U.S. v. Wall, 93-1427

• Decision Date: 14 October 1994
• Docket Number: No. 93-1427,93-1427
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. William H. WALL, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1443

37 F.3d 1443

UNITED STATES of America, Plaintiff-Appellee, v. William H. WALL, Defendant-Appellant.

No. 93-1427.

United States Court of Appeals, Tenth Circuit.

Oct. 14, 1994.

Lawrence J. Kelly, Englewood, CO, for appellant.

William R. Lucero, Asst. U.S. Atty. (Henry L. Solano, U.S. Atty., with him on the brief), Denver, CO, for appellee.

Before SEYMOUR, Chief Judge, McWILLIAMS, and ANDERSON, Circuit Judges.

STEPHEN H. ANDERSON, Circuit Judge.

Defendant William H. Wall, Jr., appeals from his conviction and sentence on six counts of bank fraud. He argues that the district court erred in failing to dismiss several counts resulting in bank fraud convictions as multiplicious, and in failing to dismiss a superseding indictment entirely because it demonstrated prosecutorial vindictiveness. We affirm.

BACKGROUND

Wall is a Colorado commercial real estate developer who, in 1985, determined that he needed $250,000 to complete the purchase of a real estate company, Van Schaak and Company ("VSC"), through a corporation, Austin Capital Corporation, in which Wall was a principal. Because Wall already had substantial debts and was delinquent on numerous loans in Colorado and other states, he was unable to borrow the necessary sum himself. Accordingly, he embarked on an elaborate scheme with Donald J. Hogoboom, a banker and officer with Citizens' Bank of Littleton ("CBL"), whereby CBL issued loans to other individuals, including Bradley W. Rothhammer, a business associate of Wall, and Gary L. Miles, the brother of Wall's business partner, who in turn funneled the proceeds of the loans to Wall without CBL's knowledge or consent. Neither Rothhammer nor Miles intended to repay the loans, because they had agreed with Wall and Hogoboom that Wall and other individuals would repay the loans when they came due. Wall and Hogoboom entered into a similar arrangement with Dudley Bo Mitchell, a director of CBL, pursuant to which the proceeds of other loans from different financial institutions were funneled through Mitchell to Wall.

Wall used the proceeds of these loans to fund a million dollar letter of credit, which was part of a complex transaction designed to permit Wall to purchase VSC. Wall and Hogoboom were involved in a number of other financial transactions, none of which are directly relevant to this appeal.

Eventually, CBL failed, and when an attempt was made to collect on the Miles and Rothhammer loans, both individuals refused to repay the loans.

In October 1992, Wall was indicted on six counts of an eight-count indictment alleging bank fraud and aiding and abetting a bank fraud scheme, in violation of 18 U.S.C. Secs. 1344(1) and (2). Counts I and II alleged violations relating to the Mitchell loans. Count III alleged a violation in connection with a letter of credit. Count IV alleged violations in connection with loans to Eugene Cahill, Sr., and counts VII and VIII alleged The district court partially granted Wall's motion for severance and ordered four separate trials. As a result, the government filed Superseding Indictment Nos. 1, 2, and 3. Superseding Indictment No. 1 related to the Miles/Rothhammer loans, Superseding Indictment No. 2 related to Wall's involvement in the Cahill loans and the letter of credit transaction, and Superseding Indictment No. 3 related to the Mitchell loans.

violations in connection with the Miles and Rothhammer loans. Four other individuals were indicted along with Wall.

Miles and Rothhammer proceeded to trial on Superseding Indictment No. 1, which resulted in Rothhammer's conviction on three counts of making a false statement in violation of 18 U.S.C. Sec. 1014, and Miles's conviction on one count of making a false statement in violation of 18 U.S.C. Sec. 1014, all in connection with the CBL loans.

Wall thereafter filed a motion seeking to dismiss several of the counts against him under Superseding Indictments Nos. 1, 2, and 3 as multiplicious. He argued that the indictments impermissibly charged him with multiple violations of 18 U.S.C. Sec. 1344(2), because the statute itself is ambiguous as to whether the government may charge such multiple violations and that, in the face of such ambiguity, the rule of lenity required dismissal of all but one count. The district court denied the motion and Wall proceeded to trial on Superseding Indictment No. 2, involving the Cahill loans and the letter of credit transaction. During that trial, the court permitted the government to introduce "similar transaction" evidence from the counts in the upcoming trials of Superseding Indictments Nos. 1 and 3. The district court dismissed the letter of credit count and the jury found Wall not guilty on the Cahill loan counts.

