United States v. Twitty ( 1997 )

United States Court of Appeals,
Eleventh Circuit.
No. 94-3563.
UNITED STATES of America, Plaintiff-Appellee,
v.
Thomas J. TWITTY; John E. Watson, a.k.a. Jack Watson; John P.
Larrison, a.k.a. Jack Larrison; G. Richard Leveritt, Defendants-
Appellants.
March 21, 1997.
Appeal from the United States District Court for the Middle
District of Florida. (No. 92-64-CR0T-25A), Henry Lee Adams, Jr.,
District Judge.
Before EDMONDSON and BLACK, Circuit Judges, and HILL, Senior
Circuit Judge.
HILL, Senior Circuit Judge:
Appellants were convicted of conspiracy and bank fraud. Two
appellants were also convicted of money laundering. For the
following reasons, we affirm each appellant's conviction and
sentence.
I. BACKGROUND
Thomas J. Twitty, John E. Watson, G. Richard Leveritt, and
John P. Larrison were partners in a joint venture to develop a real
estate project in Pinellas County, Florida, called "Hamlin's
Landing." The development included office/commercial space, retail
space, a marina, a restaurant, and time-share condominiums. On
March 6, 1985, Twitty and Larrison signed a Real Estate Mortgage
Loan Application and submitted it to Freedom Federal Savings and
Loan Association (Freedom) to obtain financing for the project.
The application stated that "[t]he 42 condominiums must be 50%
pre-sold prior to closing with minimum 10% non-refundable binders."
On April 9, 1985, Twitty submitted a status report to Freedom
showing the names of the "purchasers" of the condominium units.
The list showed twenty contracts in the name of Jewel Roome, ten in
the name of Dr. Neil Feldman, and two in appellant Watson's name.
On April 22, 1985, Twitty wrote Freedom stating:
Thirty-nine (39) out of 42 units are presently contracted for.
The response from our advertising indicates a strong market
for our townhome product from the financially independently
secure as to a viable place to own and live and do business.
The entrepreneur has shown strong interest of locating home
and business to (sic) together at this location.
On May 2, 1985, Freedom issued a commitment letter in which it
agreed to lend the joint venture money to build Hamlin's Landing,
but only if Twitty and the others promised to meet certain
conditions. Chief among the conditions was the pre-sale of
twenty-one of the proposed forty-two condominiums in binding,
non-contingent contracts, to bona fide third parties, with ten
percent down payments. Group sales would count only half the
number of actual units sold. Freedom also required that 100% of
the sales price on each condominium be paid to it before Freedom
would release its hold on that condominium.
The evidence at trial was that Roome and Feldman were not bona
fide purchasers. Each was induced to sign purchase agreements for
condominiums, but was told that they would never have to close on
the contracts. They were told that the joint venture would
arrange, guarantee, and pay all costs associated with the contracts
and any debts Roome and Feldman might incur in making the down
payments on the contracts. They were each rewarded with a discount
toward the purchase of a $120,000 partnership unit in Hamlin's
Partners, Ltd.
Sometime in the spring of 1985, Roome consulted with a lawyer
who advised her to rescind her twenty purchase agreements. Her
counsel contacted Watson and demanded that the joint venture
rescind Roome's contracts, threatening to contact Freedom directly.
On June 3, 1985, Watson agreed to rescind Roome's purchases.
On June 5, 1985, Twitty's counsel sent Freedom another status
report still showing Roome contracting to buy twenty condominium
units. At another meeting later in June, Twitty assured Freedom
that Roome actually was planning to close on her twenty
condominiums and that she had the financial ability to do so.
Without Roome's twenty contracts, the joint venture did not
have enough pre-sales to satisfy the conditions set by Freedom for
the financing. The loan was set to close in July of 1985.
Larrison went to Watson's law firm and offered to pay people
working in the firm to sign the pre-sale contracts. He recruited
three lawyers and the office manager and offered each $5000 to sign
on as a straw purchaser. Each was promised he would not have to
incur any expenses, that a loan would be arranged to pay the down
payment, and that he would not have to close on the unit. Each
executed a purchase contract and received a $5000 payment drawn on
a bank account controlled by Leveritt. Subsequently, one of the
lawyers refused to go through with the deal, telling Larrison that
he thought the submission of the "purchase agreements" to Freedom
would constitute bank fraud.
