USCA1 Opinion
January 5, 1995
[NOT FOR PUBLICATION]
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 94-1571
UNITED STATES,
Appellee,
v.
THOMAS E. BEHENNA,
Defendant, Appellant.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. William G. Young, U.S. District Judge] ___________________
____________________
Before
Selya, Circuit Judge, _____________
Campbell, Senior Circuit Judge, ____________________
and Boudin, Circuit Judge. _____________
____________________
Thomas E. Behenna on brief pro se. _________________
Donald K. Stern, United States Attorney, and Paul G. Levenson, ________________ _________________
Assistant United States Attorney, on brief for appellee.
____________________
____________________
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Per Curiam. This is an appeal from the district __________
court's judgment denying the motion of appellant Thomas E.
Behenna to withdraw his guilty plea. Behenna pleaded guilty
to a three-count information charging him with making false
statements to Dime Savings Bank of New York ("Dime New York")
in violation of 18 U.S.C. 1014.
I.BACKGROUND _ __________
In 1987, Charles McCormick, a client of Behenna
(who is an attorney), told Behenna about a chance to purchase
condominium units at two condominium developments, Hawthorne
Village in North Attleboro and Queens Court in Plainview,
Massachusetts. Behenna was informed that these units could
be purchased with almost no money down. Further, the
developer of Hawthorne Village, David Burns, told Behenna and
other purchasers that Burns would give them a 10 percent
second mortgage and a 10 percent "discount."
Arrangements were made to have Dime New York, a
federally insured bank, provide the financing through its
"Impact" loan program. Under this program, purchasers of
residential real estate making cash down payments of 20
percent of the purchase price received loan approval prior to
the receipt of documents verifying financial and other
information contained in their loan applications. Dime New
York's wholly owned subsidiary, Dime Real Estate Services of
Massachusetts ("Dime Mass."), processed the Impact loan
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applications in Massachusetts; Eric Peach was the sales
representative who handled the loans in question.
Behenna and the other purchasers of the
condominiums were informed that instead of cash, they could
use the 10 percent discount and the 10 percent second
mortgage as the down payment. Nonetheless, Behenna's loan
applications stated that cash down payments had been made and
his purchase and sale ("P & S") agreements also erroneously
reflected the presence of 20 percent cash down payments.
According to Behenna, Peach was aware of the true terms of
the financing and told him (Behenna) that Dime New York
approved of this type of financing. In addition, Behenna
prepared addenda to the P & S agreements which revealed that
the second mortgages and the discounts were the sources of
the down payments. Behenna gave the agreements with the
addenda to Peach.
After the loan applications were approved, the
closings took place at the office of Dime's closing attorney,
Alan Segal. At this time, Behenna signed Fannie Mae
affidavits and HUD-1 settlement statements indicating that he
had made 20 percent cash down payments.1 The HUD-1 forms
stated that there was no secondary financing in connection
with the purchases and, in the same vein, the Fannie Mae
____________________
1. These forms required a loan applicant to attest that the
statements contained in the forms were true and accurate and
warned that making false statements was a crime.
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affidavits failed to disclose the second mortgages and the
discounts. Finally, Behenna was aware, at this time, that
the addenda were no longer attached to the P & S agreements.
Eventually, the Federal Bureau of Investigation
conducted an investigation into Dime New York's allegations
of fraud in connection with these loans. At this time,
Behenna met with government personnel. According to Behenna,
he was told that Dime New York had never authorized a no
money down loan program, that it was unaware of the second
mortgages and that it did not have in its files the addenda
to Behenna's P & S agreements. After Behenna learned that he
was about to be indicted on charges of bank fraud, conspiracy
and making false statements to a federally insured bank, he
decided to plead guilty. In return for his cooperation with
the government, the government agreed to limit the charges to
the making of false statements. During these discussions and
in the subsequent district court proceedings, Behenna was
represented by counsel.
At his change of plea hearing, Behenna stated that
he knew when he signed the Fannie Mae affidavits and the HUD-
1 settlement statements that they contained false
information. Pursuant to the plea agreement and prior to
sentencing, Behenna testified as a witness for the
prosecution in the trial of Segal, Dime's closing attorney,
and Robert Kline, an attorney for the developer of the
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condominiums at Hawthorne Village. At the end of trial, the
court granted Segal's and Kline's motions for directed
verdicts. One and a half months later, Behenna filed the
motion to withdraw his guilty plea.
