U.S. v. Landers, 77-5719

• Decision Date: 10 July 1978
• Docket Number: No. 77-5719,77-5719
• Citation: 576 F.2d 94
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Henry Austin LANDERS, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 94

576 F.2d 94

UNITED STATES of America, Plaintiff-Appellee, v. Henry Austin LANDERS, Defendant-Appellant.

No. 77-5719.

United States Court of Appeals Fifth Circuit.

July 10, 1978.

Euel A. Screws, Jr., Montgomery, Ala., for defendant-appellant.

Charles R. Niven, Asst. U. S. Atty., Barry E. Teague, U. S. Atty., Montgomery, Ala., for plaintiff-appellee.

Appeal from the United States District Court For the Middle District of Alabama.

Before COLEMAN, AINSWORTH and VANCE, Circuit Judges.

VANCE, Circuit Judge.

This is an appeal by defendant from the United States District Court for the Middle District of Alabama. Defendant was convicted of embezzlement from a bank insured by the Federal Deposit Insurance Corporation in violation of 18 U.S.C. § 656. Because the evidence was not sufficient to support the conviction we reverse and order that judgment of acquittal be entered.

For many years Henry Austin Landers was a small town banker. At the time of the events involved in his prosecution he was executive vice president and chief executive officer of the Commercial Bank of Ozark in Ozark, Alabama. In June, 1977 he was indicted under a seven count indictment alleging embezzlement of separate amounts between March, 1973 and May, 1976. The first four counts involved repossessed automobiles and the last three involved credit life insurance proceeds. The case was tried on September 7 and 8, 1977. The district judge granted defendant's motion for acquittal as to the last three counts but submitted the first four counts to the jury. It found defendant guilty as charged in count number one but not guilty under counts two, three and four.

Count one charged that in April, 1976, Mr. Landers embezzled $1,300.00. The embezzlement was contended by the government to have taken place in connection with the repossession and subsequent resale of a 1972 Ford pick-up truck which originally was financed for a customer of the bank named Plemmons. At the time of the repossession of his truck in late 1975 Mr. Plemmons owed over $8,500.00 to the Commercial Bank. Both the truck and certain real estate were mortgaged to secure his loan which was then in default. In addition to repossession of the truck the mortgage on the Plemmons real estate was foreclosed.

The evidence discloses that it was well known by the officers and employees of the Commercial Bank that Mr. Landers had a hobby or sideline involving the reconditioning of repossessed automobiles. His whole family participated in this activity. Mr. Landers was in the habit of advancing the funds required to fix up the bank's repossessed cars. He would have mechanical and body work done by persons in those businesses. He and his family would do the servicing, the minor repairs and the so-called "detailing." ¹ He apparently would reimburse himself from the sale proceeds for the cost of outside work and materials and for the labor performed by himself and members of his family.

Vehicles repossessed by banks in the area are usually in very poor condition and as a general rule are not worth the amount owed on them. As a result of Mr. Landers' rehabilitation of repossessed vehicles, they would be put in better condition and would command a better price. In every such transaction detailed by the evidence, the bank came out better as a result of Mr. Landers' sideline.

The Plemmons vehicle was in extremely poor condition at the time it was repossessed by a teller of the bank. The transmission was "messed up" and would only go into one gear. The engine would hardly run and there was a piston noise. The windshield was damaged. The body was filthy and damaged on all four sides. The tires were worn out. Such things as mirrors had been jerked off of the body leaving holes. Estimates of the value of the truck at the time of repossession ranged downward from a high of $750.00.

Mr. Landers took the truck, had body work and mechanical work done, and he and his family thereafter concluded the rehabilitation so that it was described by its subsequent purchaser as being in "excellent condition." He sold the truck to a Mr. and Mrs. McDaniel for $2,150.00. The McDaniels made a down payment of $650.00 in cash and gave the bank a note for the balance, which subsequently was paid in full.

Mr. James Wilson is an accountant with the firm which had customarily done the bank's tax work. His firm performed an audit of the bank commencing in May, 1976. During the course of the audit Mr. Landers explained to Mr. Wilson how he handled repossessed automobiles. Mr. Wilson recommended to the board of directors that the bank advance all funds for the rehabilitation of the automobiles and that a better accounting system be utilized. He also reported the practice to the FBI and it was out of his report to the FBI that this prosecution was initiated. With respect to his audit of the Plemmons truck transaction Mr. Wilson testified:

Q. Mr. Wilson, was there any attempt to by your firm on the four vehicles involved here to ascertain the exact expenses that Landers had incurred in fixing these cars up for resale so that to see whether the accounting between him and the bank was accurate or not?

A. No, sir; we made no examination of those.

Q. And along this same line, was there any attempt to ascertain the difference in the...