Twitty sent Freedom another status report on July 15, 1985,
shortly before the July 31, 1985, scheduled loan closing. By this
time, Roome's name was off the list, but the list included the
names of the people from Watson's law firm and others who had side
agreements to sign over the purchase contracts to the partnership
at its direction. Twitty represented that these purchasers had
placed or would place cash deposits, although in fact the
defendants, themselves, had funded the down payments.
On July 31, 1985, the loan closed. Twitty and Larrison signed
the Loan Agreement. They represented to Freedom in the Agreement
that the borrowers had not defaulted under any of the loan
documents and that they knew of no event of default that would
occur after the passage of time. The Agreement defined "event of
default" to include the borrowers' failure to perform any condition
in the Loan Agreement or other loan documents. Freedom was not
aware of the side agreements and did not know that the partnership
had "fronted" the down payments on the pre-sale contracts.
Freedom required the borrowers to place $1 million of the loan
proceeds in a collateral account at Freedom. The borrowers had
agreed to allow Freedom to hold $620,000 of that amount until the
condominium loan of $6.2 million was repaid. The borrowers were
permitted to draw against the remaining $380,000 for cost overruns
in the project. For the borrowers to withdraw money from the
account, at least one representative from Freedom had to endorse
the request.
In early 1987, only the $620,000 remained in the collateral
account. In February of 1987, Twitty and Larrison went to a branch
office of Freedom and changed the signature card to show that only
Twitty and Larrison were required to sign to withdraw funds from
the collateral account. Then, on March 2, 1987, they withdrew
$520,000 from the account, contrary to the terms of their agreement
with Freedom.
Some time later, Twitty, Larrison, Watson, and Leveritt
contacted the straw purchasers and directed them to write letters
to Freedom asking to rescind their purchase contracts. Upon
Twitty's authorization, the escrow agent returned the down payment
money to the partnership, not to the alleged purchasers.
After Hamlin's Landing was completed, the borrowers never
repaid any of the $6.2 million they were supposed to recover from
the sale of the condominiums. In 1988, Freedom filed an action to
foreclose on the development. Then Freedom itself went into
receivership. The Resolution Trust Corporation (RTC) took it over,
and substituted itself as plaintiff in the foreclosure action.
On April 10, 1992, a federal grand jury returned a five-count
Superseding Indictment charging Twitty, Watson, Leveritt, and
Larrison with making false statements to a financial institution
and bank fraud. After many months, the defendants mounted a
successful challenge to the indictment based upon the theory that
the charges were duplicitous.
On March 31, 1994, the grand jury returned a Second
Superseding Indictment against the defendants. This indictment
charged each of the defendants with one count of conspiracy to make
knowingly false statements to a federally insured financial
institution and executing a scheme to defraud a federally insured
institution (18 U.S.C. § 371). The defendants were also charged
with one count of knowingly executing and attempting to execute a
scheme to defraud a financial institution, and obtaining funds from
that institution by false or fraudulent representations (18 U.S.C.
§§ 2 and 1344). Finally, Twitty and Larrison were each charged
with five counts of money laundering (18 U.S.C. §§ 2 and 1957).
In May of 1992, each of the defendants executed a waiver of
his right to a speedy trial. Twitty, Watson, and Larrison each
executed an indefinite speedy trial waiver; Leveritt waived his
right to a speedy trial through November 1992. The trial began May
9, 1994. Each defendant was convicted on all counts. At
sentencing, the district court ordered each to pay restitution.1
Appellants raise many issues on appeal. We find no merit in
most of these issues.2 We address the issues of denial of speedy
trial as to Leveritt; sufficiency of the evidence as to each
appellant's intent to defraud; and the sufficiency of the
restitution orders.
II. DISCUSSION
A. Leveritt's Right to Speedy Trial
1. Leveritt's Statutory Right
The Speedy Trial Act requires that the trial of any indicted
defendant commence within seventy days from the later of either the
filing date of the indictment or the date on which the defendant
1
Twitty and Larrison each received eighteen months
incarceration. The district court sentenced Leveritt to three
years probation, and Watson to six months home confinement and
three years probation.
