United States v. Gregg

PUBLISH
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
07/02/99
THOMAS K. KAHN
No. 98-2347 CLERK
________________________
D. C. Docket No. 97-339-CR-T-24(E)
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
THOMAS V. GREGG,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(July 2, 1999)
Before HULL and MARCUS, Circuit Judges, and RONEY, Senior Circuit Judge.
RONEY, Senior Circuit Judge:
Thomas Vance Gregg appeals his conviction and 41-month sentence for
bank fraud (18 U.S.C. § 1344); theft of bank funds, (18 U.S.C. § 2113(b)); and
money laundering, (18 U.S.C. § 1957). He argues insufficiency of the evidence on
(1) the bank fraud conviction and (2) the money laundering conviction; and two
sentencing issues: (3) improper enhancement for obstructing justice, and (4) failure
to consider his ability to pay in ordering restitution. We affirm on all issues.
The case involved a fire insurance claim settlement check in which Gregg
and other parties had an interest and which Gregg converted to his own use. Gregg
was the president and sole shareholder of TEY Productions, Inc. ("TEY"). TEY
purchased rental property from Mr. and Mrs. Walter J. Germack. The Germacks
retained a mortgage interest in the property through a wrap-around mortgage.
First Union National Bank held the first mortgage on the property, and DJC
Properties held a third mortgage as collateral on an unrelated loan. The Germacks
filed a foreclosure suit against TEY and Gregg. While foreclosure proceedings
were pending, the property caught fire and sustained considerable damage. TEY's
insurance carrier sent a casualty-loss check to Gregg in the amount of $261,000.00
in settlement of TEY's claim made payable to TEY, First Union, the Germacks,
DJC Properties, and Tutwiler & Associates, the public adjuster that negotiated the
claim on behalf of Gregg. Gregg caused the settlement check to be deposited in
TEY’s SunTrust Bank account, with only the endorsements of TEY, First Union,
and Tutwiler. Gregg withdrew funds for his own use from the insurance proceeds
deposited in the account. The bank suffered a $208,000.00 loss, the amount it had
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to pay to the Germacks and DJC Properties who had not endorsed the check but
who had an interest in the funds from the settlement check. Gregg was charged
with bank fraud, theft of bank funds, and money laundering.
1. Sufficiency of Evidence on Bank Fraud Conviction
Gregg argues that the government failed to prove that the false
representation he made to the bank was “material.” A person commits the crime of
bank fraud who “knowingly executes, or attempts to execute, a scheme . . . to
defraud a financial institution . . . by means of false or fraudulent pretenses,
representations or promises.” 18 U.S.C. § 1344.
There is no doubt in the law now that the false representation in a bank fraud
case has to be “material.” The trial court instructed the jury that the government
had to prove that Gregg made a “material” misrepresentation. After the trial in this
case, we had held to the contrary in United States v. Neder, 136 F.3d 1459 (11th
Cir. 1998). After this appeal was argued before us, however, the Supreme Court
reversed our decision in Neder and held that “materiality of falsehood is an
element of the . . . bank fraud statute[].” United States v. Neder, (June 10, 1999).
Since the jury was properly instructed, the only issue before us is whether there is
sufficient evidence to support the jury verdict on this fact.
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The evidence, viewed in the light most favorable to the government, shows
that the bank manager told Gregg he would need the endorsement of and signature
guarantees for every payee before the settlement check could be deposited.
Nevertheless, Gregg presented the settlement check without all the requisite
endorsements at the bank’s drive-through window while the manager was out of
the office, and told the teller that the bank manager had approved its deposit.
According to the bank manager’s testimony, he inspected the check later that day
and mistakenly assumed that all endorsements were on the check. Gregg argues
that his statement to the teller that the bank manager had approved the check was
not material because the teller did not rely on Gregg's false assurances to deposit
the check, but that in fact the check was finally deposited to his account only after
actual approval by the manager.
