U.S. v. Miller

• Citation: 573 F.2d 388
• Decision Date: 11 November 1977
• Docket Number: No. 76-2024,76-2024
• Parties: 2 Fed. R. Evid. Serv. 1235 UNITED STATES of America, Plaintiff-Appellee, v. Keith A. MILLER, Defendant-Appellant. . Heard
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

Page 388

573 F.2d 388

2 Fed. R. Evid. Serv. 1235

UNITED STATES of America, Plaintiff-Appellee, v. Keith A. MILLER, Defendant-Appellant.

No. 76-2024.

United States Court of Appeals,

Seventh Circuit.

Heard Nov. 11, 1977.

Decided Jan. 20, 1978.

Jason E. Bellows, Chicago, Ill., Michael Riley, Indianapolis, Ind., for defendant-appellant.

David T. Ready, U. S. Atty., South Bend, Ind., John R. Wilks, Fort Wayne, Ind., for plaintiff-appellee.

Before FAIRCHILD, Chief Judge, CUMMINGS, Circuit Judge, and WYZANSKI, Senior District Judge. ^*

CUMMINGS, Circuit Judge.

Defendant Keith Miller appeals from a judgment and sentence entered upon a guilty verdict of a jury for violation of 18 U.S.C. § 1014, which prohibits knowingly making any false statement for the purpose of influencing in any way the action of an institution whose deposits are insured by the Federal Deposit Insurance Corporation. ¹

The statement by Miller on which the indictment and judgment were based grew out of a loan to Miller by the Anthony Wayne Bank of Fort Wayne, Indiana. In December 1974, the defendant borrowed $42,000 from the Anthony Wayne Bank in order to purchase 1750 shares of stock in the Carmel Bank & Trust Company, a newly formed bank in Carmel, Indiana, from a Fort Wayne podiatrist, Dr. Allen R. Martindale. The same 1750 shares of stock, which were evidenced by certificate numbers 219 through 232, were to serve as collateral for the $42,000 loan. During March 1975, the Anthony Wayne Bank renewed the $42,000 note, lent Miller an additional sum and consolidated the two loans into a $44,000 note, with the Carmel Bank stock certificates still serving as the primary collateral.

Shortly after renewing the March note in May 1975, representatives of the Anthony Wayne Bank discovered the stock certificates were not, as they had believed, in its possession. Although the Bank had been in possession of the certificates before the loans to Miller because Dr. Martindale had earlier borrowed from the Bank to purchase the same shares and had pledged them as collateral, upon the purchase of Martindale's shares by Miller the Bank had sent the shares to the transfer agent for the Carmel Bank for transfer of ownership from Martindale to Miller. Upon contacting the transfer agent, the Anthony Wayne Bank was advised that the agent had sent the stock certificates in December 1974 directly to Miller instead of returning them to the Bank. After unsuccessfully attempting to contact Miller in order to ascertain the whereabouts of the stock certificates, the Bank contacted Martindale, who furnished the Bank with a letter written by Miller stating that he had mailed the certificates to the Bank in December 1974. Miller himself later indicated to the Bank that he had mailed the certificates to the Bank and that if they had not been received then they must have been lost in the mail.

When the Bank explained this situation to the transfer agent for the Carmel Bank, he informed the Bank that he could reissue the 1750 shares but that before doing so he would require a security bond and an affidavit from Miller explaining the circumstances surrounding the loss of the shares. On August 6, 1975, Miller went to the Anthony Wayne Bank and swore out an affidavit stating inter alia that the 1750 Carmel Bank shares evidenced by stock certificates numbered 219 through 232 had not been assigned, pledged or otherwise disposed of, other than having been pledged as collateral to the Anthony Wayne Bank, and that the shares obviously had been lost in the mail. This affidavit was the subject of the indictment.

During the trial, representatives of two other banks testified that their banks had loaned Miller money on the basis of the foregoing certificates 219-232. The vice-president of the Indiana Bank & Trust Company of Fort Wayne reported that in January 1975 his bank loaned Miller $4,000 and took as security 200 shares of Carmel Bank stock evidenced by certificate 231. Subsequently, that bank loaned Miller an additional $5,000 and received as collateral certificates 222-224. The Indiana Bank & Trust Company had physical possession of these certificates on August 6, 1975, when Miller furnished his affidavit to the Anthony Wayne Bank. Similarly, as collateral for loans of $7,350, $4,000, and $14,000, issued between January and April 1975, Miller furnished to the Citizens Northern Bank of Elkhart, Indiana, Carmel Bank stock certificates numbered 219, 220, 221, 225, 226, 227, 228, 229, 230, and 232. These certificates remained in the custody of the Citizens Northern Bank until February 1976 and of course were in its possession when the critical affidavit was executed by defendant.

