Filed: Nov. 22, 1993
Latest Update: Mar. 02, 2020
Summary: UNITED STATES COURT OF APPEALS FIFTH CIRCUIT _ No. 92-9585 _ UNITED STATES OF AMERICA, Plaintiff-Appellee, versus ANDREW V. RESTIVO, II, Defendant-Appellant. _ Appeal from the United States District Court for the Eastern District of Louisiana _ (November 22, 1993) Before POLITZ, Chief Judge, REAVLEY, and EMILIO M. GARZA, Circuit Judges. EMILIO M. GARZA, Circuit Judge: Andrew Restivo appeals his convictions on eleven counts of a twelve count indictment charging him with the following offenses: co
Summary: UNITED STATES COURT OF APPEALS FIFTH CIRCUIT _ No. 92-9585 _ UNITED STATES OF AMERICA, Plaintiff-Appellee, versus ANDREW V. RESTIVO, II, Defendant-Appellant. _ Appeal from the United States District Court for the Eastern District of Louisiana _ (November 22, 1993) Before POLITZ, Chief Judge, REAVLEY, and EMILIO M. GARZA, Circuit Judges. EMILIO M. GARZA, Circuit Judge: Andrew Restivo appeals his convictions on eleven counts of a twelve count indictment charging him with the following offenses: con..
More
UNITED STATES COURT OF APPEALS
FIFTH CIRCUIT
_____________
No. 92-9585
_____________
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
ANDREW V. RESTIVO, II,
Defendant-Appellant.
________________________________________________
Appeal from the United States District Court
for the Eastern District of Louisiana
________________________________________________
(November 22, 1993)
Before POLITZ, Chief Judge, REAVLEY, and EMILIO M. GARZA, Circuit
Judges.
EMILIO M. GARZA, Circuit Judge:
Andrew Restivo appeals his convictions on eleven counts of a
twelve count indictment charging him with the following offenses:
conspiracy to misapply bank funds and to make false entries in bank
documents; executing a scheme to defraud a bank; willful
misapplication of bank funds; money laundering; knowingly causing
to be made false entries in bank documents; and perjury before a
grand jury. Finding no reversible error, we affirm.
I
During his tenure as president of Schwegmann Bank (the
"Bank"), Restivo developed an insurance premium finance ("IPF")
department which provided consumer financing for automobile
insurance premiums. Lloyd Hoffman, a vice-president and loan
officer at the Bank, brought in Jerry Delchamps as a new Bank
customer. Delchamps was president of Dixie Lloyds Insurance
Company ("Dixie Lloyds"), an automobile liability insurer. To
conduct the financial transactions of Dixie Lloyds's, Delchamps
opened and maintained checking accounts at the Bank.
In September 1989, Delchamps approached Restivo and Hoffman
for a $1.6 million loan.1 Restivo and Hoffman presented on Dixie
Lloyds's behalf two loans packages to the Bank's Board of
Directors. The Bank eventually approved a loan to Dixie Lloyds in
the amount of $500,000.00.
The September loan did not solve Dixie Lloyds's problems. By
February 1990, Delchamps's accounts with the Bank were overdrawn in
the amount of $345,000.00. With Restivo's alleged approval,
Delchamps executed a promissory note to the Bank in the amount of
$500,000.00. The Bank's Board of Directors had no knowledge of
this loan.2
By April 1990, Delchamps's accounts were again overdrawn.
Knowing that the Bank was due to be reexamined by the Federal
Deposit Insurance Corporation (the "FDIC"), Restivo wanted the
February loan off the books and the overdrafts paid. On April 11,
Delchamps executed another promissory note in the amount of
1
An audit by the Louisiana Insurance Commissioner revealed
that Dixie Lloyds had a statutory deficit of $2.4 million, and was
therefore in danger of being closed. The Insurance Commission
listed as one remedial measure the payment of $1.6 million of the
$2.4 million deficit.
2
This loan was charged as a misapplication by a bank
officer in Count 4.
-2-
$500,000.00, which Restivo initialled.3 Two days later on April
13, Delchamps executed another promissory note in the amount of
$485,328.96, which Restivo also initialled.4 The Bank had no
knowledge of these loans.
