IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_______________________
92-2747
_______________________
UNITED STATES OF AMERICA Plaintiff-Appellant
versus
JAMES DANIEL BESZBORN, ET AL Defendants-Appellees
_______________________
Appeal from the United States District Court
for the Southern District of Texas
(CR-H-90-343-1,2,3,4 & 5)
_______________________
(April 18, 1994)
Before GARWOOD and BARKSDALE, Circuit Judges, and SHAW*, District
Judge.
SHAW, District Judge:**
O P I N I O N
The Government appeals the district court's decision granting
defendants' motions and dismissing the indictment on the basis of
pre-indictment delay and double jeopardy. We reverse and remand.
Facts and Proceedings Below
The Government charged five defendants, James Daniel Beszborn,
Joseph Westmoreland, James Purdom, Michael Blanchard, and Martin
_________________________________________________________________
*Chief District Judge of the Western District of Louisiana, sitting
by designation.
** Local Rule 47.5 provides: "The publication of opinions that
have no precedentail value and merely decide particular cases on
the basis of well-settled principles of law imposes needless
expense on the public and burdens on the legal profession.
"Pursuant to that Rule, the Court has determined that this opinion
should not be published.
Schehin with participating in a scheme to defraud First Universal
Savings, Meridian Savings Association, the Federal Savings and Loan
Insurance Corporation (FSLIC), the Federal Home Loan Bank Board
(FHLBB), and the Internal Revenue Service (IRS) through a series of
transactions made in connection with the purchase and development
of several parcels of real estate.
The facts which form the basis of the indictments involve a
complex series of transactions involving First Universal Savings
(Universal), a federally-insured savings and loan association;
First Universal Service Corporation (FUSC), a wholly-owned
subsidiary of Universal, which was created to participate in real
estate development ventures; Penn West, a general partnership owned
by Gary Pentecost, an unindicted co-conspirator, and Westmoreland;
First National Trust (FNT), a real estate development company, and
Meridian Savings Association (Meridian), another federally-insured
savings and loan association. Schehin, Purdom, and Blanchard were
officers, directors, and shareholders of Universal. Schehin was
the president of FUSC. Beszborn and Westmoreland were part-owners
of FNT. The alleged scheme involved the fraudulent acquisition of
financing by FNT through Universal and Meridian.
Initially, on September 17, 1990, a grand jury indicted
defendants-appellees, James Daniel Beszborn and Joseph
Westmoreland on four counts involving conspiracy, bank fraud, and
tax evasion. On August 22, 1991, the Government filed a
superseding indictment, adding as defendants, James Purdom, Michael
Blanchard, and Martin Schehin. The indictment charged Beszborn,
2
Westmoreland, Purdom, Blanchard, and Schehin with conspiracy, false
entry, misapplication of funds, and bank fraud.
On September 27, 1991, Schehin moved to dismiss two counts of
the indictment asserting that they were barred by the applicable
statute of limitation. Purdom and Schehin filed a motion to
dismiss due to pre-indictment delay, and all defendants moved to
adopt and incorporate each of their co-defendants' motions.
After a hearing on the defendants' motions to dismiss, the
district judge denied the motions without reasons.
Shortly thereafter, Schehin and Purdom filed special pleas of
jeopardy, and Beszborn and Westmoreland filed motions to dismiss
based upon double jeopardy. The court took these motions under
advisement.
On June 24, 1992, the Government filed a second superseding
indictment charging the defendants in twelve counts with various
crimes, including conspiracy, bank fraud, misapplication of funds,
false statements, and tax evasion.
On July 15, 1992, Purdom and Schehin amended and refiled their
earlier motion to dismiss the indictment due to pre-indictment
delay and Schehin filed a motion to dismiss on the basis of double
jeopardy.
On August 28, 1992, the district court dismissed the
indictment, granting all of the defendants' motions, including (1)
Purdom's and Schehin's motion to dismiss due to pre-indictment
delay; (2) Schehin's special plea of jeopardy; (3) Purdom's special
plea of jeopardy; (4) Beszborn's motion to dismiss for double
3
jeopardy; (5) Westmoreland's motion to dismiss for double jeopardy;
and (6) Schehin's motion to dismiss for double jeopardy. This
appeal resulted.
Discussion
I. Pre-Indictment Delay
The Government contends that the district court erred as a
matter of law when it misapplied the standard for evaluating a due
process claim. The Government argues that the district court
presumed prejudice from the pre-indictment delay, relieving the
defendants of their burden of proving actual prejudice, necessary
for a due process violation.
While the Sixth Amendment guarantees a criminal defendant a
right to a speedy trial post indictment, the Supreme Court has held
that the Due Process Clause of the Fifth Amendment protects an
accused against pre-indictment delay. United States v. Lovasco,
431 U.S. 783, 97 S. Ct. 2044, 52 L.Ed.2d 752 (1977); United States
v. Marion, 404 U.S. 307, 92 S. Ct. 455, 30 L.Ed.2d 468 (1971).
The burden of proving a due process violation due to pre-
indictment delay is on the defendant, who must prove that (1) the
prosecutor intentionally delayed the indictment to gain a tactical
advantage, and (2) the defendant incurred actual prejudice as a
result of the delay. United States v. Amuny, 767 F.2d 1113 (5th
Cir. 1985).
