U.S. v. Restivo

• Decision Date: 22 November 1993
• Docket Number: No. 92-9585,92-9585
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Andrew V. RESTIVO, II, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 274

8 F.3d 274

UNITED STATES of America, Plaintiff-Appellee, v. Andrew V. RESTIVO, II, Defendant-Appellant.

No. 92-9585.

United States Court of Appeals,

Fifth Circuit.

Nov. 22, 1993.

Rehearing and Suggestion for Rehearing

En Banc Denied Dec. 27, 1993.

Robert Glass, Lane R. Trippe, Glass & Reed, New Orleans, LA, for defendant-appellant.

Salvador Perricone, Herbert W. Mondros, Asst. U.S. Attys., Harry Rosenberg, U.S. Atty., New Orleans, LA, for plaintiff-appellee.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before POLITZ, Chief Judge, REAVLEY, and EMILIO M. GARZA, Circuit Judges.

EMILIO M. GARZA, Circuit Judge:

Andrew Restivo appeals his convictions on eleven counts of a twelve count indictment charging him with the following offenses: conspiracy to misapply bank funds and to make false entries in bank documents; executing a scheme to defraud a bank; willful misapplication of bank funds; money laundering; knowingly causing to be made false entries in bank documents; and perjury before a grand jury. Finding no reversible error, we affirm.

I

During his tenure as president of Schwegmann Bank (the "Bank"), Restivo developed an insurance premium finance ("IPF") department which provided consumer financing for automobile insurance premiums. Lloyd Hoffman, a vice-president and loan officer at the Bank, brought in Jerry Delchamps as a new Bank customer. Delchamps was president of Dixie Lloyds Insurance Company ("Dixie Lloyds"), an automobile liability insurer. To conduct the financial transactions of Dixie Lloyds's, Delchamps opened and maintained checking accounts at the Bank.

In September 1989, Delchamps approached Restivo and Hoffman for a $1.6 million loan. ¹ Restivo and Hoffman presented on Dixie Lloyds's behalf two loans packages to the Bank's Board of Directors. The Bank eventually approved a loan to Dixie Lloyds in the amount of $500,000.00.

The September loan did not solve Dixie Lloyds's problems. By February 1990, Delchamps's accounts with the Bank were overdrawn in the amount of $345,000.00. With Restivo's alleged approval, Delchamps executed a promissory note to the Bank in the amount of $500,000.00. The Bank's Board of Directors had no knowledge of this loan. ²

By April 1990, Delchamps's accounts were again overdrawn. Knowing that the Bank was due to be reexamined by the Federal Deposit Insurance Corporation (the "FDIC"), Restivo wanted the February loan off the books and the overdrafts paid. On April 11, Delchamps executed another promissory note in the amount of $500,000.00, which Restivo initialled. ³ Two days later on April 13, Delchamps executed another promissory note in the amount of $485,328.96, which Restivo also initialled. ⁴ The Bank had no knowledge of these loans.

Restivo was subsequently charged in a twelve-count indictment with: conspiracy to misapply bank funds and make false entries in bank documents, in violation of 18 U.S.C. § 371 (1988) (Count 1); executing a scheme to defraud a bank, in violation of 18 U.S.C. §§ 1344, 2 (1988) (Counts 2-3); ⁵ willful misapplication by a bank officer, in violation of 18 U.S.C. §§ 656, 2 (1988) (Counts 4-6); money laundering, in violation of 18 U.S.C. §§ 1956(a)(1)(A)(i), 2 (1988) (Counts 7-9); knowingly making false entries in bank documents, in violation of 18 U.S.C. § 1005 (1988) (Count 10); and perjury before a grand jury, in violation of 18 U.S.C. § 1623(a) (1988) (Counts 11-12). Restivo was convicted on eleven of the twelve counts of the indictment. ⁶ He was sentenced to a prison term of 100 months, followed by three years of supervised release.

On appeal, Restivo contends that: (a) the district court denied his counsel the opportunity to effectively cross-examine Delchamps, a key government witness; (b) the district court's jury instruction regarding the money laundering counts constructively amended the indictment; and (c) the evidence was insufficient to support his convictions on Counts 3, 7, 8, and 9 of the indictment.

