*3 KRAVITCH, Before RONEY and Circuit Judges, *, Judge. and ALLGOOD District KRAVITCH, Judge: Circuit Appellants Weldon Rushing Payne and *4 Lloyd Taylor appeal Earl their respective charges arising convictions on from loans by made the Federal Bank Land Associa Robertsdale, of Alabama, tion between 1977 and 1980. The jury appel found both guilty lants on five misapplication counts of (18 of Federal Land Bank funds U.S.C. § 1), 657 four counts of participa unlawful proceeds tion in the of Federal Land Bank loans, or aiding abetting and (18 the same §§ 23), U.S.C. and 10062 and one count of Helmsing, Mobile, Ala., Frederick G. for conspiracy to violate various false state Payne. ment, misapplication, and partici unlawful Gibson, Fairhope, Ala., W. Kenneth for § pation (18 3714). statutes U.S.C. In addi Taylor. tion, found guilty on one Sessions, III, J.B. Atty., Asst. U.S. Mo- of additional count participation unlawful bile, Ala., Mervyn Hamburg, Dept, proceeds of in Jus- of Federal Land Bank * States, Allgood, W. any Honorable Clarence U.S. entry District the United makes false in Alabama, Judge book, for any the Northern District of report any or statement of or to institution, sitting designation. or, such ... with intent to defraud thereof, any agency the United States or or institution, provides pertinent part: any corporation, 1. § 18 U.S.C. in or re- association section, participates ferred to in this or Whoever, shares officer, being agent employ- an or directly indirectly any in or receives or mon- any capacity or in ee of connected with ... profit, ey, transaction, property, through any or benefits bank, any land bank intermediate credit [or] loan, commission, contract, or embezzles, abstracts, purloins willfully ... or any any corporation, other act of such institu- funds, credits, any moneys, misapplies securi- tion, association, or shall be fined not more things belonging ties or other institution, of value to such $10,000 imprisoned than or not more than pledged or or otherwise intrusted years, five or both. care, to its shall be fined not more than $5,000 imprisoned or not more than five provides pertinent 3. U.S.C. part: § in both; years, or but if the amount or value (a) embezzled, abstracted, against Whoever commits purloined misap- an offense or aids, abets, counsels, $100, the United States or plied does not exceed he shall be fined commands, $1,000 procures induces or imprisoned its not more than or commis- not more sion, punishable principal. year, as a than one both. or provides pertinent provides pertinent part: part: 2. 18 U.S.C. U.S.C. § in in 4. Whoever, officer, agent being employ- persons conspire an or two If or more either to States, any capacity any against or ee of any connected with ... commit offense United bank, States, any agency land bank intermediate [or] credit or defraud the or any any any intent defraud purpose, ... with such institution thereof in manner or for any body company, politic persons any or other corpo- or and one or more of such do act rate, individual, any object any conspiracy, or or effect of each to deceive officer, auditor, agent examiner more im- or of shall fined not than or department years, agency prisoned such institution or of than or both. of more five list of loans, (18 “approved aiding abetting FLBNO placed the same §§ 2), attorneys” 1006 and closing U.S.C. three of counts loan 1974. making Land false statements on Federal became the “retained counsel” for the (18 forms Bank U.S.C. FLBAR on December position a February he held until 1980. A third (1) he appeal, Taylor contends On codefendant, Gulledge, president Robert any capacity with” not “connected Baldwin National Bank in Baldwin purposes Bank the Federal Land County, Alabama, money borrowed from 1006, (2) evidence 657 and FLBAR in 1977 and 1980.5 (3) insufficient, the evi- misapplication was was insuffi- participation dence unlawful A. The Transactions Relevant discre- cient, (4) abused its the trial court charges severance, (5) case in this stemmed grant by refusing to tion right involving several transactions farm land denied him the the trial court (6) Alabama, cross-examination, County, court Baldwin the trial between complete financed, him provided The transactions should have appeal. purposes large part, through of his transcript arranged loans trial the evidence FLBAR Payne contends and the transac- FLBNO. The insufficient, (2) the evi- appeal tions relevant to this include following: aided abetted dence he *5 insufficient, (3) participation was unlawful (1) The Bonner-Dale Taylor-Thead the requires doctrine “exculpatory no” the convictions, Transactions of his false statement reversal (4) questions on the Land Bank the Federal 1975, Jerry and Merrill Bonner bor- “vague ambiguous,” forms were $200,000 FLBAR, using from the rowed insufficient, conspiracy the evidence of was County, 400 acres of land in Baldwin Ala- (6) the trial court abused its discretion bama, the security as for loan. The annual refusing grant a to severance. 1. payments May the loan were due each May 1,1979, Bonners make hold the introduced at On the failed to We evidence 15, payment. May to that ei- the loan trial was insufficient establish scheduled On Taylor Payne misapplied Jerry Payne Federal think- ther or Bonner told that he was funds, portion Bank and we reverse ing selling Land therefore about a of the 400 acres misapplication convictions. appellants’ help payment. the the to make overdue loan claims, remaining reject appellants’ suggested Lloyd Tay- We to Bonner that however, remain- affirm all of their might prop- and we buying lor interested Lloyd Taylor convictions. The erty. Bonners met with brother, Taylor, a and his Dale to discuss I. FACTS 1979, 28, Lloyd possible sale. On June The Federal Land Bank of New Orleans (as Farms, T a secretary of & T (FLBNO) one of twelve Federal Land consisting of and Dale partnership Lloyd by Congress Banks handle the created pur- a Taylor) and the Bonners executed special credit needs of farmers. The agreement portion chase for a 140-acre provides FLBNO loan funds to borrowers $290,000. property September for On through Bank thirty-three Federal Land 3, 1979, right purchase the 140 acres Associations, including the Federal Land Taylor. assigned was to Dale Robertsdale, Bank Association of Alabama June, Meanwhile, (FLBAR). began May sometime Appellant Weldon Payne suggested to Edward Ronald working FLBAR in and be- purchase 140 acres Appellant its Thead Thead president came 1978. 