United States v. Eric K. Lam ( 2003 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 03-1415
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United States of America, *
*
Plaintiff - Appellee, *
* Appeal from the United States
v. * District Court for the Western
* District of Missouri.
Eric K. Lam, *
*
Defendant - Appellant. *
*
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Submitted: June 10, 2003
Filed: August 4, 2003
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Before MELLOY, HANSEN, and SMITH, Circuit Judges.
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MELLOY, Circuit Judge.
Eric K. Lam was convicted by a jury of one count of conspiracy to commit
bank fraud, 18 U.S.C. § 371, and six counts of bank fraud, 18 U.S.C. § 1344, based
on an alleged check-kiting scheme involving three federally insured banks. At the
close of the government’s case-in-chief, and again in a post-trial motion, Lam moved
for judgment of acquittal. The district court1 denied the motion. Lam appeals,
1
The Honorable Gary A. Fenner, United States District Judge for the Western
District of Missouri.
arguing that: (1) the government failed to prove the fraudulent representations
essential to bank fraud; and (2) the government failed to prove the identity of Lam as
the perpetrator of the charged bank transactions in the substantive fraud counts. We
affirm the district court.
I.
“In considering a district court’s denial of a motion for judgment of acquittal,
we view the evidence in the light most favorable to the verdict and accept as
established all reasonable inferences supporting the verdict.” United States v. Big
Crow, 327 F.3d 685, 688 (8th Cir. 2003) (internal quotations omitted). In this case,
the government established the following in support of its allegation that Lam and
two co-conspirators devised and conducted a check-kiting scheme involving three
federally insured banks: First Bank of Missouri, Commerce Bank, and United
Missouri Bank.
On October 4, 2000, Lam opened a bank account at each of the three named
banks with an initial $100 cash deposit. On October 10, 2000, Lam and his two
accomplices began making deposits into and withdrawals from the accounts. They
continued to make deposits and cash checks on the accounts until October 17, 2000.
Many of the transactions involved “split deposits” in which Lam would present a
deposit check for several thousand dollars but ask for a significant portion back in
cash.2 A total of thirty-one checks totaling $37,721.11 were deposited into the three
accounts from October 10 to October 16, 2000. Twenty-one of the checks were
returned for insufficient funds, totaling $36,848.11. Thus, the net deposit in all the
2
For example, on October 16, 2000, Lam deposited a check for $2,290 and
received $2,000 back in cash.
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accounts was $873. The government’s expert concluded that between October 10 and
October 17, 2000, Lam received approximately $25,000 from the scheme.
The proof of the check kiting scheme consisted of testimony from bank
personnel, and an IRS Special Agent who analyzed the accounts and the bank records
of deposits and withdrawals from the accounts. The testimony and the exhibits
showed multiple banking transactions at different branches of the same banks
throughout the week of October 10, 2000. Some of the transactions involved checks
written from one Lam account to another or to one of his accomplices, some involved
check deposits drawn on closed accounts from several banks, including Wells Fargo,
in the name of Minh Nguyen, and others involved traveler’s checks purchased with
funds from one of Lam’s accounts. Sandra Torrey, a bank teller, specifically
identified Lam as the person who conducted a transaction at a branch of the First
Bank of Missouri.3 Ms. Torrey later alerted police, on October 17, 2000, by which
time Lam’s account had been frozen, that Lam had just left the branch office after
picking up blank deposit slips and unsuccessfully attempting to use a branch ATM.
Using the information and vehicle description she provided, police located Lam, with
two other men, four blocks away at a branch of the Commerce Bank. Lam and the
two others were arrested, and a pad of blank checks in the name of Minh Nguyen was
found in the car.
At the close of the government’s case, Lam made a written motion for
judgment of acquittal. Lam claimed that the government had failed to prove that he
was the person who executed the scheme to defraud the banks, and that Ms. Torrey’s
identification to an uncharged transaction was not sufficient to establish his role in
3
The October 12, 2000, transaction about which Ms. Torrey testified was
not one of the substantive counts charged in the indictment.
