U.S. v. Engstrom, 91-4072

• Decision Date: 22 May 1992
• Docket Number: No. 91-4072,91-4072
• Citation: 965 F.2d 836
• Parties: UNITED STATES of America, Plaintiff-Respondent, v. Jerald ENGSTROM, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 836

965 F.2d 836

UNITED STATES of America, Plaintiff-Respondent, v. Jerald ENGSTROM, Defendant-Appellant.

No. 91-4072.

United States Court of Appeals Tenth Circuit.

May 22, 1992.

Tena Campbell, Asst. U.S. Atty. (Paul M. Warner, U.S. Atty., with her on the brief), Salt Lake City, Utah, for plaintiff-appellee.

Randall W. Richards (John T. Caine, with him on the brief), Ogden, Utah, for defendant-appellant.

Before LOGAN and BRORBY, Circuit Judges, and OWEN, District Judge. ^*

OWEN, District Judge.

Defendant-appellant Jerald N. Engstrom, a former vice-president and general counsel of the Commercial Security Bank, appeals from a conviction by a jury in the District Court for the District of Utah on charges of misapplication of $2,081,712.67 of his bank's funds, a violation of 18 U.S.C. § 656. On April 25, 1991, Engstrom was sentenced to a one-year prison term.

On appeal he asserts that the Court committed prejudicial error in allowing evidence of what he terms certain prior "bad acts" to be put before a jury, and that his Fifth Amendment due process rights were violated by the government's four year delay prior to obtaining the indictment. Because we find that the prior acts in question were all related to the same scheme and series of events for which Engstrom was convicted, and because Engstrom did not prove that the delay caused him substantial prejudice or that the government caused it to gain a tactical advantage, we affirm.

The facts are as follows: in the summer of 1984, Engstrom had become involved with a group of people who were forming a corporation called Double J Express Western, Inc. to purchase the bankrupt IML terminal in Salt Lake City, Utah. Engstrom was told by his superiors in the bank that the bank was not to have any of its money involved in the transaction, and Engstrom was to have no personal interest in the transaction himself. However, from certain evidence it appears that Engstrom was to receive 2,500 shares of the stock in the new deal, and a stock certificate for his shares was issued to be held by someone else as trustee for him. Engstrom himself testified that he got the shares but returned them and did not have an ownership interest in Double J. From other evidence, it appears that Engstrom was also a director of Double J, and was to have been its general counsel. It was his testimony at trial that he never served as a director.

During the fall of 1984, Engstrom represented to the trustee of the IML bankruptcy that an escrow account of $100,000 had been established at CSB by Double J, which amount would be forfeited if the transaction did not close on time. This statement was false; no such account was opened, nor any money tendered. Based on this representation, preparations were made to sell IML to Double J. At the same time, Engstrom was falsely assuring his supervisor and the president of CSB that he had no personal interest in the IML transaction, and that the bank had no funds involved.

The transaction did not timely close, however, and the closing date for the deal was postponed on condition that an additional $50,000 be placed in the escrow account by Double J. Engstrom wrote a letter certifying that this had been done, although there was still neither money nor an account. At that time Engstrom also told a local attorney who was representing Double J in the purchase that ownership of Double J had changed, and that an entity called Meggs, Inc. would now be the major shareholder and would provide the money to purchase the IML terminal.

When the sale had still not closed and Engstrom sought a further delay, he signed a letter asserting that another $100,000 would be placed in escrow, bringing the total amount in the alleged escrow account to $250,000. This too was false; there was no money and no account. On May 1, 1985, under pressure from the trustee in bankruptcy, there having been no closing, Engstrom signed and delivered a CSB bank check payable to the order of the IML trustee in the amount of $256,712.67, stating that this represented the amount of money in the fictitious escrow account.

Following this, four other misapplications of bank funds occurred when Engstrom sent from CSB bank checks to banks in Texas, simultaneously depositing four checks of one Ed Harper in the Meggs account to cover this amount. Engstrom's account of these transactions fully justified the jury concluding that Engstrom knew the Harper checks were worthless. The Ed Harper checks were in fact ultimately returned for insufficient funds, and the bank as to them suffered a loss of $1,815,000, bringing its total loss from the IML transaction to $2,081,712.

Additionally, at trial, as a related act, the government introduced a "pre-advice letter" authored by Engstrom in December 1984, in which Engstrom sent a document to the Texas American Bank in Fort Worth, Texas, stating that CSB irrevocably guaranteed for thirty days that Meggs had funds in the amount of $328,500,000, available to be transferred within seventy-two hours of notice. This representation was also false, and the president of CSB testified that not only was such a letter of credit not authorized, but also that the issuance of this letter could have ruined CSB if anyone had relied on the representations. Engstrom claims evidence of this letter should not have been received. We disagree as we do not view this evidence as evidence of "other...