United States v. John Markert
2013 U.S. App. LEXIS 21366
| 8th Cir. | 2013Background
- Markert approved five nominee loans to Wintz and related entities to cover a $1.9 million overdraft from Wintz’s check-kiting scheme.
- Wintz’s scheme triggered a bank loss, leading to charges for Markert (willful misapplication) and other offenses; Wintz (bank fraud) and Pederson (acquitted) were also charged.
- Board and lending limits allowed Markert unilateral authority up to $250,000, with larger loans needing OLC or Board approval; Markert and allies steered approvals.
- Nominee loans were structured to conceal true purpose; proceeds were funneled to Wintz’s accounts to cover the overdraft and avoid regulatory limits.
- An audit in January 2010 revealed the true purpose of the nominee loans; Pinehurst was insolvent and regulators closed the bank within months.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether there was sufficient evidence of willful misapplication | Markert argues there was no conversion; funds remained with bank and were not misused. | Markert contends the five loans were intrabank transfers not causing loss. | Sufficient evidence supported willful misapplication. |
| Whether the jury instructions properly defined willful misapplication and intent to defraud | Markert asserts the instruction allowed conviction without true conversion. | Government contends instructions adequately required intent to defraud and guarded against negligence. | No plain error; instructions properly framed. |
| Whether the nominee-loan instruction improperly merged bank fraud and misapplication theory | Markert argues instruction failed to separate counts and misled about intent. | Instruction correctly tracked applicable law on nominee loans. | Instruction not abuse of discretion. |
| Whether loss calculation for sentence was correct under the guidelines | Loss should reflect net/actual loss, possibly zero, not the nominal loan amounts. | Loss equals misapplied funds, using the five loans’ total. | Remand required to correctly apply the revised loss definition. |
| Whether the Government’s reliance on a broader loss theory was proper under the revised guidelines | Net loss concept should credit loans received and other reductions; actual loss may be zero. | Actual loss theory should reflect misapplied funds and foreseeable harm. | Remand for resentencing; loss calculation to reflect net loss under revised guidelines. |
Key Cases Cited
- United States v. Britton, 107 U.S. 655 (Supreme Court 1883) (defines willful misapplication as conversion for use by self or others with intent to defraud)
- United States v. Barket, 530 F.2d 181 (8th Cir. 1975) (conversion of bank funds for personal or third-party use with intent to injure the bank)
- United States v. Mohr, 728 F.2d 1132 (8th Cir. 1984) (misapplication covers unauthorized and improper conduct; conversion notion)
- United States v. Willis, 997 F.2d 407 (8th Cir. 1993) (nominee loans and related bank-fraud concepts)
- United States v. Dougherty, 763 F.2d 970 (8th Cir. 1985) (using unapproved instruments to conceal overdrafts—willful misapplication)
- Mullins v. United States, 355 F.2d 883 (7th Cir. 1966) (funds need not be withdrawn to constitute misapplication; concealment can suffice)
- United States v. Steffen, 641 F.2d 591 (8th Cir. 1981) (nominee loans to conceal true borrower’s actions; relevance of intent)