United States v. John A. Kroh, Jr.

ardson, however, the trial court redacted all admitting references to Marsh before America, Appellee, UNITED STATES of her co-defendant’s confession. Marsh com v.

plained coupled that when her own testimony, placed her at the scene of KROH, Jr., Appellant. John A. events described in the co-defendant’s con No. 89-1070. fession, the redacted statement still violat rejected ed Bruton. The Court this con Appeals, tention, holding that “the confession was Eighth Circuit. incriminating face, on its and became only so linked with evidence when later 11, Sept. Submitted 1989. (the introduced at trial defendant’s own 2, Decided March 1990. testimony).” 481 at U.S. S.Ct. added). (emphasis In sharp contrast scenario, to the Richardson Bello’s state

ment in through this case was introduced just

the customs officer who had finished

testifying post-arrest investiga about the Bello, Adefuye.

tion of Usman and Aderemi statement, through

Bello’s the use “we,”

pronoun (and did incriminate Usman

Aderemi)1 fairly on its face and cannot pronoun.”2 considered a “neutral Mo Cf. Warden,

nachelli v. Graterford, SCI (3d Cir.1989) (statement

F.2d 752-53

by non-testifying inculpated co-defendant

defendant “my use of terms brother” Bruton);

and “he” and therefore violated Bennett,

United States (11th Cir.1988) (“Far

1141-42 n.& 8 from neutral,

being pronoun ‘they’ clearly [defendants].”).

referred to

Despite disagreement, I am in com-

plete majority's accord with the conclusion

that, event, in any the Bruton violation

was harmless. Bello’s statement was

merely properly cumulative of admitted ev- establishing

idence knowing Usman’s possession

intentional of heroin. I would

affirm Usman’s conviction on this basis. majority,

1. majority As noted correctly Supreme evidence of Ad- 2. The indicates the possession express admissibility Court's eremi’s of the heroin reservation on the discovered in non-testifying post-arrest investigation suppressed co-defendant’s confession "in be- replaced which the defendant’s name has been coercively cause it was obtained in violation of symbol pronoun." with a or neutral See Rich- Therefore, the Fourth Amеndment. we are con- ardson, 481 U.S. at 211 n. 107 S.Ct. at 1709 n. cerned with whether the admission of Bel- agree majority's I cannot with the conclu- lo's statement violated Usman’s confrontation sion, however, that "we” is "neutral" in the con- rights. clause text of this case. Ill., and McGowen, Ellyn, Glen Darrell Mo., for Atwell, City, Kansas E.

Charles appellant. Mo., ap- Larsen, City, Kansas

Robert pellee. LAY, Judge,

Before developed shopping Chief KBDC centers and of- MAGILL, buildings BOWMAN and Circuit fice which were leased to third Judges. parties. The company stock was divided (Jack) Kroh, equally between John LAY, Judge. Chief Kroh, and the family Kroh trust. Jack was Kroh, Jr., appeals

John A. from his con- president of KBDC and was the charges defrauding viction on of three fi- vice-president. chairman and executive nancial institutions. indictment The division of work between the two charged the defendant under count one gave George responsibility brothers for the with to submit false statements development land, leasing piece and of a of banks, (1988); 18 371 U.S.C. counts obtaining partners § well as limited through two making four with false state- developed invest in property. operat- Jack banks, (1988); ments to 18 U.S.C. 1014 ed by the financial end of the § business through eight causing counts five in- managing corporate finances, including wire terstate transmissions made in execu- long-term corporate and short-term debts. defraud, tion of a scheme to 18 undisputed U.S.C. The evidence is that the broth- (1988); nine through get counts twelve ers did not involved in each other’s § of, causing sphere transportation responsibility. interstate fraud, money of taken 18 U.S.C. 2314 § Many of the investments made limited (1988); knowingly count thirteen with re- partners in KBDC-developedproperty were ceiving property that had crossed a state tax shelters. In 1985-86 these investments boundary being unlawfully taken, after appeal lost their anticipated because of an U.S.C. 2315 Kroh was sentenced § change in company’s the tax laws. The count, to the maximum term on each tight cash flow became corporation longest being years, of these with all found itself in difficulty. financial KBDC concurrently. sentences to run previously experienced temporary cash shortages, profits as most of its were appeal challenges

On Kroh the sufficien- earned near the end year. of the calendar cy count, of the evidence for each alleging past, In the Jack and per- obtained requisite intent was not established. help sonal loans to alleviate KBDC’s tem- challenges evidentiary Kroh also rulings of porary cash shortages. proceeds the district in admitting court1 the guilty these loans were transferred from the plea of his brother Kroh as a co- personal brothers’ corporate accounts into conspirаtor; admitting and per- accounts. taining to a “kiting” check scheme which charged. Upon was not full review of the shortage 1986, As result of the cash record we find sufficient evidence to sus- capi- dire need arose to borrow additional except tain Kroh’s conviction as to the tal company. company’s for the lines find, charged conspiracy. We also how- credit, point, at this were longer no ever, in light of the insufficient evidence to open. loans, proceeds Personal conspiracy charge sustain the that George KBDC, which were turned over to were guilty plea was inadmissible and therefore George’s taken out Jack and prejudicial constitutes error. On this basis names. The number of loans judgment we vacate the of conviction and greatly however, increased due to remand to the district court for a new trial. shortage. severe cash Three

loan transactions from 1986 form the basis BACKGROUND government’s prosecution. Kroh Development Company Brothers Southwest Bank Omaha (KBDC) Missouri, City, was a Kansas cor- poration which has been involved in com- president Jacob Mondschein ‍​‌​‌‌​​‌‌​​‌​‌​​‌​‌‌‌​​‌‌‌‌​​‌‌‌​‌​​‌‌​‌​‌​​‌‌‌‌‍was vice development mercial real estate since 1969. finance for and in charge KBDC was of the Whipple, 1. The Honorable Dean souri. Judge District for the Wеstern District of Mis- a million $7 May to the On control. flow and cash

