loan officer in violation of 18 U.S.C. Sec. 215 (count three), receiving a benefit in connection with a loan in violation of 18 U.S.C. Sec. 1006 (count four), misapplication of the funds of a savings and loan in violation of Sec. 657 (count five), making false entries in the books and records of a savings and loan in violation of 18 U.S.C. Sec. 1006 (count six), obstruction of justice in violation of 18 U.S.C. Sec. 1503 (), and making a false statement to a federal agent in violation of 18 U.S.C. Sec. 1001 (count nine).
A jury found Ballis guilty of all ten counts, and the court sentenced him to concurrent terms of five years' imprisonment on counts 1, 2, and 3; concurrent terms of five years' imprisonment on counts 4, 5, and 6, to run consecutively to counts 1 through 3; concurrent terms of 30 months' imprisonment on counts 7, 8, 9, and 10, to run consecutively to counts 1 through 6; concurrent terms of three years' supervised release on counts 7 through 10; a $500,000 fine; $4,260,000 in restitution; and a $50 special assessment.
Ballis first challenges various evidentiary rulings made by the trial court, complaining that the court erroneously prevented him from adducing any defense testimony as to the events of July 27 and 28, 1988, when Ballis met with federal agents for debriefing in accordance with the terms of his plea agreement. The record supports this contention. Because two counts of the indictment specifically charged Ballis with criminal conduct during those meetings, we find that the trial court's exclusion of the defense version of those meetings mandates reversal of Ballis' convictions on those counts.
Evidence about the meetings of July 27 and 28, 1988, related only to counts seven and nine of the indictment. Count nine charged Ballis with making a false statement to a federal official on those dates, in violation of 18 U.S.C. Sec. 1001. Count seven charged Ballis with participating in a conspiracy to obstruct justice and to make false statements to federal officials. This count described fifteen overt acts in furtherance of the conspiracy, the eleventh of which was the conduct charged in count nine. In its case-in-chief, the government presented evidence tending to prove that Ballis told the agents at these meetings that he would fully disclose what he knew about illegal activities at the bank, but that instead he purposefully withheld information about certain illegal kick-backs and the subsequent coverup of those transactions.
To substantively counter these charges, Ballis needed to present evidence that the events of July 27 and 28 were different...
To continue reading
Request your trial
-
U.S. v. Kay
...587 F.2d 705, 710 (5th Cir.1979). 100. United States v. Clements, 73 F.3d 1330, 1336 (5th Cir.1996); see also United States v. Rallis, 28 F.3d 1399, 1406 (5th Cir.1994) ("[E]xcluded evidence is sufficiently preserved for review when the trial court has been informed as to what counsel inten......
-
U.S. v. Bowker
...as to what that testimony may have been, failed to meet the stringent requirements for severance under Rule 14); United States v. Ballis, 28 F.3d 1399, 1408 (5th Cir.1994) (affirming denial of severance because defendant did not point out this alleged dilemma in testifying about some counts......
-
City of Arcadia v. U.S. Environ. Protection Agency
...verbally articulated) the possibility of reopening the TMDLs in the future does not implicate hearsay concerns, see United States v. Ballis, 28 F.3d 1399, 1405 (5th Cir.1994); and the board's orders to its staff are more akin to written or verbal Third, Plaintiffs assail the statements as "......
-
Falero v. State
...Banks, 56 Md.App. at 49, 466 A.2d 69. The Fifth Circuit has explained the reasoning for this exception. In United States v. Ballis, 28 F.3d 1399, 1402 (5th Cir.1994), Ballis pled guilty pursuant to a written plea agreement with the government. In the agreement, Ballis promised to be truthfu......
-
Trial of sexual harassment case
...at least inform the trial court “what counsel intends to show by the evidence and why it should be admitted.” United States v. Ballis , 28 F.3d 1399, 1406 (5th Cir.1994). We assume that the a൶davits iled by Slaughter in support of the motion for a preliminary injunction, the exhibits pro൵er......