II

A

Restivo first contends that the district court denied his counsel the opportunity to effectively cross-examine Delchamps, by limiting cross-examination on the following subjects: (1) whether a "cap" existed on Delchamp's sentence as a result of his plea agreement; (2) whether the government had to agree that Delchamps was telling the truth before it filed a substantial assistance letter on his behalf; ⁷ and (3) whether Delchamps pled guilty to spare his daughter and son-in-law from prosecution. "While the scope of cross-examination is within the discretion of the trial judge, this discretionary authority comes into play only after there has been permitted as a matter of right sufficient cross-examination to satisfy the Sixth Amendment." ⁸ The Confrontation Clause of the Sixth Amendment is satisfied where defense counsel has been "permitted to expose to the jury the facts from which jurors, as the sole triers of fact and credibility, could appropriately draw inferences relating to the reliability of the witness." ⁹ To demonstrate an abuse of discretion, Restivo must show that the limitations imposed upon his counsel's cross-examination were clearly prejudicial. ¹⁰

Notwithstanding the district court's restrictions on cross-examination, the record demonstrates that Restivo's counsel was permitted to expose to the jury the following: that Delchamps entered into a plea agreement with the government; that Delchamps could have been charged with the more serious offense of money laundering if not for his plea agreement; and that the issuance of the § 5K1.1 letter for sentencing purposes was within the discretion of the government. Based upon these facts, the jury could have inferred that Delchamps was a biased witness. ¹¹ We therefore hold that the district court's restrictions on cross-examination neither violated the dictates of the Sixth Amendment, nor were so prejudicial as to constitute an abuse of discretion. ¹²

B

Restivo next contends that the district court's jury instruction regarding the money laundering counts of the indictment, impermissibly altered the indictment. Counts 7, 8, and 9 of the indictment charged Restivo with money laundering. One of the elements of this offense, as charged in the indictment, was that Restivo knowingly entered into financial transactions involving unlawfully-obtained proceeds with the intent to promote the specified unlawful activity of bank fraud charged in Count 2. When instructing the jury on this element, the district court failed to mention bank fraud. Instead, the court instructed the jury that the term "specified unlawful activity" includes "theft, embezzlement or misapplication by a bank officer or employee." Restivo argues that the variance between the instruction and the indictment amounted to a constructive amendment of the indictment warranting reversal. Because Restivo did not raise this alleged error before the district court, we review the court's instruction for plain error. ¹³ Plain error is error so obvious and substantial that failure to notice it would affect the fairness, integrity, or public reputation of the judicial proceedings and would result in manifest injustice. ¹⁴

The Fifth Amendment guarantees that a criminal defendant will be tried only on charges presented in a grand jury indictment. "Incident to this constitutional guarantee is the longstanding principle of our criminal justice system that the charges contained in an indictment may not be broadened or altered through amendment, except by the grand jury itself." ¹⁵ An amendment may be explicit, implicit, or constructive. ¹⁶ In deciding whether the district court's jury instruction amounted to a constructive amendment of the indictment, we must determine whether the instruction permitted the jury to convict the defendant on a factual basis that effectively modified an essential element of the offense charged. ¹⁷ If so, then reversal is required because the defendant may have been convicted on a ground not charged in the indictment. ¹⁸ If not, then the district court's "refusal to restrict the jury charge to the words of the indictment is merely another of the flaws that mar its perfection but do not prejudice the defendant." ¹⁹

Restivo was charged with, as an essential element of the money laundering counts, conducting financial transactions with the intent to promote the specified unlawful activity of bank fraud. Although the district court instructed the jury that the term "specified unlawful activity" includes theft and embezzlement, we disagree with Restivo's assertion that the inclusion of these terms amounted to a constructive amendment of the indictment. The government did not offer and the district court did not permit in evidence, any facts to support these alternative bases of proving the "intent to promote" element of money laundering. Consequently, there is no possibility that the jury was permitted to convict Restivo--in view of the trial evidence--on a ground (the intent to promote theft or embezzlement) not charged in the indictment. ²⁰

The district court's definition of the term "specified unlawful activity" to include misapplication by a bank officer also did not amount to a constructive amendment of the indictment. Again, the money laundering counts of the indictment charged Restivo with conducting financial transactions with the intent to promote the bank fraud described in Count 2 of the indictment. According to Count 2, Restivo accomplished this bank fraud "by means of false and fraudulent pretenses and representations as to the bank's profitability by continuing to fund the operations of Dixie Lloyd's and related companies." It is undisputed that Restivo was able to fund Dixie Lloyds's operations through his misapplication of bank funds, which is detailed in Count 5 of the indictment. Because the misapplication by a bank officer was included in the indictment's description of bank fraud, there is no possibility...