Behenna's main argument was that his false
statements were not material because the Segal-Kline trial
evidence showed that the bank management connived in the
scheme. The district court invited briefs on the standard of
materiality under the statute. Ultimately, the district
court said that materiality should be evaluated on an
objective basis and the court denied the motion to withdraw
the plea. This appeal followed.
II.THE LAW __ _______
A. Fed. R. Crim. P. 32(d) Standards ________________________________
Before sentencing, a defendant may move to withdraw
his or her guilty plea upon a showing of a "fair and just
reason." Fed. R. Crim. P. 32(d); see United States v. ___ ______________
Parrilla-Tirado, 22 F.3d 368, 371 (1st Cir. 1994); United _______________ ______
States v. Kobrosky, 711 F.2d 449, 454 (1st Cir. 1983). ______ ________
Although the standard in this situation is a liberal one,
"[a] defendant possesses no absolute right to withdraw a
guilty plea. . . ." Kobrosky, 711 F.2d at 454; United States ________ _____________
v. Ramos, 810 F.2d 308, 311 (1st Cir. 1987). "[T]his court _____
will not set aside the district court's findings unless a
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defendant unequivocally shows an abuse of discretion."
Ramos, 810 F.2d at 311. The factors we consider include: _____
(1) the plausibility of the
reasons prompting the requested
change of plea; (2) the timing
of the defendant's motion; (3)
the existence or nonexistence
of an assertion of innocence;
and (4) whether, when viewed in
light of emergent
circumstances, the defendant's
plea appropriately may be
characterized as involuntary,
in derogation of the
requirements imposed by Fed. R.
Crim. P. 11, or otherwise
legally suspect. . . .
Parrilla-Tirado, 22 F.3d at 371 (footnote and citations _______________
omitted).
B. Section 1014 ____________
Section 1014 prohibits persons from "knowingly
make[ing] any false statement or report . . . for the purpose
of influencing in any way the action of . . . any institution
the accounts of which are insured by the Federal Deposit
Insurance Corporation . . . upon any application . . . or
loan . . . ." To convict a defendant under 1014, the
government must prove that
(i) the defendant made or
caused to be made a false
statement or report to a bank
upon an application, commitment
or loan, and that the false
statement concerned a material
fact; (ii) that the defendant
acted knowingly; (iii) that the
false statement or report was
made for the purpose of
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influencing in any way the
bank's action on the loan; and
(iv) that the false statement
or report was made to a bank
whose deposits were then
[federally] insured. . . .
United States v. Concemi, 957 F.2d 942, 951 (1st Cir. ______________ _______
1992).2 "A statement concerns a material fact when it has
the `capacity to influence' the lending institution." United ______
States v. Braverman, 522 F.2d 218, 223 (7th Cir.) (citation ______ _________
omitted), cert. denied, 423 U.S. 985 (1975). See United _____________ ___ ______
States v. Haddock, 956 F.2d 1534, 1550 (10th Cir.) (an ______ _______
omission in a personal financial statement is material if it
"had the capacity to influence the bank's decision"), cert. _____
denied, 113 S. Ct. 88 (1992). ______
Further, materiality "is not merely directed to
false statements which are actually used in the decision to _____________
make a loan." United States v. Goberman, 458 F.2d 226, 229 _____________ ________
(3d Cir. 1972) (emphasis added). That is, the government is
not required to show that the lending institution actually
relied on the defendant's statements in making its decision
____________________
2. We reject, out of hand, Behenna's argument that his
statements were not made to a federally insured bank. In
United States v. Brandon, 17 F.3d 409 (1st Cir.), cert. ______________ _______ _____
denied, 115 S. Ct. 80, 81 (1994), we held, in the context of ______
bank fraud, that the government "does not have to show the
alleged scheme was directed solely toward a particular ______
institution; it is sufficient to show that defendant
knowingly executed a fraudulent scheme that exposed a
federally insured bank to a risk of loss." Here, there is no
dispute that the loans in question were assigned to Dime New
York.