company’s discovered October kite met check Jack Kroh and Mondschein presented Bank Missouri United Karlin, 1986 when president Southwest with Gerald payment Commerce Omaha, the status checks to discuss several Bank of per- Kroh, Mond- requested also Jack loan. Jack Bank.4 corporate himself $250,000 subse- executives and other KBDC schein loans sonal purpose Bank officials. brother, representing Commerce met with quently with a investment” “personal told that KBDC allegedly as a loans The bank re- firm. Karlin problems that York investment New cash flow experiencing from current estate quested by several real alleviated there- Jack George. both Jack before expected close were deals that individual forwarded after year. Commerce Bank the end assets of had each showing the brothers simply as an the matter agreed to treat govern- and, according to the million kite, $21 con- a and overdraft, than rather The in liabilities.2 million ment, only $3.3 and the defendant that it a sidered loan on the name George’s signed defendant guaranteed. personally George by J.K.”3 “George P. as statement subject of not the transaction This promis- returned subsequently Mondschein through brought out but an indictment the with Bank to Southwest sory notes The witnesses. testimony of several the the (both signed signatures brothers’ admissability, to its objected defendant to wire the the bank notes), directed and impact far out- alleging prejudicial its ac- the brothers’ proceeds to loan district The probative value. weighed its City. in Kansas at banks counts evidence, the defen- and the court allowed evidence offered government The in court. ruling challenges that dant finan- of his the date as of liabilities Jack’s evidence urges that the government The $6,948,- 1986, 8, statement, were May cial Fed.R. under admissible was material and George had date the same that on and knowl- intent and 404(b) it showed as Evid. money the $6,913,395. After of liabilities defrauding charges of the edge relevant to accounts, the the in was received institutions.5 financial other into a immediately transferred funds were Norbank Bank of Missouri at United account KBDC City. charged bank transaction Kansas second The Octo- 1986. On place mid-October took struggled company Throughout $500,- sought 21, 1986, defendant ber Mond- problems. flow cash severe and for himself personal loans regularly discussed testified schein representing City, in Kansas Norbank from defendant, was ex- and situation per- for be used was to money that the directions Jack’s over tremely distressed project.6 Hall Farm investment sonal According activities. questionable conduct advantage the time of takes holder account dem- balance sheets asserts the defendant 2. account. clear for a check takes liabili- million $1.5 an additional onstrated undisputed. appears to be ties. This trial, we a new remand In view our 5. admissability pass this claim. on need Jack had his testified At the trial 3. over- appraised on the must papers. of such on financial authority sign his name Fed.R.Evid. under new trial all record more or typically two kite involves 4. A check accounts, funds sufficient has none at trial presented defendant Lynch, 6. The being Merrill written. the checks cover personally as invested had brother Smith, he and Fenner, Bank Nat'l Pierce, v. First Inc. & project, Hall Farm Cir.1985). partners limited Rock, Little development. estate real commercial-retail originally be- the kite testified Mondschein project, developer KBDC refers float check "float." A gan a check $500,000 pre- over advanced July, had drawing of a "between of time period partners, Kroh limited As development costs. by present- its ultimate collection check repay obligation to an Thus, his brother a check Id. drawee bank.” to the ment defense Kroh's advanced. funds account, KBDC which the one float involves president Norbank, Victor, letter, $12,105,793. Frank Georgе had liabili- received a letter with George’s August $8,418,395 Jack and ties in and in Novem- $12,480,895. financial statements. The again liabilities figures ber of These did not represented were to be million $3.3 include the per- million Commerce $7 Bank each brother. Jack’s liabilities at that time guaranty. George sonal and Jack both actually $9,659,275, were without consider- signed personal notes for the Firstate ing contingent the million liability loans, $7 proceeds owed immediately were to Commerce Bank aas result of the check corporate transferred to a account. George’s $9,630,895 kite. liabilities were Kroh was called aas and his statement likewise did not disclose witness at the trial. was aware of liability. Commerce Bank again Once KBDC’s financial difficulties in but the monies immediately obtained were seeking involve himself in corporation. transferred to the relief since he considered that his brother’s obtaining Norbank also insisted end of George’s the business. contribution signature of the person- brothers’ wives on remedying shortage the cash was to guaranties. al The evidence showed that secure more investment deals that would secretary defendant’s and George’s sec- provide KBDC with much-needed cash. retary signed Mary Lou Kroh Carolyn The evidence established that Kroh’s guaranties names to the without signеd promissory notes for Southwest their knowledge permission. or Bank, Both Norbank, sec- Savings. and Firstate His they signed retaries testified the wives’ testimony also established that he did this past names in the as a matter of conve- knowing, without at the time of the trans- nience. Significantly, George action, Kroh’s secre- accuracy representations of the tary practice testified this by was directed by made the defendant and the overall cir- Mondschein or company personnel other surrounding procurement cumstances Kroh was never involved. of the loans. Savings

Firstate & Loan APPLICATION OF 18 U.S.C. 2314 & §§ 2315 charged The final loan transaction oc-

curred in mid-November 1986 when the de- challenges defendant his convictions sought fendant personal loans from Firs- under 18 U.S.C. 2314 claiming and 2315 §§ Savings Orlando, tate and Loan in Florida. his conduct does not fall pro- within that On this occasion the defendant by obtained scribed these statutes. These statutes $400,000 George, for both himself and prohibit us- the use of interstate commerce in ing again once the financial transportation of stolen fraudulently or identifying $3.3 million as liabilities. property.7 Once obtained argues The defendant again the represented defendant the loans that since money wire transfers of are no would be used to invest in the Hall Farm more than electronic credits and debits project. The evidence showed that as they “tangible are not goods of value” statement, 15, 1986, date of the August meaning within the of these statutes. $8,400,000, defendant had liabilities of physical Since he did not have pos- actual and as of November 1986 when he sent session and money control of the until it was that the transfer of the Norbank provides: loan funds 18 U.S.C. § 2315 purpose to KBDC was receives, consistent with the stated conceals, stores, possesses, Whoever of the loans. barters, sells, wares, disposes any goods, or merchandise, securities, money or or of the provides: 7. § 18 U.S.C. 2314 * * * $5,000 more, value of or which have transmits, transports, Whoever or transfers in boundary crossed a State or United States foreign any goods, interstate or commerce stolen, converted, being unlawfully after taken, or wares, merchandise, money, securities or stolen, knowing the same to have been $5,000 more, knowing the value of or * * * * converted, taken; unlawfully or Shall stolen, same to have been converted or taken $10,000 * * * imprisoned be fined not more than or fraud; by Shall be fined not more than years, not more than ten or both. $10,000 imprisoned years, or more than ten or both.

1529 account, prerequisite Kroh claims to conviction under section reached argument reject not stolen until after We as incon- money was 2314. transportation. Dowling act of interstate sistent law this circuit. have Three circuits considered “tangible property” argu Dowling essentially copyright involved

rejected Goldberg, infringement, v. provisions ment. United States and the criminal See Cir.1987); (3d v. statute, F.2d 459 copyright U.S.C. § Cir.1986); 791 F.2d 133 Unit Wright, scope This conduct did not fall within the Cir.1982), (2d Gilboe, ed States 18 U.S.C. 2314 since “interference with § denied, 459 U.S. 103 S.Ct. rt. copyright easily equate not does [interests] ce 1185, As L.Ed.2d 432 stated theft, conversion, or fraud.” Dowl court: Gilboe 217,105 at ing, 473 at S.Ct. 3133. The U.S. cov- question whether (“the provi relies [section 2314] statement which Kroh * * * appears transfers of funds ers electronic clearly contemplate seems sion do impression, but we to be one of first subject prior physical taking some regard as a difficult one. Electron- goods”) a requirement is not indicative of the means ic in this context are signals prior literal possession occur act transported. are funds Rather, transportation. it suggests money is beginning of the transaction infringement copyright not result does money in ending one account and deprivation property that section the funds The manner which another. punish. 2314 is intended to id. at See ability to not affect the were moved does 217-18, 105 S.Ct. 3133-34. tangible paper or a bank obtain dollars States, In v. 243 F.2d 327 Loman United In- receiving from the account. check (8th Cir.1957),this court stated: “To consti- deed, suspect that actuаl dollars rare- we offense, transported the property the tute ** banks, any- *. If ly move between must in interstate commerce have been sto- of transfer here were thing, the means have been of that property len and must the fraudulent essential to the success of transported in it was in- character before scheme. commerce.” Id. 329. This terstate Gilboe, 684 F.2d at no of concluded there was violation court sug history of these statutes transporta- section 2314 since interstate concerned with catch gests Congress was prior stealing act occurred to the of tion seeking to detection ing criminals avoid sup- property. Kroh contends Loman v. Dowling crossing state lines. See Unit ports that there must be ac- argument 207, 10, States, n. 473 & 105 ed U.S. 219-20 transpor- prior interstate possession tual 10, 3127, 3134, 152 n. 87 L.Ed.2d S.Ct. tation. (1985) (statutes intended as a method Loman. We Kroh misreads believe crossing attacking problems of criminals whether the act The concern in Loman was detection). The aim of lines to avoid state actually had oc prohibited by the statute fraud; punish is the act the statute transpor time interstate at the curred perpetrator trans by which the the method Here, any at 329. tation occurred. See id. fruits the fraud in interstate ports the place took before fraud that occurred case, Thus, in is irrelevant. commerce money wire transferred banks conduct the statute condemns obtain argument therefore This Kroh’s account. through ing approval for loans the banks’ fails. also allegedly fraudulent means. These stat if properly cover wire transfers utes can OF THE EVIDENCE to transfer fruits