3,1979, Lloyd July Thead Lloyd Taylor, lawyer, Taylor. real was On a estate Cir.1984). Gulledge separate appeal filed a in this case. Gulledge, See States v. (as Lloyd Taylor secretary T of T & Thead also wrote two Tay- checks to Dale Farms) lor, $38,900 one option executed an for the 140 for $3,100. and one for $38,900 $363,000. $2,000 The paid represented acres for check Thead for the remain- proceeds der of the option. July August, Thead the earlier FLBAR loan that Thead had set told that he aside at the did not intend to exer- di- Payne. rection of Lloyd Taylor again option. Payne encouraged cise the Thead served as loan closing attorney for complete purchase and offered to Thead. defer payments or make the loan for Thead in the event Thead could not make those $226,450 paid The to Dale payments himself. Thead on deposited October the trust Lloyd Taylor’s account of law September On Dale com- firm and Taylor. credited to Dale pleted purchase (out of 60 acres of the day, $175,000 same a check was written acres) total of 140 from the Bonners for from the pay trust account to the Bonners. $110,000. Immediately thereafter, Dale check, A $4,500, second payable Taylor resold the 60 acres to Thead for cash, was written from the trust account $135,000. purchase Thead financed his by Lloyd Taylor. was cashed A third portion proceeds $297,000 of a check, $20,000, was written from the loan from the FLBAR. At closing, Taylor. trust account to Lloyd Taylor Dale Payne instructed Thead to set aside and $20,000 endorsed the deposited check and it $38,990.44 save proceeds. out of the loan in the partnership account of T & T Farms. Lloyd Taylor closing served as the loan Between October 5 and Lloyd October attorney for Thead. Taylor wrote three part- checks from the $135,000 paid Taylor by to Dale nership account, payable cash, in the September 26, 1979, Thead on deposit- $4,500, $9,000, $8,000. amounts of ed in partnership account of T & T Lloyd Taylor cashed the three checks. day, Farms. The same cheek These transactions formed basis for was written from partnership account Counts Four (charging Lloyd and Five Tay *6 pay check, to the Bonners. A second for Payne lor and with participation unlawful $11,000, was partnership written from the proceeds in the of Federal Land Bank account to the Lloyd Tay- trust account of loans, aiding abetting same, or and in deposit lor’s law firm. The in the trust §§ violation of 18 2) U.S.C. 1006 and and account was Taylor. credited to Dale On Counts (charging Lloyd Six and Seven Tay September 27, Lloyd Taylor $4,500 wrote a lor and Payne with of Feder check, payable cash, to from the trust ac- al Land Bank in funds violation of 18 September 28, count. Lloyd Taylor On § 657).6 addition, U.S.C. In six of the again $4,500 check, wrote a payable to twenty-five overt acts listed Count One cash, from the Lloyd Taylor trust account. (charging Lloyd Taylor, Payne, and Gul $4,500 checks, cashed both of the which ledge conspiracy with in violation of 18 Taylor were debited to Dale on the trust § 371) U.S.C. were related to these transac ledger account card. Lloyd Taylor tions. Payne and both were Four, Five, Six, convicted on Taylor complet- On October Counts Dale and Seven. purchase ed the remaining 80 acres $180,000.
from the Bonners for Immedi- (2) The Lipscomb-Dale Taylor- Dial & thereafter, ately Dale resold the 80 Daugherty Transactions $226,450. acres to Thead Thead fi- for purchase, pro- nanced his part, with the August, Payne encouraged Wil- $195,000 ceeds of a the FLBAR. Daugherty purchase loan from liam a 60-acre tract government’s attorney, These also formed the basis for motion 6. transactions who ad- (charging Payne making Count with Seventeen mitted that support the evidence would Land Bank false statements application a Federal loan finding guilt beyond a reasonable doubt on U.S.C. At in violation of 18 charge making false statements. trial, Count Seventeen on a the court dismissed Matthew Dial and to Dale Law- debited trust of land owned occasion, Payne ledger account card. Lipscomb. On one rence Daugherty would have to indicated that These transactions formed the basis for $1,000 purchase price only out of pay (charging Lloyd Counts Ten and Eleven acres; paid the balance would be for the 60 misapplication of Taylor and FLBAR, would receive part by of 18 Federal Land Bank funds violation part by Lloyd mortgage, and a first § 657) (charging Twelve and Count Taylor, receive a second mort- who would par- Lloyd Taylor and with unlawful gage. ticipation proceeds in the of a Federal Land loan, same, 20, 1979, Taylor paid aiding abetting August Lloyd Bank On 2). In option for an to in violation of 18 U.S.C. 1006and Lipscomb Dial and $100 $102,000. addition, twenty-five acres for On five of the overt acts purchase the 60 24, Daugherty an offer to listed in related to these August executed Count One were Lloyd Taylor Lloyd Taylor purchase the 60 acres from transactions. both Eleven, $132,000 $1,000 Ten, pay- for made a down were convicted on Counts purchase price. ment on the On October Twelve. conveyed Lipscomb Dial and Taylor-Styron The Creamer-Dale directly Daugherty. On Octo- 60 acres Transactions $110,000 Daugherty loan
ber obtained paid the FLBAR and out of 3, 1980, January Lloyd Taylor On exe- Daugh- proceeds Taylor. the loan to Dale option purchase an 318 acres cuted erty mortgage also a second executed $450,000. land from Howard Creamer for $27,000. Lloyd Taylor Dale for Subsequently, Payne contacted Herman closing attorney served as the loan farmer, Styron, and informed him a local Daugherty. property” that the “Creamer sale. Styron Lloyd Taylor then met with December, 1979, Payne Daugher- told Payne. Payne Styron Styron told if loan, ty, who also held an earlier FLBAR payment, was unable to make his first loan outstanding FLBAR loans that his two loan; the FLBAR would reamortize would have to be consolidated. On Janu- furthermore, Styron if to make was unable ary Daugherty obtained an payment, Payne pur- his second loan would $250,000. pro- FLBAR loan for Out property. January chase the On about remaining outstanding ceeds after the two 8, Styron purchase executed a contract off, $27,500 paid FLBAR loans were $534,- Taylor for Lloyd the 318 acres from paid Taylor. Lloyd Taylor again to Dale *7 closing attorney loan for served as the Daugherty. 29,1980, February conveyed Creamer On directly Styron. Styron to the 318 acres $27,500 paid Taylor by The to Dale part, in purchase, financed his with 14,1980, Daugherty January depos- on was $444,000 proceeds loan from the of a Lloyd Taylor’s ited in the trust account of $400,000 proceeds, of the FLBAR. Out loan Taylor. firm and credited to Dale On law $15,000 paid paid to and was was Creamer 15, Lloyd Taylor January wrote two checks addition, Styron Taylor. Dale In exe- to Taylor. from the account to Dale trust $50,000 mortgage for and a cuted a second checks, to- Lloyd Taylor deposited the two $69,240, mortgage third for both to Dale $14,000, talling partnership in the account assigned Taylor. Taylor Dale the second a Lloyd Taylor of T T Farms. also wrote & mortgage Lloyd Taylor to Creamer. cash, $5,000 check, from the payable to attorney closing as the loan served January January 17 and trust account. On Styron. $5,000 Lloyd Taylor checks wrote $15,000 paid Taylor by Styr- cash, trust Dale $3,000, from the payable to and 29, 1980, February deposited on on in the three cashed