U.S. v. Schimmel, 90-1508
| Decision Date | 26 September 1991 |
| Docket Number | No. 90-1508,90-1508 |
| Citation | 943 F.2d 802 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. William D. SCHIMMEL, a/k/a Billy D. Schimmel, Defendant-Appellant. Seventh Circuit |
| Court | U.S. Court of Appeals — Seventh Circuit |
Christina McKee, Asst. U.S. Atty. (argued), Office of U.S. Atty., Indianapolis, Ind., for U.S.
Rick L. Middleton (argued), Lansing, Mich., for defendant-appellant.
Before CUMMINGS, WOOD, Jr., and COFFEY, Circuit Judges.
Defendant-Appellant William D. Schimmel appeals his conviction for making false statements to a financial institution in violation of 18 U.S.C. § 1014. We affirm.
On September 22, 1989, a grand jury returned a two count indictment charging William D. Schimmel with over-valuing his assets on two separate financial statements submitted to the American Fletcher National Bank (AFNB) for the purpose of influencing the bank to provide him with a loan in the amount of $15,000.
On January 16, 1990, the defendant went to trial on charges of making false statements to a financial institution in violation of 18 U.S.C. § 1014. The defendant filed a motion in limine out of the jury's presence, requesting that the court exclude evidence regarding financial statements submitted to the People's Bank and Trust Company of Indianapolis and the Fidelity Bank of Carmel, Indiana in previous loan applications. Responding to the request, the court instructed counsel for both parties not to proffer any evidence relative to the defendant's dealings with these banks prior to a determination of the admissibility of such evidence pursuant to Federal Rule of Evidence 404(b). 1 The Assistant United States Attorney in his opening statement did, however, advise the jury as to the anticipated testimony of two of its witnesses, Lamar Richcreek and Charles Conoley, who were to testify regarding the defendant's prior banking activities. At the conclusion of the government's opening statement, defense counsel moved for a mistrial. The court at this time conducted a hearing on the admissibility of the prior bad acts involving the defendant's use of false financial statements, and ruled the evidence admissible only as to the intent, common scheme, plan, or motive of the defendant pursuant to Federal Rule of Evidence 404(b).
J. Andrew Harp, Chief Deputy Clerk of the U.S. Bankruptcy Court in Indianapolis, testified on behalf of the government. Harp stated that the defendant Schimmel was the sole director, officer, and shareholder of Coach King, Inc., a manufacturer of travel trailers in Elkhart, Indiana. In November 1984, Coach King, Inc. was the subject of an involuntary bankruptcy filed by several of its creditors in the Northern District of Indiana. Eugene Gwin, previously a plant manager for one of the defendant's companies, testified that the defendant formed a business known as SDB Fiberglass Engineering (SDB) to manufacture lightweight travel trailers and stated that the defendant had organized a group of companies to perform certain functions in the manufacturing and marketing of the lightweight travel trailers.
At trial, Lamar Richcreek, a bank official of People's Bank and Trust Company of Indianapolis, stated that in January 1985, SDB had a checking account and two outstanding commercial loans totalling $15,000 with People's Bank. Richcreek related that in February 1985, the defendant submitted a financial statement to People's Bank with his request for a third loan which included representations that the defendant was the possessor of a cash value interest in the amount of $629,000 in stocks and securities in four closely-held corporations. People's Bank denied the defendant's request for a third loan. Richcreek further testified that the defendant made one payment of $4,000 in May of 1985 on the two outstanding loans but this occurred only after the bank's attorneys had instituted collection proceedings. Thereafter, the People's Bank closed SDB's checking account occasioned by an overdraft of approximately $10,000.
Charles Conoley, a loan officer with Fidelity Bank of Carmel, Indiana, testified that in February 1985, the defendant applied for a $100,000 line of credit from Fidelity Bank. (This occurred approximately one month before the defendant applied to American Fletcher National Bank for a loan, the loan application giving rise to the indictment in this case). According to Conoley, the defendant presented a financial statement accompanying his loan application which listed, in addition to the stocks and securities valued at $629,000 (previously listed for loan purposes at another bank), a home and business property located at 1417 Commerce Avenue in Indianapolis. The defendant failed to disclose that he had deeded the home to his wife and that he held only a lease interest with an option to purchase on the business property. 2 Fidelity Bank refused to grant the loan.