Restivo was subsequently charged in a twelve-count indictment
with: conspiracy to misapply bank funds and make false entries in
bank documents, in violation of 18 U.S.C. § 371 (1988) (Count 1);
executing a scheme to defraud a bank, in violation of 18 U.S.C.
§§ 1344, 2 (1988) (Counts 2-3);5 willful misapplication by a bank
officer, in violation of 18 U.S.C. §§ 656, 2 (1988) (Counts 4-6);
money laundering, in violation of 18 U.S.C. §§ 1956(a)(1)(A)(i), 2
(1988) (Counts 7-9); knowingly making false entries in bank
documents, in violation of 18 U.S.C. § 1005 (1988) (Count 10); and
perjury before a grand jury, in violation of 18 U.S.C. § 1623(a)
(1988) (Counts 11-12). Restivo was convicted on eleven of the
twelve counts of the indictment.6 He was sentenced to a prison
term of 100 months, followed by three years of supervised release.
3
This loan was charged as a misapplication of bank funds
in Count 5. The use of this loan's proceeds to pay the February
loan was charged as money laundering in Count 7.
4
This loan was charged as a misapplication by a bank
officer in Count 6.
5
Delchamps operated a check-kiting scheme, whereby cross
deposits were made in the Bank and the Bank of Louisiana making it
appear that there were substantial deposits in both banks.
Restivo's knowing participation in the check-kiting scheme was
charged as bank fraud in Count 3. The use of the scheme's proceeds
to pay the April 13 loan was charged as money laundering in Counts
8 and 9.
6
The jury returned a verdict of not guilty on Count 4.
-3-
On appeal, Restivo contends that: (a) the district court
denied his counsel the opportunity to effectively cross-examine
Delchamps, a key government witness; (b) the district court's jury
instruction regarding the money laundering counts constructively
amended the indictment; and (c) the evidence was insufficient to
support his convictions on Counts 3, 7, 8, and 9 of the indictment.
II
A
Restivo first contends that the district court denied his
counsel the opportunity to effectively cross-examine Delchamps, by
limiting cross-examination on the following subjects: (1) whether
a "cap" existed on Delchamp's sentence as a result of his plea
agreement; (2) whether the government had to agree that Delchamps
was telling the truth before it filed a substantial assistance
letter on his behalf;7 and (3) whether Delchamps pled guilty to
spare his daughter and son-in-law from prosecution. "While the
scope of cross-examination is within the discretion of the trial
judge, this discretionary authority comes into play only after
there has been permitted as a matter of right sufficient cross-
examination to satisfy the Sixth Amendment."8 The Confrontation
Clause of the Sixth Amendment is satisfied where defense counsel
has been "permitted to expose to the jury the facts from which
7
See United States Sentencing Commission, Guidelines
Manual, § 5K1.1 (Nov. 1992).
8
United States v. Elliott, 571 F.2d 880, 908 (5th Cir.)
(attribution omitted), cert. denied,
439 U.S. 953,
99 S. Ct. 349,
58 L. Ed. 2d 344 (1978).
-4-
jurors, as the sole triers of fact and credibility, could
appropriately draw inferences relating to the reliability of the
witness."9 To demonstrate an abuse of discretion, Restivo must
show that the limitations imposed upon his counsel's cross-
examination were clearly prejudicial.10
Notwithstanding the district court's restrictions on cross-
examination, the record demonstrates that Restivo's counsel was
permitted to expose to the jury the following: that Delchamps
entered into a plea agreement with the government; that Delchamps
could have been charged with the more serious offense of money
laundering if not for his plea agreement; and that the issuance of
the § 5K1.1 letter for sentencing purposes was within the
discretion of the government. Based upon these facts, the jury
could have inferred that Delchamps was a biased witness.11 We
therefore hold that the district court's restrictions on cross-
9
Davis v. Alaska, 415 U.S. 308, 318,
94 S. Ct. 1105, 1111,
39 L. Ed. 2d 347 (1974); see also Delaware v. Van Arsdall,
475 U.S.
673, 680,
106 S. Ct. 1431, 1436,
89 L. Ed. 2d 674 (1986) (citing
Davis).