such transfers serve SUFFICIENCY prohibited acts. fraudulent sufficiency challenges Kroh government did evidence, claiming Dowling, Kroh relies on 473 U.S. intent. necessary unlawful 3127, not establish 207, prior for his claim that 105 S.Ct. necessary support a convic- goods The intent is a physical possession of stolen 1530 charged intimately

tion under the offenses can be Kroh was involved KBDC’s demonstrated direct or circumstantial operations. financial The evidence also es- evidence that allows an inference of an tablished that loans were taken v. La See United States unlawful intent. corporate out in some instances because nier, 281, (8th Cir.1988) 838 F.2d 283-84 credit lines of were exhausted. Kroh’s in- v. (18 2314); United States An U.S.C. § company’s op- volvement with the drade, (18 521, (8th Cir.) 788 F.2d ‍​‌​‌‌​​‌‌​​‌​‌​​‌​‌‌‌​​‌‌‌‌​​‌‌‌​‌​​‌‌​‌​‌​​‌‌‌‌‍527 erations and with financial per- institutions fraud), cert. denied U.S.C. 1343—wire § mits the inference rep- that he made these nom., 963, 462, sub 479 U.S. S.Ct. 93 resentations with the intent to conceal the (1986); United States v. Mil L.Ed.2d 408 money fact that the was needed for KBDC. ler, 725 F.2d 462, (8th 1984) (18 Cir. Finally, supports we believe the evidence 2315); United Stаtes v. American U.S.C. § the inference of an unlawful intent with Indus., Related Grain & 763 F.2d respect signature the false on the Nor- (18 Cir.1985) conspiracy); U.S.C. § 371 - guaranty. specifically bank in- Norbank Henderson, formed Kroh the loans would not be made (18 (7th Cir.) U.S.C. 1014-false sta teme § signature guaran- without his wife’s on the denied, banks), cert. nts 454 U.S. ty. signed guaranty submitted 102 S.Ct. 70 L.Ed.2d 139 Norbank, impliedly representing his wife government’s evidence of Kroh’s unlawful signed experience dealing it. Kroh’s liabilities, intent was based on the misstated permits with banks the inference that he representations as to the intended use rely aware the bank would on that loans, signature and the false signature false in approving the loan. We Kroh’s wife on guaranty. the Norbank thus conclude on the basis of the overall that there was sufficient evidence testified that the de- Several witnesses to sustain the burden of solely responsible for the lia- fendant was proof possessed that the req- defendant bility figures on the financial statements uisite intent to charged. commit the crimes procure govern- used to the loans. that at the ment’s evidence demonstrated SUFFICIENCY OF A EVIDENCE OF applied charged each of the time Kroh for CONSPIRACY loans, substantially his liabilities exceeded government Kroh claims the failed knowledgeable million. Kroh was a $3.3 prove the existence of an unlawful businessman, responsibility with for the fi- agreement support conspiracy the operations nancial of a national real estate charge. agreement, The existence of an an development corporation and substantial component essential conspiracy, can be experience dealing jury with banks. The by shown circumstantial evidence of “con reasonably could infer that Kroh was activity certed directed toward achievement substantially his true were aware liabilities American Grain & goal.” of a common reported pic- more than and that the true Indus., Related 763 F.2d at 315. The in negative- ture of his financial status would charged dictment to defraud ly influence the banks’ decision. See by filing financial institutions false finan Henderson, (jury 645 F.2d at 576 could misrepresenting cial statements and in the prior security infer that interest was inten- tended use of the George loans. Kroh was tionally experi- concealed since defendant’s co-conspirator, along named as a with un dealing ence with banks would have co-conspirators. named negative impact him alerted to the of that liability). George having Kroh testified to little

knowledge or involvement with the finan- given intent cial Unlawful could also be inferred side KBDC. Jack representations authority sign from the for him in most as to the intended instanc- use of the loans. The evidence es.8 involvement established did not have testimony, along testimony suggest agency relationship 8. This with an existed between indicat- Jack, ing George may support finding left all financial affairs to and Jack that would an simply signing in some cases tained state the financial preparation relevant documents. to the George’s name obtain banks to the ments submitted the fi loans, not review did was, however, sufficient There promissory notes with Jacob agreement statements an unlawful nancial par testified detail signature. Mondschein Mondschein. submitted meetings and discussions meeting regular with the about his in the October ticipated resolving cash flow the Jack about to that with prior but Bank officials Commerce testified that Jack Mondschein difficulties. ongoing an check time, aware was not banks, loans with up set sub of KBDC’s aware George was kite. to follow Mondschein directed and then difficulties, but concentrated cash stantial necessary paperwork. on the through who securing investors on his efforts giv- of the reasons Mondschein aware only cash. While needed provide person- obtaining and knew all en for loans required connect slight evidence to KBDC. over were turned al loans conspiracy, to a person obviously participation was Mondschеin’s Cir. Richmond, Sig- the scheme. the success of crucial to presented insuf 1983), we find however, proceed- until the nificantly, standard. this meet even ficient to identi- was Mondschein ings in court replete testimony is unrebutted George’s co-conspirator. as.a government fied of non-involvement claims fact that by the are troubled We statements or financial production identified specifically never government During personal loans. procurement of court co-conspirator to the as a Mondschein examination, George reiterated direct to the defendant’s response In jury. or the financial information challenging the post-trial motions pre- and or from his brother came applications loan to disclose the government failure of depart- working KBDC’s people unnamed, co-con- unindicted identity testimony established George’s ments. that it responded government spirators, the circumstances has learned that he case, “open file” on the an had maintained only transactions loan surrounding the needed. were disclosures no further so that demise company’s since the during hearing, nor pre-trial Neither of turn- practice George was aware did the closing statements opening or its the com- proceeds over loan ing personal or identify Mondschein ever government par- no evidence co-conspirator. there is pany, but as a person any other banks. jury to defraud in a scheme identified ticipated co-conspirator George. to no Yet evidence amounts brother defendant’s was the association, insufficient court an to this mere in its brief more than “principal awas Rich- Mondschein See Jacob agreement. claims finding an basis coconspirator.” stated court mond, at 1190. This F.2d 700 Andrade, F.2d 788 v. States United the necessary for is not Although it con- defendant’s success 526: “The [the co-con- an unidentified name government participant upon each depended spiracy] Rodriguez, States see United spirator, furtherance part Cir.1985), his or her (11th we performing 1546, 1552 765 F.2d it of the object scheme the the common the fairness question a motivated purpose relying on Mondschein common was that strategy failing but appeal, Jack’s scheme for this co-conspirator participant.” each fact, jury. The In him as such George’s participation. identify depend on of Mondschein the scheme and cross-examination direct demonstrates the evidence defendant’s establishing the entirely without focused operated have could difficulties knowledge of KBDC’s were ob- since loаns George’s participation, g (Second) Agency comment 34§ princi- statement Basic these agreement facts. based on suggesting (1983). no evidence however, There is assumption. agency, defeat this ples of authority brother went to his acts, grant George's illegal whether "Authority or do tortious defrauding banks. as to authorize criminal, so far readily inferred.” Re- not is or not 1532 participation questionable

