U.S. v. Chacko

• Decision Date: 01 March 1999
• Docket Number: Docket No. 98-1087
• Citation: 169 F.3d 140
• Parties: UNITED STATES of America, Appellee, v. Kurian CHACKO, Defendant-Appellant.
• Court: U.S. Court of Appeals — Second Circuit

Page 140

169 F.3d 140

UNITED STATES of America, Appellee, v. Kurian CHACKO, Defendant-Appellant.

Docket No. 98-1087

United States Court of Appeals Second Circuit.

Argued Nov. 20, 1998.

Decided March 1, 1999.

Robert Koppelman, New York, NY, for Defendant-Appellant.

David C. Finn, Assistant United States Attorney, New York, N.Y. (Mary Jo White, United States Attorney for the Southern District of New York, Alexandra A.E. Shapiro, Assistant United States Attorney, of counsel), for Appellee.

Before OAKES, WALKER, and McLAUGHLIN, Circuit Judges.

OAKES, Senior Circuit Judge:

Defendant-appellant Kurian Chacko was tried before a jury for bank fraud in violation of 18 U.S.C. § 1344, making false statements to a bank in applying for a loan in violation of 18 U.S.C. § 1014, and conspiracy to commit both crimes. The jury returned a guilty verdict on five of six counts in the indictment. Chacko appeals from the district court's refusal to vacate the jury's verdict against him, and he appeals from the 121-month sentence imposed by the district court. Chacko contends that the indictment was multiplicitous, the jury's conviction was against the weight of the evidence because the intent to harm the bank was not established, the prosecution's summation was prejudicial, and the four-level enhancement assessed against him in sentencing was not justifiable. We affirm the district court.

Background

In April 1992, Kurian Chacko, owner of Balogh Jewelers ("Balogh"), submitted a signed letter to the State Bank of India ("the Bank") requesting a five million dollar loan for Balogh. Chacko stated in the letter that he needed the money to replenish Balogh's jewelry inventory because he was sending Balogh's existing inventory to a new venture in the Middle East. In support of the loan application, he submitted numerous false documents such as personal financial statements, tax returns, and balance sheets for Balogh. As compared to both Chacko's and Balogh's tax returns filed with the Internal Revenue Service, the documents Chacko submitted to the Bank significantly overstated income, sales, and assets.

Over the next few months, Chacko submitted to the Bank many more false documents in support of the loan application. These submissions individually comprised Counts Two through Five of the indictment under 18 U.S.C. § 1014. Count Six of the indictment, for general bank fraud under 18 U.S.C. § 1344, was based on the various lies, misrepresentations, and basic conniving acts detailed below that comprised Chacko's scheme to obtain two loans from the Bank.

Chacko submitted jewelry invoices which were altered as to date or value, according to the testimony of merchants with whom he had done business, and incorrectly indicated that he had recently purchased jewelry worth substantial sums. The submissions were the basis for Count Two of the indictment under 18 U.S.C. § 1014.

In June 1992, Chacko submitted appraisals to the Bank in support of the loan application that formed the basis for Count Three of the indictment under 18 U.S.C. § 1014. These appraisals were purportedly done by Leo Lalieu of Lalieu Bijoux, a jewelry repair business. The appraisals, valuing Balogh's inventory at about $19 million and the store at approximately $20 million, were on Lalieu's business stationery and were allegedly signed by Lalieu. Lalieu testified at trial, however, that he never examined Chacko's store, books, and inventory, and he never signed the appraisal forms.

Counts Four and Five were based on separate submissions to the Bank of forged appraisals purportedly done by Simon Teakle of Christie's. In July 1992, in support of Chacko's loan application, he submitted to the Bank a fraudulently altered Christie's appraisal valuing forty-six of Balogh's stock items at over $15 million; this was the basis for Count Four. Teakle testified at trial that, while he did perform an appraisal for Chacko in 1992, he valued Balogh's inventory at less than $3 million. Count Five was based on a later fraudulent appraisal document, again allegedly by Teakle. Chacko submitted this appraisal, which Teakle testified was forged, to the Bank in September 1993 in support of a request by Chacko for an additional $1 million loan.

