Filed: Jan. 08, 2001
Latest Update: Feb. 21, 2020
Summary: [PUBLISH] IN THE UNITED STATES COURT OF APPEALS FILED FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS ELEVENTH CIRCUIT JAN 08 2001 _ THOMAS K. KAHN CLERK No. 97-6342 _ D. C. Docket No. 96-00081-CR-1 UNITED STATES OF AMERICA, Plaintiff-Appellee, versus JAMES HAROLD DENNIS, Defendant-Appellant. _ Appeal from the United States District Court for the Southern District of Alabama _ (January 8, 2001) Before COX, WILSON and GIBSON*, Circuit Judges. _ *Honorable John R. Gibson, U.S. Circuit Judge for the
Summary: [PUBLISH] IN THE UNITED STATES COURT OF APPEALS FILED FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS ELEVENTH CIRCUIT JAN 08 2001 _ THOMAS K. KAHN CLERK No. 97-6342 _ D. C. Docket No. 96-00081-CR-1 UNITED STATES OF AMERICA, Plaintiff-Appellee, versus JAMES HAROLD DENNIS, Defendant-Appellant. _ Appeal from the United States District Court for the Southern District of Alabama _ (January 8, 2001) Before COX, WILSON and GIBSON*, Circuit Judges. _ *Honorable John R. Gibson, U.S. Circuit Judge for the ..
More
[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
JAN 08 2001
________________________ THOMAS K. KAHN
CLERK
No. 97-6342
________________________
D. C. Docket No. 96-00081-CR-1
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
JAMES HAROLD DENNIS,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Alabama
_________________________
(January 8, 2001)
Before COX, WILSON and GIBSON*, Circuit Judges.
_______________________
*Honorable John R. Gibson, U.S. Circuit Judge for the Eighth Circuit, sitting by
designation.
WILSON, Circuit Judge:
James Harold Dennis appeals his sentences and convictions for bankruptcy
fraud, money laundering, wire fraud and bank fraud. For the reasons below, we
affirm all convictions and sentences except those for bank fraud.
I. BACKGROUND
Dennis was convicted of five counts of bankruptcy fraud in violation of 18
U.S.C. § 152, twenty-nine counts of illegal transfer of funds (money laundering) in
violation of 18 U.S.C. § 1956(a)(1)(B)(i), two counts of wire fraud in violation of
18 U.S.C. § 1343 and one count of bank fraud in violation of 18 U.S.C. § 1344.
He was sentenced to 60 months of imprisonment for the bankruptcy fraud and wire
fraud counts, to be followed by three years of supervised release. He was
sentenced to 125 months of imprisonment for the money laundering counts and
bank fraud to be followed by five years of supervised release. His prison terms
were to run concurrently for a total of 125 months and his supervised release terms
were to run concurrently for a total of five years.1
In 1988, Dennis formed Callen, Inc. (“Callen”) for the purpose of
establishing and managing several convenience stores in Alabama and Mississippi.
Dennis was the president and 100% owner of Callen. In 1988, Dennis also
1
The jury found Dennis not guilty on counts three, seven and eight (one count of
bankruptcy fraud and two counts of money laundering). The government voluntarily dismissed
counts nine and ten for money laundering.
2
established R.A.D., Inc. (“R.A.D.”). Later that year, acting on Callen’s behalf,
Dennis purchased the assets and assumed the debts of Dottley/Garner Investments
(“Dottley”), a Mississippi company that owned and operated convenience stores.
At the time of the transaction, Dottley was involved in Chapter 11 bankruptcy
proceedings. Because Dennis was a convicted felon, he could not obtain a liquor
or gas license in Mississippi, which was necessary to operate a convenience store.
To be able to control Callen’s newly acquired Mississippi convenience stores,
Dennis appointed Doyce Reeves as president and 100% owner of R.A.D. Reeves
later sold all of R.A.D.’s stocks to Dennis for ten dollars. In 1990, Dennis and
Reeves filled out the pertinent Mississippi licensing forms.