and his Evaluating finan the in light record of the ab- practices, sence of establishing George conspired cial rather than evidence that a brother, defraud the banks with his conspiracy. During we find closing argument, its guilty plea erroneously the was admitted. government the relied on Mondschein’stes agree We with the despite defendant that timony only respect with uncharged to the cautionary given by instruction Albert, check kite. United States v. Cf. court, jury once plea, heard the 712, (5th Cir.1982) 2 675 F.2d 713-15 & n. only George obvious inference was “if ad- (where government identified unnamed co- guilt, mitted the defendant must also be conspirators prior to trial and relied on guilty.” conspiracy with those co-con While the may evidence as we review it spirators in presenting jury, case to convic agreement Mondschein, establish an with conspiracy tion on charge upheld). could be jury given was opportunity nеver the trial Since evidence focused on an consider co-conspirator. Mondschein as a alleged illegal George scheme between jury essentially was told Kroh and the defendant there is no means co-conspirator, and since no evidence of to know whether jury verdict is based conspiracy presented, only conspiracy on the proven be- —that George’s plea effectively operated as the tween Mondschein and the defendant. only proof substantive of a conspiracy and uncertainty This becomes critical when the was erroneously therefore admitted. evidence of guilty plea considered. PREJUDICIAL ERROR Having reached this conclusion we GEORGE KROH’S GUILTY PLEA then face question whether the errone government, vigorous over ob ous guilty plea admission of the on the jection, was allowed to introduce in its case conspiracy prejudicial count constituted er guilty plea in-chief the of the defendant's requiring ror a new trial. United States v. brother, George plead Johnson, 331, Kroh. (8th Cir.1989). 879 F.2d guilty ed conspiracy wrongful We feel admission of defen George’s plea overwhelmingly dant question. preju banks in defraud dicial and tainted the government justifies entire trial. The im the affirmative properly guilty plea admitted af proof on the basis thаt it showed the credi fected credibility the defendant’s with re bility par of the witness and his admitted spect to conspiracy charge, severely ticipation conspiracy. See United impaired his defense on the remaining Hutchings, (8th States v. 751 F.2d charges. vigorously The defendant dis Cir.1984), denied, cert. 474 U.S. puted that he acted with intent to defraud S.Ct. 88 L.Ed.2d 75 Neverthe justifications banks and offered credible less, concedes that that, without the impact detrimental of the guilty plea could not be used as substantive guilty plea, may have created reasonable proof itself. United jurors. doubt the minds of some Braidlow, States v. Cir.1986); charges The thirteen all relate to the Hutchings, 751 F.2d at 237. We loans, same three bank and the same false would not difficulty have too much with liabilities, statements —the understated the the admissability plea if in fact there misrepresented purposes, sig- and the false independent was evidence of a nature of his wife—are central to all the between the defendant and Kroh. charges. credibility Kroh’s was essential discussed, however, As we have proof the jury’s to the determination of whether he shows that was not aware of the had made these statements with the intent loans or the surrounding circumstances the to defraud the banks. loans until after the transaction. There is evidence, circumstantial, no direct or that respon- Jack Kroh claimed he was not Kroh entered into conspiracy sible for the understated liabilities. His to question. defraud the three banks in supported by testimony claim was the an of end of for substantially by more the KBDC worked who CPA independent by perti- reimbursed received it was entitled be she matters, testified who from Thus, information ar- partners. financial Jack Kroh personal limited nent the employees. department accounting turning over KBDC gued that out correctly points also The defendant literally a true state- proceeds was loan financial personal the format George owed com- and ment since Jack employ- former statements, designed money project. pany for this for all liabili- accurately account ee, did not also claimed Jack Kroh For exam- liability section. ties within the a false he made “statement” prove as an listed house was ple, Jack Kroh’s guar- submitting to Norbank his wife’s mortgage outstanding was asset, but the signature. There secretary’s anty with with- in the section asset simply identified practice testimony standard liability calcula- being included out sign Mary Lou Kroh’s secretary ‍​‌​‌‌​​‌‌​​‌​‌​​‌​‌‌‌​​‌‌‌‌​​‌‌‌​‌​​‌‌​‌​‌​​‌‌‌‌‍ his assets and out that points tion. He also previously name, his wife had severly undercalculated. and worth were net by the supported practice. The defendant acquiesced in this This claim planning estate prepared for light contended outside-the-company CPA. by an purposes sign, could not be convicted he authority trial, if be- testimony at Thus Jack Kroh’s since the a false statement making for that the defen- lieved, his claim supports made, signature, was his wife’s statement liability and relying on the asset dant was authority to This authorized. claim responsible were that others figures believed, Kroh’s conten- sign, supports if updating. not with made the statement tion that did not misre- contends The defendant the bank’s decision. to influence the intent proceeds loan how the to the banks present credibility was therefore Jack Southwest He informed would be used. counts, and deciding all thirteen crucial to were for proceeds loan Bank that nothing could have been judgment in our investment,” suggested later and “personal than his brother’s prejudicial to him more investment with for an were the funds con- that he had guilty plea accusatory Bank’s docu- Allen.” Southwest “Herb fraud the bank to commit spired Jack only “personal invest- noted mentation credi- the defendant’s question. Where loan. The purpose of ment” as the case, issue, as in this bility a vital contends, the bank official is such and defendant money judge’s caution- placing the trial agreed, that tеstifying do not believe we asset, KBDC, was a largest prejudicial in his diminished ary instruction also testified The bank official investment. plea. erroneously admitted impact of the how bank not matter it did Clair, States St. United supports testimony This used. money was Re- Cir.1988); & Grain American make the did state- the claim that 319-20. Indus., F.2d at lated influence intent ments with re- not reach this Ordinarily, we would loans by promising decision bank’s supports guilt the evidence sult where investment used circumstances Aggravating the verdict. Allen. Herb deci- tactical this case—the the loans told Firstate were Norbank co- principal as its rely on sion to in the Hall Farm were for investment con- lack conspirator, George were limited project. Jack the credible George, and spiracy with develop- commercial-retail in this partners by Kroh—com- presented strong defenses was the family. KBDC Hall ment with the say unable areWe a result. pel such As lim- project. general contractor re- the defendant that confidence with George had an obli- partners, Jack ited having his terms of in fair trial a ceived By costs. development pay to gation from separately credibility assessed approxi- 1986, had advanced KBDC July, plea his brother’s influence costs, substantial $500,000 development in mately guilty.9 particularly compelling We find merits in jurors the minds оf who are regard in this Justice Jackson’s statements ready to believe that birds of a feather States, in Krulewitch v. United 336 U.S. together. are flocked (1949): 69 S.Ct. 93 L.Ed. 790 Id. at 453-54, (Jackson, J., at 69 S.Ct. matter, practical As a the accused often concurring) (citations omitted). * * * is confronted with guilty plea We find the admission of the * * * help persuade others to preju- was not harmless error but fact jury conspiracy of existence of the itself. dicially judgment tainted all counts. The words, conspiracy In other a often is of conviction is vacated and the defendant proved by evidence that is admissible is to receive Judgment a new trial. re- only upon assumption that conspiracy [a] versed and the cause remanded for a new assumption prej- existed. The naive that trial.10 udicial effects can be overcome in- jury practicing structions to all law- BOWMAN, Judge, dissenting. Circuit yers unmitigated know to be fiction. * * * * portion It is difficult for the individual I concur in of the Court’s make his own case stand on own opinion regarding application its of 18 may question why George George testify 9. One any contempo- would enter Kroh did not plea support knowledge such a when the evidence did not raneous of a scheme to defraud banks, only gave fact, charge. hindsight analysis bargains represent compro- but Plea of the аcknowledges, events. In involving as the dissent many George mises concerns. faced a "using George carrying defendant was Kroh in ten-year guilty sentence or more if he was found out the fraudulent scheme.” The fact Instead, that the charges of all the faced. his brother he advantage defendant took of his brother does only fifty-seven days jail. received not, however, illegal agreement. amount an Likewise, George’s knowledge of KBDC’sfinan- urges opinion 10. our dissent fails to illegal cial difficulties is not evidence of an give proper jury’s findings deference agreement George to defraud banks. testified conspiracy between the Kroh brothers. This response that his to the financial crisis was to begs question. appellate While an court has push equity harder on rent collections and sales duty findings jury's to sustain a of fact where (Tr. 810), engage conspiracy V at not to in a support there is sufficient evidence to those light testimony, to defraud banks. In of this findings, equally respon- it has an fundamental is difficult for us to understand the dissent’s sibility findings to reverse those where there is argument government rely that the did not support insufficient evidence to the conviction. George's guilty plea proof conspiracy. of the 307, 318-19, Virginia, See Jackson v. 443 U.S. The dissent's assessment of the defendant's 2781, 2788-89, S.Ct. 61 L.Ed.2d 560 Al- credibility very principles viоlates the it claims though goes great lengths quote the dissent majority opinion disregards. Credibility as- portions transcript, respect, of the due all province jury. sessments are the tunately, Unfor- selectively testimony, omitting dissent edits the case, jury given in this was not portions those that demonstrate Kroh's opportunity to consider the defendant’s credibil- complete isolation from the defendant's loan ity overwhelming impact without of his example, George activities. For stated he did guilty plea. attempt brother’s The dissent’s not involve himself at all in the financial as- impact George’s guilty plea, minimize the (Tr. 794); pects of KBDC V at that he could jury barely George’s plea if the understood that "assume” what the defendant did with his defendant, conspiracy involved a with the (Tr. (George's) signed financial statements V at government unrealistic. The used as a know, 798); August, figure proof central in its overall of Jack Kroh’s doing what Mondschein was to deal with the money efforts to obtain from the banks. Jack (Tr. 801); problems cash flow V at that he did just charged conspiracy was not with a anything not know about the Southwest Bank persons; charged unknown Jack was with a (Tr. 812-13); V loan that he did not know conspiracy George. with his brother loan, using pro- about the Norbank or the loan government’s entire case was based on this sce- (Tr. project ceeds for the Hall Farm V at 821— only way nario. The could 22); anything, and that he did not know proof illegal make the vital connective of an November, 1986, Savings about the Firstate loan conspiracy between the two brothers was its (Tr. 827). Although George V at Kroh's secre- proof plea affirmative had entered a tary sign had been authorized to his wife's name guilty charge to a to commit past, George signed did not know who jury bank fraud with Jack. No reasonable guaranty, wife's name to the Norbank and did conspir- could evaluate Jack’s denial of such a anything getting guaran- acy not have to do once it was shown his brother (Tr. 825-26). ty signed pled guilty charge. V at to the same properly applying provide the will basis transfers wire and 2315 to U.S.C. §§ facts of this case. the law to the concerning the suffi- in the discussion and as to counts two evidence ciency of the opening state- government’s the During 1528-1529, at Ante thirteen. through ment, jury: told the prosecutor majori- disagree with the I 1529. Because testify, brother. George Kroh will Jack’s concerning law of the interpretation ty’s in here and tell George Kroh will come George admissibility of evidence all, he you tell that will you first respectfully dissent plea, I guilty Kroh’s charges in- guilty to several pleaded has and from opinion parts of from those banks, pleaded guilty that he has volving the result. plea bargain with with a in connection reversing all thirteen is here The Court you. me; lay that out for he will and because criminal convictions of John II at 78. Transcript Vol. evidence of admitted District Court men- did not prosecutor’s statement The at John’s trial. guilty plea George Kroh’s charged with or Kroh tion that acknowledgment that Despite Court’s his broth- pleaded guilty convict evidence to was sufficient there objection was no anyone else. There er or counts, ante of the on twelve John by the defense. plea George’s guilty evidence of it finds the direct examina- During the should all the convictions prejudicial so Kroh, government first tion of I believe be reversed. and his identity the witness’s established Moreover, properly received. question Kroh Kroh and to relationship to John Kroh suffered that John not believe I do Company (KBDC). Development Brothers admission, or of its by reason any prejudice place: exchange then took following any of on was insufficient that the right, All sir. government): Q: (by the all of would affirm therefore counts. I Kroh, now, appearing are you Mr. And his convictions. agreement plea today as result pre- filed a Kroh’s defense counsel John States, correct? the United suppress referenc- limine to trial motion in Yes, Kroh): sir. (by A: agreement and plеa George Kroh’s es to of the the members Q: you tell can And motion, hearing At the convictions. bargain plea that that jury when it was judge he district told the prosecutor reached, you can if arrangement was George Kroh on direct question intended recall? plea agree- George’s about examination spring sometime. A: Last and his convic- government ment with it, if I just summarize Q: Okay. And plea written tions, but stated any me if correct you, may offered evi- would not be agreement summarizing incorrect, just but this is he would judge said The district dence. plead- to a reduced that, has been into agreement evi- written not allow the ing, correct? prosecutor dence, he allow the nor would indicate that judge it. The did That is correct. read from A: questioning of permit he would and the you between Q: agreement follows, concerning convictions in essence as States United questioning further agreement, and plea agreement part Your not. is it opened the if the government defense into Federal came you is that Transcript counts felony issue on cross-examination. three guilty to pled I at 9-10. fraud, Vol. correct? of bank conference Bench objected. initially set forth full [Defense important It is explained counsel defense at which trial during the only references to be certain hе wanted plea. Such elabora- guilty George Kroh’s George’s into go that the demonstrate in context will tion so, he truth. If to tell agreement inflammatory presented an was not plea assured prosecutor object. emphasized, unduly way and stay Q: Okay. judge imposed by he intended to within And that was Judge Wright Chief of this district? hearing