Immediately after the direct examinations of Richcreek and of Conoley, the court instructed the jury to consider their testimony only as it pertained to the defendant's intent, common scheme, plan, or motive in accordance with Rule 404(b).
Evelyn Finnell, a "metropolitan lender" with American Fletcher National Bank (AFNB) 3 also testified on behalf of the government and stated that the defendant when applying to AFNB on March 21, 1985, for a $15,000 loan to SDB, submitted a personal financial statement to AFNB listing stocks and securities owned by him valued at $629,000. The statement also listed business properties valued at $325,000, including the 1417 Commerce Avenue property. 4
Finnell stated that at the bank's insistence the defendant personally guaranteed the $15,000 loan AFNB made to SDB. AFNB made the $15,000 loan to SDB on March 22, 1985 relying upon the information provided by the defendant in his financial statements. After granting the loan, AFNB learned of the defendant's $25,000 prior debt to People's Bank and of the Coach King prior bankruptcy. In a subsequent meeting with one of the bank's loan officers, the defendant admitted giving false information in that he failed to disclose the $25,000 debt to People's Bank because he feared the loan would not have been granted had AFNB known the true facts.
Finnell testified that on March 29, 1985, AFNB restructured SDB's loan as a personal loan to the defendant. During the meeting arranged to accomplish the restructuring, the defendant admitted that his wife had title and was the owner of their home. The defendant further asserted that although he did not own the business property, he intended to exercise an option in his lease to purchase the property.
Approximately one month later, on April 25, 1985, in response to AFNB's attempts to obtain additional financial information, the defendant provided AFNB with what he referred to as an updated personal financial statement. This statement listed that he owned real estate valued at $1,025,000, as well as securities owned and valued at $2,700,000. 5 When questioned as to how the value of the securities had increased so dramatically from the $629,000 in February 1985 to the $2,700,000 figure given on April 25, 1985, the defendant testified that this updated financial statement included a more complete list of the businesses he owned. 6
On January 18, 1990, following a three-day trial, the jury returned a verdict of guilty on both counts of the indictment. On February 23, 1990, the district court imposed a two-year prison sentence on Count One and a one-year prison sentence on Count Two and ordered that the terms of incarceration be served consecutive to each other and further ordered that the defendant pay $24,431.44 in restitution to Bank One (the successor institution to AFNB) and a $100 assessment.
On appeal, the defendant-appellant William D. Schimmel contends that (1) the district court abused its discretion in denying the defendant's motion for mistrial premised on the government's alleged disregard of the motion in limine on certain prior bad acts; (2) that the prosecutor's alleged misconduct makes reversal necessary; and (3) the trial court committed plain error in giving its jury instruction on witness credibility.
Initially we address the defendant's contention that the trial court abused its discretion in denying the defendant's motion for mistrial on the basis of the government's alleged disregard of a motion in limine. After the filing of the motion and before opening argument, the district court instructed counsel for both parties not to proffer any evidence relative to the defendant's prior dealings with several banks and his use of false financial statements prior to a judicial determination of the admissibility of such evidence pursuant to Federal Rule of Evidence 404(b). Nonetheless, in the government's opening statement, the United States attorney advised the jury as to the anticipated testimony of several witnesses regarding the defendant's prior banking activities. At the conclusion of the government's opening statements, the defense counsel moved for a mistrial, and after a hearing on the admissibility of these prior bad acts involving the defendant's use of false financial statements, the court denied the motion and ruled the evidence admissible. On appeal, the defendant does not argue that the court's decision to admit the evidence dealing with his use of false financial statements under Rule 404(b) was erroneous, rather he argues that "the dissemination of that information to the jury in advance of the court's ordered and necessary approval 'irretrievably damaged' defendant." We reject the defendant's argument that the district court abused its discretion in denying his motion for mistrial.
We note that evidence can only be introduced through witnesses, and an attorney's opening statement does not constitute evidence. The jury was instructed by...
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