2
These issues include: whether the prosecution violated the
ex post facto clause; whether the prosecution was barred by res
judicata; whether the district court erred in several of its
evidentiary rulings; whether the second superseding indictment
was multiplicitous; whether the jury instruction on the money
laundering counts was erroneous; and whether effective
assistance of counsel was denied. As we find no merit in any of
these issues, we do not discuss them.
first appears before the court in which that case is pending. 18
U.S.C. § 3161(c)(1). The period of delay "resulting from any
pretrial motion, from the filing of the motion through the
conclusion of the hearing on, or other prompt disposition of, such
motion" is excluded from the computation of this seventy-day limit.
§ 3161(h)(1)(F). The day that a pretrial motion is filed and the
day on which the motion is decided by the court are excluded from
the seventy-day clock. United States v. Elkins, 795 F.2d 919, 924
n. 1 (11th Cir.), cert. denied, 479 U.S. 952, 107 S. Ct. 443, 93
L. Ed. 2d 391 (1986). Delays resulting from co-defendants' motions
are excludable time as to each co-defendant. United States v.
Mejia, 82 F.3d 1032, 1035 (11th Cir.1996); United States v. Sarro,
742 F.2d 1286 (11th Cir.1984). Section 3161(h)(8)(A) also excludes
any period of delay resulting from a continuance granted by a judge
at the request of a defendant or his counsel if the continuance
serves the "ends of justice." We review a claim under the Speedy
Trial Act de novo. United States v. Vasser, 916 F.2d 624 (11th
Cir.1990), cert. denied 500 U.S. 907, 111 S. Ct. 1688, 114 L. Ed. 2d
82 (1991).
Leveritt waived both his statutory and constitutional rights
to a speedy trial through November 1992. The speedy trial clock
was set to start running for him, therefore, on December 1, 1992.3
On November 19, 1992, however, the government filed a motion for
continuance based upon the illness of an essential witness.4 The
3
The time prior to Leveritt's waiver is also excludable
because Larrison filed a discovery motion prior to Leveritt's
arraignment, which stopped the speedy-trial clock.
4
The witness had a viral infection in a heart valve.
government requested a six-week continuance. The district court
granted the continuance the same day, but set no definite length,
stating, "[t]he need for a continuance outweighs the defendants'
interest in a speedy trial. This case will be set for trial by
future order."
No party requested the court to set a new trial date until May
5, 1993, when the government moved the court to set trial for a
date certain in July or August. Watson responded, objecting to
these dates and requesting that trial not be set prior to September
20, 1993. Larrison also moved the court to set trial after
September 20, 1993. Both cited the unavailability of their counsel
prior to that time and the need for time to prepare for trial. The
district court did not enter a written order, but neither did it
set the trial on the July or August calendars.5
On September 15, 1993, Twitty filed another pretrial motion.
This motion prevented the speedy trial clock from re-starting on
September 20. The motion remained under advisement when, on
September 27, 1993, Larrison filed a notice of supplemental
authority in support of his previous motions to dismiss. Because
the court permitted Larrison to file this authority, the government
had ten days to respond, and the motion was under advisement for
5
Section 3161(h)(8)(A) excludes any period of delay
resulting from a continuance granted by a judge at the request of
a defendant or his counsel if the continuance serves the "ends of
justice." Although the district court did not cite any reasons
for granting these requests, the grounds cited in the motions
plus the court's grant of a continuance as requested support the
inference that the continued delay was to serve the ends of
justice. See Elkins, 795 F.2d at 923 (despite lack of written
order on defendant's motion for continuance, record was
sufficient for court to determine that the continuance was
granted in the "ends of justice").
thirty days after that. See United States v. Davenport, 935 F.2d
1223, 1228-29 (11th Cir.1991) (time in which the court authorizes
the filing of supplemental materials is excluded without regard to
its reasonableness because matter not yet under advisement). Thus,
the speedy trial clock remained stopped from September 15 through
November 6, 1993. Since November 6 was a Saturday, the clock was
stopped through Monday, November 8, 1993.
The government concedes that one non-excludable day passed on
November 9, 1993. Then, on November 10, Twitty filed another
pretrial motion stopping the clock again. This motion remained
under advisement when the government filed a motion on December 10
and when Larrison's counsel moved to withdraw on December 13.
Larrison's motion was granted on December 15 and the government's
was resolved on December 22.