the limits delineated at the proceedings motion in limine. The A: That is correct. open returned to Q: court.] subsequently Was that sentence re- duced? Q: Just so that we are back on track Kroh, agreement Yes, Mr. here. is es- A: sir.

sentially you came into Federal Q: you you And can tell us—did actual- pled guilty here three ly go off and do time? banks; counts of false statements to Yes, A: I did. essentially isn’t that it? Q: what, itWas reduced to sir? Yes, A: sir. Sixty days. A: Q: involved, And one of those I counts Q: anything provided there Was else think, count, conspiracy a correct? a reduction of that sentence? A: That is correct. years probation. A: Five Q: you you Q: And any did that and also told And other caveats to that sen- you coop- tence?

erate with the Government further- A: AYes. restitution to the two banks. matter, investigation ance of its in this Q: those, Which are Mr. banks Kroh? correct? A: Norbank and Kansas National. A: That’s correct. Q: You appearing today are also in rela- Q: cooperation And that tionship immunity agreеment included testi- to an

fying grand gotten a that the jury, before federal cor- United States has you provided with, rect? have been correct? A: That is correct. Yes, A: sir. Q: essentially immunity agree- And Q: testifying And also here? you say ment is that whatever we can’t Yes, A: sir. against you, turn around and use Q: Now, that, Okay. in exchange for right? you, the United States has told first of A: That’s correct. all, cooperation you that whatever lend Q: words, your In other Fifth Amend- it, it would tell sentencing judge right longer applicable ment no sentencing, at the time of correct? this case?

A: That is correct. Yes, A: sir. Q: you And it further told that there Transcript Vol. V 780-84. five-year cap would be or a lid on conspiracy charge was mentioned case; imposed your sentence to and, specifically only fact, plea once isn’t that true? guilty with John Kroh was A: That is correct. exchange. never mentioned in this Now, Q: fairly does that summarize quite obviously reference was in the con- agreement you what was between setting agreement, text of out the entire and the United States? emphasized. and was not Yes, A: it does. testimony preceded Q: fact, right. you, plead All Did instruction, limiting which also was guilty charges? to those read without material alteration as Instruc- IA: did. tion 22 at the all the close of evidence: Q: you Were sentenced? gentlemen jury, Ladies and before Yes, A: sir. witness, begin I testimony we of this Q: you your Can tell us what initial have an additional instruction to read to sentence was? you. going You are to hear evidence sentences, three-year witness, Kroh, running A: Two who from the P. concurrently. you made will hear evidence that he has Kroh, in to Federal you came here that the Government. plea agreement a charge? to pled guilty and Court weight testimony such give his may You Kroh): Yes, or not Whether A sir. (by it deserves. you think as influenced may have been testimony objected. Bench con- his counsel [Defense you to de- is for agreement plea Objection ference. overruled.] termine. Kroh, in to Fed- Q: you Mr. came here appeared con- eral and before Chief cannot be Court guilty plea The witness’ Wright, correct? Judge defen- 0. of this Scott by you as sidered plea guilty guilt. witness’ A: correct. dant’s That’s by you for be considered can you placed Q: And at that time were much, if at determining how of purpose ‍​‌​‌‌​​‌‌​​‌​‌​​‌​‌‌‌​​‌‌‌‌​​‌‌‌​‌​​‌‌​‌​‌​​‌‌‌‌‍oath, under correct? testimony. all, upon the witness’ rely to Yes, A: sir. 776-77; at Yol. VII a Transcript Q: you Yol. V time tendered And at that your guilty plea conspiring false state- over here submit brother explored government Finally, the banks, right? ments to ex- on redirect plea further guilty A: correct. That’s by the invited follow- This amination. was Q: And— cross-examination: tеstimony on ing conference [Objection Bench renewed. counsel): it also cor- Is Q (by defense motion for mistrial. and agreed Denied.] never say you rect to a false statement make with Jack to Transcript Vol. V at 878-82. sheet? on a balance discussion That the full extent Kroh): like you mean Do