On April 2, 1991, Callen filed for Chapter 11 bankruptcy. As we shall
discuss in greater detail, the government presented evidence at trial that Dennis (1)
transferred money from Callen’s bank accounts into his personal accounts without
reporting the transfers on his bankruptcy petition; (2) falsely stated that Callen had
no bank accounts; transferred money from Callen bank accounts to his brother and
failed to list them on his bankruptcy petitions; (3) back dated sales receipts to
demonstrate that all of Callen’s assets were sold to R.A.D. so that they could not be
reached by the bankruptcy court; (4) destroyed documents related to Callen’s
3
financial affairs; and (5) wrote bad checks, impersonated a bank official and forged
an attorney’s signature .
The issues on appeal are: (1) whether the district court amended the
indictment when it instructed the jury on the elements of bankruptcy fraud; (2)
whether there was a variance between the indictment and the evidence presented at
trial; (3) whether there was sufficient evidence to support Dennis’s convictions for
bankruptcy fraud, money laundering, wire fraud and bank fraud; (4) whether the
indictment and district court’s instructions deprived Dennis of a unanimous verdict
and whether count one was duplicitous; (5) whether the district court erred in
applying the money laundering sentencing guidelines; (6) whether the district court
erred in determining the amount of loss; (7) whether the district court improperly
grouped counts and (8) whether the district court erred in computing Dennis’s
criminal history points.
II. DISCUSSION
(1) Jury Instruction on Bankruptcy Fraud
Dennis contends that the district court amended the indictment when it
instructed the jury on bankruptcy fraud by omitting the term “creditors,” and
substituting the term “custodian of the Bankruptcy Court.” The superseding
indictment charged that Dennis “knowingly and fraudulently did conceal property
4
belonging to Callen, a debtor in a case under Title 11, . . . , from the United States
Bankruptcy Court, . . . and from creditors . . . .” The district court gave the
following jury instruction for bankruptcy fraud:
The defendant can be found guilty of [bankruptcy fraud] only if all the
following facts are proved beyond a reasonable doubt . . . Second, the
defendant knowingly and fraudulently concealed the property
discussed in the indictment from the custodian of the Bankruptcy
Court and the property belonged to the estate of the debtor.
Dennis failed to raise this argument before the district court. Therefore, we apply
the plain error standard of review, inquiring whether an error occurred, whether the
error was plain and whether the error “affected substantial rights.” United States v.
Mitchell, 146 F.3d 1338, 1342 (11th Cir. 1998).
An amendment to an indictment occurs “when the essential elements of the
offense contained in the indictment are altered to broaden the possible bases for
conviction beyond what is contained in the indictment.” United States v. Keller,
916 F.2d 628, 634 (11th Cir. 1990). The jury instruction on bankruptcy fraud did
no such thing. It tracked the language of the statute and comported with the
indictment.
Pursuant to 18 U.S.C. § 152(1) “a person who . . . knowingly and
fraudulently conceals from a custodian, trustee, marshal or other officer of the
court charged with the control or custody of property, or, in connection with a case
5
under title 11, from creditors or the United States Trustee, any property belonging
to the estate of a debtor” shall be fined and/or imprisoned. 18 U.S.C. § 152(1).
“Custodian” is defined by Title 11 as a “trustee, receiver, or agent under
applicable law . . . that is appointed or authorized to take charge of property of the
debtor for the purpose of . . . general administration of such property for the benefit
of the debtor’s creditors.” 11 U.S.C. § 101 (11)(C). Custodians are appointed by
the bankruptcy court. See id. Lonnie Mixon was appointed as the trustee of the
bankruptcy estate and Travis M. Bedsole was appointed as the bankruptcy
administrator. The trustee and administrator are “custodians” under the plain
meaning of 11 U.S.C. § 101(11)(C). Essentially, the custodian is a “custodian of
the bankruptcy court.” United States v. Greenwood,
74 F.3d 1241 (6th Cir. 1996)
(unpublished). Custodians or trustees “‘are creatures of the Bankruptcy Act.’” In
re Red Carpet Corp. of Panama City Beach v. Miller,
708 F.2d 1576, 1578 (11th
Cir. 1983). As the trial testimonies illustrate, they are entrusted with the
administration of property in the bankruptcy court’s custody. See 11 U.S.C. §
101(11)(C); In re Red
Carpet, 708 F.2d at 1578. However, the bankruptcy court is
the “ultimate custodian” of the estate. See
id. at 1578-79.
