U.S. v. Ratchford, No. 90-6343

• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)
• Writing for the Court: Before McKAY and LOGAN, Circuit Judges, and BRIMMER; LOGAN
• Citation: 942 F.2d 702
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. James Allen RATCHFORD, Defendant-Appellant.
• Docket Number: No. 90-6343
• Decision Date: 12 August 1991

Page 702

942 F.2d 702 UNITED STATES of America, Plaintiff-Appellee,
v.
James Allen RATCHFORD, Defendant-Appellant. No. 90-6343. United States Court of Appeals,
Tenth Circuit. Aug. 12, 1991.

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Jay F. McCown, Oklahoma City, Okl., for defendant-appellant.

Vicki Zemp Behenna, Asst. U.S. Atty. (Timothy D. Leonard, U.S. Atty., with her on the brief), Oklahoma City, Okl., for plaintiff-appellee.

Before McKAY and LOGAN, Circuit Judges, and BRIMMER, Chief District Judge. ^*

LOGAN, Circuit Judge.

Defendant James Allen Ratchford was convicted following a jury trial of nine counts of bank fraud and two counts of misapplication of funds, in violation of 18 U.S.C. §§ 1344(1) and 657. The nine counts of bank fraud were in connection with an alleged check kiting scheme and the two counts of misapplication of funds were for an alleged diversion to personal use of moneys belonging to a savings and loan association. He now appeals, arguing that (1) there was insufficient evidence to support his convictions on the first three bank fraud counts and the two misapplication of funds counts; (2) reversal is required because the prosecutor made prejudicial misstatements in her closing remarks; and (3) the court failed to properly instruct the jury on defendant's good faith defense on counts four through nine.

I

Defendant first contends that the government presented insufficient evidence to convict him on the first three bank fraud counts of the indictment. Specifically, defendant argues that his bank accounts, when combined, contained sufficient funds on April 6, 1987, to cover the three checks that formed the basis of counts one, two, and three.

"Evidence is considered sufficient to support a criminal conviction if, when viewed in the light most favorable to the government, a reasonable jury could find the defendant guilty beyond a reasonable doubt." United States v. Culpepper, 834 F.2d 879, 881 (10th Cir.1987) (citing Jackson v. Virginia, 443 U.S. 307, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979)). Applying this standard to the instant case, we find sufficient evidence in the record to support defendant's convictions.

Defendant, an accountant and businessman, formed Home Management, Inc. and three related companies in 1980: HMI Property Management, Inc., HMI Realty, Inc., and HMI Construction Company. The indictment charged that in January 1987, defendant began kiting checks at three different banks utilizing the accounts of his companies, his personal account, and an account labeled HMI Investors Trust Account-

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; that defendant's activities continued until April 1987, ultimately causing a loss to two of the banks of nearly $50,000. Count one charged defendant with writing a check in the amount of $4,300 on January 21, 1987, count two a check of $4,500 on February 9, 1987, and count three a check of $4,900 on March 20, 1987, while "knowing or having reason to know that the funds in [the respective accounts] were not sufficient to pay such ... check[s]," in violation of 18 U.S.C. § 1344(1). Indictment, I R. tab 5/9/90, at 3, 4.

The government's evidence at trial showed that on the dates the checks charged in counts one through three were written, there were insufficient funds in the respective accounts to cover the checks. The evidence also shows that the covering deposits for these checks were in the form of checks written on either the account to which the original indicted check was deposited or an account of one of defendant's other companies involved in the float scheme. The only argument defendant makes is that the existence of sufficient funds on April 6, 1987, negates a finding of guilt because in a true check kiting scheme, there is never a positive balance of funds exclusive of inter-account transfers. We disagree. The insufficient fund checks charged in counts one, two, and three were written on January 21, February 9, and March 20, 1987, respectively. For purposes of § 1344(1), the relevant inquiry is whether defendant knowingly had insufficient funds in the accounts being utilized on the date the checks were written. The amount contained in those accounts on April 6 is irrelevant to this determination.

Based on the evidence, we hold that a jury could find beyond a reasonable doubt that defendant "knowingly execute[d] ... a scheme or artifice to defraud a financial institution." 18 U.S.C. § 1344(1).

II

Defendant's misapplication of funds conviction stemmed from his activities as head of HMI Property Management, Inc. (HMI Property). HMI Property acted as property manager for Valley Forge, an apartment complex owned by two Oklahoma savings and loan institutions. In the spring of 1987, the apartment complex sustained hail damage which resulted in a cash settlement from the insurance company. Defendant diverted $8,800 of this settlement to his personal account, using the money to pay his charge card debt. HMI Property never repaired the damage to the complex.

Defendant argues that the evidence was insufficient to convict him of misapplication of funds under the language of 18 U.S.C. § 657. Specifically, defendant contends that at the time he procured the funds from the insurance settlement, he was not "connected" with a federally insured institution as required by § 657. Defendant argues that his only connection was with First Capital Mortgage, the loan servicer for the two savings and loans, and that this contact is too remote for purposes of § 657. We disagree.

Section 657 imposes criminal liability on any "officer, agent or employee of or connected in any capacity with" a savings and loan who embezzles or willfully misapplies any money or funds belonging to such institution. 18 U.S.C. § 657 (emphasis added). In the instant case defendant was connected to a savings and loan through his association with First Capital, who employed his company to manage an apartment complex owned by two Oklahoma savings and loans. ¹ As president and owner of the managing company, defendant was aware of the savings and loans' ownership of the complex and that his ultimate responsibility was to these owners. It was in this position of trust that he diverted funds he knew belonged to these institutions to his own personal use. The check defendant diverted in part to pay his personal charge card debt was made out to "OK Federal S & L DBA Valley Forge Apts C/O Jim Gladney, Home Mgmt Inc." Addendum

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Exhibits of Appellee's Brief at 77 (ex. 65). Jim Gladney signed the check for Home Management, Inc. and turned it over to defendant. III R. at 257.

Although each case is fact specific, the courts have given a...