At this point, the speedy trial clock began to tick again and
twenty-two days elapsed before the government filed an in camera
application for an ex parte order on January 14, 1994. This motion
remained under advisement when Larrison moved to consolidate counts
four through eight on January 24, 1994. Larrison's motion to
consolidate was under advisement when Larrison moved for a
continuance on February 15, 1994. Larrison asked for the trial to
be continued to the October 1994 trial calendar. On February 18,
1994, the district court granted Larrison's motion, finding that
because Larrison's counsel was newly-appointed, the ends of justice
served by granting the motion outweighed the defendants' interest
in a speedy trial. The court set the trial for the May 1994 trial
term, and the case actually went to trial on May 9, 1994.
The maximum number of non-excludable days which passed between
May 5, 1993, and the start of Leveritt's trial was thirty-three. 6
This leaves thirty-seven days within the seventy-day limit. The
initial continuance, which lasted from December 1, 1992, until May
5, 1993, substantially exceeds thirty-seven days. Unless this
period of time is excludable,7 Leveritt's statutory right to a
speedy trial was denied.
The district court's order granting the government's motion
for a continuance stated:
Presently, the government seeks a continuance on the basis of
the ill health of an essential witness. Upon review of the
government's motion, the Court finds that the testimony of
Neil T. Feldman is essential ... and ... (he) is unavailable
to testify due to serious illness. The Court therefore finds
that the need for continuance outweighs the defendants'
interest in a speedy trial. This case will be set on a trial
calendar by future order.
There is no dispute that the district court made the required
determination that the ends of justice would be served by granting
the continuance. Leveritt argues, however, that the excludable
length of the continuance was only the six-week period requested in
the government's motion. If so, the non-excludable portion of the
continuance would exceed the thirty-seven days remaining on the
speedy trial clock.
The district court, however, stated that it would set the
6
The government maintains that only 23 non-excludable days
passed, but Leveritt disputes the government's contention that
its filing of an in camera application for an ex parte order
stopped the clock for ten days under § 3161(h)(1)(F). We do not
reach this dispute because its resolution would not affect the
outcome.
7
Alternatively, at least all but thirty-seven days must be
excludable time.
trial "by future order." This is an open-ended, not merely a
six-week, continuance. An open-ended continuance may be granted to
serve the ends of justice. We have held:
There is no fixed limit to the amount of time that may be
excluded under the ends of justice provision. The provision
excludes "any period of delay resulting from a
continuance...." § 3161(h)(8)(A) (emphasis added).
Vasser, 916 F.2d at 627. If the trial court determines that the
"ends of justice" require the grant of a continuance, and makes the
required findings, any delay is excludable under § 3161(h)(8)(A) of
the Speedy Trial Act. See Elkins, 795 F.2d at 923.
Although "a defendant has no duty to bring himself to trial,"
Barker v. Wingo, 407 U.S. 514, 527, 92 S. Ct. 2182, 2190, 33 L. Ed. 2d
101 (1972), Leveritt could have objected to the delay caused by the
open-ended nature of the continuance, but did not. Cf. Mejia, 82
F.3d at 1036 (upholding open-ended continuance and noting defendant
could have objected). The length of the delay resulting from the
continuance in this case does not constitute a per se violation of
the Speedy Trial Act, nor is it unprecedented. See e.g.,
Davenport, 935 F.2d at 1228-29 (six-month delay excludable);
United States v. DiTommaso, 817 F.2d 201, 210 (2nd Cir.1987)
(seven-week delay excludable); United States v. Savoca, 739 F.2d
220, 223 (6th Cir.1984) (six-month delay excludable).8
8
We note that on May 5 when the government notified the
court that the continuance was no longer necessary and moved to
set the trial for a date certain in July or August, Watson and
Larrison filed motions requesting the court not to set trial
before September 20. Leveritt filed no objection to these
motions. We infer from this series of events that, at the time,
Leveritt did not find the continuance to be unreasonable. In
fact, by his actions he indicated to the court that a further
continuance would be reasonable.
Accordingly, we hold that the continuance granted on November 19,
1992, served to exclude all time until May 5, 1993, when the
government moved the district court to set the case for trial.
As only a maximum of thirty-three non-excludable days elapsed
between the defendants' indictment and the start of trial,
Leveritt's prosecution did not violate his rights under the Speedy
Trial Act.
2. Leveritt's Constitutional Right
Leveritt claims that the delay in this case violates his
right under the Sixth Amendment to a speedy trial. A delay of
sufficient length may be a constitutional violation, even though it
is not a violation of the Speedy Trial Act. United States v.
