United States v. Loeffel

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT March 29, 2006
Charles R. Fulbruge III
Clerk
No. 05-10236
UNITED STATES OF AMERICA
Plaintiff - Appellee
v.
ROBERT ANTONY LOEFFEL
Defendant - Appellant
_________________________________________________________________
Appeal from the United States District Court
for the Northern District of Texas, Fort Worth
No. 4:04-CR-133-ALL
_________________________________________________________________
Before KING, SMITH, and BENAVIDES, Circuit Judges.
PER CURIAM:*
Defendant-appellant Robert Antony Loeffel appeals his
conviction for bank fraud under 18 U.S.C. § 1344 (2000) in
connection with a fraudulent scheme involving proceeds from an
established line of credit with Summit National Bank. Loeffel
challenges: (1) the district court’s refusal to specifically
instruct the jury that it must find that Loeffel knew his
*
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that this opinion should not be published and is not precedent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.
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statements to the bank were false at the time he made them; (2)
the district court’s allowance of an impermissible closing
argument to the jury concerning the timing of Loeffel’s
fraudulent intent; and (3) the sufficiency of the evidence as to
Loeffel’s fraudulent intent submitted at trial to support the
jury’s verdict. For the following reasons, we AFFIRM Loeffel’s
conviction.
I. FACTUAL AND PROCEDURAL BACKGROUND
On August 18, 2004, a federal grand jury for the Northern
District of Texas returned a one-count indictment against
defendant-appellant Robert Antony Loeffel (“Loeffel”), charging
him with knowingly devising and executing a scheme (1) to defraud
Summit National Bank (“Summit”), a financial institution with
accounts insured by the Federal Deposit Insurance Corporation,
and (2) to obtain moneys, funds, and credits owned by and under
the custody and control of Summit by means of false and
fraudulent pretenses, representations, and promises, in violation
of 18 U.S.C. § 1344.1
1
18 U.S.C. § 1344 provides that:
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, representation, or promises;
shall be fined not more than $1,000,000 or imprisoned not
more than 30 years, or both.
-2-
A jury trial began on October 4, 2004. According to
evidence presented at trial, Loeffel was employed as an
accountant and general manager of Progressive Tractor Corporation
(“Progressive”), a company involved in the sale and rental of
heavy equipment. From May of 1998 to August of 2000, Progressive
had an established $2.5 million line of credit with Summit.
Summit required Progressive to submit documentation specifically
identifying the heavy equipment to be purchased before
transferring the necessary funds into Progressive’s checking
account. Upon purchase, those specific units of heavy equipment
would then be listed as collateral to secure the credit line.
At approximately 10:22 a.m. on May 12, 2000, Loeffel faxed a
request to Jay Morgan Fry (“Fry”) at Summit for an advance of
$390,000 on the line of credit to purchase two Volvo articulated
dump trucks from American Midwest Equipment Company (“American
Midwest”). The fax also included the following supporting
documents: (1) an invoice identifying the serial numbers of the
trucks to be purchased from American Midwest and (2) a check from
Progressive’s account made payable to American Midwest in the
amount of $411,665 that was dated May 12, 2000 and signed by
Loeffel. Upon receipt of this fax, Fry sent Loeffel a security
agreement describing the two trucks,1 which Loeffel promptly
1
The indictment incorrectly states that the deal involved
the purchase of three Volvo articulated trucks from American
Midwest. The record exhibits indicate that the discrepancy
probably arose from the invoice that included an additional
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signed and faxed back to Fry. Fry then executed the transfer of
$390,000 into Progressive’s operating account.
That same day, Loeffel wrote two checks for a combined total
of $371,000 to the Texas Comptroller to cover back taxes owed by
Progressive.2 According to Fry, without Summit’s advance for the
purchase of the trucks, Progressive’s account did not contain
sufficient funds to cover these checks to the Texas Comptroller
for the back taxes. Fry testified further that Summit would not
have advanced the $390,000 to Progressive on an unsecured basis--
that is, without the assurance that the funds would be used to
purchase the trucks that would in turn serve as collateral for
the loan. There is no evidence in the record that Loeffel
contacted the bank when he wrote the check to pay the back taxes
with the advanced funds, rather than to purchase the trucks.
