U.S. v. Salinas, 80-1799

• Decision Date: 24 August 1981
• Docket Number: No. 80-1799,80-1799
• Citation: 654 F.2d 319
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Enrique M. SALINAS, Defendant-Appellant. . Unit A
• Court: U.S. Court of Appeals — Fifth Circuit

Page 319

654 F.2d 319

UNITED STATES of America, Plaintiff-Appellee, v. Enrique M. SALINAS, Defendant-Appellant.

No. 80-1799.

United States Court of Appeals, Fifth Circuit.

Unit A

Aug. 24, 1981.

Kevin T. O'Hanlon, Austin, Tex., for defendant-appellant.

LeRoy M. Jahn, Asst. U. S. Atty., San Antonio, Tex., William C. Bryson, Atty., U. S. Dept. of Justice, Washington, D. C., for plaintiff-appellee.

Appeal from the United States District Court for the Western District of Texas.

Before MARKEY ^*, Chief Judge, and GEE and POLITZ, Circuit Judges.

GEE, Circuit Judge:

On May 19, 1977, a grand jury returned a 49-count indictment against the present appellant, Enrique M. Salinas, and others, ¹ charging violations of 18 U.S.C. §§ 371 (conspiracy), ² 656 (misapplication of bank funds), ³ and 1005 (false entries upon bank records). ⁴ These charges grew out of the operation of the Citizens State Bank in Carrizo Springs, Texas. Following a lengthy trial, ⁵ the jury returned a guilty verdict on various counts. Salinas, the present appellant, was found guilty of conspiracy, four counts of making false entries in bank records, and twelve counts of misapplication of bank funds. On appeal, this court reversed the convictions on the misapplication counts, 601 F.2d 1279 (5th Cir. 1979) (Salinas I ), but affirmed the convictions on the conspiracy and false entry counts. The appellant was sentenced to five years imprisonment and a $10,000 fine.

On remand, Salinas alone was retried on three of the misapplication counts that had been reversed. Following a jury trial, the appellant was convicted on all three counts. He was sentenced to two years imprisonment and a $5,000 fine on the first count, to run consecutively to the sentences that had previously been upheld on appeal. On the second and third counts, he was given two-year terms of imprisonment, which were made concurrent with the previous sentence. For the reasons set forth below, we reverse the judgment of conviction on count one and remand for a new trial consistent with this opinion. We affirm on counts two and three. ⁶

Amendment of Count One

In late 1975, the appellant was in the process of acquiring control of the Citizens State Bank of Carrizo Springs. In November 1975, appellant had his friend Lewis Woodul named as president of the bank, and on Woodul's recommendation appellant hired Woodul's partner, Dan Sanchez, as vice chairman of the bank's board of directors. Shortly after Woodul became president, appellant began using the bank to obtain loans on behalf of his friends, relatives, and associates. One of these improper loans was the subject of count one (count eight of the original indictment). This count charged that Woodul, the president of the bank, caused a misapplication of bank funds in connection with a $33,000 loan to Maverick Air, Inc. and that the appellant aided and abetted him in that offense. The indictment charged that the appellant, Woodul, and the president of Maverick Air (Ron Guess) knew at the time of the loan that it was not well secured, that the bank had no credit information on Maverick Air, and that, in fact, the aircraft pledged as collateral was pledged already to another lender. ⁷

Testimony developed at trial, however, did not coincide with the terms of the indictment. The trial evidence showed that it was actually another government witness, the executive vice president of the bank, James Robert Nance, rather than Woodul, who authorized the loan at issue in count one. Woodul had no direct involvement with the $33,000 loan and apparently was not even at the bank at the time of the transaction. The trial judge avoided the difficulty through broad jury instructions:

Now, in order to establish that the defendant, Enrique Salinas, is guilty of count one of the indictment, the following essential elements must be proved beyond a reasonable doubt.

1. That the principal being considered in connection with count with the count that you are then considering that is, count one was an officer, director or employee of the bank described in the indictment.

2. That the bank was in fact an insured bank.

3. That the principal being considered in connection with count one, being an officer, director or employee of the bank, knowingly and willfully misapplied funds or credits belonging to the bank or entrusted to its care.