Under either a strict or broad construction of the term “custodian,” the
indictment’s inclusion of the term “bankruptcy court” rather than “custodian” does
6
not render it infirm. The indictment comports with 18 U.S.C. § 152(1).
Furthermore, the indictment also included the term “creditors” as a victim of the
bankruptcy fraud. It cannot be disputed that the creditors of the bankruptcy estate
were entitled to the concealed monies. See United States v. Levine, 970 F.2d 681,
686 (10th Cir. 1992).
The jury instruction did not amend the indictment by including the phrase
“custodian of the bankruptcy court.” It comports with 18 U.S.C. § 152(1). The
district court did not plainly err in giving the instruction.
(2) Variance Between Indictment and Evidence at Trial
Dennis contends that there was a fatal variance between the indictment and
the proof at trial. According to Dennis, the indictment charged him with
knowingly concealing property from the bankruptcy court and creditors; however,
the government proved only that he made a false oath to the bankruptcy court and
not that he concealed anything from creditors.
Because Dennis failed to raise this argument at the trial level, we review it
under the plain error standard. See Mitchell, 146 F.3d at 1342. “The standard of
review for whether there is a material variance between the allegations in the
indictment and the facts established at trial is twofold: First, whether a material
variance did occur, and second, whether the defendant suffered substantial
7
prejudice as a result.” United States v. Chastain, 198 F.3d 1338, 1349 (11th Cir.
1999). The first prong of this test is not met because no material variance
occurred.
Counts one, two, four and five of the superseding indictment charge Dennis
with knowingly and fraudulently concealing property belonging to Callen from the
bankruptcy court and creditors in violation of 18 U.S.C. § 152. Count six alleges
that Dennis “knowingly and fraudulently did conceal, destroy, and mutilate books,
documents, records and papers relating to the property and financial affairs of
Callen Corporation, a debtor in a case under Title 11, . . . , in violation of” 18
U.S.C. § 152.
One can violate 18 U.S.C. § 152 if he “knowingly and fraudulently conceals
from a custodian, trustee, marshal, or other officer of the court charged with the
control or custody of property, or, in connection with a case under title 11, from
creditors or the United States Trustee, any property belonging to the estate of a
debtor;” or “knowingly and fraudulently makes a false oath or account in or in
relation to any case under title 11.” 18 U.S. C. § 152(1), (2). The government
charged Dennis with concealment in violation of 18 U.S.C. § 152(1) rather than
with making a false oath under 18 U.S.C. § 152(2).
8
Whether property is part of the bankruptcy estate is a factual issue for the
jury. See United States v. Blane, 375 F.2d 249, 252-53 (6th Cir. 1967) (approving
jury instruction that included requirement of jury finding that property in question
belonged to the bankruptcy estate); Greenwood,
74 F.3d 1241. There was
sufficient evidence from which a jury could conclude that Dennis concealed assets
belonging to the bankruptcy estate by failing to disclose on his bankruptcy filings
numerous bank accounts in the name of Callen, transfers from Callen to other
accounts, a transfer of inventory to R.A.D., and an account receivable that
Mantissa Corporation owed Callen. The government also proved that Dennis
destroyed documents related to Callen’s financial affairs. Dennis’s failure to
disclose the existence of property belonging to Callen’s (the debtor’s) estate
constitutes concealment. See United States v. Ward,
197 F.3d 1076, 1080 (11th
Cir. 2000) (defendant concealed property belonging to the bankruptcy estate by
failing to disclose it on his bankruptcy petition).
Upon our careful review of the record, we find no variance between the
indictment and the proof at trial.
(3) Sufficiency of the Evidence
Dennis contends that the evidence was insufficient to support his convictions
9
for bankruptcy fraud, money laundering, wire fraud and bank fraud. “Whether
there is sufficient evidence to support the convictions is a question of law subject
to de novo review.” United States v. Majors, 196 F.3d 1206, 1210 (11th Cir.
1999), cert. denied, ___U.S.___,
120 S. Ct. 2022 (2000). We review the evidence
in the light most favorable to the government, making all reasonable inferences and
credibility determinations in its favor. See
id. Applying this standard of review,
we address each offense in turn.
a. Bankruptcy Fraud
Based on the evidence presented at trial, a reasonable jury could have found
Dennis guilty of five counts of bankruptcy fraud for concealing property belonging
to the bankruptcy estate. We need not discuss each of the numerous items that
Dennis was charged with concealing.
