U.S. v. Trice
| Citation | 823 F.2d 80 |
| Decision Date | 21 July 1987 |
| Docket Number | No. 86-1925,86-1925 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. John TRICE, Defendant-Appellant. |
| Court | United States Courts of Appeals. United States Court of Appeals (5th Circuit) |
Kerry P. FitzGerald, Dallas, Tex., for defendant-appellant.
Sidney Powell, Asst. U.S. Atty., Marvin Collins, U.S. Atty., Lynn Hastings, Asst. U.S. Atty., Dallas, Tex., for plaintiff-appellee.
Appeal from the United States District Court for the Northern District of Texas.
Before RANDALL, WILLIAMS, and GARWOOD, Circuit Judges.
Appellant John R. Trice ("Trice") was convicted following a jury trial on three felony counts of making false statements to a financial institution insured by the Federal Savings and Loan Insurance Corporation ("FSLIC"), contrary to 18 U.S.C. Sec. 1014. Appellant raises several contentions in this appeal. Finding merit only in a challenge to the jury instructions, we reverse his conviction on two of the counts but affirm as to the remaining count of which he was found guilty.
Appellant, an attorney, devoted most of his professional energies to petroleum industry activities until 1983, when he established a limited partnership to open and operate a sand and gravel business near Waco, Texas. Appellant and Glenn Harris ("Harris"), both from the Dallas area, were the two general partners in this enterprise- On November 17, 1983, the day after the loan was funded, Trice wrote a check on T&H's Lancaster account to Harris' janitorial contrating business ("Jireh") in the amount of $50,000. On the memorandum line of the T&H check, Trice indicated the check was issued for "Road Shop & Equip." Harris testified that Trice instructed him to write a $30,000 check on Jireh's account (at another bank) back to Trice the same day and to record the Jireh check as issued for legal fees, which Harris did.
--T&H Materials, Ltd. ("T&H"). Harris' work included managing the gravel pit, and Trice's responsibilities included arranging financing and land leasing. Trice established a $700,000 line of credit with Lancaster First Federal Savings and Loan Association ("Lancaster"), effective November 16, 1983. Lancaster was the sole limited partner in T&H. The same day the loan went into effect, initial funding of $200,000 was deposited to T&H's newly established checking account at Lancaster. Trice had exclusive control over this T&H account and dealt with Lancaster without Harris' involvement.
On January 20, 1984, Trice gave Harris another T&H check, number 117 for $50,000, and on that same day a Jireh check was issued to Trice for $40,000, which Harris' Jireh books described as a loan to Trice. On February 17, 1984, Trice wrote T&H check number 119 to Jireh, noting on the check that it was for "Iron & steel fabrication--conveyors." 1 Another Jireh check to Trice, dated March 30, 1984 for $20,000, was recorded in Harris' books as a loan to Trice. Endorsements on the Jireh checks and appellant's personal bank account records showed that Trice deposited each of these three checks in his regular personal checking account at the Bank of Dallas.
Cecilia Johnson ("Johnson"), who was a secretary to a loan officer at Lancaster during 1983 and 1984 and who later became a loan officer there, testified at trial about appellant's dealings with Lancaster. She stated that the T&H loan "was to be disbursed in increments" and that the loan was "renewed two more times." A subsequent loan agreement, dated August 24, 1984, and a later modification agreement, dated April 4, 1985, were both admitted into evidence. Johnson testified that the initial $700,000 loan was "rolled into the new loan." These two later agreements respectively extended Lancaster's total loan to T&H to about $1.36 million, and then to some $1.55 million.
Johnson also testified that the initial lending agreement provided "that should the borrower request additional funds [above those already drawn against the loan line of credit], he was to submit to the lender written request which consists of invoices or receipts or bills to justify those additional funds" (emphasis added). 2
Johnson testified that, before the amount of the loan was increased, in February 1984 Trice "furnished [Lancaster] with three invoices at our request." The invoices arrived with a "note stapled on top of the three invoices." Johnson indicated that the note was "[d]ated February 1984, but [when it was] put in the file the [day of the month] ... was punched out." The note stated:
Johnson identified the three invoices she said had been stapled to the note; all three were typed on identical yellow invoice forms with nonconsecutive numbers. Invoice number 8851 was dated November 17, 1983 and reflected payment of $50,000 to Jireh for "Roads & Fences, Engineer." This invoice formed the basis of count 1. The second invoice--number 8864--formed the basis of count 2. It was dated January 20, 1984 and showed that another $50,000 was paid to Jireh for "Shop foundation, electric, materials, utuilities [sic ] erection." The third invoice--number 8887--was dated February 17, 1984 and indicated that $30,000 had been disbursed to an unidentified payee for "Iron and Steel, Steel channels, conveyor system, plant erection & labor." It formed the basis of count 3, on which Trice was acquitted. Johnson also stated that she recalled an additional $300,000 above the initial loan funding was advanced to T&H, although she was unable to identify just when this occurred.
Harris testified that the amounts reflected in these three invoices had not actually been spent for the purposes indicated on the invoices. Harris also described the origins of these invoices, stating that Trice talked to him about needing some documentation for Lancaster in February 1984:
Johnson also testified that $240,000 was advanced to T&H on the basis of an invoice Trice submitted reflecting that T&H had paid $230,000 to purchase equipment (a "dragline") from Rector Equipment Company ("Rector Equipment") on or about September 14, 1984. This invoice formed the basis of count 4. Don Rector testified that his company sold the dragline for $180,000 to Trice, acting for T&H, but that appellant asked Rector to prepare an invoice showing a price of $230,000, that appellant wrote a $230,000 T&H check to Rector Equipment, and that Trice asked for and received a $50,000 "commission" check back from Rector on the day the sale was finalized.
Banking records showed that appellant deposited the $50,000 Rector Equipment check into the "Trice Minerals" account at the First Security Bank and Trust in Coppel, Texas on September 17, 1984, purchased a $50,000 forty-five-day certificate of deposit from that bank on that same day, and on November 5, 1984, after the certificate had matured, deposited the resulting Appellant was indicted on four counts of having made false statements to a federally insured institution in violation of 18 U.S.C. Sec. 1014. Each count of the indictment described a different invoice, but all counts alleged:
principal and interest ($50,693.49) into his personal account at the Bank of Dallas.
Counts 1, 2, and 3 related to appellant's submission to Lancaster of the three invoices on or about February 17, 1984. 5 Count 4 charged that appellant had violated section 1014 by submitting the dragline purchase invoice on or about September 14, 1984.
The jury found appellant guilty on counts 1, 2, and 4, and acquitted him on count 3. Appellant was sentenced to concurrent two-year terms of imprisonment on counts 1 and 2, and given a suspended sentence with five years' probation on count 4 (he was also ordered to pay a $50 special assessment on each of counts 1, 2, and 4).
The statute under which appellant was charged provides in pertinent part:
"Whoever knowingly makes any false statement or report ... for the purpose of influencing in any way the action of ... any institution the accounts of which are insured by the Federal Savings and Loan Insurance Corporation ... upon any application, advance, discount, purchase, purchase agreement, repurchase agreement, commitment, or loan, or any change or extension of any of the same, by renewal, deferment of action or otherwise, or the acceptance, release, or substitution of security therefor, shall be fined not more than $5,000 or imprisoned not more than two years, or both." 18 U.S.C. Sec. 1014.
Proving a violation of section 1014 requires showing beyond a reasonable doubt that the financial institution to which the false statements were made was enrolled in a federal account insurance program, and that:
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