U.S. v. Kelly

• Citation: 973 F.2d 1145
• Decision Date: 16 September 1992
• Docket Number: No. 91-5645,91-5645
• Parties: 36 Fed. R. Evid. Serv. 1137 UNITED STATES of America, Plaintiff-Appellee, v. William M. KELLY, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 1145

973 F.2d 1145

36 Fed. R. Evid. Serv. 1137

UNITED STATES of America, Plaintiff-Appellee, v. William M. KELLY, Defendant-Appellant.

No. 91-5645.

United States Court of Appeals Fifth Circuit.

Sept. 16, 1992.

Rehearing Denied Oct. 15, 1992.

Robert Michael Duffey, San Antonio, Tex. (court-appointed), for defendant-appellant.

Michael Edmund O'Neill, Dept. of Justice, Criminal Div., Appellate Section, Washington, D.C., Richard L. Durbin, Jr., Asst. U.S. Atty., Ronald F. Ederer, U.S. Atty., San Antonio, Tex., for plaintiff-appellee.

Appeal from the United States District Court For the Western District of Texas.

Before WISDOM, SMITH, and EMILIO M. GARZA, Circuit Judges.

EMILIO M. GARZA, Circuit Judge:

William M. Kelly was indicted and tried for conspiring to violate the Bank Bribery Act, 18 U.S.C. § 215, and the Bank Fraud Act, 18 U.S.C. § 1344. A jury subsequently found Kelly guilty on all charged counts. On appeal, Kelly argues that the district court improperly: (1) denied his motion for continuance; (2) denied his request to produce evidence; and (3) admitted the hearsay statements of a coconspirator. Kelly also contends that the Bank Bribery Act is unconstitutionally vague as applied to his case. Finding no error, we affirm Kelly's conviction.

I

The facts of this case are straightforward and uncontested. Kelly was a senior vice-president at the Valley-Hi National Bank in San Antonio, Texas. Kelly's two co-defendants had previously been his customers: John T. Haney was a customer at Valley-Hi, and Leslie A. Leverett was a business associate of Haney's. ¹

The other party involved in this case, Steven A. Marburger, was president of La Hacienda Savings Association. Haney was a customer at La Hacienda, and had previously befriended Marburger. Haney introduced Leverett to Marburger. Later, Marburger told the two men he needed money, and Haney and Leverett told Marburger that they would help him get a loan from Kelly, if he would help Kelly get a loan from La Hacienda.

Kelly subsequently applied to La Hacienda for a $100,000 loan. At Haney's and Leverett's direction, Kelly contacted Marburger by telephone. Kelly and Marburger agreed to make reciprocal loans to each other to cover their respective financial needs. Kelly then met Marburger in his office to fill out the loan application form, even though he had no collateral to secure the loan.

Kelly told Marburger that he would be glad to consider a loan request from him. Marburger requested a $125,000 loan from Valley-Hi. Valley-Hi's president, however, denied the loan request because of Marburger's extensive debt. When Marburger learned that Valley-Hi had denied his loan request, he refused to approve Kelly's loan request because he thought that Kelly had reneged on the "loan swap." Marburger later determined, however, that Kelly had not personally denied his loan, and eventually provided Kelly with a $50,000 unsecured line of credit from La Hacienda.

To obtain his money, Marburger then used Leverett as a surrogate borrower. Leverett applied for and received a $125,000 loan from Valley Hi. To secure the loan, Leverett submitted numerous financial statements, including papers showing that he owned a mortgage company. Kelly took personal charge of the loan, and it was quickly approved. Kelly issued a $50,000 cashier's check directly to Leverett, deposited $25,000 in an account controlled by Haney, and used the remaining $50,000 to purchase a certificate of deposit. Haney and Leverett gave $50,000 of the loan proceeds to Marburger.

The defendants' troubles began when Valley-Hi's board of directors subsequently discovered that the name of the institution reported on Leverett's financial statement and the name of the institution listed on the line of credit were different, and that a financial institution with the same name as that listed on Leverett's financial statement had filed for bankruptcy. Kelly attempted to remedy this situation by stating to the board of directors that he had contacted the accountant who had audited the mortgage company's financial statement and that the accountant had verified the financial statement.

In the meantime, Marburger was indicted by a federal grand jury for "kiting" checks. ² Before the jury returned a verdict, Marburger pled guilty, and agreed to cooperate with the Government. As part of his plea agreement, he telephoned Haney and Kelly, and recorded his conversations with them. Marburger then became the Government's principal witness in Kelly's trial, and testified that he and Kelly had arranged a "loan swap" with the participation of Haney and Leverett.