Among other things, Dennis was required to disclose all bank accounts in
which the debtor (Callen) had any interest as well as any transfer of Callen assets
within one year preceding the commencement of the bankruptcy case. See 11
U.S.C., Official Bankruptcy Form 7. The bankruptcy estate includes “all legal or
equitable interests of the debtor in property as of the commencement of the
[bankruptcy] case.” 11 U.S.C. § 541(a)(1). Dennis did not disclose the property
alleged in the indictment on his bankruptcy schedules or statement of financial
10
affairs. He indicated that Callen had no bank accounts and no interest in any bank
account. During his deposition, he testified that no bank accounts were in Callen’s
name. However, at trial the evidence established that Callen owned or had an
interest in fifty-five bank accounts. In September, 1991, Dennis’s accounting firm
compiled a quarterly balance statement showing that Callen retained fifty bank
accounts and had extensive assets. At trial, FBI Special Agent Tim Turner
explained that each of the accounts were in the name of Callen or contained funds
transferred from Callen within two years of the bankruptcy filing.
Dennis contends that none of these accounts belonged to Callen because
R.A.D. purchased them in 1990. This contention is belied by the evidence which
demonstrates that when R.A.D. filed for bankruptcy, none of the accounts
allegedly transferred in 1990 were contained in R.A.D.’s financial disclosure.
Dennis also failed to disclose a transfer of inventory to R.A.D.. The president of
R.A.D. confirmed that no money was paid for the inventory and that he knew
nothing about the sale. R.A.D.’s tax filings showed that it had no income and only
$1,000 in assets.
The evidence at trial also established that Dennis concealed property from
the bankruptcy court by transferring approximately 1.8 million dollars from Callen
bank accounts to his personal accounts. These transfers were not reported on his
11
bankruptcy filings. At trial, it was further proven that Dennis transferred over four
hundred thousand dollars from Callen accounts to his brother and that his brother’s
company, Mantissa Corporation, owed Callen money as an account receivable.
Neither the account receivable nor the transfers were reported on the bankruptcy
filings.
At trial, the government proved that Dennis destroyed or concealed financial
documents relating to Callen. He paid someone to shred Callen documents which
were taken to a landfill. He asked Callen’s computer analyst to duplicate Callen’s
books under the name of R.A.D.. He told the computer analyst that lightening
struck Callen’s computer and erased selected files, and he also asked the analyst to
delete more files. When the bankruptcy trustee went to inspect Callen’s
documents, Dennis told him that Callen did not have any documents. The trustee
did not find any documents relating to Callen. However, when the government
subpoenaed Dennis’s accounting firm’s records, they indicated that Callen had
numerous financial records which revealed that Callen had fifty bank accounts
with a total balance of over $500,000 at the time the bankruptcy petition was filed.
12
Based upon the foregoing evidence, a reasonable jury could conclude that
Dennis was guilty of the five counts of bankruptcy fraud for which he was
convicted, beyond a reasonable doubt.
b. Money Laundering
Dennis was convicted of twenty-nine counts of money laundering (illegal
transfer of funds) in violation of 18 U.S.C. § 1956 (a)(1)(B)(i). It was alleged that
Dennis
knowingly and wilfully did conduct and attempt to conduct the below-
listed financial transactions affecting interstate commerce, that is,
deposits into the below-listed [personal accounts] . . . , which involved
the proceeds of a specified unlawful activity, that is bankruptcy fraud,
a violation of Title 18, United States Code, Section 152, knowing that
the transactions were designed in whole or in part to conceal and
disguise the nature, the location, the source, the ownership, and the
control of the proceeds of specified unlawful activity, to wit:
bankruptcy fraud . . . . and that while conducting and attempting to
conduct such financial transactions the defendant knew that the
property involved in the transactions, that is the deposits . . .
represented the proceeds of some form of unlawful activity . . . all in
violation of Title 18, United States Code, Sections 1956(a)(1)(B)(i)
and Section 2.