During an audit at Summit in August of 2000, Fry discovered
that the check Loeffel had written to American Midwest for
$411,665 to the purchase the two trucks had never cleared. Fry
called Loeffel for an explanation, and Loeffel admitted that he
had used the $390,000 advance to cover back taxes instead of
buying the trucks. According to Fry, during this brief telephone
truck, identified by a separate serial number. It is clear,
however, that Summit’s security agreement with Progressive
included only two of the three trucks purchased from American
Midwest on this occasion.
2
According to Loeffel’s testimony, the Texas Comptroller
concluded a tax audit of Progressive in December of 1999 or early
January or February of 2000.
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conversation, Loeffel freely admitted his responsibility and did
not mention the involvement of any other Progressive personnel,
including Progressive’s owner Randy Mathews (“Mathews”). Loeffel
told Fry that he had anticipated covering the tax liabilities
with money from an account receivable from a company called U.S.
Stone that was supposed to be coming in soon after Summit
advanced the money. When Progressive failed to collect on the
U.S. Stone account, however, Loeffel never contacted Fry to
inform him that the two trucks had not been purchased with the
funds.
Loeffel then prepared a written memorandum, dated August 16,
2000, that discussed Progressive’s cash flow problems at the end
of 1999, particularly with respect to collecting on the
outstanding U.S. Stone account.3 He also accepted sole
responsibility for the problem and expressed regret at not
informing Mathews and Fry about the cash shortages and tax
liabilities. Mathews testified that, although he delegated
responsibility to Loeffel to obtain financing for the trucks, he
never authorized Loeffel to pay the back taxes with those funds.4
3
Both Mathews and Fry testified that Fry requested that
Loeffel prepare the memorandum. Loeffel testified, however, that
he did not recall Fry mentioning this during their telephone
conversation and claimed that he first heard about the memorandum
from Mathews. Indeed, Loeffel maintained that he wrote the
memorandum at the behest of Mathews in order to help Mathews
“save face with the bank.” 1 Rawle at 134.
4
During cross-examination, Mathews discussed the tax
liability in the following colloquy:
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Testifying on his own behalf, Loeffel maintained that at the time
he requested the advance from Summit, he intended to use the
funds to purchase the trucks from American Midwest and wrote the
checks for the tax liability based on information from Mathews
that the money would be forthcoming from U.S. Stone.
On October 5, 2004, the jury found Loeffel guilty of one
count of bank fraud in violation of 18 U.S.C. § 1344. Loeffel
moved for a judgment of acquittal or for a new trial on October
12, 2004, which the district court denied on October 25, 2004.
The district court also denied Loeffel’s motion for
reconsideration on November 18, 2004. On January 24, 2005, the
district court sentenced Loeffel to six months in prison and five
years of supervised release. He was also ordered to pay
restitution to Summit in the amount of $390,000. Loeffel filed a
Q. Now, you were aware that there was a tax audit; is
that correct?
A. I was aware there was a tax lien, yes.
Q. Now, do you remember talking to Robert Loeffel
about needing to pay those taxes?
A. Yes.
Q. Do you remember telling him that there was going to
be a big check from U.S. Stone?
A. Yes. U.S. Stone owed us a rather large sum of
money. That’s correct.
Q. And that money -- to go ahead and pay the taxes
because that money would cover it.
A. I was told that we had the money to pay the taxes.
It was going to run us short on funds. And I said,
well, if we can get our U.S. Stone check then
perhaps we will be okay.
1 Rawle at 106. Mathews noted that the U.S. Stone account was
“in excess of $400,000,” which would have covered the entire
tax liability. Id. at 107.
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timely notice of appeal challenging only his conviction.
II. DISCUSSION
On appeal, Loeffel argues that he lacked the requisite
intent to defraud at the time he made the representation to
Summit about using the funds to purchase the two trucks. Loeffel
contends that on May 12, at the time of the request to Summit, he
believed a large payment was forthcoming from U.S. Stone that
could be used to pay the back taxes. When the money from U.S.