Lloyd Taylor account. Lloyd cash, the trust account of law all of which payable checks made $650,000. proceeds Taylor. to Dale On loan for firm and credited $5,000 used, Taylor part, purchase Lloyd wrote two loan were March $480,000. checks, Taylor Gulledge Lloyd one to Dale and the other acres cash, from the payable Taylor closing attorney trust account. as the loan served $2,000 Lloyd Taylor March wrote a On for Schoen. cash, check, payable to from the trust ac- Payne It later revealed that had 26, Lloyd Taylor count. On March wrote been, times, partner all relevant at 50% $3,400 Taylor check to Dale from the trust Gulledge March, with the 320 acres. Taylor account. The two checks to Dale $22,732.73 Payne paid half of the deposited partnership in the account mortgage payment annual on the 320 Lloyd Taylor of T & T Farms. cashed the 1978, Payne Gulledge acres. In late and cash, payable checks made both of two signed a document acknowledging that were debited to Dale each owned a interest in the 320 50% acres. ledger trust account card. The document was backdated to March These transactions formed the basis for Finally, 4, 1979, January on Gul- (charging Lloyd Taylor and Count Thirteen $113,646.57, ledge paid Payne representing Payne with of Federal Land profit half realized on the sale of the § 657) Bank funds violation of U.S.C. 320 acres to Schoen. (charging Lloyd Taylor Fourteen and Count These transactions formed the basis for participation in with unlawful (charging Payne Gulledge Count Two loan, proceeds Federal Land Bank of a participation proceeds with unlawful in the same, abetting aiding and viola loan, aiding of a Federal Land Bank §§ 2).7 1006 and In addi
tion of 18 U.S.C. same, abetting the in violation of 18 U.S.C. tion, twenty-five acts list four of the overt At the conclusion 1006 and related to these ed Count One were trial, the court instructed not to Lloyd transactions. both eight consider overt acts related to were convicted on Counts Thirteen deliberating transactions these while on Fourteen. Count One. was convicted on Count Two, appeal and he does not that convic- Estate-Gulledge-Schoen The Clarke tion. Transactions January, Gulledge, Robert (5) The Farms-Baldwin Machine- Bank in president of Baldwin National Gulf Gulledge Transactions Alabama, County, friend of Baldwin and a per Payne’s, submitted a bid of acre $735 17,1979, Lloyd Taylor paid On November a 320-acre tract of land owned 90-day option to to Gulf Farms for a and, accepted Clarke Estate. The bid was $534,000. purchase 320 acres of land for 8, 1977, Gulledge completed the on March January Lloyd Taylor created On $235,200. purchase of the 320 acres for Corporation. Machine Bow- Baldwin S.D. Gulledge purchase his financed designated president man was of Bald- $250,000 loan from the proceeds of a Machine, but Dale owned win 90% Lloyd Taylor served as the loan *8 FLBAR. 14, 1980, February corporation. of the On closing attorney Gulledge. for $5,000 Taylor paid 90-day another Lloyd for option February the 320 acres. On May, talked with on Otto Schoen Lloyd Taylor assigned option to Dale Gulledge purchasing acres. about Taylor. March Dale as- $1,500 On Gulledge price per set a acre. On signed option to Baldwin Machine. FLBAR January closed an Schoen 1006). could not reach a verdict on for 7. These transactions also formed the basis Fifteen, (charging unlawful Count and the a mistrial Count Fifteen with court declared participation Land in of a Federal the benefits that count. as to mortgage U.S.C. Bank of 18 release in violation 31, 1980, (as in management either operations), On March S.D. Bowman Machine) president completed otherwise, of Baldwin or function which con- purchase of the acres from Gulf any part your during sumes time $534,000. Immediately Farms for there- hours, normal business or which after, sold the 320 S.D. Bowman acres might any way in whatsoever con- $768,000. Gulledge Gulledge for Robert your flict with the interest of associ- purchase, part, financed his with the ation and/or Bank and interfere $570,000 proceeds of a loan from the your ability discharge with your proceeds, $534,- FLBAR. Out of the loan duties? paid 000 was to Baldwin Machine. On the The “no” questions answers to these were day, Gulledge, Taylor, same Dale and S.D. false; during period the entire covered (as president Machine) Bowman of Baldwin Form, Conflict of Interest was a agreement providing executed an that Gul- partner Gulledge, with 50% who was a bor ledge pay would not have difference FLBAR, rower of the ownership purchase price $768,- between listed purchased the 320 acres from the Clarke payment Gulledge and the Estate.8 proceeds. agree- made from the loan provided ment Gulledge also would Count Three concerned the 1979 Conflict Taylor two-thirds of the pay profits Dale Form, covering of Interest period from any acres, future lease or resale of the 320 12,1978 April 17,1979, January in which while Dale would make two-thirds Payne following answered “no” to the mortgage payments of the on the 320 acres questions: until such lease or resale. you participated 1. Have in the deliber- These transactions did not form the basis upon any question ations affecting any charges against Lloyd substantive your interest or any person those of Payne. twenty-five Two of the you related to or of a business or- One, however, overt acts listed in Count ganization you in which are interest- related these transactions. ed? you fee, accepted any salary, 2. Have B. The Interest Forms Conflict of commission, honorarium, gift or fa- Payne was also convicted on Counts any parties vor from of the outlined
Three, Eight, Nine, charged which him 2160(c)(1)? making with false statements on Conflict you 3. Have entered any into of the annually of Interest Forms filed with the transactions outlined in (18 Federal Section Land Bank 2160(c)(2),wherein the consideration Count Nine concerned the 1978 Conflict $1,000.00? exceeded Form, of Interest covering period April 12, April 1977 to in which you 6. participated Have in a transac- following answered “no” to the involving purchase tion or sale questions: stocks, bonds, estate, etc., real you
7. Have had a business relation- purely speculative purposes, ship any parties outlined might tend to interfere with 2160(f)? in Section proper impartial perform- your ance of you engaged any bring 11. Are duties or discred- other busi- farming activity (including upon ness or it an association or the Bank? 2160(f) Administra- Section of the Farm Credit with a "borrower" ... of the Farm Cred- ____ regulations provided pertinent part: tion employer; it institution which is his officer, 612.2160(f) (1980), agent employee, 12 C.F.R. § A salaried codified in its System: Credit *9 institution of the Farm current form at 12 C.F.R. 612.- relation, (f) 2150(c)(1)(1984). business direct- shall not have a ly indirectly, or
853
2). Lloyd
any
Taylor
and
and
you received
considera-
both
10. Have
were
convicted on Count One.