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to approve a loan. Id. See Haddock, 956 F.2d at 1550 ___ ___ _______
(actual reliance need not be shown to meet materiality
requirement); United States v. Wilcox, 919 F.2d 109, 112 (9th _____________ ______
Cir. 1990) ("no actual influencing need be demonstrated");
United States v. Norberg, 612 F.2d 1, 4 (1st Cir. 1979) ______________ _______
("[i]t is not the result of the transaction upon which the
statute focuses, but the purpose"). As the court in Goberman ________
put it:
Requiring proof of reliance on
the statement by the lending
institution would wreak havoc
with enforcement of the
provision. A successful
prosecution for the violation
would depend on the wholly
fortuitous factor of actual ______
reliance and not at all upon ________
the intent of the guilty party.
The obvious result would be
that not all statements which
could potentially harm the
United States would be subject
to prosecution, undermining the
legitimate purpose Congress
sought to achieve.
Goberman, 458 F.2d at 229. ________
III. DISCUSSION ____ __________
Behenna's primary argument is that he is innocent
of violating 1014. Specifically, he claims that the
evidence at the trial of Segal and Kline and reports of
statements given to the FBI by various employees of Dime
Mass. establish that the bank, in fact, had authorized the
"no money down" payment loan program. He also asserts that
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this evidence shows that he had made full disclosure to the
bank of the true terms of his financing arrangements.
Behenna argues that he should be allowed to withdraw his
guilty plea because the government misrepresented the true
facts to him prior to his decision to plead guilty.
In a case strikingly similar to this one, the Court
of Appeals for the Fifth Circuit rejected a defendant's
argument that his false statements did not have the capacity
to influence the lending institution because the entire ______
institution was aware of defendant's scheme. United States _____________
v. Johnson, 585 F.2d 119, 124 (5th Cir. 1978). The court, _______
assuming the truth of defendant's assertion concerning the
extent of the lending institution's knowledge, held that
"[t]he focus of the offense is on the defendant's intent
rather than on the victim." Id. The court went on: ___
The phrase "for the purpose of
influencing in any way" defines __________
the intent required to
accompany a false statement and
defines it broadly. It draws
under its purview not only a
defendant who intends to
defraud an unwitting insured
institution but also a
defendant who intends to
cooperate with the institution
in a scheme requiring him, with
the institution's knowledge, to
make false statements for the
furtherance of the scheme. The
savings and loan's awareness of
the fraud is not relevant, for
its existence is not
inconsistent with the intent to
influence which a violator of
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1014 must possess. Thus, this
collection of facts labeled
"complicity" is not a defense
to a charged violation of 18
U.S.C. 1014.
Id. See also United States v. Bush, 599 F.2d 72, 75 (5th ___ ___ ____ _____________ ____
Cir. 1979) ("[T]he words `for the purpose of influencing'
define the quality of the required intent, they do not
immunize a party in duplicity with a bank officer."); United ______
States v. Kennedy, 564 F.2d 1329, 1340 (9th Cir. 1977) ______ _______
(defendant was not immunized from criminal liability "merely
because the bank officer was a party to the scheme"), cert. _____
denied, 435 U.S. 944 (1978); United States v. Niro, 338 F.2d ______ _____________ ____
439, 440 (2d Cir. 1964) (the court described as a "non ___
sequitur" the argument that defendant's false statements ________
could not have influenced the lender because the president of
the lending institution had suggested the scheme). Cf. ___
Concemi, 957 F.2d at 944-45 (one of the defendants was a loan _______
originator for the bank); Norberg, 612 F.2d at 2 (defendant _______
was the attorney for and a director of the bank); United ______
States v. Sheehy, 541 F.2d 123, 124 (1st Cir. 1976) ______ ______
(defendant was a member of the bank's executive committee
which was responsible for approving loans).
In deciding whether to allow a defendant to
withdraw a guilty plea, a court ordinarily will "not decide
the merits of a proffered defense by resolving factual issues
that are more properly decided at trial." United States v. ______________
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Allard, 926 F.2d 1237, 1242 (1st Cir. 1991). "However, when ______
the defendant's factual allegations, even if true, fail to
establish a cognizable defense, they do not provide a reason
for permitting withdrawal of a plea." Id. See also Ramos, ___ ___ ____ _____
810 F.2d at 312 (Rule 32 motion may be denied if a
defendant'sfactualcontentionsdonot createarecognizeddefense).