Stone did not come in as expected, however, Loeffel admittedly
used the advanced funds from Summit to pay the tax liability
without informing Summit that he was no longer following through
with the purchase of the trucks.
Loeffel raises three issues for this court’s consideration.
First, he asserts that the district court erroneously refused to
instruct the jury that, for purposes of bank fraud, a
representation is “false” only if it is known to be untrue or is
made with reckless indifference to its truth at the time the
representation is made. Second, he contends that the district
court compounded this error by allowing the prosecutor to tell
the jury during its closing argument that Loeffel could be
convicted even if he did not have the intent to deceive at the
time of the initial draw request to Summit. Finally, he argues
that the evidence was insufficient to support his conviction for
bank fraud under 18 U.S.C. § 1344 because the evidence did not
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support a finding that he intended to deceive Summit at the time
he requested the funds.
A. Requested Jury Instructions
We afford district courts “substantial latitude in
formulating jury instructions” and review challenges to jury
instructions only for abuse of discretion. United States v.
Monroe, 178 F.3d 304, 307 (5th Cir. 1999). A district court’s
refusal to include a specific instruction constitutes reversible
error only if all three of the following conditions are met: (1)
the requested instruction is substantially correct; (2) the
actual charge given to the jury did not substantially cover the
content of the proposed instruction; and (3) the omission of the
instruction would seriously impair the defendant’s ability to
present his defense. United States v. Jensen, 41 F.3d 946, 953
(5th Cir. 1994). Accordingly, we 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.” United States v. Hernandez, 92 F.3d 309, 311
(5th Cir. 1999).
The jury was instructed that “[a] representation is ‘false’
if it is known to be untrue or is made with reckless indifference
as to its truth or falsity.” 1 Rawle at 178. Loeffel requested
that the phrase “at the time the representation is made” be added
to the end of that sentence in order to emphasize the relevant
time at which Loeffel must have had the requisite fraudulent
-8-
intent to be convicted of bank fraud under 18 U.S.C. § 1344.
Although the judge initially agreed to this change, he later
decided that the phrase, while technically correct, was already
implied in his jury charge, which was substantially identical to
the Fifth Circuit pattern jury instruction for bank fraud.5 See
FIFTH CIRCUIT PATTERN JURY INSTRUCTIONS § 2.61 (West 2001) (“A
representation is ‘false’ if it is known to be untrue or is made
with reckless indifference as to its truth or falsity.”); see
also Hernandez, 92 F.3d at 311 (finding no abuse of discretion
where the requested instruction was technically “a correct
statement of the law” but already “adequately covered by the
charge given to the jury”). Indeed, this circuit has previously
accepted this definition of “false statement” in the context of
jury instructions for a bank fraud case under 18 U.S.C. § 1344
without the proposed modification. See United States v. Dillman,
15 F.3d 384, 392 (5th Cir. 1994); United States v. Gunter, 876
F.2d 1113, 1120 (5th Cir. 1989).
Moreover, the jury instruction used in this case did not
impair Loeffel’s ability to present his defense to the bank fraud
charge. Loeffel consistently maintained that he intended to
5
The judge specifically stated: “Whether it’s in or out,
it’s implied. I’m going to take it out since I’ve studied the
pattern jury charge and it’s not in there, and I’m not going to
put it in there.” 1 Rawle at 159. Although the pattern jury
instructions are not conclusively correct, this court encourages
their use and considers them a useful guide in fashioning
accurate and consistent instructions. See United States v.
Tomblin, 46 F.3d 1369, 1380 n.16 (5th Cir. 1995).
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purchase the trucks at the time of the fax to Summit because of
his expectation that the money from U.S. Stone was forthcoming to
cover the back taxes. Given the relatively uncomplicated nature
of this case, we presume that the jury was able to follow the
instructions and apply the correct legal standard. See United
States v. Levine, 80 F.3d 129, 136 (5th Cir. 1996) (“The jury is
presumed to have followed the court’s instructions.”).