(byA redirect guilty plea on George Kroh’s agreed? and together sat down we mentioned It never examination. other- closing argument in or again, either Q: Right. other references are no wise. There sit didn’t say that’s—we A: I would or his con- plea agreement George Kroh’s something up, no. and write down transcript of this anywhere in the victions say, you and Q: come Nor did he six-day trial. to file false [sic], going I am “Jack in discretion has broad “The court your on behalf”? trial statement admit determining evidence can what No. A: on ted, will be overturned its decision and him knowledge of no Q: you And of discre was an abuse appeal only if there fact? so until after having done States, F.2d 789 v. Rothgeb tion.” United correct. A: That’s Cir.1986). ac (8th The discretion 650 agreed to de- never Q: You and Jack determining admissi lower courts corded bank, you? did fraud in a broad particularly “is bility of evidence draw down and we didn’t sit Again, A: Davis, v. conspiracy trial.” United States sign some agreement up an Cir.1989), (8th petition 1334, 1343 F.2d 882 going out we were agreement (U.S. Dec. 89-1043 filed, No. cert. no, banks, sir. to defraud with stayed well 1989). Court District government allowing at 875-76. Transcript Vol. V in its discretion and redi on direct George Kroh question witness redirect, prosecutor On agreement plea his about rect examination exchange: had this and convictions. Kroh, you Mr. government): Q (by the Circuit, is clear law Eighth In the do questions about asked were some plea is admissi- guilty “a confederate’s your brother submit you agree with ex- direct ble, the Government’s I even on to banks. false financial witness, you amination you responded understand that his acknowl- credibility, or of agree- the witness’ up an and draw didn’t sit down offense.” participation true, edgment Mr. isn’t it But ment with them. agreement prose- F.2d was mentioned in the Hutchings, (wit Cir.1984) added) (emphasis argument; closing cutor’s examination about proof ness testified on direct relied neither its John’s aiding abetting plea guilty participation conspiracy. District defendant defendant in crime with which plainly did abuse its discretion denied, charged), cert. U.S. allowing testimony.1 this direct 75 The 106 S.Ct. 88 L.Ed.2d question There remains the whether the thereof, plea or evidence how witness’s plea emphasized guilty to John Kroh’s ever, evi “cannot be used as substantive prejudice on the redirect ex- guilt,” and the dence of the defendant’s George amination of Kroh. It is clear from Id.; jury instructed. see also should be so government the record that on redirect the Drews, 877 F.2d v. United States George properly guilty plea used Kroh’s (8th Cir.1989) (no of discretion in abuse purposes. impeachment On cross-ex- receiving witness-coconspirators’ written amination, George the defense asked if he jurors plea agreements into evidence when agreed with John to defraud banks. pleas instructed that were not evi were denial, though opened George’s equivocal, guilt of defendant but dence of substantive government impeach the door for the to witnesses, credibility only went to testimony. “The trial court does government did not indicate “it had inde by allowing its the use of abuse discretion pendently verified the witnesses’ testimo clarify evidence on redirect examination to Braidlow, ny”); opened up by an the defense issue Cir.1986) (no error in admit on cross-examination—even when this evi- ting guilty pleas evidence of of confeder dence would otherwise be inadmissible.” ates on direct examination when the evi Braidlow, F.2d at cross-exam- 783. On dence was not used as substantive evidence ination, agree- George Kroh testified “no cautionary guilt, of defendant’s instruc ment,” guilty but his was to the con- plea given, tions were and evidence was not trary. guilty plea already The had been emphasized). contеxt, clearly mentioned in another guilty The evidence of Kroh’s probative credibility George’s of the tes- plea brought out on direct examination timony denying agreed that he had clearly was admissible under the law of banks, to defraud and was not unfair- John plea agreement this Circuit. written ly prejudicial. It is also a reiterated “ac- evidence, any in nor was was not offered knowledgment participation in the of- jury. The part of the text read to the fense,” participation George which was at- only government focused on the fact tempting deny. 751 F.2d at Hutchings, guilty plea quid pro quo and the involved circumstances, proper 237. In these it was George’s agreement government. with the government to ask Kroh on even mention that prosecutor plead- redirect examination whether he had conspiracy plead- Kroh to which guilty conspiracy ed with his brother to guilty conspiracy was a with John Kroh ed submit false statements to banks. Defense event, and, in- the District Court opened up questioning counsel this line of jury structed the twice that evidence pursue was entitled to George’s plea interpreted was not it to show that had been less than guilt, was to be used evidence of John’s but candid in his answers on cross-examination. determining weight given to be argues, opin- and the Court’s John testimоny. charges George’s that, agrees, there is no ion here because guilty played only a George pleaded participation evidence of his a con- and other part in his direct examination small George, jury must spiracy with have certainly emphasized were not disregarded limiting the District in- guilty plea nor Court’s government. Neither the bargain government's opening plea the statement, in the event defense intended the continu- 1. In the reasoning applies hearing and there ing objection following the same it made opening error in the statement. is no the motion in limine to cover the reference plea as dence from several witnesses George’s guilty demonstrates and used structions significantly A review of the that those liabilities were un- guilt. of John’s however, demonstrates, derstated. The individual false transcript signed by of John statements were John and is substantial there George Kroh and sent to the in a defrauded participation The banks to obtain loans. to defraud banks. George Kroh to view seems determined opinion Court’s May represented In John Kroh light most favorable to the evidence Southwest Bank of Omaha he wanted Kroh, finding despite jury verdict John of half a million a total dollars charged. taking In this un- guilty as him loans for himself and his brother for a violates well- approach, usual “personal a New York investment” with that, in our review of a rule established Southwest, upon investment firm. review- conviction, the evidence must be criminal statements, personal financial ing the false to sus- light in the most favorable viewed and, approved the loans after John and verdict, jury giving govern- taining the George signed promissory notes, inferenc- of all reasonable ment the benefit personal the funds to the brothers’ wired may be drawn. United States es that George promptly accounts. John and 988, (8th Marin-Cifuentes, 866 F.2d signed personal transferring the checks Cir.1989). money into a account. KBDC abundant evi The trial record contains 1986, representa- In October on John’s involving showing dence tion that the funds were to be used for it much of George and John. While in the personal investments Hall Farms circumstantial, independent evidence “[t]he project, applied for a Krohs combined to conspiracy may be direct or showing a personal loans one million dollars from States v. tally circumstantial.” United City. of North Kansas After re- Norbank Cir.1983), Jankowski, 713 F.2d ceiving reviewing personal the false denied, 1051, 104 464 U.S. S.Ct. rt. ce by signed financial statements John and 79 L.Ed.2d 192 Kroh, George approved the bank the loans. required personal guaranties Norbank also personal secretaries John The former wives, Kroh, signaturеs George Kroh him- of the brothers’ but George upon which it relied self, liability figures furnished to bank all testified that in fact those of the brothers’ secre- personal financial state- were the brothers’ on signing promissory After Kroh. Evi- taries.2 supplied by John ments were tice of personal schein George testimony: 1528. That is not In its personal A personal you A: The first came Norbank Q the loan is that I loans because thing curred or was it—is A: Q: on the Q: 1986? (by (by Well, And can Do have her or other opinion Kroh was never that I needed Michelle guaranty. guaranties] that I can remember about you only thing signing George secretary): of North Kansas loan I didn't government): about, secretary you remember how involvement in the the Court it company personnel and that Bosch, George signed Carolyn Kroh’s name just tell me how it was that that pay