United States v. Rabe ( 2001 )

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
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No. 00-20018
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UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
ARVELL J. RABE,
Defendant-Appellant.
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Appeal from the United States District Court for the
Southern District of Texas
H-98-CR-351-1
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February 21, 2001
Before BARKSDALE, EMILIO M. GARZA, and BENAVIDES, Circuit Judges.
PER CURIAM:*
Defendant-appellant Arvell J. Rabe (Rabe) appeals his
convictions for bank fraud (18 U.S.C. § 1344) arising out of an
alleged check kiting scheme. The sole issue Rabe raises on appeal
is whether the district court erred in charging the jury with
respect to “deliberate ignorance.” Finding that any error was
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this
opinion should not be published and is not precedent except under the
limited circumstances set forth in 5TH CIR. R. 47.5.4.
harmless, we AFFIRM.
I. FACTUAL AND PROCEDURAL HISTORY
The evidence at trial established that, in 1996, Rabe set up
a commercial checking account with Norwest Bank. The account was
in the name of A.J. Rabe, Inc., doing business as Eastex Livestock
Company (the “Norwest Account”). Rabe also had an account at
Citizens State Bank (“Citizens”) in Marlin, Texas, in the name of
Marlin Livestock Company (the “Marlin Livestock account”). Rabe
requested that Citizens authorize a person named Kimberly Truax to
sign checks on the Marlin Livestock account.
The alleged kiting scheme began in June 1997. From June to
September, Rabe deposited checks into the Norwest account drawn on
the Marlin Livestock account. Thereafter, he would obtain a
cashier’s check from Norwest against the uncollected deposit and
then deposit that check into the Marlin Livestock account.
Overall, Rabe deposited into the Marlin Livestock and Norwest
accounts “kited” checks totaling $2.8 million, while his actual
deposits totaled only $66,000. During that time, Rabe deposited
into the Norwest account eleven checks drawn on the Marlin
Livestock account, payable to Eastex Livestock or A.J. Rabe, Inc.
Each Marlin Livestock check was purportedly signed by Kimberly
Truax. Rabe and Truax contradicted each other’s testimony
regarding whether Truax had authorized Rabe to sign her name.
Nevertheless, Rabe admitted that he had signed the checks in
Kimberly Truax’s name, and Truax testified that the signature
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authorization for the Marlin account was not hers.
Four of the deposits in question were made in person at the
Briarcrest branch, four were made in person at the Rock Prairie
location, and three were mailed to the bank. On either the day
each deposit was made or on the following day, Rabe would go to
Norwest’s Rock Prairie location, some six to eight miles from the
Briarcrest location, and obtain a cashier’s check in amounts nearly
equal to the amount of the deposit.
The jury found Rabe guilty of ten counts of bank fraud. The
district court sentenced him to twenty-one months of imprisonment
as to each count, to run concurrently.
II. JURY INSTRUCTION
The only issue Rabe raises on appeal is that the district
court erred by giving a jury instruction on “deliberate ignorance.”
This Court reviews challenged jury instructions for abuse of
discretion and will not reverse if the court’s charge, viewed in
its entirety, is a correct statement of the law which clearly
instructs jurors as to the relevant principles of law applicable to
the factual issues confronting them. See United States v.
Hernandez, 92 F.3d 309, 311 (5th Cir. 1996); United States v.
Ojebode, 957 F.2d 1218, 1228 (5th Cir. 1992). We look to the
entire charge in the context of the trial and will reverse only if
the charge, as a whole, “misled the jury as to the elements of the
offense.” United States v. Wyly, 193 F.3d 289, 300 (5th Cir. 1999)
(internal quotation marks and citations omitted).
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The district court instructed the jury that in order to find
Rabe guilty they had to find, inter alia, that Rabe executed or
attempted to execute a scheme or artifice to defraud Norwest Bank
and that he acted knowingly. The court instructed the jury that a
scheme to defraud means a plan involving a false or fraudulent
pretense or promise “intended to deceive others in order to obtain
something of value.” Further, the court stated that a defendant
acts with “intent to defraud if the defendant acted knowingly and
with the specific intent to deceive, ordinarily for the purpose of
causing some financial loss to another or bringing about some
financial gain to the defendant.” The word “knowingly” was defined
as meaning “that the act was done voluntarily and intentionally and
not because of mistake or accident.”