Beard, 41 F.3d 1486, 1488 n. 6 (11th Cir.1995). Although
compliance with the Speedy Trial Act does not bar Sixth Amendment
speedy trial claims, "it will be an unusual case in which time
limits of the Speedy Trial Act have been met but the Sixth
Amendment right to a speedy trial has been violated." United
States v. Nance, 666 F.2d 353, 361 (11th Cir.1982), cert. denied,
456 U.S. 918, 102 S. Ct. 1776, 72 L. Ed. 2d 179 (1982).
Four factors underlie a constitutional claim of denial of
speedy trial: the length of the delay, the reason for the delay,
the defendant's assertion of his or her right to a speedy trial,
and the prejudice to the defendant. Barker, 407 U.S. at 530, 92
S.Ct. at 2192. The length of the delay must be "presumptively
prejudicial" to trigger an inquiry into the other three factors.
Ringstaff v. Howard, 885 F.2d 1542 (11th Cir.1989), cert. denied,
496 U.S. 927, 110 S. Ct. 2622, 110 L. Ed. 2d 643 (1990).
In this case, more than two years elapsed between Leveritt's
indictment and the beginning of his trial. This amount of time is
sufficient to trigger inquiry into the other three Barker factors.
Leveritt suggests that the delay in this case was the result
of the government's and the district court's negligent failure to
monitor the case. The record reveals that the delay was the result
of: numerous pretrial motions; the illness of an essential
9
government witness; Larrison's substitution of counsel; and
scheduling conflicts resulting in the unavailability of certain
defense counsel. There is no suggestion that the delay was due to
the bad faith or dilatory purpose of the government. Nor was the
illness of the government's witness under its control. The
unavailability of certain defense counsel cannot be charged to the
government. Therefore, the reasons for the delay in this case do
not militate in favor of finding a violation of the Sixth
Amendment. See United States v. Loud Hawk, 474 U.S. 302, 316, 106
S. Ct. 648, 656-57, 88 L. Ed. 2d 640 (1986).
Furthermore, Leveritt did not assert his right to a speedy
trial in a timely fashion. He filed his motion to dismiss on the
day trial was to begin. The failure to assert the constitutional
right to speedy trial is weighed heavily against the defendant.
Doggett v. United States, 505 U.S. 647, 653, 112 S. Ct. 2686, 2691,
120 L. Ed. 2d 520 (1992). At no time did Leveritt object to any
continuance granted, nor to co-defendants' motions requesting
additional delay. Neither did he request severance so that he
9
Larrison's original counsel was appointed to the state
court bench.
could proceed to trial more speedily. Only on the day of trial,
did Leveritt seek to escape prosecution based upon the length of
these delays. This factor, also, then, militates against finding
a constitutional violation.
Finally, Leveritt fails to identify any actual prejudice he
suffered from the delay, relying instead on an argument that the
two-year delay presumptively prejudiced his defense. While it is
true that "affirmative proof of particularized prejudice is not
essential to every speedy trial claim," Doggett, 505 U.S. at 655,
112 S.Ct. at 2692, where the other factors do not indicate a
constitutional violation, a defendant must show he suffered actual
prejudice from the delay. See Loud Hawk, 474 U.S. at 316, 106
S.Ct. at 656-57. Leveritt's failure to do so does not support his
claim.
The government was neither negligent nor purposefully dilatory
in this prosecution. Leveritt failed both to assert his
constitutional speedy trial right in a timely fashion and to
identify actual prejudice to his defense from the delay in this
case. Accordingly, we hold the Sixth Amendment was not offended by
his prosecution.
B. Sufficiency of the Evidence
Appellants were convicted of making false representations to
Freedom. The government based its case upon the theory that the
representations made to Freedom concerning pre-sales of the
condominiums were false. Paragraph 15(c) of the Commitment Letter
sent by Freedom to Twitty provided:
At least ten (10) days prior to closing, Borrower shall submit
evidence satisfactory to Freedom that Borrower has entered
into binding non-contingent contracts for sale with bona fide
third party purchasers for at least twenty-one of the
condominiums to be built with the proceeds of this loan.
Freedom shall have the right to review the terms of the
contracts. All such contracts for sale shall be accompanied
by a deposit of no less than ten percent (10%) of the sales
price, which shall be placed in an escrow account with
Freedom. In meeting this pre-sale requirement, Borrower will
be given credit for only fifty (50%) of the units purchased by
any person or entity which purchases more than one unit.
