U.S. v. Castro

• Decision Date: 23 October 1989
• Docket Number: 87-5240,Nos. 87-5227,s. 87-5227
• Citation: 887 F.2d 988
• Parties: 28 Fed. R. Evid. Serv. 1479 UNITED STATES of America, Plaintiff-Appellee, v. Patrick Arthur CASTRO, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Herbert Thomas COTTER, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 988

887 F.2d 988

28 Fed. R. Evid. Serv. 1479

UNITED STATES of America, Plaintiff-Appellee, v. Patrick Arthur CASTRO, Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellee, v. Herbert Thomas COTTER, Defendant-Appellant.

Nos. 87-5227, 87-5240.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Dec. 6, 1988.

Decided Oct. 23, 1989.

Bernard G. Skomal, San Diego, Cal., for defendant-appellant Castro.

Frank T. Morell, Moreno & Morell, Chula Vista, Cal., for defendant-appellant Cotter.

William Braniff, U.S. Atty., San Diego, Cal., for plaintiff-appellee.

Appeal from the United States District Court for the Southern District of California.

Before HALL, WIGGINS and THOMPSON, Circuit Judges.

DAVID R. THOMPSON, Circuit Judge:

After a ten-week jury trial, Patrick Arthur Castro and Herbert Thomas Cotter were each convicted of one count of conspiracy in violation of 18 U.S.C. Sec. 371; seventeen counts of misapplication of bank funds in violation of 18 U.S.C. Sec. 656; and five counts of causing false entries to be made in bank records in violation of 18 U.S.C. Sec. 1005. Cotter also was convicted of three counts of submitting false loan applications in violation of 18 U.S.C. Sec. 1014. Both Castro and Cotter appeal. We affirm.

FACTS

Castro was a vice president and commercial loan officer at Mitsui Manufacturers Bank (the "Bank") in San Diego, California, during the time of the alleged conspiracy from June 1981 through July 1982. Cotter was a self-employed consultant who located loan customers and brought them to Castro to obtain loans from the Bank. The prosecution alleged approximately twenty-one loans were made by Castro, through Cotter, in a manner which defrauded the Bank.

Numerous loan applicants, many of whom lived outside the Bank's San Diego Several borrowers testified they belonged to a company called Consolidated Pacific Holding Corporation, of which Cotter was president. Members of the company obtained loans through Castro and the loans were then pooled within the company. Loan proceeds obtained by new members were used to pay off the loans of existing members. Castro and Cotter received commissions on each loan.

lending area, described the same set of procedures for obtaining their loans. Many had financial problems and were referred to Cotter by mutual acquaintances or business associates. After meeting with Cotter, usually at his La Jolla offices, the borrowers were taken to the Bank to meet Castro. Loans ranging from $50,000 to $100,000 were approved by Castro after short meetings, some lasting only thirty minutes. A percentage of the loan amount was issued in the form of a cashier's check which the applicant was then instructed to cash at another bank. The cash then was given to either Castro or Cotter.

Borrowers also testified that Cotter provided local San Diego addresses for them to use on their loan applications to comply with the Bank's lending area policy. Evidence was presented that both Cotter and Castro knew prior to the approval of the loans that information contained in the loan applications was false. There was also testimony that Cotter created false information to conceal the poor financial condition of some applicants. One witness, Preetpal Singh, an Indian citizen visiting the United States with no residency status or credit in this country, nevertheless received a $100,000 loan after meeting with Castro and describing his background. He testified Castro told him:

You take this loan, and you pay us our commission which has been told to you, and you go out of the country, and no money is going to come out of you at all. No one is going to come after you to pay this loan or pay this money back.

Trial Transcript at 108.

ANALYSIS

Castro and Cotter contend the district court erred in failing to give the jury a unanimous verdict instruction on the objects of the conspiracy; in denying their motions for severance; and in admitting evidence which they argue had the cumulative effect of denying them a fair trial. Cotter challenges the sufficiency of the evidence to convict him of conspiracy and of aiding and abetting Castro in the substantive crimes of which Cotter was convicted. Castro contends that he was improperly convicted of the conspiracy charge as well as the substantive crimes because the substantive crimes necessarily required the participation of two persons as did the conspiracy count. Finally, as to the sentences Castro and Cotter received, Cotter argues that the court improperly imposed a disparate sentence on him in relation to the sentence it imposed on Castro.