4. That the principal being considered in connection with the count you are then considering that is, count one acted with the intent to injure and defraud the bank, and

5. That the defendant, Enrique M. Salinas, willfully aided and abetted the principal in said actions.

The appellant's motion for a judgment of acquittal, on the ground that there was no evidence that Woodul was involved in the Maverick loan, was denied. The trial judge in effect allowed the jury to convict if it found that the appellant aided and abetted the misapplication of funds by any officer, director, or employee of the bank. Appellant argues that the trial judge constructively amended the indictment; the government contends that the discrepancy between the proof and the indictment was merely a nonprejudicial variance.

This court has traveled this route before, to the detriment of the government's position. Salinas I, 601 F.2d at 1287-91, surveyed the distinction between a fatal "amendment" of an indictment and a permissible "variance" in the context of the same factual situation. Under the progeny of Stirone v. United States, 361 U.S. 212, 80 S.Ct. 270, 4 L.Ed.2d 252 (1960), a judicial amendment of the indictment is reversible error per se. In contrast, a variance in the proof justifies reversal only where the defendant has been prejudiced thereby. See, e. g., United States v. Bryan, 483 F.2d 88, 96 (3d Cir. 1973). This difference in treatment is attributable to the difference in the rights of the defendant that are affected. Where the indictment is amended, "the defendant's substantial right to be tried only on charges presented in an indictment returned by a grand jury," Stirone, 361 U.S. at 217, 80 S.Ct. at 273, is violated. In contrast, where the evidence proves facts different from those alleged in the indictment resulting in a variance the defendant may be deprived of notice of the details of the charge against him. In United States v. Bursten, 453 F.2d 605, 607 (5th Cir. 1971), we quoted from a District of Columbia Circuit case, Gaither v. United States, 413 F.2d 1061 (D.C.Cir.1969), in articulating the difference between an amendment and a variance:

An amendment of the indictment occurs when the charging terms of the indictment are altered, either literally or in effect, by prosecutor or court after the grand jury has last passed upon them. A variance occurs when the charging terms of the indictment are left unaltered, but the evidence offered at trial proves facts materially different from those alleged in the indictment.

Id. at 1071 (emphasis in original). And in United States v. Ylda, 653 F.2d 912, 914 (5th Cir. 1981), we observed, "The misconstruction of an indictment is reversible error if it is possible that the defendant was tried and convicted for a crime other than that alleged in the indictment."

The original indictment at issue in Salinas I charged the present appellant with misapplying funds as a director of the bank. At trial the evidence showed that he was not in fact a director when the transactions at issue took place. The trial judge refused the appellant's requested instruction that he be acquitted if the evidence did not prove he was a director; instead, he charged the jury that it could convict if it found Salinas to be an officer, director, agent, or employee of the bank. We reversed the resulting conviction on the basis that this instruction "modified an essential element of the offense charged and thereby effectively amended the grand jury's indictment in violation of the fifth amendment." 601 F.2d at 1282. "Under Stirone this is fatal error requiring reversal, for appellants may have been convicted on a ground not charged in the grand jury's indictment." Id. at 1290.

Our opinion in Salinas I requires that the appellant's conviction under count one be reversed. An essential element of the crime of aiding and abetting the misapplication of bank funds is that the named principal in fact misapplied these funds. By allowing the jury to convict if it found that the principal whom Salinas aided and abetted was an officer, director, employee, or agent of the bank when the indictment charged him only with aiding and abetting a specific named individual, Woodul, the trial judge modified an essential element of the offense in the same way that we held the trial judge did in Salinas I. The trial court's instructions in effect expanded the indictment to include other individuals not named in the indictment (i. e., Nance). The grand jury could have named Nance. It could have charged "unnamed principals." It chose not to do so. Although it may be difficult to imagine that the identity of the principal involved would have had any effect on the grand jury's decision to return an indictment, the Supreme Court has cautioned against speculating as to what a grand jury would have done. Stirone, 361 U.S. at 217, 80 S.Ct. at 273. Once the grand jury has spoken, the defendant goes to trial prepared to defend these charges, and the government is bound to prove the essential elements of the charges specified in the indictment. See United States v. Trexler, 474 F.2d 369, 371 (5th Cir. 1973). The game's rules are fixed prior to the judge's charge to the jury.

There is no denying the considerable appeal of the government's argument. Without question, the particular loan was well described; nor is there question that the appellant aided and abetted a bank officer in the misapplication of bank funds. Theft, by any other name, is still theft. But the mistake in the particular name of the officer involved is not like a variance in a date or...