U.S. v. Davis

• Decision Date: 21 January 2005
• Docket Number: No. 03-4114.,03-4114.
• Citation: 397 F.3d 340
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. William J. DAVIS, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

397 F.3d 340

UNITED STATES of America, Plaintiff-Appellee, v. William J. DAVIS, Defendant-Appellant.

No. 03-4114.

United States Court of Appeals, Sixth Circuit.

Argued October 29, 2004.

Decided and Filed January 21, 2005.^*

ARGUED:

C. Mark Pickrell, Nashville, Tennessee, for Appellant. Dwight Keller, U.S. Attorney, Dayton, OH, for Appellee.

ON BRIEF:

C. Mark Pickrell, Nashville, Tennessee, for Appellant. David J. Horne, U.S. Attorney, Dayton, Ohio, for Appellee.

Before KEITH, CLAY and COOK, Circuit Judges.

CLAY, J., delivered the opinion of the court, in which KEITH, J., joined. COOK, J. (p. 352), delivered a separate concurring opinion.

OPINION

CLAY, Circuit Judge.

Defendant William J. Davis appeals his conviction and sentence for bank fraud in violation of 18 U.S.C. § 1344, entered by the United States District Court for the Southern District of Ohio on August 29, 2003. For the reasons set forth below, we AFFIRM Defendant's conviction; however, in light of the Supreme Court's recent opinion in United States v. Booker, ___ U.S. ___, 125 S.Ct. 738, ___ L.Ed2d ___ (2005), we VACATE Defendant's sentence and REMAND the case for resentencing in a manner consistent with this opinion.

I. BACKGROUND

Procedural History

On August 16, 1993, Defendant received a target letter from the United States Attorney for the Southern District of Ohio, advising him that the United States intended to initiate criminal proceedings against him for violations of 18 U.S.C. §§ 1014 and 1344. Nothing further occurred, however, until December 15, 1999, when Defendant was indicted. The indictment included five separate counts: Count 1 alleged a conspiracy between Defendant, his wife Marilyn K. Davis, and other unindicted coconspirators, to defraud the First National Bank of Dayton ("First National"), a federally insured financial institution, in violation of 18 U.S.C. § 371; Counts 2 and 3 alleged that Defendant made materially false statements in connection with federally insured loans, in violation of 18 U.S.C. § 1014; and Counts 4 and 5 charged Defendant with bank fraud in violation of 18 U.S.C. § 1344. Defendant was arraigned on January 14, 2000, and pleaded not guilty.

Defendant and his wife were tried jointly; their trial commenced on May 15, 2002. At the close of the government's case, Defendant moved for a judgment of acquittal under Federal Rule of Criminal Procedure 29, and the court dismissed Counts 1 and 3 of the indictment. The court also dismissed the government's case against Mrs. Davis. On May 23, 2002, the jury returned its verdict, acquitting Defendant on Count 2 but convicting him on Counts 4 and 5.

Defendant's sentencing hearing was held on August 13, 2003, at which time the court sentenced Defendant to 33 months imprisonment, followed by five years supervised release. The district court entered its final judgment on August 29, 2003.

Defendant timely filed a Notice of Appeal with this Court on August 29, 2003.

Substantive Facts

From 1978 until May, 1992, Defendant was the president and part-owner of Fries Correctional Equipment of Kentucky, Inc. ("Fries of Kentucky") and Fries Correctional Equipment of Ohio, Inc. ("Fries of Ohio"). Along with his wife and two daughters, Defendant was also partner in the D & A Company ("D & A"), an Ohio partnership. Fries was in the business of manufacturing and installing jail and prison equipment.

In November, 1989, a mutual acquaintance introduced Defendant to Neal Ratliff, then a commercial loan officer and vice-president at First National Bank.¹ Defendant was seeking financing for Fries of Kentucky, and was unhappy with his current bank. On June 1, 1990, First National approved a line of credit in the amount of $1.6 million for Fries of Kentucky. That same day, the bank also approved a loan to D & A for $1 million, and a $50,000 personal line of credit for Defendant. Regular payments were made on the D & A loan, and on September 30, 1991, First National renewed Fries of Kentucky's and Defendant's personal lines of credit.

The First National loans were only partially secured by Fries' accounts, inventory and equipment. Thus, in order to secure the original loans in 1990 and to renew them in 1991, First National required personal guarantees from Defendant and his wife. Defendant submitted personal financial statements to First National in 1990 and 1991.² The 1990 statement listed personal assets including property, livestock, stored crops, a gold and silver coin collection, and shares of stock other than Fries stock. The 1991 statement, submitted to First National on July 29, 1991, listed similar assets, including 140 shares of Pitney Bowes and Polaroid stock. The 1991 statement listed liabilities of $227,711.00, divided between mortgages, loans on life insurance, accounts payable, and accrued interest payable.