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the charged offenses. The district court denied the motion, finding sufficient
circumstantial evidence to establish Lam’s part in the charged fraud transactions.
Lam subsequently testified on his own behalf, during which he admitted
opening the three bank accounts, and depositing checks and traveler’s checks into the
accounts every day during the week of October 10, 2000. The defense theory of the
case was that Lam was an unknowing pawn in a scheme by Heip Vu, one of the men
with whom he was arrested on October 17. Lam testified that he believed the checks
were valid payment for two diamond rings from his previous marriage that he was
selling to Vu for $10,500, and that Vu had instructed him to open three accounts to
facilitate faster payment by multiple small checks rather than one large check.
According to Lam, Vu told him he could keep the rings as collateral until the payment
checks cleared the bank. Lam admitted going to multiple bank branches every day
to conduct transactions. He further admitted receiving significantly more cash from
the transactions than the $10,500 that he claims Vu owed him for the rings.
Lam was convicted of all charges. In a post-trial motion for judgment of
acquittal, Lam renewed his challenge that the government had not properly identified
him as the perpetrator of the substantive fraud charges. Lam also argued that the
government indicted, and prosecuted him, only under subsection two of 18 U.S.C. §
1344,4 and failed to prove the false or fraudulent representation or promise required
4
The indictment did not specifically reference either subsection one or two, but
rather alleged, generally, a violation of 18 U.S.C. § 1344, which provides:
Whoever knowingly executes, or attempts to execute, a scheme or
artifice – (1) to defraud a financial institution; or (2) to obtain any of the
moneys funds, credits, assets, securities, or other property owned by, or
under the custody or control of, a financial institution, by means of false
or fraudulent pretenses, representations, or promises; shall be fined not
more than $1,000,000 or imprisoned not more than 30 years, or both.
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under that subsection. Lam argued that the government’s reliance on subsection one
– which would encompass a check-kiting scheme – was a post-hoc justification which
violated his due process rights under the Fifth Amendment because he was unaware
that the government was proceeding under that theory of prosecution. The district
court rejected Lam’s contention that the government had changed tack, finding
instead that the government had from the beginning alleged, and prosecuted, a §
1344(1) “scheme to defraud” the banks by means of a check kiting scheme.
II.
Lam’s appeal from the denial of his motion for judgment of acquittal
challenges the sufficiency of the evidence on all counts. To prevail, Lam “must show
that the evidence presented by the government was not sufficient to permit a
reasonable jury to find him guilty beyond a reasonable doubt.” United States v. Hart,
212 F.3d 1067, 1070-71 (8th Cir. 2000) (citations omitted); see also Big Crow, 327
F.3d at 688 (“We will uphold the conviction unless no reasonable jury could have
found the defendant guilty beyond a reasonable doubt.”) (internal quotations
omitted). After careful review of the record, including the indictment and trial
transcript, we conclude that the district court properly denied Lam’s motion.
With regard to Lam’s argument that the government failed to present sufficient
evidence of identity to sustain the bank fraud charges, we agree with the district court
that circumstantial evidence in this case was sufficient for a reasonable jury to
conclude beyond a reasonable doubt that Lam was the perpetrator of the charged
transactions in the substantive fraud counts. Lam’s direct testimony proved his
participation in many of the charged transactions and circumstantial evidence inferred
his involvement as well. Lam argues that the government must directly link Lam to
each charged transaction by witness identification, but it is well-settled that a jury is
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entitled to consider circumstantial evidence exactly as it would direct evidence. See
Lenza v. Wyrick, 665 F.2d 804, 812 (8th Cir. 1981) (“In evaluating the sufficiency
of the evidence to sustain the verdict, circumstantial evidence is to be treated no
differently than direct evidence.”) (citing Holland v. United States, 348 U.S. 121, 140
(1954)).