10
See Elliott, 571 F.2d at 909 (quoting Gordon v. United
States,
438 F.2d 858, 865 (5th Cir.), cert. denied,
404 U.S. 828,
92 S. Ct. 139,
30 L. Ed. 2d 56 (1971)).
11
We further note that while instructing the jury, the
district court apprised the jury that "the government called as two
of its witnesses Jerry Delchamps and Lloyd Hoffman, with whom the
government has entered into plea agreements providing for the
dismissal of some charges and lesser sentences than they would
otherwise be exposed to or for the offenses to which they pled
guilty."
-5-
examination neither violated the dictates of the Sixth Amendment,
nor were so prejudicial as to constitute an abuse of discretion.12
B
Restivo next contends that the district court's jury
instruction regarding the money laundering counts of the
indictment, impermissibly altered the indictment. Counts 7, 8, and
9 of the indictment charged Restivo with money laundering. One of
the elements of this offense, as charged in the indictment, was
that Restivo knowingly entered into financial transactions
involving unlawfully-obtained proceeds with the intent to promote
the specified unlawful activity of bank fraud charged in Count 2.
When instructing the jury on this element, the district court
failed to mention bank fraud. Instead, the court instructed the
jury that the term "specified unlawful activity" includes "theft,
embezzlement or misapplication by a bank officer or employee."
Restivo argues that the variance between the instruction and the
indictment amounted to a constructive amendment of the indictment
warranting reversal. Because Restivo did not raise this alleged
error before the district court, we review the court's instruction
12
See United States v. Vasilos, 598 F.2d 387, 390 (5th
Cir.), cert. denied,
444 U.S. 932,
100 S. Ct. 277,
62 L. Ed. 2d 190
(1979) (holding that defendant was not prejudiced by the
restrictions placed on his counsel's cross-examination of key
government witness, where "[t]he jury was sufficiently apprised of
other bases on which [the defendant's] credibility was vulnerable
to attack");
Elliott, 571 F.2d at 909 (holding that restrictions
placed upon defense counsel's cross-examination did not violate
Sixth Amendment violation where "the jury was well aware of the
fact that most of the government's witnesses were co-conspirators
and convicted felons, testifying under grants of immunity and other
agreements with the prosecution").
-6-
for plain error.13 Plain error is error so obvious and substantial
that failure to notice it would affect the fairness, integrity, or
public reputation of the judicial proceedings and would result in
manifest injustice.14
The Fifth Amendment guarantees that a criminal defendant will
be tried only on charges presented in a grand jury indictment.
"Incident to this constitutional guarantee is the longstanding
principle of our criminal justice system that the charges contained
in an indictment may not be broadened or altered through amendment,
except by the grand jury itself."15 An amendment may be explicit,
implicit, or constructive.16 In deciding whether the district
court's jury instruction amounted to a constructive amendment of
the indictment, we must determine whether the instruction permitted
the jury to convict the defendant on a factual basis that
effectively modified an essential element of the offense charged.17
If so, then reversal is required because the defendant may have
13
See United States v. Mize, 756 F.2d 353, 355 (5th Cir.
1985) (reviewing alleged error in jury instruction for plain error
where no objection made at trial), cert. denied,
484 U.S. 943,
108
S. Ct. 328,
98 L. Ed. 2d 355 (1987); United States v. Fitzpatrick,
581 F.2d 1221, 1223 (5th Cir. 1978) (same).
14
United States v. Lopez, 923 F.2d 47, 50 (5th Cir.), cert.
denied, ___ U.S. ___,
111 S. Ct. 2032,
114 L. Ed. 2d 117 (1991).
15
United States v. Chandler, 858 F.2d 254, 256 (5th Cir.
1988) (citing Stirone v. United States,
361 U.S. 212, 215-17,
80
S. Ct. 270, 272-73,
4 L. Ed. 2d 252 (1960)).
16
Id.
17
See United States v. Doucet,
994 F.2d 169, 172 (5th Cir.
1993);
Mize, 756 F.2d at 355; United States v. Young,
730 F.2d 221,
223 (5th Cir. 1984).
