United States v. Restivo

UNITED STATES COURT OF APPEALS
FIFTH CIRCUIT

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No. 92-9585
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UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

ANDREW V. RESTIVO, II,

Defendant-Appellant.

________________________________________________

Appeal from the United States District Court
for the Eastern District of Louisiana
________________________________________________
(November 22, 1993)
Before POLITZ, Chief Judge, REAVLEY, and EMILIO M. GARZA, Circuit
Judges.

EMILIO M. GARZA, Circuit Judge:

Andrew Restivo appeals his convictions on eleven counts of a

twelve count indictment charging him with the following offenses:

conspiracy to misapply bank funds and to make false entries in bank

documents; executing a scheme to defraud a bank; willful

misapplication of bank funds; money laundering; knowingly causing

to be made false entries in bank documents; and perjury before a

grand jury. Finding no reversible error, we affirm.

I

During his tenure as president of Schwegmann Bank (the

"Bank"), Restivo developed an insurance premium finance ("IPF")

department which provided consumer financing for automobile

insurance premiums. Lloyd Hoffman, a vice-president and loan
officer at the Bank, brought in Jerry Delchamps as a new Bank

customer. Delchamps was president of Dixie Lloyds Insurance

Company ("Dixie Lloyds"), an automobile liability insurer. To

conduct the financial transactions of Dixie Lloyds's, Delchamps

opened and maintained checking accounts at the Bank.

In September 1989, Delchamps approached Restivo and Hoffman

for a $1.6 million loan.1 Restivo and Hoffman presented on Dixie

Lloyds's behalf two loans packages to the Bank's Board of

Directors. The Bank eventually approved a loan to Dixie Lloyds in

the amount of $500,000.00.

The September loan did not solve Dixie Lloyds's problems. By

February 1990, Delchamps's accounts with the Bank were overdrawn in

the amount of $345,000.00. With Restivo's alleged approval,

Delchamps executed a promissory note to the Bank in the amount of

$500,000.00. The Bank's Board of Directors had no knowledge of

this loan.2

By April 1990, Delchamps's accounts were again overdrawn.

Knowing that the Bank was due to be reexamined by the Federal

Deposit Insurance Corporation (the "FDIC"), Restivo wanted the

February loan off the books and the overdrafts paid. On April 11,

Delchamps executed another promissory note in the amount of

1
An audit by the Louisiana Insurance Commissioner revealed
that Dixie Lloyds had a statutory deficit of $2.4 million, and was
therefore in danger of being closed. The Insurance Commission
listed as one remedial measure the payment of $1.6 million of the
$2.4 million deficit.
2
This loan was charged as a misapplication by a bank
officer in Count 4.

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$500,000.00, which Restivo initialled.3 Two days later on April

13, Delchamps executed another promissory note in the amount of

$485,328.96, which Restivo also initialled.4 The Bank had no

knowledge of these loans.

Restivo was subsequently charged in a twelve-count indictment

with: conspiracy to misapply bank funds and make false entries in

bank documents, in violation of 18 U.S.C. § 371 (1988) (Count 1);

executing a scheme to defraud a bank, in violation of 18 U.S.C.

§§ 1344, 2 (1988) (Counts 2-3);5 willful misapplication by a bank

officer, in violation of 18 U.S.C. §§ 656, 2 (1988) (Counts 4-6);

money laundering, in violation of 18 U.S.C. §§ 1956(a)(1)(A)(i), 2

(1988) (Counts 7-9); knowingly making false entries in bank

documents, in violation of 18 U.S.C. § 1005 (1988) (Count 10); and

perjury before a grand jury, in violation of 18 U.S.C. § 1623(a)

(1988) (Counts 11-12). Restivo was convicted on eleven of the

twelve counts of the indictment.6 He was sentenced to a prison

term of 100 months, followed by three years of supervised release.