any
the sale or transfer of
tion from
acquired
estate
for resale?
real
D. The Sentences
questions
to these
were
The “no” answers
Taylor
Lloyd
and
each received a
false;
by
during
period
covered
suspended custody
years
sentence and five
Form, Payne
a
of Interest
was
Conflict
50%
special
probation,
of
with the
condition that
Gulledge in
the 320
partner
the sale of
with
perform
community
350 hours of
each
ser-
addition, Payne
In
re-
acres to Schoen.
addition,
In
vice.
each was fined a total of
$113,646.57
proceeds
out of the
ceived
$50,000, with the amount of the fine to be
loan that was used
Schoen
the FLBAR
any
reduced
the amount of
restitution
purchase the 320 acres.
paid FLBAR or the
FLBNO.
Eight
Count
concerned
1980 Conflict
II. TAYLOR
Form, covering
period
of Interest
February
Taylor
January
any
1979 to
A.
“connected in
ca-
Was
pacity
Purposes
“no”
the same
with” the Bank
answered
§§
Questions
657 and 1006?
appeared
7 and 11 that
U.S.C.
The “no”
of Interest Form.
Conflict
statute,
misapplication
Both the
false;
questions
to these
were
answers
§ 657,
participa
U.S.C.
and the unlawful
during
by the Conflict
period
covered
statute,
tion
18 U.S.C.
under which
Form, Payne
partner
Interest
was a
Taylor
apply
anyone
was convicted
who
Thead,
was a borrower of the
with
who
officer, agent
employee
is “an
or
of or
FLBAR,
farming operation.
Further-
a
any capacity
any
connected in
with ...
land
more, Payne
partner
Daugher-
a
with
was
Tay
bank
intermediate credit bank.”
[or]
FLBAR, in
ty,
who was borrower
inap
lor contends that the two statutes are
used car business.
plicable
he
because
“connected
any capacity
govern
with” the bank.9 The
Conspiracy Charge
C. The
ment,
hand,
other
contends that
Taylor’s dual roles as “retained counsel”
One, Lloyd Taylor, Payne,
and
Count
closing
for the FLBAR and
attorney”
“loan
Gulledge
charged
conspiracy to
placed
for the
transactions
him
relevant
offenses,
following
either as
commit the
scope
squarely within the
of the two stat
(1)
aiders and abettors:
principals or as
government,
agree
We
with the
utes.
proceeds
participation in the
unlawful
Taylor
hold that
was “connected in
we
Federal Land Bank loans and
benefits of
purposes
capacity with” the bank for
of 18
§§
(18
other transactions
U.S.C.
§§
U.S.C.
657 and 1006.
2); (2) making false statements on Federal
§§
(18
Land Bank forms
U.S.C.
1006 and
undisputed
It is
served as the
2); (3) making false statements to influence
closing attorney”
“loan
for each of the
approval
of Federal Land Bank loans
transactions relevant to the instant case.
§§
(18
Taylor contends,
mortgage
however,
releases
U.S.C.
that as “loan
2); (4) falsifying, concealing, and mak-
closing attorney”
represented
he
the bor
agency
false statements to an
or de-
rower and not the bank. He cites United
(18
(5th
partment
Musgrave,
of the United States
U.S.C.
that “control” is a
Taylor Misapplication?
Convict
contrary,
and 1006. On the
U.S.C.
657
govern
Taylor contends that the
reached the
that the Ninth Circuit
we note
produce
ment failed to
evidence sufficient
factually
in the
analo
opposite conclusion
him of
under 18
to convict
Rice, 645
gous case of
v.
United States
657. The four elements
(9th Cir.),
denied,
cert.
454 U.S.
F.2d 691
(1)
misapplication are:
the accused
crime of
(1981).
862,
318,
kets, only 1006 was enacted must Section We misapplication.12 the crime Taylor’s momentarily issue, our discussion defer we of this our resolution Because of if, falsely
sustain
taking
convictions
the loans
inflated
Payne,
government,
most
view
favorable to
initially per
apply
reasonable
could have found that
suaded the
borrowers
guilt beyond
persuaded
evidence established
a reason
loans and later
them not to back
Bell,
United States
closing
able doubt.
allegations,
out of
the loans. These
1982) (en
B
adequately proven, might
Cir. Unit
if
have constitut
banc),
grounds,
on other
misapplication”
462 U.S.
ed “willful
of bank funds.
*12
aff'd
356,
(1983).13 See,
2398,
e.g.,
Riebold,
103 S.Ct.
"intent
to defraud" claim. See
section II.
13. Decisions of the
Fifth
former
Unit
infra
C.
September
binding
rendered after
are
precedent
Reynolds
in this circuit. Stein v.
Se-
curities, Inc.,
(11th Cir.1982).
