U.S. v. Booty

• Decision Date: 21 July 1980
• Docket Number: No. 79-5237,79-5237
• Parties: 6 Fed. R. Evid. Serv. 737 UNITED STATES of America, Plaintiff-Appellee, v. Robert Laverne BOOTY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1291

621 F.2d 1291

6 Fed. R. Evid. Serv. 737

UNITED STATES of America, Plaintiff-Appellee, v. Robert Laverne BOOTY, Defendant-Appellant.

No. 79-5237.

United States Court of Appeals, Fifth Circuit.

July 21, 1980.

James A. McPherson, New Orleans, La., for defendant-appellant.

John P. Volz, U.S. Atty., Ronald A. Fonseca, Asst. U.S. Atty., New Orleans, La., for plaintiff-appellee.

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

Before THORNBERRY, FRANK M. JOHNSON, Jr. and HENDERSON, Circuit Judges.

FRANK M. JOHNSON, Jr., Circuit Judge:

This is a direct appeal from a conviction for conspiracy to commit mail fraud against or otherwise defraud the United states in violation of 18 U.S.C. § 371 ¹. The defendant, Robert Laverne Booty, challenges the sufficiency of the evidence on which he was convicted and the correctness of a number of the trial court's evidentiary rulings and instructions to the jury. His contentions have no merit, and we affirm the conviction.

I.

The undisputed factual background is as follows. Booty and his business partner, Clyde Smoak, owned and operated the Southeastern Paving Company, Inc., and the Louisiana Southern Construction Company. In 1972, in the name of Southeastern Paving, Booty and Smoak applied for and obtained a Small Business Administration guaranteed loan of $140,000. The loan was made by a local Amite, Louisiana, bank of which Booty was a director. One of the conditions of the loan was that Booty and Smoak assign to the bank insurance policies on their lives in the amount of $70,000 each, $140,000 in total. ² In the spring of 1975, in the name of Louisiana Southern Construction, Booty and Smoak obtained another SBA guaranteed loan of $350,000 from the same bank. One of the conditions of this loan was that Booty and Smoak assign to the bank insurance policies on their lives in the amount of $160,000 each, $320,000 in total. ³ For each of the loans, Booty and Smoak signed agreements with the SBA warranting, among other things, that they would maintain payments on the life insurance until the loans were fully repaid ⁴ and that they would obtain the consent of the SBA in writing prior to assuming or otherwise suffering any encumbrance upon it. ⁵ In August 1975, Southeastern Paving and Louisiana Southern Construction ceased doing business. At the time, neither Smoak nor Booty had assigned any life insurance to the bank. ⁶ The 1972 loan became past due in June 1975; the 1975 loan, made in April 1975, became past due in December 1975.

In September 1975, Booty approached P.A. Roth, Jr., a close business associate of Booty ⁷ and the chief executive officer of the lender bank, and showed him two insurance policies on the life of Clyde Smoak naming Booty as beneficiary. ⁸ The face amount of the policies was $150,000. Booty told Roth that he could not afford the $534 monthly premiums. He asked Roth if he knew anyone who would be willing to pay the premiums in exchange for a share of the proceeds of the policies. Roth told Booty that he did not but that he thought that he could convince the the bank to agree to continue payment of the premiums if Booty would agree to assign the policies to the bank. After some initial hesitation, Booty agreed to this proposal. ⁹ Roth reported to Booty at a later meeting that he had obtained the permission of the bank board of directors. ¹⁰ Booty and Roth then sent a letter to Booty's insurance agent, signed by Booty and dated October 5, 1975, notifying the agent of the assignment. ¹¹ Booty gave Roth the policies and the bank began paying the premiums.

At the time these arrangements were made it was apparently known that Smoak's death was imminent. ¹² Smoak died on November 9, 1975, and on November 11 Booty's insurance agent came by the bank and picked up the policies. The agent informed Roth at that time, as he had earlier, that the insurance company would not recognize the assignment of the policies to the bank until Booty completed certain company forms. Although Roth then, as before, instructed Booty to complete the forms, and Booty promised Roth that he would do so, he never did. In December 1975, Booty, a lawyer representing Booty, and the insurance agent travelled to the insurance company headquarters in Dallas and picked up checks for the $150,000 in proceeds from the policies. The checks were then exchanged for a cashier's check from a Dallas bank. The next day, Booty, two lawyers representing Booty, and Roth travelled to New Orleans to cash the check. They obtained the $150,000 in cash in hundred dollar bills, placed the money in two brief cases, and carried it back to the Amite bank. There, Booty gave Roth $5,000 for his personal use and transferred most of the rest to a safe deposit box, opened in Booty's name and access to which was personally controlled by Roth. Roth kept all records of the box in his desk drawer. ¹³ Over the course of the next three months, Booty withdrew approximately $15,000. In late February 1976, Roth told Booty that the bank wanted $45,000 of the cash. Roth told Booty that this was the amount the bank stood to lose on the 1972 and 1975 SBA loans. Booty removed the remaining cash from the safe deposit box, paid the bank $15,000 of it and kept the rest. He told Roth to keep a $30,000 check the bank was holding for him proceeds from the sale of certain bank stock Booty had owned to make up the rest of the $45,000.