At the end of the two-day trial, the jury found Miller guilty of violating 18 U.S.C § 1014 on the basis of his August 6, 1975, affidavit. The district court later sentenced him to one year's imprisonment, with the first 40 days to be spent in a jail-type institution and the remaining time to be served on probation pursuant to 18 U.S.C. § 3651. On appeal, defendant argues that the evidence is insufficient to support the verdict, that the trial court erred in permitting the Government to cross-examine Miller concerning two previous financial statements, and that the court erred in refusing defendant's pretrial motion for a continuance. We disagree with each contention and therefore affirm.

I. The Sufficiency of the Evidence

The essence of defendant's contention that the evidence is insufficient to support the verdict is that the Government offered no proof that Miller's August 1975 affidavit was intended to influence the action of the Anthony Wayne Bank within the meaning of 18 U.S.C. § 1014. Defendant asserts that the only testimony relevant to the issue of his intent was the statement of Howard Zimmerman, vice-president of the Anthony Wayne Bank, that Miller's loan would have been affected if the Bank had known that its collateral already had been pledged elsewhere; defendant therefore concludes that in the absence of evidence that these concerns were communicated to him or that he was aware of any problem other than a need for the Carmel Bank to reissue certificates, no support exists for the Government's theory that he made a false statement about his collateral for the purpose of keeping the Anthony Wayne Bank from recalling the loan. ²

Although defendant is correct that no direct evidence of his intent was offered, proof of intent through the use of circumstantial evidence in such cases is not unusual (see United States v. Braverman, 522 F.2d 218, 220 (7th Cir. 1975), certiorari denied, 423 U.S. 985, 96 S.Ct. 392, 46 L.Ed.2d 302) and here there is ample evidence to support the inference that Miller intended to influence the Anthony Wayne Bank as the Government contends. First, Miller knew that in lending him the $44,000 in March 1975 the Bank was relying upon the Carmel Bank certificates as collateral (Tr. 273-274). Second, Miller had considerable experience in dealing with bank loans using stock certificates as collateral, and admitted to being a stockbroker by trade (Tr. 265). In this context, even if the bank did not advise Miller of its concern about the loan, ³ the jury could infer that when the Bank inquired into the whereabouts of his collateral Miller was well aware of the ramifications of that inquiry, including possible cancellation of the loan. ⁴ See United States v. Sheehy, 541 F.2d 123, 127 (1st Cir. 1976); United States v. Goberman, 458 F.2d 226, 228 (3d Cir. 1972). Having drawn the inference that Miller knew what the results would be of presenting a truthful or false statement as to the whereabouts of the certificates (even without reference to Miller's past dealings with banks discussed in Part II infra ), the jury justifiably could conclude that Miller offered the false affidavit with the intent of influencing the Bank to refrain from calling the note or taking a similar step adverse to him. See United States v. Sheehy, supra.

II. The Cross-Examination Based on Past Financial Statements

Tied to defendant's argument that the evidence is insufficient to establish intent is his position that financial statements used by the Government in cross-examining Miller and admitted by the district court on the ground that they were relevant to his intent ⁵ should not have been admitted under Rules 404(b) and 403 of the Federal Rules of Evidence. The financial statements consist of one sheet with questions on each side seeking information about the assets of an applicant for a loan. The two statements whose introduction is challenged on this appeal both were filled out by Miller and were dated December 7, 1974, but were submitted to different banks. Several answers to questions on the form submitted to the Citizens Northern Bank of Elkhart differ from answers to the same questions on the form submitted to the Carmel Bank, and the sums given for total assets differ by over $117,000. Although not challenged by defendant nor discussed by either party on this appeal, also in evidence was a third financial statement filled out by Miller when he applied for the December 6, 1974, Anthony Wayne Bank loan that was the basis of the indictment. That statement, dated in the Bank's files as December 3, 1974, was introduced prior to the cross-examination of Miller and contains a third set of figures that differs in part from both of the December 7 statements (Tr. 50) and seems to have been used by the Government in conjunction with the other two statements during Miller's cross-examination (Tr. 262-263, 268-269, 271).

In response to the Government's contention that the two challenged statements to the Elkhart and Carmel banks are relevant to intent because as statements made for the purpose of inducing those banks to grant loans they indicate how the defendant deals with banks, defendant argues first that the statements are inadmissible under Rule 404(b) because there was no proof that they were...