The government thereafter returned a new indictment, Superseding Indictment No. 4, which increased the counts relating to the Miles/Rothhammer transactions (former Superseding Indictment No. 1) from two felony counts to six and increased the counts relating to the Mitchell loans (former Superseding Indictment No. 3) from two felony counts to four. Wall filed a motion to dismiss Superseding Indictment No. 4 for prosecutorial vindictiveness. The district court denied the motion, concluding that while "the decision to increase the penalty exposure 225% for imprisonment and 175% in fines occurred after the completion of the first trial" gave rise to a presumption of vindictiveness, the government had rebutted that presumption. Order & Mem. Decision, R.Vol. 3, Tab 133. The district court denied a subsequent motion to dismiss Superseding Indictment No. 4 for due process violations, and Wall proceeded to trial. He was convicted of all six felony counts relating to the Miles/Rothhammer transactions and acquitted of all four counts relating to the Mitchell loans. Wall was sentenced to two concurrent five-year prison terms, two concurrent two and one-half year prison terms (to run consecutively to the two five-year terms), five years of probation, a $50,000 fine, $150,000 in restitution, and a special assessment of $300.00. He appeals.

DISCUSSION

I. Multiplicious Counts:

Wall first argues that it is multiplicious to charge him with two counts of bank fraud, in violation of 18 U.S.C. Sec. 1344(2), for the Miles and Rothhammer loans, when the two loans were simply multiple acts necessary for the completion of a single scheme to defraud. Section 1344(2) provides:

Whoever knowingly executes, or attempts to execute, a scheme or artifice--

(2) to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises;

shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.

18 U.S.C. Sec. 1344(2). Wall argues that the "unit of prosecution" for bank fraud is the execution or completion of a scheme, which may, in turn, involve multiple acts. Wall argues that the plain language of section 1344(2) appears to require multiple acts, but concedes that the statute is ambiguous as to the scope of the appropriate unit of prosecution. In the face of such ambiguity, Wall argues that the rule of lenity mandates an interpretation in his favor and requires dismissal of all but one count of bank fraud.

We review de novo Wall's argument that the indictment was multiplicious. United States v. Hord, 6 F.3d 276, 280 (5th Cir.1993), cert. denied, --- U.S. ----, 114 S.Ct. 1551, 128 L.Ed.2d 200 (1994); see also United States v. Bonnett, 877 F.2d 1450, 1454 (10th Cir.1989). " '[M]ultiplicity refers to multiple counts of an indictment which cover the same criminal behavior.' " United States v. Fleming, 19 F.3d 1325, 1330 (10th Cir.1994) (quoting United States v. Dashney, 937 F.2d 532, 540 n. 7 (10th Cir.), cert. denied, --- U.S. ----, 112 S.Ct. 402, 116 L.Ed.2d 351 (1991)); see also United States v. Meuli, 8 F.3d 1481, 1485 (10th Cir.1993), cert. denied, --- U.S. ----, 114 S.Ct. 1403, 128 L.Ed.2d 76 (1994) ("In reviewing multiplicity claims we look to the language of the statute to determine whether Congress intended multiple convictions and sentences under the statute.")

Section 1344 plainly prohibits the execution of a "scheme" to "obtain ... moneys, funds ... or other property [of a bank] by means of false or fraudulent pretenses, representations, or promises." 18 U.S.C. Sec. 1344(2). Courts addressing the issue have held that "each separate execution of a scheme to defraud may be pled as a distinct count of the indictment." United States v. Rimell, 21 F.3d 281, 287 (8th Cir.1994); see also United States v. Brandon, 17 F.3d 409, 422 (1st Cir.1994); United States v. Molinaro, 11 F.3d 853, 859-60 (9th Cir.1993); Hord, 6 F.3d at 281; United States v. Schwartz, 899 F.2d 243, 248 (3d Cir.), cert. denied, 498 U.S. 901, 111 S.Ct. 259, 112 L.Ed.2d 217 (1990). Thus, the crucial question in any given case is what constitutes the execution of a scheme.

The Eighth Circuit recently has held that " 'the first step in determining the number of offenses is to ascertain the contours of the scheme; once that is done, each execution of that scheme is a separate offense.' " Rimell, 21 F.3d at 287 (quoting United States v. Barnhart, 979 F.2d 647, 651 (8th Cir.1992)). Similarly, the First Circuit recently has stated that "[t]he central question for determining multiplicity is 'whether a jury could plausibly find that the actions described in the [disputed] counts of the indictment, objectively viewed, constituted separate executions of the [bank fraud] scheme.' " Brandon, 17 F.3d at 422 (quoting United States v. Lilly, 983 F.2d 300, 303 (1st Cir.1992)) (alteration in original). The court in Brandon observed that a "number of factors are relevant in determining whether a single or multiple executions of bank fraud have taken place, including the number of banks, the number of transactions, and the number of movements of money involved in...