Based on the caselaw, it is plain that Behenna's
claim of innocence must fail. Simply, the assertion that
Dime New York acquiesced in the use of secondary financing
and had full knowledge that borrowers often did not make cash
down payments in connection with the Impact loan program does
not provide a defense to the charge of making false
statements under 1014. See Johnson, 585 F.2d at 124. The ___ _______
relevant determination for criminal liability is not
dependent on whether the lender relied, or even participated
in, the fraud; rather, the offense is based on the
defendant's "intent to influence an action, and nothing
more." Wilcox, 919 F.2d at 112. ______
Further, it is clear, notwithstanding Behenna's
claim to the contrary, that he possessed the requisite
intent. In Wilcox, defendant submitted to a savings and loan ______
association phony vouchers stating that work on a real estate
development had been completed. These vouchers were
necessary to obtain the loan proceeds. Defendant asserted
that the false vouchers were submitted according to
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instructions from the lender, that the officials of the
association never indicated that their advice concerning the
vouchers would lead to illegal conduct, that he had not
intended to mislead the association and that although he knew
that the information in the vouchers was false, the
association was aware of the true circumstances.
The court held:
Here, the submission of the
false vouchers was designed to
influence the disbursement of
funds by the savings and loan.
The filing of the documents was
a prerequisite to the financial
institution's payments of the
defendant's claims. In fact,
under the procedures adopted by
[the association], the payments
could not have been made unless
the defendant made the false
representations at issue. That
defendant may have been
encouraged in this scheme, or
even joined in it, by one or
more bank officials affords him
no defense at all.
Id. ___
As in Wilcox, the evidence shows that Dime New York ______
would not have made an Impact loan in the absence of a 20
percent deposit made up of the borrower's own funds. Thus,
Behenna's false statements concerning the down payments were
necessary prerequisites to obtaining the proceeds of the
loans and the statements were made precisely for the purpose
of influencing Dime New York in making its decisions
regarding the loans.
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Finally, one of the most significant factors in
deciding whether a defendant has met his or her burden of
establishing a "fair and just reason" for withdrawing a
guilty plea is whether the plea is knowing and voluntary.
Allard, 926 F.2d at 1243; Kobrosky, 711 F.2d at 455. In the ______ ________
change of plea hearing, the district court judge explained to
Behenna what rights he was giving up by pleading guilty and
what the maximum penalties were; he next ascertained that
Behenna had discussed these matters with his attorney. The
government laid out the evidence it would present at trial.
Asked why he was pleading guilty, Behenna responded that the
HUD-1 statements and the Fannie Mae affidavits contained
false statements and that he knew this when he signed them.
Nothing in the record of the change of plea hearing
indicates that Behenna "was anything other than an
intelligent defendant who fully understood what he was doing
and was competent voluntarily to enter [a] guilty plea." See ___
Kobrosky, 711 F.2d at 455; Ramos, 810 F.2d at 314 (district ________ _____
court's compliance with Fed. R. Crim. P. 11 "weighs heavily"
against a defendant). In this situation, "[w]e will not
permit a defendant to turn his back on his own
representations to the court merely because it would suit his
convenience to do so." United States v. Pellerito, 878 F.2d _____________ _________
1535, 1539 (1st Cir. 1989). The plea having been given
knowingly and voluntarily, we cannot say that the district
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court judge abused his discretion by denying Behenna's motion
to withdraw his guilty plea.
Given our conclusions, we reject Behenna's claim
that there was no factual basis for his guilty plea. See ___
United States v. Webb, 433 F.2d 400, 403 (1st Cir. 1970) ______________ ____
(where court questioned defendant about the elements of the
crime and had the prosecution present the evidence it had
gathered, there existed a factual basis for the plea), cert. _____
denied, 401 U.S. 958 (1971). We also find no merit in ______
Behenna's assertion that the government withheld exculpatory
evidence in violation of Brady v. Maryland, 373 U.S. 83 _____ ________
(1963). Plainly, the information in the FBI reports was not
exculpatory.
The judgment of the district court is affirmed. ________
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