Therefore, we conclude that the district court did not abuse its
discretion by refusing to give the requested jury instruction.
B. Prosecutorial Closing Argument
Loeffel next contends that the failure to give the requested
instruction was exacerbated when the district court allowed the
government to misstate the law during its closing argument.
During his rebuttal argument, the prosecutor stated that
“[w]hether you believe [Loeffel] intended to deceive Summit at
10:22 in the morning on May 12 of 2000 or form[ed] the intent
later that day or later that month or through July” before being
interrupted by Loeffel’s objection that this was a “misstatement
of the law.” 1 Rawle at 169. Rather than expressly ruling on the
objection, the district court made the following remark: “I’m
going to give the jury the instructions on the law, and they’ll
be guided by the legal instructions I give them.” Id. As we
previously stated, the actual jury instructions given in this
case did not constitute reversible error.
This court applies a two-step analysis in reviewing a claim
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of prosecutorial misconduct. United States v. Insaulgarat, 378
F.3d 456, 461 (5th Cir. 2004), cert. denied, 543 U.S. 1013
(2004). First, we must determine whether the prosecutor’s
comment was improper when viewed in context. Id. (citing United
States v. Washington, 44 F.3d 1271, 1278 (5th Cir. 1995)). If an
improper remark was made, we consider three factors when deciding
whether to reverse a conviction based on improper prosecutorial
argument: (1) the magnitude of the prejudicial effect of the
statements; (2) the efficacy of any curative instruction; and (3)
the strength of the evidence of the defendant’s guilt. Id.;
Levine, 80 F.3d at 135. “The determinative question is whether
the prosecutor’s remarks cast serious doubt on the correctness of
the jury’s verdict.” Insaulgarat, 378 F.3d at 461 (quoting
United States v. Iredia, 866 F.2d 114, 117 (5th Cir. 1989)).
Although the prosecutor did not complete his remark, given
the government’s concession that it had to prove intent to
defraud at the time Loeffel made the statements to the bank, the
prosecutor’s argument was improper to the extent it attempted to
convey to the jury that it could still convict Loeffel even if he
formed the fraudulent intent after the draw request. See United
States v. Shah, 44 F.3d 285, 294 n.16 (5th Cir. 1995) (“The
relevant facts must be false when the statement is made, not
before or after that time.”). When viewed in the context of the
strength of the circumstantial evidence of Loeffel’s intent at
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the time of the request6 and the efficacy of the judge’s
immediate curative statement,7 however, we conclude that the
remark neither prejudiced Loeffel’s right to a fair trial nor
cast serious doubt on the correctness of the jury’s verdict. See
United States v. Ramirez-Velasquez, 322 F.3d 868, 874 (5th Cir.
2003) (noting that “prosecutorial remarks alone rarely are
sufficient to warrant reversal”).
C. Sufficiency of the Evidence
Finally, Loeffel argues that the evidence was insufficient
to support his conviction for bank fraud under 18 U.S.C. § 1344
because the evidence did not prove beyond a reasonable doubt that
he intended to deceive Summit at the time he requested the
$390,000. He argues that the intent to deceive must exist at the
time the representations are made. We review jury verdicts with
6
Although Loeffel insists that he intended to use the
funds to purchase the trucks at the time of the draw request, the
evidence adduced at trial amply demonstrated that he was aware of
the outstanding tax liability before the draw request and
actually wrote two checks to the Texas Comptroller on the same
day he received the advance from Summit. Moreover, according to
Fry’s testimony, Progressive’s account did not have adequate
funds to cover the tax liability until it received the advance on
May 12. It is well established that circumstantial evidence can
support an inference of criminal intent. See United States v.
Stevenson, 126 F.3d 662, 665 (5th Cir. 1997); United States v.
Restivo, 8 F.3d 274, 280-81 (5th Cir. 1993).
7
During his charge, the judge also expressly informed the
jury of its “duty to base [its] verdict solely upon the evidence
received during the trial and the law as given and explained to
[it] by the Court.” 1 Rawle at 171. The judge also reminded the
jury that “[w]hat the lawyers say is not binding upon [it].” Id.
at 172.