A defendant violates 18 U.S.C. § 1956 if “knowing that the property
involved in a financial transaction represents the proceeds of some form of
unlawful activity, [he] conducts or attempts to conduct such a financial transaction
which in fact involves the proceeds of specified unlawful activity. . .knowing that
the transaction is designed in whole or in part . . . to conceal or disguise the nature,
13
the location, the source, the ownership, or the control of the proceeds of specified
unlawful activity . . . .” 18 U.S.C. § 1956(a)(1)(B)(i); see also Ward, 197 F.3d at
1083 (citation omitted) (“To obtain a conviction under § 1956(a)(1)(B)(i), the
government must prove beyond a reasonable doubt ‘that the party engaged in the
transaction knew that the funds used represented, in whole or in part, proceeds of a
specified unlawful activity.’”).
An element of the offense is a transaction involving a financial institution.
This “‘includes a deposit, withdrawal, transfer between accounts, exchange of
currency, loan, extension of credit, . . . or any other payment, transfer, or delivery
by, through, or to a financial institution, by whatever means effected.’” Id.
(quoting 18 U.S.C. § 1956(c)(3)). The statute also requires a “specified unlawful
activity” to predicate money laundering. The phrase “specified unlawful activity”
includes bankruptcy fraud proscribed by 18 U.S.C. § 152. See
id. at 1081-82.
The government proved that Dennis engaged in transfers from the concealed
Callen bank accounts into his personal accounts. At trial, Special Agent Ruth
Frazier traced every check, listed in the money laundering counts of the indictment,
which Dennis sent from a Callen account to his personal brokerage accounts. The
funds were concealed from the bankruptcy court. Dennis failed to disclose these
funds, and thus kept them beyond the reach of the bankruptcy court. See Ward,
14
197 F.3d at 1080 (defendant concealed property belonging to the bankruptcy estate
by failing to disclose it on his bankruptcy filings); United States v. Thayer,
204
F.3d 1352, 1354-55 (11th Cir. 2000) (defendant funneled profits from one
company to other companies and fictitious business accounts and then into her
personal account; evidence was sufficient to prove that she intended to conceal the
funds). Additionally, while under Chapter 7 bankruptcy and therefore under the
control of the trustee, Dennis directed a bank employee to wire funds from a Callen
account to the Mantissa Corporation. Dennis had no authority to make this transfer
and it was not disclosed to the trustee or the bankruptcy court.
Viewing the evidence and all reasonable inferences therefrom in the light
most favorable to the government, a reasonable jury could have concluded that
Dennis fraudulently concealed property belonging to the bankruptcy estate because
he knowingly withheld information related to the property and acted to prevent the
discovery of the property, thereby intending to deceive the bankruptcy court, the
estate’s creditors, or the custodian. This resulted in financial loss to the estate and
financial gain to Dennis. See Ward, 197 F.3d at 1080; see also Merriam Webster’s
Collegiate Dictionary 238 (10th ed. 1996) (“concealment” is defined as preventing
disclosure or recognition or placing out of site).
15
The property itemized in the indictment came from an unlawful source
because it “emanated from a bankruptcy fraud.” Levine, 970 F.2d at 686. There
was sufficient evidence from which a reasonable jury could conclude that Dennis
was guilty of the money laundering offenses beyond a reasonable doubt.
c. Wire Fraud
Under 18 U.S.C. § 1343, one who “having devised or intended to devise any
scheme or artifice to defraud, or for obtaining money or property by means of false
pretenses, representations, or promises, transmits . . . by means of wire, . . . in
interstate . . . commerce, any writings, . . . or sounds for the purpose of executing
such scheme or artifice” shall be fined and/or imprisoned. 18 U.S.C. § 1343. To
obtain a conviction for wire fraud, the government was required to prove that
Dennis “intentionally participated in a scheme to defraud” and that he “used wire
communications to further that scheme.” United States v. Brown, 40 F.3d 1218,
1221 (11th Cir. 1994).
The trial evidence established that Dennis wrote numerous checks when
there were insufficient funds in R.A.D.’s account at the People’s Bank. The checks
were made out to Ed Garner for fuel shipments. Dennis called Garner’s bank
impersonating an employee of People’s Bank and told the person he spoke to that
Dennis’s insufficient checks were attributable to a computer error by People’s
16
Bank. The evidence demonstrated that no employee of People’s Bank actually
made the call and that People’s Bank did not have any computer problems.