667 Furthermore,
government
government’s
case-in-chief did
in- because
reports.
discrepancies
that the
original
that the
any
troduced no evidence
not include
evidence
cash
of available
would
Hickman,
the statements
appraisals
based on the
made
the decision whether
material to
have been
by Payne,
“suggested”
values
the loans.
approve
or not to
way
the “fair and reason-
inconsistent with
properties.
market values” of the
able
encountered similar dif-
evidence about the
presenting
ficulties
stated,
Simply
the record in this case
ease-in-chief, the
During its
land values.
support
conclusion that
does not
Hickman, a field-
government called James
relevant loans should not have been
five
appraiser with the
representative
record,
appears in the
made. For all that
signed the
prepared
FLBAR
who had
may
perfectly
have been
ac
borrowers
all five of the
appraisals in connection with
ceptable
the loans at the
candidates for
on direct
loans. Hickman testified
relevant
approved
time the loans were
and made.14
“suggested”
had
examination that
fact,
light
of this
whether or not
*13
properties used as
value for each of the
encouraged the
to take out the
borrowers
security
respective
for the
loans.
each
Furthermore,
import.
loans is of no
the
case,
eventually appraised the
Hickman
record does not establish that
the loans
“suggest-
at the
had been
land
value that
Although
proper
undersecured.
were
the
However,
by Payne.
ed”
Hickman never
appraised
greatly ex
ties were
at values
“suggested”
testified that the
values were
ceeding
prices paid by Taylor
acquire
the
to
fact,
any way.
inflated or erroneous
them,
alone,
discrepancy, standing
such a
attempted
Payne’s attorney
to cross-
when
appraisals
does not
that the
were
establish
opinion
Hickman
his
of the
examine
about
opinion,
equal
inflated.
In our
it is at least
properties,
actual values of the
the court
ly likely
prices paid by Taylor
that
restricted the cross-examination because
the
were
given “any testimony
low,
rel- unrealistically
Hickman had not
either
the
because
sales
property” on
ative to the value of this
Taylor took ad
were distressed or because
examination.
direct
vantage
Because the
of
the sellers.
government
prove either
failed to
that the
Later,
case,
part
the
as
of its rebuttal
credit-worthy
were not
or that
borrowers
Anderson,
government called Kermit
a sen-
undersecured,
loans
we hold that
the
were
appraiser
analyst
ior credit
with the
to
the evidence was insufficient
establish
FLBNO,
testimony
attempted
to solicit
Taylor misapplied
simply
funds
that
bank
actual
of a
from Anderson about the
value
arrange
by helping to
the five relevant
particular parcel of land.
court refus-
permit
testimony on rebuttal
loans.15
ed to
such
loans,
obligated
Taylor
government’s argument
pay
borrow-
back the
14. The
the
creditworthy
guilty
misapplication.
be
not
seems to be based
could still
found
ers were
See, e.g.,
Krepps,
15. We also find the evidence insufficient
applications
be
filed
"straw man” borrowers
Taylor misapplied
funds under
bank
tablish that
the real borrowers could not have secured
cause
theory misapplication. For exam
other
Here,
directly from the bank.
loans
prove
government
that the
ple,
the
failed
hand,
named
used the loan
other
the
borrowers
pay
obligated
the
back
borrowers were not
purchase
respective
proceeds
the
themselves to
See,
King,
F.2d
e.g.,
v.
484
United States
loans.
Taylor.
properties
this case does
denied,
Because
Cir.1973),
416 U.S.
cert.
924
borrowers,
the cases
not involve "straw man”
(1974);
L.Ed.2d
government
inapposite.
cited
the
are
(3d Cir.),
Moraites,
States
denied,
S.Ct.
L.Ed.2d
government
U.S.
Finally,
evi-
the
introduced no
argues
appeal
(1972).
great-
dence that the amounts of the loans were
credit-worthy
were
prices paid by
borrowers
if the
the
even
er than the
borrowers
Taylor’s
unusual,
at
unprecedented.
do not condone
conduct
was
least
if
We
not
Although
Lloyd Taylor
connection with the transactions involved
both Dale and
testi-
Taylor may
guilty
this ease.
of defraud
fied that the cash
turned
.over to Dale.
properties,
Taylor,
jury
and at
purchasers
of the
the
was entitled to discount
very
engaged
testimony.
least
in unethical self- such
We find that a reasonable
dealing.
jury
beyond
But
involves
could have concluded
a reason-
bank,
against
against
Lloyd Taylor “partici-
crime
able doubt
opinion,
pate[d]
directly
In our
in or
bank’s customers.
share[d]
receive[d]
support
indirectly”
portion
proceeds
record does not
the conclusion that
“willfully misapplied”
funds
Taylor
bank
relevant loans.
meaning
of 18 U.S.C.
within
element,
respect
With
to the “intent”'
was insufficient to
Because the evidence
most,
all,
evidence indicated that
if not
jury
beyond
to conclude
allow a reasonable
negotiations preceding
each of the rele-
guilty
a reasonable doubt
by Lloyd
vant transactions were conducted
misapplication,
must
we
reverse
instance,
Taylor. In all
Lloyd Tay-
but one
misapplication convictions.16
personally acquired
rights
pur-
lor
subject properties.
chase the
Sometime
C.
the Evidence
Was
Sufficient
prior
closings, Lloyd Taylor assigned
to the
Convict
Partic-
Unlawful
rights
subject
properties
his
to Dale
ipation?
Taylor.
We find that a reasonable
govern-
also contends that
inferred,
could have
from the manner in
produce
ment failed to
sufficient
evidence
subject properties
acquired,
*14
participation
to convict him of unlawful
Lloyd Taylor
“pulling
that it
who was
§
specifically,
under 18
1006. More
strings,”
Lloyd Taylor
and that
used
Taylor contends that the
failed to
evidence
personal
his brother to conceal his own
(1)
“participate[d]
that he
establish
or
in the
involvement
relevant
transactions.
directly
or
or indirect-
share[d]
receive[d]
on this inference and the aforemen-
Based
ly” any part
proceeds
of the
of the relevant
concerning
proceeds
tioned evidence
of
requisite
loans and
that he had the
loans,
find that
the relevant
we
a reason-
“intent to defraud” the bank.
jury
beyond
have concluded
able
could
Lloyd Taylor
reasonable doubt that
had the
The evidence introduced at trial indi
requisite
“intent
defraud” the bank. We
that, shortly
proceeds
cated
after the"
of
that the
therefore hold
evidence introduced
each of the relevant loans were disbursed
at trial was sufficient to establish all of the
placed
Taylor
to Dale
in either the
partici-
elements of the crime of unlawful
Lloyd Taylor’s
trust account of
law firm or
pation under 18 U.S.C. 1006.