Approximately a week later, Roth, as president of the bank, sent a letter to the SBA requesting the agency to honor its guaranty agreement and send a check to the bank for the guaranteed portion of the balance past due on each of the Booty loans. The letter noted that certain collections had already been made and credited to the loan accounts, indicated that the bank was holding a number of mortgages for the loans on which it had yet to foreclose, and promised that the bank would continue to service the loans in an effort to collect more of the outstanding balance. No mention was made of the Smoak life insurance proceeds or of the $45,000 recently received from Booty. ¹⁴ Two weeks later, the SBA wrote Roth that the agency's checks for the guaranteed portion of the loan balances were, as requested, on their way. Noting that the bank would retain servicing of the loans, the SBA asked Roth to "(p)lease attempt to work out an orderly means of liquidation with the signers of the Note. If orderly liquidation cannot be arranged, a decision will be made whether or not to institute suit and judgment proceedings."

Approximately a month later, in late April 1976, the bank underwent a Federal Deposit Insurance Corporation audit. In the midst of this audit Roth made entries in the bank's records for the first time reflecting the receipt of the $45,000 from Booty. According to the auditor, the entries were improperly made. Although notations on the entries indicated that the $45,000 had been received in connection with Booty's SBA loans, the $45,000 was credited not to a reduction of the loan balances, but to two bank income accounts to which the SBA was not privy. The auditor asked Roth to explain the entries but was rebuffed.

In early May 1976, shortly after the audit had begun, Roth and Booty met with an SBA loan officer to discuss the status of the loan. Roth informed the agency for the first time of the $15,000 in cash he had received from Booty in late February. Roth also told the SBA officer that Booty had some bank stock which would be sold and applied to the loan. Neither he nor Booty disclosed to the agency the source of the $15,000 or otherwise mentioned the Smoak life insurance proceeds.

Approximately a week later, Roth resigned his position with the bank. See note 25, infra. One month after his resignation, during a weekend in June, he convinced a bank officer to allow him into the bank building in order to dictate a letter to the SBA. A bank secretary typed and mailed the letter shortly thereafter on June 22, 1976, but, pursuant to Roth's instructions, backdated it to May 13, 1976. ¹⁵ The letter informed the SBA that the bank had received $15,000 in cash from Booty and $30,000 in cash from the sale of Booty's stock. It did not mention the Smoak insurance proceeds.

At no time during this entire period did Roth or Booty bring the insurance proceeds to the SBA's attention. ¹⁶

In December 1978, Booty was indicted on two counts of misapplication of bank funds in violation of 18 U.S.C. § 656. ¹⁷ That indictment, later dismissed on the government's motion, was superseded by an indictment charging Booty with conspiracy to commit mail fraud against or otherwise defraud the United States in violation of 18 U.S.C. § 371. ¹⁸ At the close of a two day trial, a jury found Booty guilty and he was sentenced to 18 months in prison.

II.

Booty's principal contention is that there was insufficient evidence to support his conviction. He claims that the trial court erred in denying his motion for acquittal, made at the conclusion of the government's case. This contention has no merit.

Since Booty presented evidence in his own behalf following denial of the motion and did not renew the motion at the close of all the evidence, this Court's review of the evidence is limited to a determination of whether there has been a 'manifest miscarriage of justice.' See United States v. White, 611 F.2d 531, 536 (5th Cir. 1980); United States v. Bourg, 598 F.2d 445, 448 (5th Cir. 1979); United States v. Phipps, 543 F.2d 576, 577 (5th Cir. 1976), cert. denied, 429 U.S. 1110, 97 S.Ct. 1146, 51 L.Ed.2d 564 (1977). See also United States v. Sander, 615 F.2d 215, 218 (5th Cir. 1980). When viewed in the light most favorable to the verdict with all reasonable inferences and credibility choices made to support the verdict, Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed. 680 (1942), the evidence in this case establishes that no miscarriage of justice has occurred.

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