Dennis’s voice was positively identified as the caller. The evidence established
that Dennis wrote approximately forty-two insufficient fund checks and that
Dennis forged a letter from his attorney stating that the overdrawn account was the
attorney’s fault.
Presented with the foregoing evidence, a reasonable jury could conclude that
Dennis was guilty of wire fraud beyond a reasonable doubt.
d. Bank Fraud
Count forty-four of the indictment charges Dennis with bank fraud. Bank
fraud is established under two alternative methods. See United States v. Mueller,
74 F.3d 1152, 1159 (11th Cir. 1996). To prove bank fraud under section 1344(1),
the government must establish “that the defendant (1) intentionally participated in
a scheme or artifice to defraud another of money or property; and (2) that the
victim of the scheme or artifice was an insured financial institution.” United States
v. Goldsmith,
109 F.3d 714, 715 (11th Cir. 1997); see also 18 U.S.C. § 1344(1).
To prove bank fraud under section 1344(2), the government must establish “(1)
that a scheme existed in order to obtain money, funds, or credit in the custody of
the federally insured institution; (2) that the defendant participated in the scheme
17
by means of false pretenses, representations or promises, which were material; and
(3) that the defendant acted knowingly.” Goldsmith, 109 F.3d at 715; see also 18
U.S.C. § 1344(2). A conviction can be sustained under either section when the
indictment and jury instructions, as in this case, charge both clauses. See
Goldsmith, 109 F.3d at 716.
Dennis contends that the evidence does not establish fraud or that the banks
allegedly defrauded were insured by the Federal Deposit Insurance Corporation
(FDIC). “Proof of federally-insured status of the affected institution is, for . . .
section 1344 . . . a jurisdictional prerequisite as well as an element of the
substantive crime.” United States v. Key, 76 F.3d 350, 353 (11th Cir. 1996). The
contention that this element was not proved is a challenge to the sufficiency of the
evidence. See
id. Therefore, we view all evidence and reasonable inferences from
the evidence “in the light most favorable to the verdict.”
Id.
The evidence at trial established that Dennis devised a scheme to obtain
money by conducting a check kite where he would deposit insufficient funds
checks drawn on a Callen account at Commercial Bank into his checking account
at Deposit Guaranty National Bank and by writing checks on Callen’s account,
knowing that the account had insufficient funds. Dennis had signatory authority
over both accounts and signed checks from both accounts.
18
The testimony of FBI Special Agent Charles English was equivocal about
whether Commercial Bank and Deposit Guaranty National Bank were federally
insured. Defense counsel’s cross-examination of Agent English was as follows:
Q: Are these national banks that are involved in this case, sir?
A: When you say a “national bank” what are you referring to?
Q: Nationally chartered bank, banks chartered under the national laws
of the [U]nited [S]tates.
A: Federally insured bank sir?
Q: Yes, sir.
A: Yes, sir.
Q: Both of them? Do you know?
A: I would have to look at the bank-- state certificate, the federal
certificate to state for sure.
Q: Is the answer then--
A: I have not physically looked at the certificate for these banks.
Q: Is the answer then that you don’t know?
A: I have been told by bank officials that they are federally insured. I
cannot–I did not go any further, I took their word for it.
Q: You are telling this jury that both of these banks are national
banks?
A: Federally insured banks.
Q: What are the name[s] of these banks, sir?
A: Commercial State Bank.
Q: Let’s stop on that one, sir. Commercial State Bank, do you see the
word national in the name of Commercial State Bank?
A: No, sir.
Q: Do you?
A: No, sir.
Q: Pardon me?
A: No, sir.
Q: Are you aware of the law that requires the use of the word national
in nationally charted (sic) banks?
A: All I am aware of is that it’s federally insured?
Q: I do know whether it’s a national bank?
19
[Assistant U.S.] Attorney: Objection, I think its been asked and
answered.
The Court: Yeah, sustained.
[Defense Counsel]: Q: What is the name of the other bank sir?
A: Deposit Guarant[y] National Bank.
Q: Do you know whether it’s a national bank?
A: The name implies it, until I see the certificate.
Q: Do you know the difference in float time that would be applicable
to a state bank as opposed to a national bank?
...
A: I know how the system runs. I know how it pertains on bank
fraud. I am not an expert on the banking system. Just on bank fraud
and check kiting as a form of bank fraud.