3
This loan was charged as a misapplication of bank funds
in Count 5. The use of this loan's proceeds to pay the February
loan was charged as money laundering in Count 7.
4
This loan was charged as a misapplication by a bank
officer in Count 6.
5
Delchamps operated a check-kiting scheme, whereby cross
deposits were made in the Bank and the Bank of Louisiana making it
appear that there were substantial deposits in both banks.
Restivo's knowing participation in the check-kiting scheme was
charged as bank fraud in Count 3. The use of the scheme's proceeds
to pay the April 13 loan was charged as money laundering in Counts
8 and 9.
6
The jury returned a verdict of not guilty on Count 4.

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 On appeal, Restivo contends that: (a) the district court

denied his counsel the opportunity to effectively cross-examine

Delchamps, a key government witness; (b) the district court's jury

instruction regarding the money laundering counts constructively

amended the indictment; and (c) the evidence was insufficient to

support his convictions on Counts 3, 7, 8, and 9 of the indictment.

II

A

Restivo first contends that the district court denied his

counsel the opportunity to effectively cross-examine Delchamps, by

limiting cross-examination on the following subjects: (1) whether

a "cap" existed on Delchamp's sentence as a result of his plea

agreement; (2) whether the government had to agree that Delchamps

was telling the truth before it filed a substantial assistance

letter on his behalf;7 and (3) whether Delchamps pled guilty to

spare his daughter and son-in-law from prosecution. "While the

scope of cross-examination is within the discretion of the trial

judge, this discretionary authority comes into play only after

there has been permitted as a matter of right sufficient cross-

examination to satisfy the Sixth Amendment."8 The Confrontation

Clause of the Sixth Amendment is satisfied where defense counsel

has been "permitted to expose to the jury the facts from which

7
See United States Sentencing Commission, Guidelines
Manual, § 5K1.1 (Nov. 1992).
8
United States v. Elliott, 571 F.2d 880, 908 (5th Cir.)
(attribution omitted), cert. denied, 439 U.S. 953, 99 S. Ct. 349,
58 L. Ed. 2d 344 (1978).

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jurors, as the sole triers of fact and credibility, could

appropriately draw inferences relating to the reliability of the

witness."9 To demonstrate an abuse of discretion, Restivo must

show that the limitations imposed upon his counsel's cross-

examination were clearly prejudicial.10

Notwithstanding the district court's restrictions on cross-

examination, the record demonstrates that Restivo's counsel was

permitted to expose to the jury the following: that Delchamps

entered into a plea agreement with the government; that Delchamps

could have been charged with the more serious offense of money

laundering if not for his plea agreement; and that the issuance of

the § 5K1.1 letter for sentencing purposes was within the

discretion of the government. Based upon these facts, the jury

could have inferred that Delchamps was a biased witness.11 We

therefore hold that the district court's restrictions on cross-

9
Davis v. Alaska, 415 U.S. 308, 318, 94 S. Ct. 1105, 1111,
39 L. Ed. 2d 347 (1974); see also Delaware v. Van Arsdall, 475 U.S.
673, 680, 106 S. Ct. 1431, 1436, 89 L. Ed. 2d 674 (1986) (citing
Davis).
10
See Elliott, 571 F.2d at 909 (quoting Gordon v. United
States, 438 F.2d 858, 865 (5th Cir.), cert. denied, 404 U.S. 828,
92 S. Ct. 139, 30 L. Ed. 2d 56 (1971)).
11
We further note that while instructing the jury, the
district court apprised the jury that "the government called as two
of its witnesses Jerry Delchamps and Lloyd Hoffman, with whom the
government has entered into plea agreements providing for the
dismissal of some charges and lesser sentences than they would
otherwise be exposed to or for the offenses to which they pled
guilty."