Farms,
partnership
account of T
T&
Lloyd Taylor wrote and cashed several
D. Was the Evidence
Sufficient
large
payable
checks made
to cash from
Taylor
Conspiracy?
Convict
of
the same accounts. The evidence also indi
practice
writing large
Taylor
govern
cated that
contends that the
cash from
produce
checks to
those two accounts ment failed to
evidence sufficient
Here,
respective properties.
"willfully misapplied"
This case is therefore dis-
bank funds.
Farrell,
hand,
tinguishable from United States v.
other
the record contains no evidence
Farrell,
(5th Cir.1980).
F.2d 816
ant,
In
the defend-
greater
that the amounts of the loans were
than
bank,
employee
an
of a state
was convicted
necessary
legitimate purposes
to achieve the
misapplication.
loans,
on three counts
The defend-
namely,
purchases
respec-
of the
time,
and,
ant sold three
at the same
ar-
cars
properties.
tive
ranged
pur-
to the
for the bank to make loans
knowledge
arguments
appeal,
chasers of the
Without the
fifth and sixth
on
cars.
16.
concerning
right
approval
ar-
purchasers,
the defendant
his
of cross-examination and
of the
exceeding
ranged
greatly
right
complete
transcript,
his
to a
trial
relate
for loans in amounts
cars,
solely
validity
purchase prices
and the defend-
of his
con-
up
Taylor’s misappli-
the excess
we
accomplice divided
victions. Because
reverse
ant and an
ground,
proceeds
held the evi-
cation
on
The court
convictions
another
we do
of the loans.
arguments.
the defendant
not address these
dence
to establish that
sufficient
conspiracy in
transactions
con
him of
violation
when the relevant
to convict
he
that a
admits that
find
reasonable
18 U.S.C.
summated. We
alleged
beyond
several of the overt acts
committed
concluded
could have
reasonable
indictment,
argues
he
that none
in the
but
doubt,
inferences drawn
from the
based
illegal.
he committed were
of the overt acts
circumstances,
Taylor conspired
addition, Taylor
admits that his acts
Payne and that
knew the essential
purposes
furthered several of the
of the
conspiracy. We
nature of the
hold that the
indictment,
alleged in
conspiracy
but he
sufficient to convict
evidence was
argues
purposes
of the
he fur
that none
conspiracy to violate various false state
illegal. Taylor contends that
thered were
participation
ment and unlawful
statutes as
of,
knowledge
committed
he had no
no alleged in
indictment.17
of, any illegal purposes
acts in furtherance
conspiracy alleged in the indictment.
E.
Did
Trial Court Abuse Its Dis-
First, “it
These contentions are meritless.
by Refusing to
cretion
Grant a Sev-
settled that acts which are them
well
erance?
legal
legal
selves
their
character when
lose
Taylor contends that
the trial
they
of an
become constituent elements
by refusing
court abused its discretion
Haje
scheme.”
States v.
unlawful
United
grant a
severance so
the defendants
cate,
(5th Cir.1982),
896-97
683 F.2d
separately. Taylor’s
could
tried
conten
denied, 461 U.S.
cert.
primarily
tion is based
on the fact that the
(1983)(quoting
Payne’s Payne arranged like that approval probably by fraudulent. tainly unethical and relevant loans the bank. All these of cuit, designed “exculpatory acts to aid in the is whether constituted overt no” doc- respect prosecutions scheme. With to applicable success trine is under 18 § intent, certainly Payne so, to aware If question U.S.C. second instance, Taylor personally in all one but “exculpatory is whether no” doctrine acquired rights purchase subject Payne’s reversal of requires the false state- assigned rights properties and then those ment convictions. We hold that the “excul- Furthermore, to his the evidence brother. patory applicable no” doctrine is prose- instructed, Payne showed that had been § 1006, cutions under U.S.C. but that occasion, more than one about the “conflict require the doctrine does not the reversal of interest” rules of the bank.18 We find Payne’s false statement convictions. jury could that a reasonable have conclud “exculpatory The no” developed doctrine doubt, beyond ed a reasonable based on § exception 1001,19 as an to 18 U.S.C. evidence, inferences drawn from the false statement designed broad statute Taylor’s participation knew prevent persons fraudulently from assert proceeds improper of the loans was but against, obtaining privileges claims or intentionally assisted nevertheless from, employment perverting or legiti completion of the loans. We there of, mate functions any or fore hold that the was sufficient evidence agencies.20 The “exculpatory its no” Payne guilty aiding abetting to find doctrine, by as formulated this circuit’s participation the unlawful under predecessor, excluded from the coverage of 18 U.S.C. 1006 and 2. § negative 18 U.S.C. 1001 “mere responses “Exculpatory
C. Does the
No” Doc-
questions propounded
...
an investi
Require
trine
the Reversal
gating agent during question
and answer
Payne’s False Statement Convic- conference,
not initiated
the [defendant].”
tions?
States,
rnostro
v. United
Pate
F.2d
(5th Cir.1962).
original
neg
contends that his false
basis for the doctrine was that such “mere
questions
ative answers to certain
on Fed
negative responses” were outside the in
forms,
gave
eral Land Bank
which
rise to
scope of the statutory prohibition.
tended
his false statement convictions under 18
Subsequently,
began
courts
recog
Id.
exculpatory
were mere
deni
nize that the doctrine also derives “at least
wrongdoing. Payne
als of
therefore con
part
applica
from latent distaste for an
tends
“exculpatory
that the so-called
no”
uncomfortably
tion of the statute that is
requires
doctrine
the reversal of his false
close to the Fifth Amendment.”
statement
convictions. This contention
United
Lambert,
presents
questions.
two distinct
States v.
first
n.
(5th Cir.1974)(en
question, previously
banc);
unanswered
this cir-
see United States
distinguishable
Snyder
provides:
18. This case is
U.S.C. 1001
19. 18
States,
(8th Cir.1971),
863
tion.”).
opinion,
already
rejected
only
the
In our
it is
Having
such
doctrine.