how I read the what Mr. was directed it not clear at this time? Yes, to be concerned about. a lot of didn’t—it wasn’t some- testified Kroh's wife’s name happened? Now, involved.” Ante at says, “Significantly, I City did. attention to the that event oc- Ms. [that Kroh’s former in October Kroh at the securing Bosch, by secretary’s Mond- prac- did There were other had been asked to believe, simply me to cannot tell took A: Q cult to remember Q: Q: ously. sign? sign ceive those directions put A: A your signature? whether or Q: (by (by on Frequently. And from Just as an—I Do her name care of that. If her name was sign but ^[******] signed Michelle defense the Norbank you it on that as a board, you Kroh. not Mr. have a it because I had done so whom would frequently, if someone general practice, would counsel): Bosch): understand it would people but what sign particular occasion or if I specific guaranty you as to happened it over the Yes. infrequently, did whether or not to You specifically you generally re- identify recollection Kroh, which I company identified, in October required, years. be diffi- that as what? asked previ- won't that you I I I rately reflected the total liabilities notes, George Kroh received and John and you had? accounts the deposited their and immediate- money orders for the loans A: I don’t it did. believe amounts ly signed checks for the loan you Q: you tell me back then what Can now, KBDC, payable made thought your liabilities were? inside, having to all on the was clear mil- thought they I were about $5 A: problems. very serious cash flow lion. volvement proceeds into the the fraudulent scheme. ber 1986 and acy, that tate ment Kroh, had become. afloat, and was personal loans Finally, again upon It is obvious from the evidence Savings & Loan of Orlando Novem- the funds were in Hall in a using George desperate is, George in the knowingly Farms, immediаtely transferred the totalling scheme, sinking ship that KBDC scheme to the brothers Kroh in Kroh’s $800,000 As for the defrauding his own testimo- representation carrying knowing keep from Firs- that John acquired conspir- invest- KBDC banks out in- A: A: Q: Why Q: Q: Okay. much to banks? financial statement flected rowed. me whether Firstate ^[*] Well, Do No, you you thought it did not. your do ‡ Savings I had more than And $3.3 remember at that time how you say or not back November bank liabilities? million & connection that Loan, that, that went to the accurately you sir? can had owed with this you ^[*] bor- tell re- five, particularly damning. thought A: I it was around five ny is and a half million. examination: On direct 800, 822-23, Transcript Vol. V at Q (by government): When did it cross-examination: On apparent you that Kroh become Development Company counsel): was Q Brothers (by you defense Do believe this, in financial trouble 1986? say if the Ameri- that the—that A A: There were some Q: Why August? the bills. j-< (by George the first time. is that? Kroh): August. Why ‡ In problems paying did it hit ^[*] you # That (byA think would slowed have made a difference that through, outcome relative can Express you it it had do down working, you Kroh): have made an ultimate a little to Kroh Brothers? think institutional deals if It bit, in the ultimate they that might but I don’t had it would gone have company decision of whether [Discussing George personal fi- or not. gone would have down nancial statement that was sent Q: ultimately you Do think that that Norbank.] place event? would have taken Q: you In can tell me October million accu- A: I am afraid so. or not the $3.3 whether documents, it was needed to particular signature, me to do this so I did it when the Norbank they to—if you sign particular be done and he was not available document? directed No, signature, he was not stand- specific needed the and if I don’t have a recollection. A: Q: this, ing I would do it you specific there to tell me to do have a recollection of Do previously Carolyn signing because I had been authorized Kroh’s name without ever pattern been established. authority at do it and the had from Mr. Kroh or Norbank, basically you Q: So on the—so direction? earlier, signed initially or because of either it at his direction I stated when I started A: As established; name, always pattern would signing that had been it was her on, say? request. be As time went fair Kroh's direct him, pattern Exactly. longer A: I worked with 521-22, Transcript expected 533-34. Vol. IV at established and I knew that he been Although may true that kind of There some right. Q: All negotiations operation; is involved defect inherent an saying? preparation are loans or the you what statements, signed the finan- You too late. No, it was I think A: false, knowing them to be happen a clos- cial if these asked —if loans, signed promissory or November omitting, financial statements signed false person required connect a to is to liabilities, guar- the other among Here there conspiracy.” Ante at 1531. a they just million seven dollars anties for circumstantial is substantial Commerce, those and used given to sufficient the brothers conspiracy between (that they procure to loans false statements conspiracy the John Kroh of convict to being misrepresented knowingly strength of the Considering the charge. use) of the banks from two their personal case, simply no rea- is government’s there at- counsel While defense question. does, that Court speculate, as the to son testimony, damaging cure this tempted to the District disregarded have jury must guilt that the is, fact, an admission it consid- not to repeated instructions Court’s credited. jury have could law, the As to the from the banks. regarding swindled the evidence a review of 3. For persons con- or more incident, is clear: “If two statute see ante 1527. persons do spire or of such ... and one more conspiracy,” object of the act to effect the and the evidence mischaracterizes 18 U.S.C. they offense. commit a criminal says, "In when it impliedly the law misstates object of the con- The unlawful § 371 fact, scheme evidence demonstrates only completed, and spiracy not even need George’s entirely operated without could have aсt coconspirators do an must of the one in some obtained participation, since loans were need The act shown scheme. furtherance signing George’s to the by simply name cases plan. the success of act critical to be an not The evi- Ante at 1531. documents.” relevant indispensability to the a defendant’s "some,” While one, of the was that not dence surely would completed crime perpetration aof subject to the statements sent three participation in the crime and of his be evidence George, signed by and none John for banks complete to a actor with fellow in a is no means promissory notes. It of the crime, indispensability ‍​‌​‌‌​​‌‌​​‌​‌​​‌​‌‌‌​​‌‌‌‌​​‌‌‌​‌​​‌‌​‌​‌​​‌‌‌‌‍does an absence of would have the banks involved that all of clear Thus, evidence that prove innocence. not signing on the acquiesced in John’s essential to participation George’s documents, made the loans. and still have loan evidence, fraud, such were if in fact there bank sign questioned the to or refused Had George’s nonparticipation documents, establish would not no more than half accuracy of the conspiracy. have been of the could perhaps none funds and testimony alleged conspi- that his plea as evidence of fendant’s George’s guilty еr any illegal rational actions were innocent of guilt. John’s purpose), jury obviously that the references The Court concludes agree Kroh. I cannot that the believe John guilty plea “tainted the to Kroh’s fleeting entirely proper three and referenc- damage they entire trial” because of guilty six-day es in a trial to Kroh’s credibility, which credi- did John plea, presented purpose assisting for the all bility was crucial to his defense on jury George’s testi- its evaluation Having carefully counts. Ante at 1532. John’s, mony prejudiced and not of John’s record, however, I am con- reviewed right to a fair trial. Our Court’s deference (and fleeting vinced that the perceives “credibility” to be the what George’s guilty plea proper) references defendant, of this white-collar and its dis- impact jury’s could have had little counting jury’s ability follow credibility. ap- It is assessment of John’s instructions, weigh trial court’s the cred- parent transcript from the trial that John witnesses, ibility of the and to evaluate damage Kroh himself did the most serious defenses, unjustified, im- John’s asserted credibility. Throughout cross-exami- to his regrettable. proper, and nation, prosecutor, sparred with the dis- playing hostility and a determination never I would affirm the convictions on all answer, constantly give straight “split- counts. hairs,” put ting prosecutor as thе it at one continually memory point. He manifested evasive,