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examination neither violated the dictates of the Sixth Amendment,

nor were so prejudicial as to constitute an abuse of discretion.12

B

Restivo next contends that the district court's jury

instruction regarding the money laundering counts of the

indictment, impermissibly altered the indictment. Counts 7, 8, and

9 of the indictment charged Restivo with money laundering. One of

the elements of this offense, as charged in the indictment, was

that Restivo knowingly entered into financial transactions

involving unlawfully-obtained proceeds with the intent to promote

the specified unlawful activity of bank fraud charged in Count 2.

When instructing the jury on this element, the district court

failed to mention bank fraud. Instead, the court instructed the

jury that the term "specified unlawful activity" includes "theft,

embezzlement or misapplication by a bank officer or employee."

Restivo argues that the variance between the instruction and the

indictment amounted to a constructive amendment of the indictment

warranting reversal. Because Restivo did not raise this alleged

error before the district court, we review the court's instruction

12
See United States v. Vasilos, 598 F.2d 387, 390 (5th
Cir.), cert. denied, 444 U.S. 932, 100 S. Ct. 277, 62 L. Ed. 2d 190
(1979) (holding that defendant was not prejudiced by the
restrictions placed on his counsel's cross-examination of key
government witness, where "[t]he jury was sufficiently apprised of
other bases on which [the defendant's] credibility was vulnerable
to attack"); Elliott, 571 F.2d at 909 (holding that restrictions
placed upon defense counsel's cross-examination did not violate
Sixth Amendment violation where "the jury was well aware of the
fact that most of the government's witnesses were co-conspirators
and convicted felons, testifying under grants of immunity and other
agreements with the prosecution").

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for plain error.13 Plain error is error so obvious and substantial

that failure to notice it would affect the fairness, integrity, or

public reputation of the judicial proceedings and would result in

manifest injustice.14

The Fifth Amendment guarantees that a criminal defendant will

be tried only on charges presented in a grand jury indictment.

"Incident to this constitutional guarantee is the longstanding

principle of our criminal justice system that the charges contained

in an indictment may not be broadened or altered through amendment,

except by the grand jury itself."15 An amendment may be explicit,

implicit, or constructive.16 In deciding whether the district

court's jury instruction amounted to a constructive amendment of

the indictment, we must determine whether the instruction permitted

the jury to convict the defendant on a factual basis that

effectively modified an essential element of the offense charged.17

If so, then reversal is required because the defendant may have

13
See United States v. Mize, 756 F.2d 353, 355 (5th Cir.
1985) (reviewing alleged error in jury instruction for plain error
where no objection made at trial), cert. denied, 484 U.S. 943, 108
S. Ct. 328, 98 L. Ed. 2d 355 (1987); United States v. Fitzpatrick,
581 F.2d 1221, 1223 (5th Cir. 1978) (same).
14
United States v. Lopez, 923 F.2d 47, 50 (5th Cir.), cert.
denied, ___ U.S. ___, 111 S. Ct. 2032, 114 L. Ed. 2d 117 (1991).
15
United States v. Chandler, 858 F.2d 254, 256 (5th Cir.
1988) (citing Stirone v. United States, 361 U.S. 212, 215-17, 80
S. Ct. 270, 272-73, 4 L. Ed. 2d 252 (1960)).
16
Id.
17
See United States v. Doucet, 994 F.2d 169, 172 (5th Cir.
1993); Mize, 756 F.2d at 355; United States v. Young, 730 F.2d 221,
223 (5th Cir. 1984).

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been convicted on a ground not charged in the indictment.18 If not,

then the district court's "refusal to restrict the jury charge to

the words of the indictment is merely another of the flaws that mar

its perfection but do not prejudice the defendant."19

Restivo was charged with, as an essential element of the money

laundering counts, conducting financial transactions with the

intent to promote the specified unlawful activity of bank fraud.

