United States v. Manlove
| Decision Date | 03 April 2017 |
| Docket Number | CR 15-40-M-DLC-01 |
| Parties | UNITED STATES OF AMERICA, Plaintiff, v. GEORGE LESLIE MANLOVE, Defendant. |
| Court | U.S. District Court — District of Montana |
Before the Court is Defendant George Leslie Manlove's ("Manlove") renewed motion for acquittal pursuant to Rule 29 of the Federal Rules of Criminal Procedure. Following a three-week jury trial, the jury found Manlove guilty of 170 counts of wire fraud, money-laundering, bank fraud, false statements to federally insured lending institutions, bankruptcy fraud, and conspiracy to defraud Vann's, Inc. and others. The court reserved decision on Manlove's Rule 29 motion, pursuant to Federal Rule of Criminal Procedure 29(b). For the reasons explained below, the Court denies Manlove's motion.
DISCUSSION
Rule 29(c) provides that a court may set aside a guilty verdict upon timely motion by a convicted defendant. The question presented to a court in such a motion is "whether at the time of the motion there was relevant evidence from which the jury could reasonably find the defendant guilty beyond a reasonable doubt, viewing the evidence in light favorable to the government." United States v. Dreitzler, 577 F.2d 539, 545 (9th Cir. 1978) (citing United States v. Figueroa-Paz, 468 F.2d 1055, 1058 (9th Cir. 1972)). "In ruling on a Rule 29(c) motion, a district court must bear in mind that it is the exclusive function of the jury to determine the credibility of witnesses, resolve evidentiary conflicts and draw reasonable inferences from proven facts." Dreitzler, 577 F.2d at 545 (internal citations and quotations omitted).
To be found guilty of conspiracy, the government must prove beyond a reasonable doubt that: (1) there was an agreement between two or more persons to commit at least one of the crimes charged in the Indictment; (2) the defendant became a member of the conspiracy knowing of at least one of its objects and intending to help accomplish it; and (3) one of the members of the conspiracy performed at least one overt act for the purpose of carrying out the conspiracy. 18 U.S.C. § 371; United States v. Kaplan, 836 F.3d 1199, 1212 (9th Cir.2016). "The agreement need not be explicit; it is sufficient if the conspirators knew or had reason to know of the scope of the conspiracy and that their own benefitsdepended on the success of the venture." United States v. Montgomery, 384 F.3d 1050, 1062 (9th Cir. 2004) (citing United States v. Romero, 282 F.3d 683, 687 (9th Cir. 2002)). A conspiracy may exist even if some members of the conspiracy cannot complete the offense, so long as the object of the conspiracy is that at least one conspirator complete the offense. Ocasio v. United States, 136 S.Ct. 1423, 1429-32 (2016).
With respect to the single count of conspiracy, the Indictment describes the objects of the conspiracy as "a purpose . . . to conceal and misrepresent the ongoing schemes . . . thereby avoiding detection and enriching MANLOVE and NISBET" and "to conceal and misrepresent the true financial condition and status of Vann's in order to avoid detection of the defendants' fraudulent acts." (Doc. 27 at 7.) The Indictment further lists multiple overt acts that the defendants conspired to accomplish: leaseback schemes, fraudulent loans, payment for Kellogg MBA tuition, unauthorized credit card charges, club memberships, jewelry transactions, family benefits, etc. (Doc. 27 at 9-19.) The government need only prove one of those overt acts.
Manlove argues that the government did not present sufficient evidence to establish that there was a scheme or plan between Manlove and Mr. Nisbet to commit any of the overt acts. The Court disagrees. The government presentedsufficient evidence at trial to support a finding, beyond a reasonable doubt, that Manlove and Mr. Nisbet had an agreement to commit at least one of the overt acts. In particular, the government's witness, Paul Lyn Nisbet, the co-defendant in this case, testified at length about his agreement with Manlove to purchase real estate and enter into fraudulent leaseback schemes between Vann's and the holding companies. Mr. Nisbet also explained his participation in the unauthorized credit card charges that Manlove made on the Vann's American Express Card. Based on this testimony alone, the Court concludes that any rational juror could have found that Manlove and Mr. Nisbet agreed to scheme and defraud Vann's. Thus, Manlove's Rule 29 motion regarding the count of conspiracy is denied.