The charges against the defendants were based upon the
government's contention that they intentionally defrauded Freedom
by deliberately misrepresenting that they met the terms of this
paragraph, i.e., that they, in fact, had entered into "binding
non-contingent contracts for sale with bona fide third party
purchasers for at least twenty-one of the condominiums." The
government sought to prove its case by introducing evidence that
appellants recruited and induced people to execute purported
purchase agreements for condominiums by: (1) either making the
down payments for them or guaranteeing loans to them for that
purpose; (2) promising these "purchasers" they would not sustain
any out-of-pocket expenses; (3) giving them cash payments of
$5,000 to execute purchase agreements; (4) promising them they
would never have to close on the purchase agreements; and (5)
offering them attractive opportunities to obtain participation in
the enterprise.
Appellants contend that, even if all this evidence is
credited, the government still has not proved its case because the
evidence does not establish the specific intent to defraud required
by the statute. Appellants argue that the evidence was that the
pre-sale requirements found in Paragraph 15(c) were merely
aspirational, contained vague terms, and were, in any event,
considered immaterial and waived by Freedom. Furthermore,
appellants argue that even under the government's interpretation of
Paragraph 15(c), appellants made no misrepresentations as Freedom
could have and should have discovered all the facts proven at trial
by making its own pre-loan inquiries. The sufficiency of the
evidence is an issue of law subject to de novo review. United
States v. Smith, 918 F.2d 1551, 1564 (11th Cir.1990).
At the outset, we reject the argument that, at the most, what
appellants did in this case amounts to non-disclosure, which does
not satisfy the statutory requirements to constitute the offense.
What appellants did10 was to represent to Freedom that they met the
conditions set out in Paragraph 15(c). This is more than
non-disclosure. This is an active misrepresentation unless, as
appellants also claim, the conditions set out in Paragraph 15(c)
were either so vague that appellants cannot be said to have
violated them, or immaterial to the bank and waived by it.
10
We also reject Watson's contention that, because the
evidence did not show that he himself actually made false
statements to Freedom, he is not guilty of the offense. Watson
was indicted under 18 U.S.C. § 2, which renders him guilty as a
principal if he aided, abetted, or counseled the commission of
the fraud against Freedom. The government also charged Watson
with conspiracy. The conspiracy charge required the government
to prove that the conspiracy existed, that the defendants knew of
the conspiracy, and that they voluntarily joined in the
conspiracy. United States v. Hernandez, 896 F.2d 513 (11th
Cir.), cert. denied, 498 U.S. 858, 111 S. Ct. 159, 112 L. Ed. 2d 125
(1990). All the government need prove to establish the offenses
charged in this case is that Watson knew that some financial
institution was lending money for financing of the condominium
project, knew that down payments were required in connection with
the loans, knew that a scheme of some sort existed to make it
appear the down payments were being made, when, in fact, they
were not, and that he willfully participated in the scheme.
United States v. Brandon, 17 F.3d 409 (1st Cir.1994). Proof of
participation in each and every act in furtherance of the
conspiracy is not necessary. Id.
The crux of appellants' argument as to Paragraph 15(c) is that
the term "bona fide" purchaser was not defined, was interpreted
differently by various Freedom loan officers in their testimony at
trial, and, therefore, would not exclude their purchasers. If
their actions amounted to representations to Freedom that they met
the conditions contained in Paragraph 15(c), they argue this was
not a misrepresentation.
Appellants base this argument on their theory that Paragraph
15(c) did not require the purchasers to put up their own money as
a down payment, and could not require the "purchasers" actually to
close on their condominiums. Failure to close might forfeit the
purchasers' deposits, but nothing more. Appellants conclude from
this that they made no misrepresentations to Freedom; with
appellants' straw-purchasers, Freedom was in exactly the same
position it would have been with non-straw-purchasers who
originally intended to close and subsequently changed their minds.
