U.S. v. Stovall, 86-1453

• Decision Date: 12 August 1987
• Docket Number: No. 86-1453,86-1453
• Citation: 825 F.2d 817
• Parties: 23 Fed. R. Evid. Serv. 992 UNITED STATES of America, Plaintiff-Appellee, v. Don STOVALL and Robert Harlon "Frosty" Winter, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 817

825 F.2d 817

23 Fed. R. Evid. Serv. 992

UNITED STATES of America, Plaintiff-Appellee, v. Don STOVALL and Robert Harlon "Frosty" Winter, Defendants-Appellants.

No. 86-1453.

United States Court of Appeals Fifth Circuit.

Aug. 12, 1987.

G. David Westfall, John H. Hagler, Dallas, Tex., for Stovall.

Henry D. Gabriel, Loyola Law School, New Orleans, La. (court appointed), for Winter.

Marvin Collins, U.S. Atty., Dallas, Tex., Joseph C. Wyderko, Washington, D.C., for plaintiff-appellee.

Appeals from the United States District Court for the Northern District of Texas.

Before WILLIAMS and HILL, Circuit Judges, and MENTZ ^*, District Judge.

ROBERT MADDEN HILL, Circuit Judge:

In this appeal Robert Winter and Don Stovall challenge their individual sentences arising out of their convictions in a credit association fraud scheme. For the reasons stated below, we affirm Winter's sentences in part and vacate in part, and we affirm Stovall's sentence.

I.

Up until January 1984 Robert "Frosty" Winter was the vice-president in charge of the Blacklands Production Credit Association (Blacklands) in Kaufman, Texas. Blacklands is a cooperative financial institution that provides short and intermediate term, agricultural loans to farmers and ranchers. Blacklands is regulated and funded by the Federal Intermediate Credit Bank of Texas (FICB). Both Blacklands and FICB are part of the Farm Credit Administration.

Beginning in 1980 Winter began approving improper loans, for nonagricultural purposes, and in some instances, accepting benefits directly out of the loans or indirectly from loan recipients. Following Winter's resignation in January 1984, an internal investigation into the Kaufman office's accounts uncovered Winter's fraudulent activities. Specifically, the investigation revealed that loan documents listed collateral that did not exist and misstated the purposes of the loans. The investigation also uncovered the fact that Winter personally benefited from several of the loan transactions.

Winter was subsequently indicted on nineteen counts of improperly making, recording, and/or participating in loan transactions, all violations of federal law. Below we briefly outline the pertinent loan transactions that were the basis of Winter's ultimate conviction on sixteen counts. ¹

In March 1981 Winter authorized a $10,000 loan to Billy R. Ables, a local farmer. On the loan documents Winter listed the reason for the loan as the purchase of "a few more cows." Ables in fact used the $10,000 to purchase land for Winter on which Winter made monthly mortgage payments and built a home. Several months later Winter used $9,000 of his personal funds to make a payment on Ables' loan balance at Blacklands. In crediting the $9,000 to Ables' balance, Winter stated on the loan receipt that the money came from the sale of Ables' cattle.

Winter was charged with and convicted of three offenses arising out of the Ables transaction: (1) recording a false statement when he made the loan, a violation of 18 U.S.C. Sec. 1006 (count one); misapplying funds by loaning money to Ables for nonagricultural purposes, a violation of 18 U.S.C. Sec. 657 (count two); and (3) recording a false statement when he credited Ables' account with his own funds, a violation of 18 U.S.C. Sec. 1006 (count three).

The next improper loan transaction carried out by Winter involved a local framing contractor, Randall Johnson. Johnson was having financial difficulties and needed $20,000 for payroll expenses. Johnson was referred to Winter by Floyd Kirby, a friend and later codefendant of Winter's. Winter agreed to give Johnson the money. On the loan documents Winter wrote that the loan was for an equipment purchase and that the loan was secured by collateral. In fact, the loan proceeds were used to pay Johnson's payroll and no collateral existed.

Winter was charged with and convicted of two offenses arising out of the Johnson transaction: (1) recording a false statement when he made the loan, a violation of 18 U.S.C. Sec. 1006 (count four), and (2) misapplying funds for nonagricultural purposes, a violation of 18 U.S.C. Sec. 657 (count five).

The third pertinent loan transaction involved Winter, Donald B. Stovall, and a cutting horse "Doc Sunshine." Stovall was a local construction and carpeting businessman who also dabbled in training cutting horses and raising cattle. In March 1983 Stovall decided to purchase Doc Sunshine from his then owner Don Simpson. Simpson had recently brought Doc Sunshine for $20,000, but Stovall agreed to buy the horse for $200,000 if Simpson insured Doc for the purchase price. To carry out the sale Stovall enlisted Winter's aid. Winter authorized a $50,000 loan to Stovall. Stovall transferred this money to Simpson along with a promissory note for the balance of the purchase price. The note was executed by both Stovall and Winter. In return Simpson conveyed Doc Sunshine to Stovall and Winter. Doc Sunshine soon died and the insurance proceeds were split between Simpson ($127,000), Stovall ($66,000), and Winter ($7,000).