To be found guilty of wire fraud, the government must prove beyond a reasonable doubt that: (1) the defendant knowingly devised and participated in a scheme or plan to defraud, or a scheme or plan for obtaining money or property by means of false or fraudulent pretenses, representations, or promises; (2) the statements made or facts omitted as part of the scheme were material; that is, they had a natural tendency to influence, or were capable of influencing, Vann's to part with its money or property; (3) the defendant acted with the intent to defraud, that is, the intent to deceive or cheat; and (4) the defendant used, or caused to be used,a wire communication to carry out or attempt to carry out an essential part of the scheme. 18 U.S.C. § 1343; Neder v. United States, 527 U.S. 1, 20-21 (1999); United States v. Loftis, 843 F.3d 1173, 1177 (9th Cir. 2016).
Manlove argues that the wire fraud counts also include an "agreement" element whereby Manlove and another individual must agree to each wire fraud count. The Court disagrees and believes that Manlove is conflating the conspiracy count with the wire fraud counts. Under the first element of wire fraud, it contemplates that the scheme or plan to defraud can be conducted by a single person. There is no reference to a scheme or plan between two or more people in any element of the offense. Thus, this argument is without merit.
Manlove further contends that Counts 2 through 85 of the Indictment, which consist of personal expenses made on Manlove's corporate American Express card, were legitimate business expenses and that he did not intend to deceive or cheat Vann's with respect to any of these expenses. The government offered into evidence many months of American Express credit card statements regarding each expense listed in the Indictment. Furthermore, Darrell Messmer, Gordon King, Jay Allen and Paul Nisbet—all long term employees of Vann's that worked alongside Manlove for years—testified during the government's case-in-chief about the accounting practices at Vann's and the expenses Manlove charged to hiscorporate credit card. The testimony of these witnesses combined with the credit card statements was sufficient evidence for the jury to reasonably find the defendant guilty of wire fraud beyond a reasonable doubt. Of equal importance, the jury did not convict Manlove of counts 2 through 85 in total, but instead chose to convict him of only a select number of the wire fraud counts which demonstrates the attention the jury applied to the evidence. Therefore, the Court will not invade the exclusive function of the jury to determine the credibility of witnesses and resolve evidentiary conflicts related to these wire fraud counts.
Under Counts 86 through 121, which involve the wire fraud counts for the Painted Sky, LLC and JPEG, LLC leaseback schemes, Manlove argues that these were arms-length transactions, were approved by the Board of Directors, and that Manlove did not know the wires involved interstate transfers. The government offered into evidence the loan documents, bank statements, and transfer authorizations relating to the Painted Sky, LLC and JPEG, LLC accounts. The government also presented testimony from past members of the Vann's Board of Directors (William Honzel, Chris Abess, and Arlington Chris Price), Ryan Jones with First Interstate Bank, and Mark Hopwood regarding the wire transfers and the leaseback arrangements. The Court finds that this was sufficient evidence for the jury to reasonably find the defendant guilty beyond a reasonable doubt. Therefore,the Court denies Manlove's Rule 29 motion on the wire fraud counts.
To be found guilty of bank fraud, the government must prove beyond a reasonable doubt that: (1) the defendant knowingly devised a plan or scheme to obtain money or property from the financial institution by false promises or statements; (2) the promises or statements were material; that is, they had a natural tendency to influence, or were capable of influencing, a financial institution to part with money or property; (3) the defendant acted with the intent to defraud; (4) the defendant did something that was a substantial step toward carrying out the plan or scheme; and (5) the bank was a federally insured institution. 18 U.S.C. § 1344; United States v. Molinaro, 11 F.3d 853, 862-863 (9th Cir. 1993). The government need not prove that the defendant knowingly made false representations directly to a bank. United States v. Cloud, 872 F.2d 846, 850 (9th Cir. 1989).
Manlove claims that because First Interstate Bank's loan agreement documents did not include language about a written lease being in place, there was no false promise or statement given to the bank that an actual written lease was in fact in place. Manlove goes on to contend that the emails between Ryan Jones, Paul Nisbet, and Manlove establish that no one actually thought there was a valid written lease agreement in place; instead, everyone thought that one would be inplace in the future. Manlove further argues that of all people, he had a more vested interest in a valid lease because if he was unable to collect rent from Vann's then his loan with First Interstate Bank would go into default.
The Court assumes that the essence of Manlove's arguments rests on element three of bank fraud. Thus, he asserts that the government did not provide relevant evidence from which the jury could reasonably find that the defendant acted with...
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