In August 1992, the Bank agreed to loan Chacko $4 million of the originally requested $5 million. At that time, Chacko signed a Credit Agreement ("the Agreement") with the Bank which provided, among other things, that (1) Chacko would submit financial records for himself and Balogh to the Bank; (2) Balogh would maintain an inventory of at least $15 million at its New York store and would submit monthly statements to the Bank indicating that the inventory levels were met; (3) Chacko would obtain an appraisal by Christie's of Balogh's inventory prior to any loan extension or renewal; (4) all of Balogh's jewelry purchases would be made through Balogh's account at the Bank and the Bank would wire money directly to the jewelry merchants involved in the transaction; (5) Chacko would submit copies of all of Balogh's purchase invoices to the Bank; and (6) Chacko would proffer to the Bank a $600,000 cash deposit or "cash margin."

In the ensuing months, Chacko submitted monthly inventory statements to the Bank, representing that Balogh's inventory was at the required level of $15 million. These inventory statements were false. Chacko also arranged for the Bank to wire money for purported jewelry purchases to Henry Berk, Gerald Modell, Frank Mastoloni, and Paul D'Auria, but, in most cases, there were no jewelry transactions. Instead, these men, at Chacko's direction, sent most of the money back to Chacko. ¹

In 1993, Chacko requested an additional one million dollar loan from the Bank, which was supported by a forged inventory appraisal by Christie's. While the Bank granted the additional loan, it imposed many of the August 1992 loan conditions on Chacko, and, in addition, required that bank account statements from Balogh's business account with Citibank be submitted monthly.

Chacko initially submitted the required statements, but a Citibank representative testified that the statements proffered were altered, to indicate that Balogh was financially healthy. In reality, Balogh was in great financial distress. In the spring of 1994, Chacko failed to submit the required statements, and, when the Bank requested such information, Chacko told the Bank that he would pay the entire principal of the loan, with interest, ahead of schedule. He repeatedly reiterated this promise, and he also informed the Bank that he would surrender approximately $15 million worth of inventory as security for the loan. Chacko never paid the loan, never surrendered the jewelry as security, and his assets, when seized by the Government, did not satisfy the loan.

Chacko was indicted on the above detailed six counts, and was tried before a jury. At trial, Chacko testified in his own defense. He maintained that Sunny Cherian, who was his accountant when Chacko obtained and maintained the loans, was responsible for the false documents submitted to the Bank. Cherian died before trial. Chacko testified that he signed blank forms which Cherian later fraudulently filled out, and he testified that Cherian was the person who altered Chacko's and Balogh's financial documents. In support of Chacko's contentions, he maintained that he was overseas when many of the false documents were submitted to the Bank, but other evidence, including his own passport and travel itinerary, indicated to the contrary. Numerous witnesses testified against Chacko, including a lawyer for the Bank who asserted that Chacko admitted during a meeting with the Bank's lawyers that there was never a Middle East venture, and that the loans were actually used to pay Chacko's debts.

The jury convicted Chacko on Counts One, Two, Three, Five, and Six. Chacko moved to set aside his convictions on Counts Two, Three, and Five as multiplicitous of his conviction on Count Six, the general bank fraud count. Chacko also moved to set aside the entire verdict based on the allegedly improper summation by the prosecution and the allegedly perjured testimony of several Government witnesses. Chacko further moved for acquittal on Count Six, contending that the Bank did not prove beyond a reasonable doubt that Chacko intended to harm the Bank. The district court denied these motions. See United States v. Chacko, 1997 WL 481862 (S.D.N.Y.1997).

Judge Koeltl sentenced Chacko to 121 months' imprisonment. He declined to exercise his discretion to depart downwardly for family circumstances and strong community ties. He instead enhanced Chacko's sentence by four levels under § 3C1.1, § 2F1.1(b)(6)(B), and § 3B1.1(a) of the United States Sentencing Guidelines Manual ("the Guidelines") on the grounds that Chacko had obstructed justice, the transactions had involved more than a million dollars, and Chacko's role was as an organizer or leader in connection with the crime(s).

Chacko now appeals, arguing that the indictment was multiplicitous, the evidence was insufficient to prove beyond a reasonable doubt that Chacko intended to harm the Bank, the prosecutor's summation was improper, and the district court incorrectly made a four-level role assessment under § 3B1.1(a) of the Guidelines. For the reasons that follow below, we affirm the district court.

Discussion

Indictment

Chacko contends that the indictment was multiplicitous, and therefore his convictions should be set aside. He argues that the same conduct was charged as underlying the false statement counts and the bank fraud counts. The district court determined both that (a) Chacko's multiplicity challenge was waived because it was not objected to prior to trial or at trial, and (b) the multiplicity argument was meritless. We do not agree that the claim was waived, but we agree with the district court's conclusion that the indictment was not multiplicitous.

An indictment is...