Although the district court instructed the jury that the term

"specified unlawful activity" includes theft and embezzlement, we

disagree with Restivo's assertion that the inclusion of these terms

amounted to a constructive amendment of the indictment. The

government did not offer and the district court did not permit in

evidence, any facts to support these alternative bases of proving

the "intent to promote" element of money laundering. Consequently,

there is no possibility that the jury was permitted to convict

Restivo))in view of the trial evidence))on a ground (the intent to

promote theft or embezzlement) not charged in the indictment.20

18
Young, 730 F.2d at 223; see Stirone, 361 U.S. at 213, 80
S. Ct. at 271 ("The crucial question . . . is whether [the
defendant] was convicted of an offense not charged in the
indictment.").
19
Young, 730 F.2d at 223 (quoting United States v. Ylda,
653 F.2d 912, 914 (5th Cir. Unit A 1981)).
20
See United States v. Slovacek, 867 F.2d 842, 847 (5th
Cir.) ("If the court, through its instructions and facts it permits
in evidence, allows proof of an essential element of a crime on an
alternative basis permitted by the statute but not charged in the
indictment, per se reversal is required." (emphasis added)), cert.
denied, 490 U.S. 1094, 109 S. Ct. 2441, 104 L. Ed. 2d 997 (1989);
Ylda, 653 F.2d at 914 (holding that the evidence actually presented
raised no possibility that the defendant's conviction was based on
anything other than the facts set forth in the indictment).

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 The district court's definition of the term "specified

unlawful activity" to include misapplication by a bank officer also

did not amount to a constructive amendment of the indictment.

Again, the money laundering counts of the indictment charged

Restivo with conducting financial transactions with the intent to

promote the bank fraud described in Count 2 of the indictment.

According to Count 2, Restivo accomplished this bank fraud "by

means of false and fraudulent pretenses and representations as to

the bank's profitability by continuing to fund the operations of

Dixie Lloyd's and related companies." It is undisputed that

Restivo was able to fund Dixie Lloyds's operations through his

misapplication of bank funds, which is detailed in Count 5 of the

indictment. Because the misapplication by a bank officer was

included in the indictment's description of bank fraud, there is no

possibility that Restivo was convicted upon a ground (the intent to

promote the misapplication by a bank officer) not charged in the

indictment.21 The district court apparently defined the term

"specified unlawful activity" to include a predicate of bank fraud,

21
We further note that the government's theory at trial for
proving money laundering did not diverge from the indictment))i.e.,
that Restivo acted with the intent to promote bank fraud. This is
evident from the government's final argument to the jury:

Count 7 is money laundering. Money laundering. What
essentially that boiled down to is basically elements.
You got an illegal activity such as misapplication. You
got a financial transaction; that is, the movement of
money by financial means. In this case it's a credit
memo. You got this two hundred thousand dollars which
represents Count 7 in the indictment. This money went to
pay off this illegal loan. It promoted the overall bank
fraud which the defendant is charged with.
Record on Appeal vol. 13, at 123-24 (emphasis added).

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rather than the offense of bank fraud itself. We further note that

the district court in no way limited the term "specified unlawful

activity" to only include theft, embezzlement, or misapplication by

a bank officer. We therefore hold that any variance between the

indictment and the jury instruction did not amount to a

constructive amendment of the indictment, and was at most, harmless

error. Accordingly, we find no plain error in the district court's

jury instruction.

C

Lastly, Restivo contends that the evidence was insufficient to

support his convictions on Counts 3, 7, 8, and 9 of the indictment.

Count 3 charged Restivo with executing and attempting to execute a

check-kiting scheme to defraud the Bank, in violation of 18 U.S.C.

§§ 1344, 2. Counts 7, 8, and 9 of the indictment charged Restivo

with money laundering, in violation of 18 U.S.C.

§§ 1956(a)(1)(A)(i), 2.