“exculpa-
argument
that
the
that Fifth Amendment
government’s
cases
values are
only
prosecu-
applies
doctrine
tory
implicated
“exculpa
no”
to the extent
that
the
§ 1001,
See
18
we hold
under
U.S.C.
tory
applicable.
tions
no” doctrine becomes
Anderez,
prosecutions
applicable
v.
doctrine is
404,
United States
the
661 F.2d
§ 1006.
under 18 U.S.C.
(5th
B
therefore
Unit
We
409
Cir.
re
“exculpatory no” doctrine
hold that
the
for Fifth
Although our solicitude
of a false statement
quires
the reversal
requires us to extend
Amendment values
§
only if
18 U.S.C.
1006
conviction under
prosecu
“exculpatory no” doctrine
the
answers would have
truthful
affirmative
§ 1006, however,
the
tions under 18 U.S.C.
incriminating, or if the defendant can
been
us to limit
same considerations
lead
reasonably
he or she
believed
establish that
involving substantial
doctrine to cases
affirmative
answers would
truthful
real hazards
of self-incrimination.21 Cf.
Maness v.
incriminating.
have been
Apfelbaum,
115,
United States v.
Cf.
445
U.S.
Meyers,
449, 461,
584,
95 S.Ct.
419 U.S.
956,
128,
948,
L.Ed.2d 250
100
63
S.Ct.
States,
592,
(1975) (Fifth
42
574
Amend
L.Ed.2d
Marchetti v. United
(1980);
390
protection includes evidence that an
ment
697, 702,
39, 48,
19 L.Ed.2d
88
U.S.
S.Ct.
“reasonably
individual
believes” could be
(1968) (“The
889
central
standard
against
prosecution);
used
him in a criminal
privilege’s
application
[Fifth Amendment]
States,
v. United
479,
341 U.S.
claimant
is confront
has been whether
Hoffman
486,
814, 818,
(1951)
‘real,’
merely
71 S.Ct.
21. We
relied
1001,
statement,
making
properly
“exculpatory
U.S.C.
char-
§
no” cases under 18
the false
“investigative”
between
and "administrative"
defense” on which
acterized as an "affirmative
See, e.g.,
governmental inquiries.
proof.
States
United
the defendant must bear the burden of
894,
(5th Cir.1982),
Hajecate,
difficulty
requir-
v.
683 F.2d
900-01
We see no constitutional
2086,
denied,
927, 103 S.Ct.
77
cert.
461 U.S.
ing
proving
to bear the burden of
the defendant
Bush,
(1983);
States v.
L.Ed.2d 298
reasonably
that truth-
that he knew or
believed
813,
(5th Cir.1974). Initially, we
818 n. 2
would have been in-
ful affirmative answers
legisla
that this distinction is based on
note
criminating.
1001,
see Pater
§
tive intent behind 18
holding
between our
We also see no conflict
States,
(5th
tive answers would not have been incrimi might have led bank officials to ask further nating. questions Payne’s about real estate trans- Question example, 10 on the 1979 For vein, actions. In a similar truthful affirma- Form asked: tive Question answers to 11 on the 1978 government’s proof burden of on the ele- false discussing statement conviction. After knowledge.” ment of Palzer’s Id. history at 1356. "exculpatory of 18 U.S.C. 1001 and the that, The doctrine, court did not hold in all false Palzer no” the court added: “Our conclusion cases, statement must bear the possible also fits the mold of self-incrimination proving burden of that the defendant knew that at least probably in the minds of travelers who truthful affirmative answers would not have illegal $5,000 bring think it is to more than in Rather, incriminating. been court Palzer currency country.” into this Id. at 1213. expressly acknowledged that its discussion con- Finally, Anderez, in United States v. 661 F.2d cerning proof the burden of was limited to the (5th 1981), Cir. Unit B the defendant was context of the case. A review of several former Fifth Circuit cases reveals making statement, a false convicted in viola- why this is so. tion of 18 answering U.S.C. § "no” to Granda, (5th United States v. question the same on the Customs Form as in
Cir.1978), the defendant was convicted of know- Citing Schnaiderman. Granda and Schnaider- ingly $5,000 willfully transporting more than man, the court stated: currency into the United States with- In both of those cases we held unless the filing statutorily out required reports, permissible bring individual knows it is to (now violation of 31 U.S.C. and 1101 §§ 1058 $5,000 country, more than into the a lie to codified at 31 U.S.C. 5316 and agents expected customs to avoid retribution court held that the conviction could not be sus- currency under laws will not lead to section tained because the defendant did not know about punishment____ Unless customs offi- reporting requirement. rejected The court cials disabuse travelers of the belief that government’s argument question that the on the bringing currency country illegal, into the is Customs that asked whether the defendant Form $5,000 solicitude for pre- fifth carrying currency placed amendment values more than attaching vents us liability reporting section 1001 the defendant on notice about the re- quirement: this sort of conduct. effect, any, (citations question merely omitted). if of this is Id. at 409 The court held illegal "exculpatory cause the traveler to think that it is the ever, inapplicable, no” doctrine how- carry large money amount into the coun- government proved because the that the try____ Nor does the untruthful answer informed, defendant had been at or about the question by prove beyond the defendant Form, time he filled out the Customs that it was sup- reasonable doubt that she knew she was illegal $5,000 simply carry more than posed to fill out a form. An untruthful an- currency into the United States. very easily prompted by swer could Granda, Schnaiderman, opinion, In our An- question might on the form which cause the derez, presumption are based on the Palzer country traveler who enters the with more travelers, probably most of whom are unfa- $5,000 possession than to think his or her regulations govern- miliar with the statutes and illegal, itself and who therefore answers assume, inspections, upon Customs will re- untruthfully attempt in order to to avoid be- Form, ceiving reading the Customs that it is ing caught breaking the law. illegal simply carry more than in cur- Id. at 926. rency into the United States. It is because Schnaiderman, In United States v. presumption this that the courts in these cases Cir.1978), the defendant was convict- govern- placed proof have the burden of Granda, charges ed of the same as in but was ment to show that the traveler knew that truth- statement, making also convicted of a false affirmative would not have been ful answers answering violation of 18 U.S.C. § incriminating. We read these cases as question do not "no” to the on the Customs Form. The proof in other "exculpatory court determinative burden of concluded that the no” doc- required trine the reversal factual contexts. of the defendant’s explaining Questions 2 and 6 on statement the situation in 1980 Forms and de- *20 incrimi- Form not have been the 1979 would Likewise, tail must attached. be if the nating. surrounding previously circumstances approved transaction or questions relationship