Gregg’s argument fails for two reasons: First, reliance is not necessary to
make the false statement material. “In general, a false statement is material if it has
‘a natural tendency to influence, or [is] capable of influencing, the decision of the
decision making body to which it was addressed.’” Neder, (quoting United States
v. Gaudin, 515 U.S. 506,509(1995)). In other words, the statement need not have
exerted actual influence, so long as it was intended to do so and had the capacity
do so. See, e.g. United States v. Lopez, 728 F.2d 1359,1362 (11th Cir.)(discussing
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whether false statement material under 18 U.S.C. 1001), cert denied, 469 U.S. 828
(1984).
Second, the evidence would indicate the bank manager at least partially
relied on Gregg’s representation. The manager testified that he thought the check
had all the endorsements, as he had instructed Gregg and as was implicit in
Gregg’s representation that the manager had approved the deposit, and that he
never intended to approve the deposit with two endorsements missing. Because of
the number of endorsements on the back of the check and the bank guaranty of
endorsements on it, there was some difficulty in discerning exactly which
endorsements were there and which were not. The evidence is sufficient to support
Gregg’s bank fraud conviction.
2. Sufficiency of Evidence on Money Laundering Conviction
Gregg was convicted on two counts of money laundering based on the
withdrawal from his bank account of the proceeds from the insurance check.
Money laundering occurs when one “knowingly engages or attempts to engage in a
monetary transaction in criminally derived property.” 18 U.S.C. 1957. The
withdrawal of money from a bank account is a “monetary transaction.” 18 U.S.C.
1957(f)(1). The government had to prove, however, that before that withdrawal,
the proceeds in that account were “obtained from a criminal offense.” 18 U.S.C.
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1957(f)(2). Thus, the bank fraud offense had to be a completed criminal offense
when the proceeds went into Gregg’s account.
Gregg argues on this appeal that the bank fraud offense was not completed
when the proceeds were deposited in his account, but only after withdrawal. Since
this withdrawal was an element of the money laundering offense, he argues, the
counts merged and there were not separate bank fraud and money laundering
crimes committed.
Although there appear to be no cases in this circuit directly on point, we
have no trouble in deciding that the bank fraud was a completed crime when Gregg
fraudulently obtained the deposit of the proceeds of the check into his account,
with the intent at that time to eventually withdraw money from that account for his
own use.
There appears to be sparse authority on the point. Although we held in
United States v. Christo, 129 F.3d 578, 579 (11th Cir. 1997) that “money
laundering is an offense to be punished separately from an underlying criminal
offense,” that case involved a single check-kiting scheme. There, the bank-fraud
charge and the money-laundering charges were predicated on the same transaction,
writing checks on accounts with insufficient funds and causing the bank to pay
those checks through the check-kiting scheme.
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Here Gregg was in the same position as if he had robbed the bank and placed
the proceeds of the robbery into his own account with the intent to use the money
for his own purposes. The crime was completed at that point, without any actual
withdrawal of the money. As the 4th Circuit in a sentencing issue case held in
United States v. Williams, 81 F.3d 1321, 1328 (4th Cir. 1996):
Under 18 U.S.C. § 1344, and as he was specifically charged, Williams
had completed the offense of bank fraud as soon as he fraudulently
obtained credit from Wachovia in the form of a balance in a bank
account. See e.g., United States v. Hord, 6 F.3d 276, 281 (5th Cir.
1993) (bank fraud indictment that charged withdrawals as well as the
deposits was multiplicitous since “[i]t is the deposits, not [the]
withdrawal attempts, that constitute executions of the scheme”);
United States v. Strozier, 981 F.2d 281, 286 (7th Cir. 1992) (“The
defendant completed his defrauding of the [bank] when he set up the
two fraudulent accounts; what he did not get around to completing
was inflicting on [the bank] all the loss his actions clearly indicate he
planned.”).