The evidence at trial, however, was that appellants knew that
the purpose of Paragraph 15(c) was to enable Freedom to evaluate
the demand for the condominiums prior to loaning money to
appellants. The fact that Freedom might not have been able to
enforce the pre-sale purchase agreements is not relevant. What
mattered to Freedom was that the purported purchasers be "bona
fide" third parties willing to put up a ten percent down payment
which would be forfeited upon breach of the agreement. Such a
purchaser indicates real interest in the development. Pre-sales of
more than half of the units offered indicates real demand, and
justifies the risk of extending financing to the developers.11
Appellants entered into a scheme essentially to fabricate the
requisite pre-sales. They deliberately misrepresented their
pre-sale purchasers as third parties who genuinely sought to buy
the units contracted for, knowing all the while that the pre-sales
were not sales at all but paper transactions with straw purchasers.
In order to convict appellants of bank fraud, the government was
required to prove that they intended to defraud Freedom. United
States v. Moede, 48 F.3d 238, 241 (7th Cir.1995). There is more
than ample record evidence to support this conclusion.
Finally, appellants argue that under United States v. Brown,
79 F.3d 1550 (11th Cir.1996), Freedom had a duty to inquire about
the "bona fides" of their purchasers. Appellants cite Brown for
the proposition that a party is not defrauded if a person of
ordinary prudence could have confirmed the representations from
readily available external sources. Id. at 1559. They argue that
Freedom could have called any of the pre-sale purchasers listed on
the status reports appellants submitted to it and discovered all
the side agreements between appellants and their purchasers.
Brown does not apply to this case. In Brown, a developer
misrepresented the value and potential rental income of its homes
to customers. We noted that there was no fiduciary duty between
these parties such that the developer had an affirmative duty to
disclose alternative pricing structures. Id. We held that persons
11
If Twitty had been telling the truth about having already
presold thirty-nine of the forty-two condominiums to be built (at
$175,000 per condominium), the developers would have been able to
pay off $6.2 million of the construction loan as soon as they
completed the project.
of ordinary prudence should not, therefore, have relied upon these
representations.
The circumstances of this case are quite different. Here
appellants have affirmatively misrepresented their compliance with
a series of requirements established by their lender as a condition
for the loan. A lender in such a circumstance is entitled to rely
on the representations of the applicant even though no fiduciary
relationship exists. See Pelletier v. Zweifel, 921 F.2d 1465,
1498-99 (11th Cir.1991). We reject this extension of Brown.
C. The Restitution Issue
The Victim and Witness Protection Act, 18 U.S.C. §§ 3663-3664
authorizes restitution to victims of crimes and specifically
directs a sentencing judge to consider not only the victim's
injury, but also "the financial resources of the defendant, the
financial needs and earning ability of the defendant and the
defendant's dependents, and such other factors as the court deems
appropriate." § 3664(a); see also United States v. Barnette, 10
F.3d 1553, 1556 (11th Cir.), cert. denied, --- U.S. ----, 115 S. Ct.
74, 130 L. Ed. 2d 28 (1994). The district court must evaluate the
defendant's financial condition and ability to pay before
determining the restitution amount. United States v. Cobbs, 967
F.2d 1555, 1558 (11th Cir.1992); United States v. Stevens, 909
F.2d 431, 435 (11th Cir.1990). Restitution orders must be "in
accordance with sections 3663 and 3664." 18 U.S.C. § 3556;
Barnette, 10 F.3d at 1556.
Although Watson, Leveritt, and Larrison did not contest their
ability to pay restitution at sentencing, they, along with Twitty,
challenge the restitution orders on appeal. Appellants claim that
the restitution orders are defective because they are not
sufficiently supported by findings of fact on the record regarding
each appellant's ability to pay. We review a district court's
restitution order for abuse of discretion. United States v. Husky,
924 F.2d 223, 225 (11th Cir.), cert. denied, 502 U.S. 833, 112
S. Ct. 111, 116 L. Ed. 2d 81 (1991).
Freedom's loss as a result of appellants' failure to repay
their loan amounted to approximately $15 million dollars, not
including interest. The RTC recovered $3.7 million from the
12
foreclosure sale. The district court ordered each of the
defendants to pay restitution of $11.3 million. This calculation
of the amount of the loss was fair to the defendants. See United
States v. Norris, 50 F.3d 959 (11th Cir.1995).