In his opening appellate brief, Lam opines, “Although circumstantial evidence
may support an inference that Mr. Lam was involved in these transactions, the
evidence also supports an inference that a person other than Mr. Lam presented such
checks.” Appellant brief, at 16. This may be true, but it does not support Lam’s
argument in this case. As we recently re-stated, “[t]he facts and circumstances relied
on by the government must be consistent with guilt, but they need not be inconsistent
with any other hypothesis, and it is enough to convict if the entire body of evidence
is sufficient to convince the jury beyond a reasonable doubt that the defendant is
guilty.” United States v. Chavez, 230 F.3d 1089, 1090 (8th Cir. 2000) (quotations
omitted). The evidence in this case, both direct and circumstantial, sufficiently tied
Lam to the charged bank fraud transactions, and the district court properly denied, on
this basis, Lam’s motion for judgment of acquittal.
With regard to Lam’s second argument – that the evidence was insufficient to
prove the requisite fraudulent representation or promise for bank fraud – we again
agree with the district court’s resolution of the issue. Lam’s argument on this point
is somewhat convoluted in that Lam does not appear to contest the sufficiency of the
evidence to support a conviction under 18 U.S.C. § 1344(1), which makes it a crime
to scheme to defraud a financial institution, including, inter alia, through check-kiting
schemes. See, e.g., United States v. Whitehead, 176 F.3d 1030, 1041 (8th Cir. 1999)
(affirming conviction under § 1344(1) for check-kiting scheme). Rather, Lam argues
primarily that he was indicted and prosecuted under 18 U.S.C. § 1344(2), which
makes it a crime to obtain money from a financial institution by means of false or
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fraudulent representations, and that there was insufficient evidence to establish the
requisite fraudulent representations in this case.5 Lam concedes that each count of
the indictment contains language from both subsections of § 1344. He contends,
however, that the fact that the majority of the indictment language tracks subsection
two, combined with the government’s extensive trial testimony and evidence
regarding false checks, mandates a conclusion that the government was proceeding
under subsection two, and that his due process rights were violated by letting the
conviction stand on what the government now contends was a subsection one check-
kiting scheme to defraud.
We agree with the district court that both the indictment and trial evidenced the
government’s prosecution of a check-kiting scheme which falls within 18 U.S.C. §
1344(1), and that the evidence supported the jury’s conviction on each count. Review
of the indictment in its entirety supports the conclusion that the indicted facts alleged
a check-kiting scheme, and hence a violation of § 1344(1), despite the absence of that
specific term or the statutory subsection. Although the indictment includes language
from both subsections of the statute, the “manner and means” and “overt acts” set
forth in the indictment adequately describe a check-kiting scheme. Review of the
trial transcript demonstrates that the government proceeded on a check-kiting theory
at trial as well. The government discussed check-kiting in both its opening statement
and closing arguments, and the special agent’s testimony and exhibits were clearly
intended to explain to the jury how the defendant used the different accounts in
concert to inflate the balances and facilitate the check-kiting scheme. Because we see
5
“[A] check is not a factual assertion at all, and therefore cannot be
characterized as ‘true’ or ‘false.’” Williams v. United States, 458 U.S. 279, 284
(1982). Thus, the deposit of checks that are not supported by sufficient funds does
not involve the making of a “false or fraudulent representation” as required for
conviction under 18 U.S.C. § 1344(2). See id., at 284-85 (concluding that a check is
not a “false statement” for purposes of federal statute criminalizing the making of
false statements in loan applications).
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nothing inconsistent in the government’s conduct throughout the prosecution of this
case, Lam cannot establish a due process violation. And because the evidence was
more than sufficient to prove a check-kiting scheme, the district court properly
rejected Lam’s sufficiency challenge.
Accordingly, we affirm the district court’s denial of Lam’s motion for judgment
of acquittal.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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