Likewise, the First Circuit, in an 18 U.S.C. § 2314 case involving transfer of
money “knowing the same to have been stolen, converted and taken by fraud . . .,”
held:
We see no reason why the fraudulent taking required any more than
Medina’s deposit of the check in Medina’s account, the
misrepresentations, the availability of the money to him, and the
requisite scienter. Popielski testified that the $365,000 was available
to Medina for withdrawal on November 10, at least two days before
the wire transfer to England. True, the bank could have nullified the
deposit before the transfer, had it been more alert; but from November
10 onward the money was just as much available to Medina as if it
were cash stored under his mattress.
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United States v. Puerta, 38 F.3d 34 (1st Cir. 1994), cert denied, 514 U.S. 1084
(1995).
The bank fraud crime having been completed upon the deposit to Gregg’s
account, there was sufficient evidence to support the conviction for the separate
money laundering crimes when the money was withdrawn.
3. Enhancement of Sentence for Obstructing Justice
The district court enhanced Gregg’s sentence two levels for obstruction of
justice on the finding that Gregg testified untruthfully about the endorsements at
trial. See U.S.S.G. § 3C1.1 (increase offense level by two levels “[i]f defendant
willfully obstructed or impeded, or attempted to obstruct or impede, the
administration of justice during the investigation, prosecution, or sentencing of the
instant offense . . .”).
Gregg contends the court erred in finding that his false testimony was willful
rather than the result of confusion, mistake, or faulty memory. See § 3C1.1,
comment. (n.1). (“[T]he court should be cognizant that inaccurate testimony or
statements sometimes may result from confusion, mistake, or faulty memory and,
thus, not all inaccurate testimony or statements necessarily reflect a willful attempt
to obstruct justice.”).
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We review for clear error the district court’s factual findings necessary for
an obstruction of justice enhancement based on perjury. See United States v.
Lewis, 115 F.3d 1531, 1538 (1997), cert. denied, __ U.S. __,118 S. Ct. 733 (1998).
The district court found that Gregg’s trial testimony was “opposed to” the
bank manager’s testimony, and that it was unbelievable and “incredible” that
Gregg would be told he did not have to get the endorsements of the other payees
who had a mortgage or ownership interest in the property. We accord great
deference to the district court’s credibility determinations. See Lewis, 115 F.3d at
1538. The court’s finding is supported by the record, which reflects that although
Gregg testified that he believed that he did not need the endorsements of all payees
after his meeting with the bank manager, that testimony is contradicted by other
witness testimony. The bank manger testified that he told Gregg to get
endorsements and signature guarantees for all payees. An FBI agent testified that
Gregg told him that the bank manager advised him to get all payees’ endorsements.
Gregg’s argument that this court should distinguish between what Gregg
“understood” following his meeting with the bank manager and what the bank
manager told him is disingenuous. Accordingly, the court’s finding that an
enhancement was warranted was not clear error.
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We note also that because defendant failed to request more detailed findings
of perjury at sentencing, “[i]t is too late now to complain in this court.” United
States v. Geffrard, 87 F.3d 448, 453 (11th Cir.), cert denied, 519 U.S. 985 (1996).
4. Restitution and the Ability to Pay
Gregg argues that the district court abused its discretion and violated his
Fifth Amendment right to due process by ordering him to pay $156,029.51 in
restitution without considering his financial situation and ability to pay.
At sentencing, the district court announced that the amount of restitution
being suggested was $156,029.51, rather than the $248,000.00 amount of SunTrust
Bank’s judgment against Gregg, and asked Gregg’s lawyer if he wished to be heard
on the issue. Gregg’s lawyer responded, “Judge, I would agree that the one fifty-
six amount is the appropriate amount.” Gregg did not object generally to the
award of restitution, either.
By expressly agreeing to the amount of restitution, Gregg waived any right
to contest the amount of restitution ordered. See United States v. Schrimsher, 58
F.3d 608, 610 (11th Cir. 1995) (defendant who conceded at sentencing that court
could order restitution in a specified amount “waived the point by inviting the
court to order the restitution he now contests”).
AFFIRMED.
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