lapses. vague, equiv- He was

ocal, frequently declared that he was understanding govern-

having difficulty straightforward simple ques-

ment’s general impression that re- tions. The STUDIOS, INC., HAL ROACH reading transcript is of a mains after Corporation, Delaware attempting sabotage the search witness Plaintiff-Appellee, truth, rather than of an innocent trying victim to clear his name. All this especially have been vivid COMPANY, AND RICHARD FEINER jurors, minds of the since John testified on INC., Corporation, a New York trial, day jury began last Defendant-Appellant. day. It there- its deliberations that same No. 87-6146. why fore is not difficult to understand jury rejected attempts his to convince them Appeals, United States Court of acted fraudulent intent. without Ninth Circuit. replete The trial record is with evidence Argued and Submitted Oct. 1988. severely what the calls tested Aug. Decided 1989. strong present- defenses “the credible In ed Kroh.”5 Ante at 1533. Amended Feb. 1990. As event, credibility “[t]he determine,” jury (8th Cir.1984) Lee, despite affirmed de- (conspiracy conviction strong" recognize multi-million dollar errors— the "credible and character- I find highly questionable. including ization To me it is far of multi-million dollar the omission experi- from credible that a well-educated recently that he had assumed. liabilities principals person, enced business one of the Equally implausible is that such a businessman enterprise, rely to- a substаntial business tally upon underlings floundering compa- funds for his would obtain company prepare in his lending ny by misrepresenting to the banks that statements, and then ei- use, yet do the monies were for so accuracy ther never review the statements intending banks. without to deceive the unaware of his own finances that he or be so in December notes ing or two helped I am transferring out. signed would have then checks ’86 late at that KBDC, it was too saying knowing I think proceeds of the loans to point. ability well that KBDC had lost its full and that it was headed for financial borrow jí! í¡s ijs

Notes

[*] sfs “Secrecy concealment es- disaster. are Kroh, say, Mr. Q: it be correct Would conspir- successful features of sential knowingly signed a you never rightly gives room acy .... Hence the law financial statement? false discov- allowing the of those conviction well, up until the say A: I would that’s— showing sufficiently the essen- upon ered up through say I’d very end. —after plan and their connec- nature of the tial might there have Bank Commerce it, requiring evidence of with without tions question. been knowledge partic- all its or of the details question? Q: was a There Blumenthal v. United ipation of others.” I Bank did. A: Commerce After 248, 256, States, 68 S.Ct. 332 U.S. 845-46, (em- 874-75 V at Transcript Yol. L.Ed. 154 added). phasis that there is no simply It cannot be said check-kiting Bank Commerce After conspiracy, as George-John after, in the case of day debacle3—the ac- majority alleges.4 As each George and John Norbank — “[Ojnly slight knowledges opinion, in its

Case Details

Case Name: United States v. John A. Kroh, Jr.

Court Name: Court of Appeals for the Eighth Circuit

Date Published: Mar 2, 1990

Citation: 896 F.2d 1524

Docket Number: 89-1070

Court Abbreviation: 8th Cir.