U.S. v. Levy, 85-3703
| Decision Date | 10 November 1986 |
| Docket Number | No. 85-3703,85-3703 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. John B. LEVY, Vincent F. Franzone, Marvin Poole, and Earl W. Moriarity, Defendants-Appellants. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Russell Schonekas, Frank G. DeSalvo, New Orleans, La., for defendants-appellants.
Donald L. Foret, New Orleans, La., for Marvin Poole.
Curtis Collier, Asst. U.S. Atty., John P. Volz, U.S. Atty., Harry W. McSherry, Jr., New Orleans, La., for plaintiff-appellee.
Appeal from the United States District Court for the Eastern District of Louisiana.
Before WISDOM, RUBIN and HIGGINBOTHAM, Circuit Judges.
This appeal presents questions concerning the double jeopardy and collateral estoppel effects of an acquittal on a conspiracy count and related substantive counts. The defendants, John Levy and Vincent Franzone, were previously acquitted by a jury on five counts of misapplication of bank funds, one count of making false statements in connection with certain bank loans, and one count of conspiracy to commit these offenses. They now argue that the instant prosecution on conspiracy and substantive counts concerning related bank transactions are barred under the doctrines of double jeopardy and collateral estoppel. We agree that the conspiracy charged in the present indictment is part of the same conspiracy involved in the matter in which the defendants were acquitted. Therefore, double jeopardy prevents the government from prosecuting them on the conspiracy charge. The substantive counts in the instant case, however, are discrete and distinct from the charges involved in the previous case. Therefore, neither double jeopardy nor collateral estoppel precludes the
government from prosecuting the defendants on these counts.
On July 26, 1984, a federal grand jury returned an indictment against the defendants, John Levy and Vincent Franzone, and against another individual, George Oubre. Levy and Oubre were both partners in the law firm, Levy, Oubre, Lenz, and Rosenthal. Franzone was the president and chief executive officer of the First Progressive Bank. The indictment concerned loans made to Oubre by three banks in the New Orleans area, Gulf South Bank, the National Bank of Commerce in Jefferson Parish, and the First Progressive Bank. The Federal Deposit Insurance Corporation insured all three banks.
The indictment charged Levy, Franzone, and Oubre with five counts of misapplication of funds in connection with loans by First Progressive Bank to Oubre totalling approximately $60,000, 1 and with one count of making a false statement in connection with a $125,000 loan to Oubre by Gulf South Bank. 2 The indictment charged Oubre alone with two counts of making a false statement in connection with two $25,000 loans from the National Bank of Commerce in Jefferson Parish. 3 Finally, the indictment charged that Levy, Franzone, Oubre, and other persons known and unknown to the grand jury had conspired to commit these substantive offenses. 4 All the acts charged as substantive offenses in the indictment, as well as the making of certain payments on Oubre's loans at the First Progressive Bank by Levy and Franzone, were alleged as overt acts in furtherance of this conspiracy. This indictment was sent to Section "A" of the District Court for the Eastern District of Louisiana. We shall refer to it as the "A" indictment.
While the "A" indictment was pending, the indictment in this case was returned by the federal grand jury. This indictment was returned on June 15, 1984, and was superseded on November 29, 1984. This indictment was sent to Section "K", and we shall refer to it as the "K" indictment.
The "K" indictment charges Levy, Franzone, Earl Moriarty, Marvin Poole, and other persons known and unknown to the grand jury with one conspiracy: to defraud the United States of America and the Federal Deposit Insurance Corporation and to make false statements to the federally insured First Progressive Bank. 5 The indictment also includes several substantive counts. The "K" indictment charges Levy with two counts and Franzone with three counts of making a false statement to the Federal Deposit Insurance Corporation, an agency of the United States. 6 Finally, the indictment charges Franzone with perjury in connection with testimony he gave before the grand jury. 7
While the "K" case was pending, the "A" case went to a jury trial. The jury found Levy and Franzone not guilty on all counts. Oubre had previously pleaded guilty.