District courts are not obligated to make explicit factual
findings of a defendant's ability to pay restitution if the record
provides an adequate basis for review. United States v. Hairston,
888 F.2d 1349, 1352-53 (11th Cir.1989); accord United States v.
Lombardo, 35 F.3d 526, 529-30 (11th Cir.1994). Conversely, "we
will not uphold the district court's exercise of discretion if the
record is devoid of any evidence that the defendant is able to
12
We reject appellants' argument that their settlement with
the RTC in which they were absolved from future liability for the
claims which were the subject of the civil suit precludes any
restitution order in this case. "Restitution is not a civil
matter; it is a criminal penalty meant to have strong deterrent
and rehabilitative effect." United States v. Hairston, 888 F.2d
1349, 1355 (11th Cir.1989). While a victim's receipt of partial
compensation should be considered by the trial court in forming
the restitution order, it does not preclude the criminal court
from ordering restitution. Id.
satisfy the restitution order." United States v. Remillong, 55
F.3d 572, 574-75 (11th Cir.1995) (quoting United States v. Patty,
992 F.2d 1045, 1052 (10th Cir.1993)).13 "If the record is
insufficient, reasons must be assigned." Hairston, 888 F.2d at
1353 (quoting United States v. Patterson, 837 F.2d 182, 183-84 (5th
Cir.1988)).
Here, the district court did consider the requisite factors
before ordering restitution. Prior to sentencing these defendants,
the district court recited that it had reviewed and considered the
information in each defendant's Presentence Report (PSR), which
detailed the amount of the loss sustained by the victim, the
defendant's financial resources, and other factors enumerated in
Sections 3663-3664 as appropriate for the court to consider when
imposing restitution.14
Further findings are not required in this case because the
record provides an adequate basis for review of the restitution
orders. Remillong, 55 F.3d 574-75. The PSRs affirmatively
demonstrate that appellants are educated, experienced in business
or the practice of law, and have the likelihood of future
13
Although Larrison, Leveritt, and Watson did not dispute
their ability to pay restitution, the district court retains an
obligation to consider the defendant's ability to pay before
ordering restitution. Remillong, 55 F.3d at 574.
14
Twitty did contest his ability to pay restitution. A
defendant who disputes his ability to pay restitution bears the
burden of demonstrating his financial resources by a
preponderance of the evidence. 18 U.S.C. § 3664(e); Remillong,
55 F.3d at 575. He did not, however present any evidence at all
of his financial resources or lack of future ability to pay. As
a result, the district court was entitled to rely on the
uncontested facts contained in Twitty's PSR.
employment.15
A defendant claiming that the district judge failed to
consider a mandatory sentencing factor under Sections 3663-3664
must show either that (1) it is not improbable that the judge
failed to consider the mandatory factor and was influenced thereby,
or (2) the judge explicitly repudiated the mandatory factor.
Remillong, 55 F.3d at 576 (citing United States v. Murphy, 28 F.3d
38, 41 (7th Cir.1994)). The record affirmatively indicates that
the district court did consider appellants' ability to pay.
Appellants have not demonstrated that, despite the district court's
announcement that it had considered the information in the PSRs, it
is not improbable that he failed to consider their ability to pay.
Therefore, the district court did not abuse its discretion in
ordering restitution. See Barnette, 10 F.3d at 1556.
15
The PSRs contained the following information supporting
the orders of restitution: Watson had practiced law since 1964.
His suspension from the practice of law is only three years.
Although he reported his net worth at $84,689, he has sold his
home for 675,000 and paid off all debts. He has liquefiable
assets, and the ability to earn substantial income in the future.
He has no children to support. He received no incarceration.
Leveritt operated his own financial company, preparing
tax returns and providing advice. Although indebted now, he
was very successful for twenty years in business,
demonstrating the ability to earn substantial future income.
He has no children to support. He received no
incarceration.
Larrison has also been very successful in business,
working as a consultant and commercial real estate investor.
He has owned and operated several businesses. At the time
of sentencing, he had a small negative monthly cash flow.
He received eighteen months incarceration.
Twitty is a licensed real estate broker who made enough
money to invest millions in real estate ventures. He would
be expected to have that ability in the future. He received
eighteen months incarceration.
III. CONCLUSION
We hold that the indefinite continuance granted by the
district court served to exclude sufficient time from the speedy
trial clock so that trial in this case began within the statutory
period. We hold there was no Sixth Amendment violation. We hold
that the evidence at trial was sufficient to support the
convictions returned by the jury. Finally, we hold that the
district court did not abuse its discretion in ordering
restitution. Accordingly, we
AFFIRM.