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great deference and evaluate the evidence in the light most
favorable to the verdict, giving the government the benefit of
all reasonable inferences and credibility choices.8 United
States v. McCauley, 253 F.3d 815, 818 (5th Cir. 2001). “The
evidence is sufficient to support a guilty verdict if a rational
jury could have found the essential elements of the crime beyond
a reasonable doubt.” United States v. Dupre, 117 F.3d 810, 818
(5th Cir. 1997); see also United States v. Anderson, 174 F.3d
515, 522 (5th Cir. 1999). Moreover, the jury is free to choose
among reasonable constructions of the evidence, and the evidence
need not exclude every reasonable hypothesis of innocence or be
wholly inconsistent with every conclusion except that of guilt to
sustain a conviction. Anderson, 174 F.3d at 522; see also United
States v. Bell, 678 F.2d 547, 549 (5th Cir. Unit B 1982) (en
banc), aff’d, 462 U.S. 356 (1983).
In order to establish the elements of bank fraud, the
government must prove beyond a reasonable doubt that the
defendant “knowingly executed or attempted to execute a scheme or
artifice 1) to defraud a financial institution or 2) to obtain
any property owned by, or under the custody or control of a
financial institution by means of false or fraudulent pretenses,
8
This standard of review applies here because, although
Loeffel did not move for a judgment of acquittal at the close of
the government’s case or at the close of all the evidence, he
moved for a judgment of acquittal within seven days after the
jury returned its verdict. See FED. R. CRIM. P. 29(c); United
States v. Allison, 616 F.2d 779, 784 (5th Cir. 1980).
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representations or promises.” McCauley, 253 F.3d at 819 (citing
United States v. Odiodio, 244 F.3d 398, 400-02 (5th Cir. 2001));
see 18 U.S.C. § 1344. “The requisite intent to defraud is
established 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 himself.” United States v. Doke, 171 F.3d 240, 243 (5th
Cir. 1999).
The government’s theory--which the jury apparently believed
in reaching a guilty verdict--was that Loeffel misrepresented to
Summit that Progressive would use the funds to purchase trucks in
order to secure the advance to pay the back taxes. The evidence
presented at trial demonstrated that Loeffel was aware at the
time of the request that Summit would not transfer funds to
Progressive’s account on an unsecured basis.9 Indeed, there is
nothing in the record to suggest that Summit had ever extended
funds on Progressive’s line of credit without simultaneously
arranging for a security interest in the underlying equipment
being purchased with the funds. The government also submitted
the two checks that Loeffel wrote to the Texas Comptroller
totaling $370,000 on the same day of the draw request. According
to Fry’s testimony, Progressive did not have sufficient funds to
9
Fry stated that Summit would not have loaned the $390,000
on an unsecured basis because Progressive was not credit worthy.
1 Rawle at 93.
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cover these checks until the $390,000 was transferred into its
operating account on May 12.10
This court has sustained guilty verdicts for bank fraud
under 18 U.S.C. § 1344 where the defendant knowingly
misrepresents how funds will be used in order to induce a bank to
authorize a particular loan or advance. See Anderson, 174 F.3d
at 524 (finding sufficient evidence to support the jury’s verdict
where the defendant “knowingly made a misrepresentation that
influenced the bank’s decision with the intention of obtaining
something of value from the bank--the use of the bank’s money for
longer than [the defendant] would have otherwise been entitled to
it”); Dupre, 117 F.3d at 820 (holding that “a reasonable jury was
entitled to conclude that appellants made false representations
regarding the use of the $1.5 million to induce the bank to
approve the withdrawal”); cf. United States v. Dobbs, 63 F.3d
391, 396 (5th Cir. 1995) (noting that the jury could conclude
that the defendant knowingly “divert[ed] funds that properly
belonged to [the] bank into his own ranch operation” when the
10
On direct examination, Mathews testified that more than
$700,000 was available in May of 2000 to pay off the back taxes
without using the funds advanced from Summit. See 1 Rawle at 103.