-7-
been convicted on a ground not charged in the indictment.18 If not,
then the district court's "refusal to restrict the jury charge to
the words of the indictment is merely another of the flaws that mar
its perfection but do not prejudice the defendant."19
Restivo was charged with, as an essential element of the money
laundering counts, conducting financial transactions with the
intent to promote the specified unlawful activity of bank fraud.
Although the district court instructed the jury that the term
"specified unlawful activity" includes theft and embezzlement, we
disagree with Restivo's assertion that the inclusion of these terms
amounted to a constructive amendment of the indictment. The
government did not offer and the district court did not permit in
evidence, any facts to support these alternative bases of proving
the "intent to promote" element of money laundering. Consequently,
there is no possibility that the jury was permitted to convict
Restivo))in view of the trial evidence))on a ground (the intent to
promote theft or embezzlement) not charged in the indictment.20
18
Young, 730 F.2d at 223; see
Stirone, 361 U.S. at 213, 80
S. Ct. at 271 ("The crucial question . . . is whether [the
defendant] was convicted of an offense not charged in the
indictment.").
19
Young, 730 F.2d at 223 (quoting United States v. Ylda,
653 F.2d 912, 914 (5th Cir. Unit A 1981)).
20
See United States v. Slovacek, 867 F.2d 842, 847 (5th
Cir.) ("If the court, through its instructions and facts it permits
in evidence, allows proof of an essential element of a crime on an
alternative basis permitted by the statute but not charged in the
indictment, per se reversal is required." (emphasis added)), cert.
denied, 490 U.S. 1094,
109 S. Ct. 2441,
104 L. Ed. 2d 997 (1989);
Ylda, 653 F.2d at 914 (holding that the evidence actually presented
raised no possibility that the defendant's conviction was based on
anything other than the facts set forth in the indictment).
-8-
The district court's definition of the term "specified
unlawful activity" to include misapplication by a bank officer also
did not amount to a constructive amendment of the indictment.
Again, the money laundering counts of the indictment charged
Restivo with conducting financial transactions with the intent to
promote the bank fraud described in Count 2 of the indictment.
According to Count 2, Restivo accomplished this bank fraud "by
means of false and fraudulent pretenses and representations as to
the bank's profitability by continuing to fund the operations of
Dixie Lloyd's and related companies." It is undisputed that
Restivo was able to fund Dixie Lloyds's operations through his
misapplication of bank funds, which is detailed in Count 5 of the
indictment. Because the misapplication by a bank officer was
included in the indictment's description of bank fraud, there is no
possibility that Restivo was convicted upon a ground (the intent to
promote the misapplication by a bank officer) not charged in the
indictment.21 The district court apparently defined the term
"specified unlawful activity" to include a predicate of bank fraud,
21
We further note that the government's theory at trial for
proving money laundering did not diverge from the indictment))i.e.,
that Restivo acted with the intent to promote bank fraud. This is
evident from the government's final argument to the jury:
Count 7 is money laundering. Money laundering. What
essentially that boiled down to is basically elements.
You got an illegal activity such as misapplication. You
got a financial transaction; that is, the movement of
money by financial means. In this case it's a credit
memo. You got this two hundred thousand dollars which
represents Count 7 in the indictment. This money went to
pay off this illegal loan. It promoted the overall bank
fraud which the defendant is charged with.
Record on Appeal vol. 13, at 123-24 (emphasis added).
-9-
rather than the offense of bank fraud itself. We further note that
the district court in no way limited the term "specified unlawful
activity" to only include theft, embezzlement, or misapplication by
a bank officer. We therefore hold that any variance between the
indictment and the jury instruction did not amount to a
constructive amendment of the indictment, and was at most, harmless
error. Accordingly, we find no plain error in the district court's
jury instruction.
C
Lastly, Restivo contends that the evidence was insufficient to
support his convictions on Counts 3, 7, 8, and 9 of the indictment.
Count 3 charged Restivo with executing and attempting to execute a
check-kiting scheme to defraud the Bank, in violation of 18 U.S.C.
§§ 1344, 2. Counts 7, 8, and 9 of the indictment charged Restivo
with money laundering, in violation of 18 U.S.C.
§§ 1956(a)(1)(A)(i), 2.