II

A

Kelly contends that the district court erred in denying his second motion for continuance, and that he was "materially prejudiced by such denial." The grant or denial of a continuance is within the sound discretion of the trial court, and will be disturbed on appeal only for abuse of discretion. See United States v. Shaw, 920 F.2d 1225, 1230 (5th Cir.) (quotation omitted), cert. denied, --- U.S. ----, 111 S.Ct. 2038, 114 L.Ed.2d 122 (1991); United States v. Uptain, 531 F.2d 1281, 1285 (5th Cir.1976) (citations omitted). Kelly must demonstrate an abuse of discretion resulting in serious prejudice. See United States v. Webster, 734 F.2d 1048, 1056 (5th Cir.) (citation omitted), cert. denied, 469 U.S. 1073, 105 S.Ct. 565, 83 L.Ed.2d 506 (1984). Furthermore, "[w]hether a continuance was properly denied depends on the circumstances of the case." See United States v. Hopkins, 916 F.2d 207, 217 (5th Cir.1990) (citation omitted). Relevant circumstances may "include the amount of time available, the defendant's role in shortening the time needed, the likelihood of prejudice from a denial, and the availability of discovery from the prosecution." Id. ³

Kelly argues that his counsel was prevented from preparing adequately, because his counsel had a conflicting trial set for the same day as Kelly's trial, and that the Government's alleged failure to timely comply with its discovery obligations resulted in material prejudice to his case. The Government responds that Kelly was not prejudiced by the denial of another continuance, as he did not show how the granting of another continuance would have significantly aided his case. Furthermore, regarding the alleged tardy production of discovery materials, the Government asserts that Kelly had access to the tapes throughout the pretrial proceedings and, that, even if there was some delay in providing Kelly with a final copy of the transcript, it did not result in prejudice to Kelly's substantial rights.

The trial was originally set for July 16, 1990. Kelly's co-defendant, Haney, moved for a continuance on July 5, 1990, and the district court granted the motion and rescheduled the trial for September 10, 1990. On August 28, 1990, Kelly submitted his own motion for continuance, and the district court granted this motion and rescheduled the trial for October 29, 1990. Thus, Kelly received the benefit of two continuances, by which he received approximately three additional months to prepare for trial. On October 19, Kelly moved for a continuance of the October 29 trial date. This motion was denied. On October 29, 1990, Kelly filed a renewed motion for continuance, and the district court denied the motion. ⁴

As the Government notes, the record does not indicate that Kelly's case was so complicated as to warrant additional delay. In addition, the record does not indicate that Kelly's counsel failed to provide an adequate defense. His counsel participated in pretrial preparation, and actively participated in trial by cross-examining the Government's witness and calling witnesses on Kelly's behalf. An examination of the totality of circumstances indicates that Kelly's counsel had sufficient time to prepare for the case. See Webster, 734 F.2d at 1056-57 (when claims of insufficient time for preparation are advanced, the court of appeals examines the totality of circumstances to determine if the continuance should have been granted). Furthermore, regarding any delays in discovery, Kelly has failed to show how any alleged delay prejudiced him. See United States v. Hamilton, 492 F.2d 1110, 1112-13 (5th Cir.1974) (abuse of discretion is defined as a trial error that harms or prejudices the defendant). Accordingly, the district court did not abuse its discretion in denying Kelly's motion for continuance.

B

Kelly also argues that the district court erred in refusing to require the Government to produce documentary materials related to other crimes by Marburger. The evidence that Kelly contends should have been produced is evidence related to the $50,000 he allegedly gave to Marburger. He alleges that the Government should have produced evidence related to the check-kiting charges against Marburger. By having such evidence, Kelly argues that he would have discovered who the cashier's checks were payable to, and how Marburger received the funds. Kelly contends that he would have been able to show that Marburger received the $50,000 not from him, but from another source.

The Government argues that, because the cashier's checks were noted in Marburger's indictment ⁵, Kelly had sufficient evidence to argue that Marburger obtained the $50,000 without Kelly's participation. The Government also contends that Kelly had the opportunity to cross-examine Marburger about the issuance of the $50,000 check from La Hacienda, allegedly issued with the funds from Kelly.

"It is well[-]settled that the government has the obligation to turn over evidence in its possession that is both favorable to the accused and material to guilt or punishment." Pennsylvania v. Ritchie, 480 U.S. 39, 57, 107 S.Ct. 989, 1001, 94 L.Ed.2d 40 (1987), (citing Brady v. Maryland, 373 U.S. 83, 87, 83 S.Ct. 1194, 1196, 10 L.Ed.2d 215 (1963) (other citation omitted)). "Suppressed evidence is material 'if there is a reasonable probability that, had the evidence been...