A. Unanimous Verdict Instruction

Castro and Cotter contend their conspiracy convictions must be reversed because the trial judge failed to give the jury a specific unanimity instruction as to the objects of the conspiracy. They contend this omission violated their rights to a unanimous jury verdict under Article III, section two, and the sixth amendment of the Constitution.

1. Standard of Review

Neither of the appellants' counsel objected to the trial judge's proposed jury instruction on the conspiracy count. Castro's counsel admits he failed to catch the judge's substitution of a disjunctive instruction for the conjunctive wording proposed by appellants, and consequently did not request a specific unanimity instruction.

Because counsel failed to request the specific unanimity instruction or object to the court's instruction, reversal is required only if the trial court committed plain error in instructing the jury. United States v. Bryan, 868 F.2d 1032, 1038 (9th Cir.1989) (citing United States v. Payseno, 782 F.2d 832, 834 (9th Cir.1986). Plain error is highly prejudicial error affecting substantial rights. Bryan, 868 F.2d at 1038. We will reverse a criminal conviction for plain error only "to prevent a miscarriage of justice or to preserve the integrity and reputation of the judicial process." Bryan, 868 F.2d at 1039 (quoting United States v. Bustillo, 789 F.2d 1364, 1367 (9th Cir.1986) (citations omitted)).

2. The Missing Instruction

The superseding indictment charged in count one that appellants

... did knowingly and wilfully combine, conspire and agree together to violate the laws of the United States, to wit: (1) to wilfully misapply and cause to be misapplied, monies, funds and credits belonging to, and entrusted to, the care, custody and control of [the Bank], in amounts in excess of $100.00, with intent to injure and defraud said bank, in violation of Title 18, United States Code, Sections 656 and 2; (2) to knowingly make and cause to be made false statements to [the Bank] upon applications for extensions of credit, in violation of Title 18, United States Code, Sections 1014 and 2; and (3) to knowingly make and cause to be made false entries in books, reports and statements of [the Bank], with the intent to injure and defraud said bank, in violation of Title 18, United States Code, Sections 1005 and 2.

The court's jury instruction on the conspiracy charge was in the disjunctive. The court told the jury:

To establish the crime charged, the Government must prove four elements beyond a reasonable doubt:

First, that there was an agreement to fraudulently misapply Mitsui Manufacturers Bank funds in connection with loan transactions, or that there was an agreement to knowingly make false statements on applications for extensions of credit, or that there was an agreement to make false entries in bank books, all with the intent to defraud the bank; ...

Third, that one of the members of the conspiracy committed at least one of the so-called overt acts described in the indictment, with all of you agreeing on which of the overt acts was committed; and

Fourth, that the overt act which you found was committed by one of the members of the conspiracy was committed for the purpose of carrying out the conspiracy.

Appellants contend the court was required to instruct the jury that they had to agree unanimously whether the object of the conspiracy was to misapply Bank funds, make false statements or make false entries in Bank records. The court did not give this kind of unanimity instruction.

When an indictment includes a single conspiracy count conjunctively alleging multiple offenses, a jury may convict by finding a conspiracy to commit any or all of the conjunctive acts alleged. United States v. Mastelotto, 717 F.2d 1238, 1248 n. 10 (9th Cir.1983) (citing United States v. Abascal, 564 F.2d 821, 832 (9th Cir.1977), cert. denied, 435 U.S. 953, 98 S.Ct. 1583, 55 L.Ed.2d 804 (1978)). A unanimity instruction as to the particular objects of a charged conspiracy is appropriate "where it appears that a conviction might rest upon different jurors having found the existence of different facts ... where the complex nature of the evidence, a discrepancy between the evidence and the indictment, or some other particular factor creates a genuine possibility of juror confusion." United States v. Feldman, 853 F.2d 648, 652 (9th Cir.1988) (quoting United States v. Frazin, 780 F.2d 1461, 1468 (9th Cir.), cert. denied, 479 U.S. 844, 107 S.Ct. 158, 93 L.Ed.2d 98 (1986)).

The evidence presented during the trial of this case was not complex and revealed only one conspiracy to defraud the Bank by committing the three offenses alleged. The jury did not request any additional instructions on the objects of the conspiracy and there was no discrepancy between the superseding indictment and the evidence. See Bryan, 868 F.2d at 1039. Moreover, the jury convicted both Castro and Cotter of aiding and abetting the misapplication of Bank funds and of making false entries in Bank records, substantive offenses which were set out in the conspiracy count as objects of the conspiracy. The court had instructed the jury that any vote to convict on these substantive offenses had to be unanimous. The jury's guilty verdict on these substantive offenses establishes that the jury was unanimous in their...