U.S. v. Goldsmith, 95-3335

• Decision Date: 08 April 1997
• Docket Number: No. 95-3335,95-3335
• Citation: 109 F.3d 714
• Parties: 10 Fla. L. Weekly Fed. C 812 UNITED STATES of America, Plaintiff-Appellee, v. Steven Dennis GOLDSMITH, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 714

109 F.3d 714

10 Fla. L. Weekly Fed. C 812

UNITED STATES of America, Plaintiff-Appellee, v. Steven Dennis GOLDSMITH, Defendant-Appellant.

No. 95-3335.

United States Court of Appeals, Eleventh Circuit.

April 8, 1997.

Michael Sigman, Orlando, FL, for Defendant-Appellant.

Stephen P. Preisser, Asst. U.S. Atty., Pensacola, FL, for Plaintiff-Appellee.

Appeal from the United States District Court for the Northern District of Florida.

Before EDMONDSON and BLACK, Circuit Judges, and RONEY, Senior Circuit Judge.

PER CURIAM:

On this appeal, the defendant argues that his conduct--proven by the Government and to which he admits--did not violate the federal bank fraud criminal statute. We hold that it did, and therefore affirm the judgment of conviction based on a jury verdict.

Defendant Steven Dennis Goldsmith was convicted by a jury on all counts of a 23-count indictment charging him with a violation of 18 U.S.C. § 1344, which makes it a crime to knowingly execute a scheme to defraud a financial institution or to obtain money from a financial institution by means of false or fraudulent pretenses or representations. The "scheme" in this case involved 23 vehicles that Goldsmith purchased with bank financing and then sold without remitting the proceeds to the bank. Defendant admits that he was wrong in commingling these funds but has consistently denied any intent to defraud the bank, arguing that his conduct was at worst a breach of contract, a business transaction gone bad. Thus, the facts, uncontroverted on this appeal, must be examined in light of the meaning of bank fraud under section 1344.

The bank fraud statute has two parts. ¹ Section 1344(a)(1) requires the Government to prove that the defendant (1) intentionally participated in a scheme or artifice to defraud another of money or property; and (2) that the victim of the scheme or artifice was an insured financial institution. United States v. Stavroulakis, 952 F.2d 686, 694 (2d Cir.1992). Section 1344(a)(2) requires the Government to establish three elements: (1) that a scheme existed in order to obtain moneys, funds or credit in the custody of the federally insured financial institution; (2) that the defendant participated in the scheme by means of false pretenses, representations or promises, which were material; and (3) that the defendant acted knowingly. United States v. Falcone, 934 F.2d 1528, 1539-40 (11th Cir.1991), modified in part, 960 F.2d 988 (11th Cir.), cert. denied, 506 U.S. 902, 113 S.Ct. 292, 121 L.Ed.2d 216(1992); United States v. Swearingen, 858 F.2d 1555, 1556 (11th Cir.1988), cert. denied, 489 U.S. 1083, 109 S.Ct. 1540, 103 L.Ed.2d 844 (1989).

To satisfy either of these two subsections, the Government must prove specific intent to defraud. See United States v. Medeles, 916 F.2d 195, 198 (5th Cir.1990). Under subsection (a)(1), however, the Government is not required to establish misrepresentation on the part of the defendant. Medeles, 916 F.2d at 198.

The indictment charged Goldsmith under both provisions of section 1334(a), so we must determine if his conduct amounts to a violation under either subsection. United States v. Briggs, 939 F.2d 222, 225 (5th Cir.1991), cert. denied, 506 U.S. 1067, 113 S.Ct. 1016, 122 L.Ed.2d 163 (1993). If evidence presented at trial is sufficient to prove either theory of bank fraud, the case may be submitted to the jury. Where the indictment and instructions to the jury charge both clauses of the statute, as was done in this case, the defendant's conviction may be sustained under either clause. Briggs, 939 F.2d at 225.

The evidence supports the Government's argument that defendant violated the first section of the bank fraud statute with the scheme to defraud the bank and to obtain money that rightfully belonged to the bank for his own account.

For the basic facts, we can look at the indictment. The defendant essentially concedes on this appeal that the Government proved the basic facts alleged in the indictment, but argues that those facts do not prove a violation of either subsection of 1344(a). Paraphrasing the indictment, it alleges as follows:

1. Goldsmith was president of both Sunbelt Assurance Corporation (SAC), which provided purchaser's automobile financing, and The Auto Bank, which sold automobiles repossessed by SAC.

2. Goldsmith, doing business as SAC, obtained a line-of-credit from Citizens and Builders (C & B), a federally insured financial institution, to fund automobile loans. Citizens and Southern Trust Company served as escrow agent on behalf of C & B and SAC for the disbursement of funds against the line of credit and for the deposit of money collected on the automobile loans.

3. After the loan was established, SAC would be listed as the lienholder, would maintain insurance on the collateral, and would service the loans by collecting the monthly loan payments and depositing them in the Citizens and Southern escrow account. SAC would then cause the escrow funds to be paid to C & B to apply to the line-of-credit. SAC was paid a fee for servicing the loans.

4. SAC was responsible for reporting to C & B the status of the individual automobile loans through a "Portfolio Remittance Report."

The indictment then alleged that Goldsmith executed the following scheme to defraud the C & B:

5. Goldsmith, through SAC, repossessed 23 automobiles on defaulted loans, sold the automobiles through the Auto Bank, and converted the proceeds to his own use without informing C & B of the defaults or forwarding...