All the other on Conflict have for Forms concerned activities changed of Interest substantially, a statement ex- approval Payne could have secured which plaining same must be attached. and its board of directors. from the bank placed Payne This on notice that he could Question Form example, 1 on the 1979 For approval already- secure retroactive for asked: completed short, activities. In the record you participated in the delibera- Have Payne shows that even if believed that affecting your upon any question tions truthful affirmative answers would have any person related to interest or those of incriminating, such a been belief would not in organization you or of a business have been reasonable. you are interested? similarity case We note the between this Question 1 mentioned in The activities Anderez, and United States by a Farm Credit Administration prohibited 1981). Anderez, Unit B Cir. regulation appeared at C.F.R. charged making a false defendant was § 612.2160(a)(1980).23 regulation The also § because, under 18 U.S.C. 1001 statement however: provided, States, upon entry his into the United he enjoined by not deemed An act shall be employing negative question insti- paragraph gave if the a false answer to this ... degree in- that the tution determines he a Customs Form that asked whether on relationship question is not terest or $5,000 currency. carrying more than to create but so trivial as substantial defendant on the convicted the probability that the officer’s ... little charge, the trial court statement but false action has impartiality judgment post-trial motion granted the defendant’s affected, such determination been acquittal. appeal, the defendant On di- reported to the board of has been alia, “exculpatory argued, that the inter employing rectors of the institution. statement precluded doctrine his false no” Ques- reasoning applies The same Id. disagreed and rein- The court conviction. Form, 3 on the 1979 see C.F.R. tion the false statement conviction. stated (1980), 612.2160(c)(2)(iv) Question explained that the defendant had court Forms, and 1980 see C.F.R. the 1978 informed, the time he at or about been § 612.2160(f)(6)(1980). statement, that it was not made the false addition, Payne did not establish $5,000 bring than into the illegal to more reasonably he believed that truthful affirm- Moreover, pointed the court United States. have incrimina- ative answers would been may though this information out even anything, supports If the record ting. given to the defendant until not have been example, For on the opposite conclusion. already made the false state- he had after Form, gave affirma- truthful ment, incrimina- he still could have avoided questions of the answers to two tive ting himself: approval he had added that received bring informed that he could more Once engage in the activities men- the bank country into the Anderez than Furthermore, questions. in those tioned told the easily could have recanted and by Payne forms filed contained of the each liability by could truth. He have avoided following provision: original changing cus- his answers of the If the answer NOTE: form____ chose Because Anderez toms “yes” approval questions is above being after to continue his falsehood transaction engaging involved sought to conceal told that the act he previously granted, then a has not been (1984). 612.2150(b)(1) form, regulation, appears at 12 C.F.R. in its current 23. The illegal exculpatory no all of them proven doc- in order to sustain a inapplicable. trine is fraud.”). conviction for (footnote omitted). Id. at 409 E. Was the Evidence Sufficient reasoning find the We Anderez Conspiracy? Convict Anderez, persuasive. Payne, court like contends that chose to “continue his falsehood” al- produce failed to though evidence sufficient to con truthful affirmative answers would conspiracy him of incriminating, vict in violation of not have been either because *21 already U.S.C. 371. questions We have of the nature of the or because discussed sufficiency Payne sought approval could evidence to convict have conspiracy. light of by questions. covered of the evi activities Fur- thermore, Payne therein, dence and inferences did not mentioned establish that he reasons, and for the reasonably same we hold that believed that truthful affirma- tive evidence was sufficient to convict answers would have been of incrimina- ting. conspiracy to violate We therefore hold various false state “exculpa- that the tory participation no” ment and unlawful require doctrine does not statutes as the re- alleged in Payne’s the indictment.24 versal false statement convic- tions. F. Did the Trial Court Abuse Its Dis- Questions
D. on Were by cretion Refusing to Grant a Sev- Conflict or “am- “vague” Interest Forms erance? of biguous” Require so as to the Re- Payne finally contends that the trial Payne’s versal False Statement court abused its refusing discretion Convictions? grant a severance so that the defendants questions contends that the separately. could be tried already We have on the annual Conflict of Interest Forms Taylor’s discussed similar contention. “vague ambiguous.” were He there Payne, Taylor, particular like identifies no argues fore principle under the evidence the introduction of which could be lenity, his false statement convictions un prejudiced said to have light him. der 18 U.S.C. 1006 should be reversed. our discussion of previous conten- argument We find this meritless. In our tion, reasons, and for the same we hold opinion, only questions possi could is not entitled to a reversal of bly be described as way “vague” his convictions on the basis the trial “ambiguous” Question 6 on the 1979 grant court’s refusal to a severance. Question Form and 11 on the 1978and 1980 IV. CONCLUSION questions, Forms. These unlike the others discussion, foregoing Based on the we Forms, required an judg exercise of appellants’ reverse the misapplication con- person ment answering ques victions, but we affirm all of their remain- Payne’s tions. None of false statement ing convictions. convictions, however, solely were based AFFIRMED IN PART and REVERSED questions. Therefore, his answers to these IN PART. ques even were we conclude that these fatally “vague ambiguous,” tions were RONEY, Judge, specially Circuit concur- Payne’s nevertheless sustain we would ring: false statement convictions. Cf. Vicars, Although v. I States have a serious reservation Cir.1972)(“When misrepresen one or more “exculpatory about whether the no” doc- made, it necessary applicable prosecutions tations are is not trine is under 18 Payne's misapplication spiracy supra reversal of Our con- conviction. See footnote 17. validity does not victions affect the of his con-
«67 § 1006, I neither concur nor dissent Judge portion opin- from that Kravitch’s
ion, necessary to the since it is not decision fully I concur in all of the rest of the
here. opinion.
Court’s MILES,
Mary Plaintiff-Appellant, J. *22 CORPORATION,
M.N.C.
Defendant-Appellee.
No. 83-7309. Appeals,
United States Court of
Eleventh Circuit. 15, 1985.
Jan.