The court then gave the following instruction:
You may find that a defendant had knowledge of a fact if
you find that the defendant deliberately closed his eyes
to what otherwise would have been obvious to him. While
knowledge on the part of the defendant cannot be
established merely by demonstrating that the defendant
was negligent, careless, or foolish, knowledge can be
inferred if the defendant deliberately blinded himself to
the existence of a fact.
Rabe objected to this instruction, arguing that there was no
evidence of subjective knowledge of illegality and that he admitted
writing the checks; thus, a deliberate-ignorance instruction was
not appropriate. The Government countered that the instruction was
appropriate because Rabe avoided his account officer, Robert Wood
(Wood), by going to the Rock Prairie branch to obtain the cashier’s
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checks. The court overruled the objection and, at Rabe’s urging,
added a good-faith instruction.1
We will assume for purposes of this appeal that the
district court erred by giving the deliberate-ignorance
instruction. It therefore must be determined whether the
error was harmless. An erroneous jury instruction that
pertains to an element at issue is harmless “if the evidence
of guilt is so overwhelming that the error could not have
contributed to the jury’s decision to convict.” See United
States v. Chen, 913 F.2d 183, 188 n.6 (5th Cir. 1990)
(internal quotation marks and citation omitted).
Rabe contends that the instruction was not harmless error
because there was evidence that Rabe reasonably could have
believed that Wood had given him a floating loan. For
example, on several occasions, Wood approved checks in excess
of the $10-12,000 limit against uncollected funds for Rabe’s
business purposes, and the Rock Prairie personnel authorized
1
The court instructed on good faith as follows:
Good faith is a complete defense to the
charges in the indictment, since good faith on
the part of the defendant is inconsistent with
intent to defraud or willfulness, which is an
essential part of the charges. The burden of
proof is not on the defendant to prove good
faith, of course, since the defendant has no
burden to prove anything. The government must
establish, beyond a reasonable doubt that the
defendant acted with specific intent to
defraud as charged in the indictment.
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cashier’s checks in significant amounts. According to Rabe,
however, the deliberate-ignorance instruction “tipped the
scales,” because it created a risk that the jury would equate
specific intent with deliberate ignorance, and thus allowed
the jury to find Rabe guilty if he “should have known” that
his actions would defraud Norwest, even if he did not intend
to do so.
A jury may infer intent to defraud from all the facts and
circumstances surrounding the transaction in question. See
United States v. Aubrey, 878 F.2d 825, 827 (5th Cir. 1989)
(mail-fraud case). Rabe clearly knew that there were no funds
in the Marlin Account to cover the checks he deposited in his
Norwest Account, as there was little to no business activity
for Marlin and he knew that he was writing checks against
other checks rather than against cash deposits.2 He also
signed Kimberly Truax’s name to the checks, although she did
not work for him and was in prison at the time the checks were
signed. Most significantly, on several occasions, Rabe made
deposits at one branch of his bank and then obtained cashier’s
checks on the same day at another branch, only a few miles
away. These facts support an inference that Rabe was engaged
in a scheme to defraud Norwest.
2
According to FBI financial analyst Ronald Emmert, there was no
evidence of any significant business activity for either Marlin
Livestock or Eastex during 1997.
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Finally, the instructions as a whole emphasized that the
Government was required to prove specific intent to defraud,
and Rabe was allowed to argue that he believed that his
actions were authorized by Norwest. The court told the jury
that good faith was a defense and that the Government had to
prove Rabe’s specific intent to defraud. The Government did
not mention deliberate ignorance in its cross-examination of
Rabe or in its closing remarks, and there was no evidence
adduced at trial that Rabe deliberately ignored any suspicious
facts. These factors, combined with the evidence of Rabe’s
guilt, persuade us that the instruction, even if erroneously
given, could not have contributed to the jury’s decision to
convict.
Accordingly, the district court’s judgment is AFFIRMED.
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