On April 25, 1991, Defendant and his wife borrowed $100,000.00 from Alice Baldwin, Defendant's mother-in-law. This debt was not recorded anywhere on Defendant's 1991 personal financial statement. At trial, Neal Ratliff testified about the importance of the guarantee, asserting that had the additional $100,000.00 debt been recorded it "would certainly reduce the strength of the personal guarantee," and would be a "negative."

In early 1992, Defendant notified Ratliff that Fries of Kentucky was having some financial difficulties, which Defendant connected to a large job pending in Connecticut. Defendant told Ratliff that he was thinking about selling the company, although a buyer never materialized. The Fries loan went into default in late February or early March of 1992. On April 1, 1992, First National sent a letter to Defendant advising him that the Fries loan was in default, and demanding that the principal balance of $1.6 million be paid in full.

Shortly after their letter to Defendant, First National filed a civil suit in the Montgomery County Court of Common Pleas, attempting to recover the balance on the Fries loan. On April 15, 1992, Defendant's deposition was taken in connection with the civil suit. Defendant denied that either he or his wife still owned any of the securities listed on their July, 1991 personal financial statement. However, Schedule D of their joint federal income tax return for 1992 indicates that they acquired fifty-six shares of Pitney Bowes stock on April 1, 1988, and sold the shares on October 29, 1992, realizing a capital gain of $1,189.92.

On May 7, 1992, Defendant and Mrs. Davis were escorted out of Fries' offices, and First National took control of the business, placing a receiver in charge. Shortly before First National took over, Neal Ratliff spoke with Defendant, asking him to transfer certain assets into his name. Ratliff was referring to the fact that on March 2, 1992, Defendant and Mrs. Davis executed six deeds conveying title in various properties to their daughter. Between February and May of 1992, Defendant also wrote thirteen checks, totaling over $86,000, from Fries' bank account to himself, his wife, and their two daughters. At Defendant's bank fraud trial, Ratliff testified that Defendant refused to transfer the assets back into his name, and said that "he would do what he had to protect his family and his assets."

Ultimately, First National sold Fries' assets, and Defendant and his wife declared bankruptcy. The bankruptcy proceedings were completed sometime in 1996. Despite collecting funds from both the sale of Fries' assets and Defendant's bankruptcy, the district court found that First National was still owed over $600,000 when Defendant was sentenced in 2003.

A jury convicted Defendant of two counts of bank fraud, stemming from his omission of the $100,000 debt in his 1991 personal financial statement and his denial that he owned the Pitney Bowes stock during his 1992 deposition. Defendant appeals both his conviction and the 33 month sentence imposed by the district court.

II. DISCUSSION

Defendant raises several issues on appeal. First, he challenges his conviction, alleging that there was insufficient evidence presented at trial to convict him, and that the judge should have granted his motion for a judgment of acquittal under Rule 29. Second, Defendant argues that the district court improperly sentenced him by using the version of the Sentencing Guidelines in effect at the time of sentencing, as opposed to the time Defendant's crime occurred. Finally, Defendant claims that in calculating his sentence, the district court erroneously determined the amount of loss attributable to his conduct. We will address each of these contentions in turn.

A. Sufficiency of the Evidence

We have often noted that we "will sustain a jury's guilty verdict so long as, `after viewing the evidence in the light most favorable to the government, any rational trier of fact could have found the elements of the crime beyond a reasonable doubt.'" United States v. Ware, 282 F.3d 902, 905 (6th Cir.2002) (quoting United States v. Beddow, 957 F.2d 1330, 1334 (6th Cir.1992)); accord United States v. Spearman, 186 F.3d 743, 746 (6th Cir.1999); United States v. Lutz, 154 F.3d 581, 587 (6th Cir.1998). Thus, Defendant "bears a very heavy burden" in his sufficiency of the evidence challenge to his conviction. Spearman, 186 F.3d at 746 (citing United States v. Vannerson, 786 F.2d 221, 225 (6th Cir.1986)). The same standard for sustaining a jury verdict also applies to the district court's denial of Defendant's motion for a judgment of acquittal under Rule 29. See United States v. Bowker, 372 F.3d 365, 387 (6th Cir.2004).

Defendant was convicted of bank fraud in violation of 18 U.S.C. § 1344.³ There are three elements to the offense: (1) that the defendant knowingly executed or attempt to execute a scheme to defraud a financial institution; (2) that the defendant did so with the intent to defraud; and (3) that the financial institution was insured by the Federal Deposit Insurance Corporation ("FDIC"). United States v. Everett, 270 F.3d...