When deciding the sufficiency of the evidence, we view the

evidence and the inferences that may be drawn from it in the light

most favorable to the verdict, and ask whether a rational jury

could have found the essential elements of the offenses beyond a

reasonable doubt.22 The evidence need not exclude every rational

hypothesis of innocence or be wholly inconsistent with every

conclusion except guilt, provided a reasonable trier of fact based

22
United States v. Pruneda-Gonzalez, 953 F.2d 190, 193 (5th
Cir.), cert. denied, ___ U.S. ___, 112 S. Ct. 2952, 119 L. Ed. 2d
575 (1992).

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upon the evidence could find guilt beyond a reasonable doubt.23 We

further accept all credibility choices which tend to support the

jury's verdict.24

To convict Restivo of bank fraud, the government had to prove

that Restivo knowingly executed a scheme to defraud with the intent

to defraud the Bank.25 A "scheme to defraud" includes any false or

fraudulent pretenses or representations intended to deceive others

in order to obtain something of value, such as money, from the

institution to be deceived.26 A defendant acts with the requisite

intent to defraud if he 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.27

Although Restivo concedes the existence of the check-kiting

scheme, he argues that he did not know of the kite, and therefore

did not possess the requisite intent to defraud. Proof of an

intent to defraud "may arise by inference from all of the facts and

circumstances surrounding a transaction."28 The evidence showed

23
Id.
24
United States v. Anderson, 933 F.2d 1261, 1274 (5th Cir.
1991).
25
See 18 U.S.C. § 1344; United States v. Saks, 964 F.2d
1514, 1518 (5th Cir. 1992).
26
Saks, 964 F.2d at 1518.
27
Id.
28
United States v. Aubrey, 878 F.2d 825, 827 (5th Cir.),
cert. denied, 493 U.S. 922, 110 S. Ct. 289, 107 L. Ed. 2d 269
(1989).

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that, although Restivo knew Delchamps was writing checks in excess

of $50,000.00 drawn on the Bank and that Delchamps's accounts were

constantly overdrawn, Restivo often authorized payment of

Delchamps's non-sufficient fund checks. The record also

demonstrated that Restivo, when apprised by a subordinate of a

possible check-kiting scheme between the Bank and the Bank of

Louisiana, directed that subordinate to continue accepting checks

from Delchamps which were drawn on the Bank of Louisiana. Based on

this evidence, a rational trier of fact could have found beyond a

reasonable doubt that Restivo knew of the kite and intended to

deceive the Bank. We therefore hold that sufficient evidence

supported his conviction on Count 3.

To convict Restivo of money laundering, the government had to

prove that Restivo: (1) knowing that the property involved in a

financial transaction represented the proceeds of unlawful

activity, (2) conducted or attempted to conduct such a financial

transaction which in fact involved the proceeds of specified

unlawful activity (3) with the intent to promote the carrying on of

specified unlawful activity.29 Restivo's challenge to the

sufficiency of the evidence supporting his convictions on Counts 8

and 9 is derivative of his challenge to the sufficiency of the

evidence supporting his conviction on Count 3. Since we reject his

challenge to Count 3, we also reject his challenge to Counts 8 and

9.

29
18 U.S.C. § 1956(a)(1)(A)(i); United States v. Alford,
999 F.2d 818, 823 (5th Cir. 1993).

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 As for Count 7, Restivo argues that he did not act with the

intent to promote the bank fraud described in Count 2. One of the

aspects of the bank fraud cited in Count 2 was a knowing scheme "to

defraud [the] Bank by hiding the financial condition of Dixie

Lloyd[s'] and related companies and their inability to meet their

financial obligations to [the] Bank." The evidence showed that

Restivo used the proceeds of the unauthorized April 11 loan30 to

repay an earlier loan. Based on this transaction, a rational trier

of fact could have found beyond a reasonable doubt that Restivo

intended to hide the true financial condition of Dixie Lloyds from

the Bank, and thus intended to promote bank fraud. We therefore

hold that sufficient evidence supported his conviction on Counts 7,

8, and 9.

III

For the foregoing reasons, we AFFIRM.

30
This loan was charged as a misapplication by a bank
officer in Count 5.

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