Winter was charged with and convicted of one offense arising out of the Stovall transaction: receiving benefits from a loan, a violation of 18 U.S.C. Sec. 1006 (count twelve). Stovall was also indicted for and convicted of aiding and abetting Winter's section 1006 violation.

Winter again made an improper loan in February 1983 to a local businessman Gerald Howell. Howell was a tractor and car salesman who also raised cattle on the side. Howell had previously borrowed over $40,000 from Blacklands for his ranching business. Winter approached Howell with a real estate speculation venture in late February. The two men agreed to use a Blacklands' loan to Howell as a mutual down payment on a five-acre tract of land. Winter authorized the loan of $5,000, stating it was "for operating costs." Title to the tract was conveyed to both Howell and Winter. They later sold the tract at a profit of approximately $1,000 an acre.

Winter was charged with and convicted of two offenses arising out of the Howell transaction: (1) misapplying loan proceeds for nonagricultural purposes, a violation of 18 U.S.C. Sec. 657 (count thirteen), and (2) receiving benefits from a loan, a violation of 18 U.S.C. Sec. 1006 (count fourteen). ²

Winter next extended credit to John Wood, a Plano, Texas, fireman who also farmed and ran cattle near Kaufman. Winter authorized a $12,000 loan to Wood, listing as the purpose of the loan "the purchase of cattle." Wood actually used the loan proceeds to purchase a commercial building for himself and Winter. Title to the building was held by the Straw Boss Corporation, a closely-held concern owned by Wood and Winter. Wood and Winter ultimately sold the building for a profit.

Winter was charged with and convicted of two offenses arising out of the Wood transaction: (1) misapplication of funds for nonagricultural purpose, a violation of 18 U.S.C. Sec. 657 (count fifteen), and (2) receiving benefits from a loan, a violation of 18 U.S.C. Sec. 1006 (count sixteen).

The final loan transaction serving as a basis for Winter's conviction involved Floyd Kirby and oil and gas speculation. Winter authorized a $20,000 loan to Kirby supposedly for the purchase of livestock. Kirby actually used $10,000 of the loan proceeds to buy Winter a percentage of an oil and gas well being drilled by Kirby's employer, Best Petroleum Company. Winter promised to repay Kirby the $10,000 but never did. ³

Winter was charged with and convicted of two offenses arising out of the Kirby loan transaction: (1) recording a false statement when he made the loan, a violation of 18 U.S.C. Sec. 1006 (count eighteen), and (2) receiving benefits from a loan, a violation of 18 U.S.C. Sec. 1006 (count nineteen).

In summary, the jury convicted Winter on sixteen of the nineteen counts contained in the indictment. The district court sentenced Winter to five years imprisonment on counts one, two, four, five, and nine, each running consecutively. On the remaining eleven counts (three and ten through nineteen) the district court sentenced Winter to five years on each count with each to run concurrently with Winter's consecutive sentences. Winter thus received a cumulative twenty-five year sentence and was ordered to make $100,000 in restitution to Blacklands. ⁴ The district court also sentenced Don Stovall to five years in prison for his involvement with Winter and assessed a $50,000 restitution order upon Stovall in favor of Blacklands.

II.

Winter raises four points of error in his appeal. First, he claims that his sentences based upon his several convictions of violating 18 U.S.C. Secs. 657, 1006 are multiplicitous in that he stands punished more than once for the same offense. Second, Winter claims his conviction on count three of the indictment violates the "exculpatory no" doctrine. Third, Winter contends that the district court prejudiced his defense by admitting evidence of his and Stovall's horse-trading activities. Finally, Winter argues that the sentence imposed by the district court is excessive and that we should vacate his sentence and remand to allow the district court to consider an appropriate sentence in light of newly proposed federal sentencing guidelines.

Stovall also appeals complaining that there is insufficient evidence to support his conviction of aiding and abetting Winter's loan fraud. He also asserts that evidence about the Doc Sunshine transaction was erroneously admitted and that it prejudiced his defense.

We address first Winter's points of error and then we take up Stovall's complaints.

III.

A.

Winter contends that several of his sentences are multiplicitous. He basically claims that he cannot be sentenced for both a violation of 18 U.S.C. Sec. 657 and a violation of 18 U.S.C. Sec. 1006 that arise out of the same factual situation because the provisions proscribe the same conduct. The specific combinations of counts (and...