During cross-examination, however, Mathews slightly altered his
position and stated that paying the tax liability would cause
Progressive to be “short on funds” but that if the U.S. Stone
account came in as expected “then perhaps we will be okay.” Id.
at 106. In light of the standard of review applied in evaluating
the sufficiency of the evidence to sustain a jury verdict, we
decline to supplant the jury’s decision to credit the testimony
of Fry over that of Mathews on this issue. See McCauley, 253
F.3d at 818.
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defendant sold the cattle securing the bank’s loan). In this
case, Loeffel’s failure to inform Summit that he would be using
the advanced funds to pay the tax liability, rather than to
follow through with the purchase of the trucks from American
Midwest, supports an inference that he was aware of his
wrongdoing at the time of the draw request. Moreover, the
content of Loeffel’s memorandum suggests that he knew it was
inappropriate to use the funds from Summit to pay the tax
liability but hoped he could cover his tracks once the U.S. Stone
account came in. Even if the U.S. Stone account had eventually
arrived, however, the violation of § 1344 occurred at the moment
Loeffel diverted the advance from Summit to an impermissible use.
See Anderson, 174 F.3d at 524 (“That [the defendant] later
substituted new collateral once he was confronted with the
missing collateral is irrelevant because the crime was already
completed.”).
We are not persuaded by Loeffel’s reliance on the Eleventh
Circuit’s decision in United States v. McCarrick, 294 F.3d 1286
(11th Cir. 2002). In McCarrick, the defendant received a $49,000
loan to expand his automobile repair business, of which $35,000
was to be used for purchasing five specific pieces of equipment,
including a spray paint booth, and the remaining $14,000 was to
be used for working capital. Id. at 1288. After purchasing four
of the five pieces of equipment, the defendant testified that he
deposited the remaining check for $12,679 into his account with
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the intent to purchase the spray paint booth, which had been
ordered but not yet delivered at the time. Id. at 1289. Over
the next month, the defendant’s business experienced financial
difficulties, prompting him to use the $12,679 to cancel the
order for the spray paint booth and use the funds to “keep his
business afloat.” Id. In finding the evidence insufficient to
convict under § 1344, the court noted that “[t]he evidence at
trial consisted entirely of events that occurred subsequent to
the signing of the loan documents” and that the evidence of the
defendant’s conduct subsequent to signing the loans did “not
support a rational inference of the requisite prior intent,
beyond a reasonable doubt.” Id. at 1291 (emphasis added).
Even if this court were bound by the Eleventh Circuit’s
decision in McCarrick,11 we conclude that the instant case does
not present a situation in which the government proffered
evidence that related only to conduct subsequent to the draw
request; rather, the jury was presented with evidence that could
support a rational inference that Loeffel formed the intent to
deceive Summit prior to his draw request. According to Loeffel’s
testimony at trial, the tax audit by the Texas Comptroller was
completed around December of 1999 or early January or February of
2000. 1 Rawle at 122. Because Loeffel did not send the fax to
11
Although we often look to our sister circuits for
persuasive authority, “the Fifth Circuit is in no way bound by
decisions rendered by other circuits.” United States v. Dawson,
576 F.2d 656, 659 (5th Cir. 1978).
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Summit requesting the $390,000 advance until May 12, 2000,--at
least three months after the tax audit--the jury could have
reasonably inferred that Loeffel was fully aware of the tax
liability at the time of the draw request and made the
misrepresentation to induce Summit to disburse the funds. See
Anderson, 174 F.3d at 524; Dupre, 117 F.3d at 820. Furthermore,
Loeffel wrote two checks to the Texas Comptroller totaling
$371,000 on the very same day that Summit transferred the funds
into Progressive’s account, which Fry testified had previously
lacked adequate funds to cover the tax liability. Therefore, we
conclude that there was sufficient evidence to support the jury’s
finding that Loeffel had the requisite fraudulent intent at the
time he made the draw request to Summit.
III. CONCLUSION
For the foregoing reasons, we AFFIRM Loeffel’s conviction.
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