Q: Do you know the significance, if any, of one of these banks being a
state bank, if it is?
A: I am not aware of how that would change the flow of money at all,
it does not as far as I am aware.
Although Agent English’s testimony does not establish beyond a reasonable
doubt that Commercial Bank was federally insured, part of an exhibit admitted into
evidence does. Government’s exhibit thirty-four contains a letter from the vice
president and cashier of Commercial Bank to FBI Special Agent Tim Turner. The
letter is printed on bank stationary and contains the phrase “MEMBER FDIC” on
the bottom.
In contrast, none of the documents related to Deposit Guaranty National
Bank
give any indication that the bank was federally insured. Even when viewed in the
light most favorable to the government, the evidence and all reasonable inferences
20
drawn therefrom do not establish that Deposit Guaranty National Bank was
federally insured. The agent’s conclusion that the bank was federally insured
appears to be premised upon his belief that because a bank is a “national bank,” it
is necessarily a “federally insured bank.” This reasoning lacks legal support. A
“national bank” is not necessarily “federally insured.” As demonstrated by
pertinent statutory provisions, the two concepts are distinct and not synonymous.
See 12 U.S.C. § 1813.2
2
Title 12, section 1813, of the United States Code governs banks and banking. Its
definitional section provides in pertinent part:
(a) . . .
(1) Bank
The term “bank” --
(A) means any national bank, State bank, and District bank, and any Federal
branch and insured branch;
...
(2) . . . The term “State bank” means any bank, banking association, trust
company, savings bank, industrial bank (or similar depository institution which
the Board of Directors finds to be operating substantially in the same manner as
an industrial bank), or other banking institution which--
(A) is engaged in the business of receiving deposits, other than trust funds (as
defined in this section); and
(B) is incorporated under the laws of any State or which is operating under the
Code of Law for the District of Columbia (except a national bank),
...
(c) . . .
...
(4) Federal depository institution
The term “Federal depository institution” means any national bank, any Federal
savings association, and any Federal branch.
(5) State depository institution
The term “State depository institution” means any State bank, any State savings
association, and any insured branch which is not a Federal branch.
(d) . . .
(1) National member bank
21
The evidence is insufficient to establish beyond a reasonable doubt that
Deposit Guaranty National Bank was federally insured. Because this element of
the offense was not proven, Dennis’s conviction for bank fraud cannot stand.
Accordingly, we reverse Dennis’s conviction for bank fraud, vacate Dennis’s
sentence for bank fraud ---125 months’ imprisonment to be followed by five years
of supervised release-- and remand the case for re-sentencing.
Remaining Issues
The remaining issues raised by Dennis do not warrant discussion. We
summarily reject Dennis’s contentions with regard to those issues. See 11th Cir.
R. 36-1.3
The term “national member bank” means any national bank which is a member of
the Federal Reserve System.
(2) State member bank
The term “State member bank” means any State bank which is a member of the
Federal Reserve System.
...
(h) Insured bank
The term “insured bank” means any bank (including a foreign bank having an
insured branch) the deposits of which are insured in accordance with the
provisions of this chapter; and the term “noninsured bank” means any bank the
deposits of which are not so insured.
12 U.S.C. § 1813(a), (c), (d), (e), (h).
3
11th Cir. R. 36-1 provides:
When the court determines that any of the following circumstances exist:
(a) judgment of the district court is based on findings of fact that are not clearly
erroneous;
(b) the evidence in support of a jury verdict is sufficient;
22
III. CONCLUSION
There was sufficient evidence to sustain all convictions except that for bank
fraud. We affirm in part, reverse in part and remand the case for re-sentencing.
Convictions and Sentences for bankruptcy fraud, money laundering, and wire fraud
are AFFIRMED.
Conviction for bank fraud is REVERSED. Sentence for bank fraud is VACATED.
The case is REMANDED for re-sentencing.
AFFIRMED in part, REVERSED in part, and REMANDED for re-sentencing.
(c) the order of an administrative agency is supported by substantial evidence on
the record as a whole;
(d) summary judgment, directed verdict, or judgment on the pleadings is
supported by the record;
(e) judgment has been entered without a reversible error of law; and an opinion
would have no precedential value, the judgment or order may be affirmed or
enforced without opinion.
23