Following the not guilty verdict, Levy and Franzone filed a motion to dismiss the "K" indictment on grounds of double jeopardy and collateral estoppel. The government argued, however, that the conspiracy and substantive charges in the two indictments were completely different and did not arise from the same acts or transactions.
According to the government, the "K" conspiracy involved a plan to concentrate the credit of the First Progressive Bank in Levy. Under this plan, Franzone would use his influence as president of that bank The "A" conspiracy, on the other hand, was allegedly a smaller conspiracy that centered around Oubre. According to the government, in this conspiracy, Oubre, Levy, and Franzone agreed to obtain loans, fraudulently, from Gulf South Bank, First Progressive Bank, and the National Bank of Commerce in Jefferson Parish by making false statements as to matters such as the ability of the borrower, usually Oubre, to repay. When the loans became due, the three would, either directly or indirectly, obtain new loans to pay off the old. The district court accepted the government's characterization of the two conspiracies as separate and distinct and concluded that neither double jeopardy nor collateral estoppel precluded the government from prosecuting the defendants Levy and Franzone for the conspiracy count or the substantive counts charged in the "K" indictment. The defendants now bring this appeal. 8
to ensure that First Progressive would lend money to nominal borrowers and Levy-controlled companies for the use and benefit of Levy. The danger created by such a concentration was a loss of diversification; if Levy became unable to pay off the loans, the bank would likely fail. By not making the loans directly to Levy, the parties could conceal the scheme from the Federal Deposit Insurance Corporation, which insured a large portion of the deposits in the First Progressive Bank. In this way, the Federal Deposit Insurance Corporation was prevented from properly fulfilling its duty to inspect the bank for such an impropriety and from protecting its own interest. If funds were needed to cover principal or interest payments on these loans, Levy would, either personally or through another individual or entity, secure an additional loan from either First Progressive or another bank.
Levy and Franzone first contend that the "K" indictment subjects them to double jeopardy in violation of the Fifth Amendment. 9 The double jeopardy clause guarantees that the government, "with all its resources and power [will] not be allowed to make repeated attempts to convict an individual for an alleged offense, thereby subjecting him to embarrassment, expense, and ordeal and compelling him to live in a continuing state of anxiety and insecurity...." 10 Specifically, the prohibition against double jeopardy provides three categories of protection:
It protects against a second prosecution for the same offense after acquittal. It protects against a second prosecution for the same offense after conviction. And it protects against multiple punishments for the same offense. 11
In this case, Levy and Franzone seek protection under the first category.
To support a claim of double jeopardy, the defendants must show that the two offenses charged are the same offense. 12 The defendants must first make out a prima facie nonfrivolous double jeopardy claim. If they succeed, the government must then prove by a preponderance of the
evidence that separate offenses are charged. 13
Turning first to the conspiracy count charged in the "K" indictment, the central inquiry in a double jeopardy claim involving conspiracies is whether one or more than one agreement exists. As the Supreme Court stated in Braverman v. United States: 14
[W]hen a single agreement to commit one or more substantive crimes is evidenced by an overt act, as the statute requires, the precise nature and extent of the conspiracy must be determined by reference to the agreement which embraces and defines its objects. Whether the object of a single agreement is to commit one or many crimes, it is in either case that agreement which constitutes the conspiracy which the statute punishes. The one agreement cannot be taken to be several agreements and hence several conspiracies because it envisages the violation of several statutes rather than one. 15
Because of the clandestine nature of conspiracy, discerning the scope of an alleged conspiratorial agreement is a difficult and imprecise task for a reviewing court. The problems inherent in such an undertaking are even more pronounced when, as here, the defendants have denied the existence of any wrongdoing from the beginning and have previously been acquitted by a jury of the first alleged conspiracy. They contend that if any conspiratorial agreement ever existed, it was broad enough to encompass the alleged wrongdoings charged in both indictments. The district court ruled that the defendants had established a prima facie nonfrivolous double jeopardy as to the conspiracy charge and that it was up to the government to overcome that proof. 16 The district court concluded, however, that the government had established by a preponderance of the evidence that the defendants had entered into not one but two conspiratorial agreements. We now review that conclusion.
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