When deciding the sufficiency of the evidence, we view the
evidence and the inferences that may be drawn from it in the light
most favorable to the verdict, and ask whether a rational jury
could have found the essential elements of the offenses beyond a
reasonable doubt.22 The evidence need not exclude every rational
hypothesis of innocence or be wholly inconsistent with every
conclusion except guilt, provided a reasonable trier of fact based
22
United States v. Pruneda-Gonzalez, 953 F.2d 190, 193 (5th
Cir.), cert. denied, ___ U.S. ___,
112 S. Ct. 2952,
119 L. Ed. 2d
575 (1992).
-10-
upon the evidence could find guilt beyond a reasonable doubt.23 We
further accept all credibility choices which tend to support the
jury's verdict.24
To convict Restivo of bank fraud, the government had to prove
that Restivo knowingly executed a scheme to defraud with the intent
to defraud the Bank.25 A "scheme to defraud" includes any false or
fraudulent pretenses or representations intended to deceive others
in order to obtain something of value, such as money, from the
institution to be deceived.26 A defendant acts with the requisite
intent to defraud if he acted knowingly and with the specific
intent to deceive, ordinarily for the purpose of causing some
financial loss to another or bringing about some financial gain to
himself.27
Although Restivo concedes the existence of the check-kiting
scheme, he argues that he did not know of the kite, and therefore
did not possess the requisite intent to defraud. Proof of an
intent to defraud "may arise by inference from all of the facts and
circumstances surrounding a transaction."28 The evidence showed
23
Id.
24
United States v. Anderson,
933 F.2d 1261, 1274 (5th Cir.
1991).
25
See 18 U.S.C. § 1344; United States v. Saks, 964 F.2d
1514, 1518 (5th Cir. 1992).
26
Saks, 964 F.2d at 1518.
27
Id.
28
United States v. Aubrey,
878 F.2d 825, 827 (5th Cir.),
cert. denied,
493 U.S. 922,
110 S. Ct. 289,
107 L. Ed. 2d 269
(1989).
-11-
that, although Restivo knew Delchamps was writing checks in excess
of $50,000.00 drawn on the Bank and that Delchamps's accounts were
constantly overdrawn, Restivo often authorized payment of
Delchamps's non-sufficient fund checks. The record also
demonstrated that Restivo, when apprised by a subordinate of a
possible check-kiting scheme between the Bank and the Bank of
Louisiana, directed that subordinate to continue accepting checks
from Delchamps which were drawn on the Bank of Louisiana. Based on
this evidence, a rational trier of fact could have found beyond a
reasonable doubt that Restivo knew of the kite and intended to
deceive the Bank. We therefore hold that sufficient evidence
supported his conviction on Count 3.
To convict Restivo of money laundering, the government had to
prove that Restivo: (1) knowing that the property involved in a
financial transaction represented the proceeds of unlawful
activity, (2) conducted or attempted to conduct such a financial
transaction which in fact involved the proceeds of specified
unlawful activity (3) with the intent to promote the carrying on of
specified unlawful activity.29 Restivo's challenge to the
sufficiency of the evidence supporting his convictions on Counts 8
and 9 is derivative of his challenge to the sufficiency of the
evidence supporting his conviction on Count 3. Since we reject his
challenge to Count 3, we also reject his challenge to Counts 8 and
9.
29
18 U.S.C. § 1956(a)(1)(A)(i); United States v. Alford,
999 F.2d 818, 823 (5th Cir. 1993).
-12-
As for Count 7, Restivo argues that he did not act with the
intent to promote the bank fraud described in Count 2. One of the
aspects of the bank fraud cited in Count 2 was a knowing scheme "to
defraud [the] Bank by hiding the financial condition of Dixie
Lloyd[s'] and related companies and their inability to meet their
financial obligations to [the] Bank." The evidence showed that
Restivo used the proceeds of the unauthorized April 11 loan30 to
repay an earlier loan. Based on this transaction, a rational trier
of fact could have found beyond a reasonable doubt that Restivo
intended to hide the true financial condition of Dixie Lloyds from
the Bank, and thus intended to promote bank fraud. We therefore
hold that sufficient evidence supported his conviction on Counts 7,
8, and 9.
III
For the foregoing reasons, we AFFIRM.
30
This loan was charged as a misapplication by a bank
officer in Count 5.
-13-