The Government contends that the district court, in dismissing
the indictment for pre-indictment delay, did not apply the proper
4
standard in evaluating a due process claim, and did not make a
finding of actual prejudice. In its order, the district court
reviewed a list of five potentially material witnesses who have
died since the acts which formed the basis of the indictment
occurred. The court stated that documents have moved and it is
virtually impossible to re-create the circumstances surrounding the
alleged transactions. Apparently, being unable to make a finding
of actual prejudice, the district court relied on the case of
Doggett v. United States, ______ U. S. _______, 112 S. Ct. 2686,
120 L.Ed.2d 520 (1992), in dismissing the indictment on a finding
of presumptive prejudice, holding that the defendants should not be
penalized because they are unable to show actual prejudice. The
district court quotes extensively from Doggett stating, "excessive
delay presumptively compromises the reliability of a trial" and
"affirmative proof of particularized prejudice is not essential to
every speedy trial claim...."
The law is well settled that it is actual prejudice, not
possible or presumed prejudice, which is required to support a due
process claim. The applicable statute of limitations is the
mechanism established by law to guard against possible, as
distinguished from actual, prejudice resulting from the passage of
time between crime and the charge, protecting a defendant from
overly stale criminal charges. United States v. Ewell, 383 U.S.
116, 86 S. Ct. 773, 15 L.Ed.2d 627 (1966), United States v. Marion,
404 U.S. 307, 92 S. Ct. 455, 30 L.Ed.2d 468 (1971).
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The concept of presumed prejudice has no place in a due
process analysis, and the district court's reliance on Doggett is
misplaced. Doggett was a case involving a Sixth Amendment speedy
trial violation claim, due to post-indictment delay, rather than
pre-indictment delay. The proper measure of a claim of prejudice
due to pre-indictment delay is the due process standard of the
Fifth Amendment, which requires a showing of actual prejudice.
Without proof of actual prejudice resulting from the delay, a due
process claim is merely speculative and cannot be maintained.
The Supreme Court was clear in its directive that, "There is
no need to...guard against mere possibility that...delays will
prejudice the defense...since statutes of limitation already
perform that function." United States v. Marion, 404 U.S. 307, 92
S. Ct. 455, 30 L.Ed.2d 468 (1971). The law is well settled--the
Due Process Clause of the Fifth Amendment requires dismissal of an
indictment if it is shown that the pre-indictment delay caused
actual prejudice to the accused and that the Government
intentionally delayed the indictment to gain a tactical advantage.
Assuming the district court applied the proper standard for a
due process claim, requiring proof of actual prejudice, this court
must review the record to determine whether the record supports a
finding of actual prejudice.
As a general rule, this court reviews the district court's
findings of fact for clear error and reviews its conclusions of law
de novo. Colonial Penn Ins. Co. v. Market Planners Ins. Agency,
6
Inc., 1 F.3d 374 (5th Cir. 1993). A finding of prejudice involves
a mixed question of law and fact.
This court has applied a clearly erroneous standard to similar
mixed questions of law and fact under the Fifth Amendment. United
States v. Gibson, 963 F.2d 708 (5th Cir. 1992); United States v.
Bourgeois, 950 F.2d 980 (5th Cir. 1992).
The district court relied upon the death or relocation of
potentially material witnesses and the movement and misplacement of
several documents in its finding of apparent prejudice, without an
actual showing of prejudice by defendants.
The deceased witnesses were merely potentially material to the
defense in this case. There was no evidence that the testimony of
any of these witnesses was exculpatory in nature, or that it would
have actually aided the defense. Although the district court
stated that documents have been moved numerous times and it is
virtually impossible to re-create the circumstances surrounding the
alleged transactions, there is no evidence that the information to
be derived from these documents could not otherwise be obtained
from other sources. Vague assertions of lost witnesses, faded
memories, or misplaced documents are insufficient to establish a
due process violation from pre-indictment delay. United States v.
Harrison, 918 F.2d 469 (5th Cir. 1990); United States v. Ballard,
779 F.2d 287 (5th Cir. 1986).
Therefore, the court having misapplied the standard in a due
process claim and the defendants having failed to meet their burden
7
of proof of actual prejudice, the district court erred when it
dismissed the indictment due to pre-indictment delay.1
II. Double Jeopardy
The Government asserts that the court erred when it granted
the defendants' motions to dismiss based upon double jeopardy.
On May 20, 1988, prior to the Government's indictments against
Beszborn, Westmoreland, Purdom, Blanchard, and Schehin, Universal
Savings Association and First Universal Service Corporation filed
a civil complaint against Beszborn, Westmoreland, Schehin,
Pentecost, Westland Realty, Houston Storage, Inc., First National
Trust Company, Penn West, Progressive Interest and Development
Corp., and David Carpenter for RICO violations, civil conspiracy,
breach of fiduciary duties, common law fraud, state statutory
fraud, negligence, breach of contract, and unjust enrichment. In
May, 1990, the Resolution Trust Corporation (RTC), as
conservator/receiver of Universal Savings Association, was
substituted as a plaintiff in place of Universal to proceed to
trial. At trial, the plaintiffs sought punitive damages against
Gary Pentecost, David Carpenter, Houston Storage, Inc., Penn West,
and First National Trust Company. No issue of punitive damages was
submitted to the jury as to Beszborn, Westmoreland, Purdom,
Schehin, or Blanchard, individually.
1
This court need not reach the issue of whether the
Government intentionally delayed the indictment to gain a
tactical advantage, because the defendants did not meet their
threshold burden that they suffered actual prejudice.
8
The defendants argued that because the RTC is a government
entity, and the Government has sought and was awarded punitive
damages by the jury against entities in which the defendants have
an interest, the Double Jeopardy Clause has been violated. The
district court agreed and dismissed the indictment.
The Double Jeopardy Clause affords a trio of protections to a
criminal defendant: (1) protection against a second prosecution
for the same offense after acquittal, (2) protection against a
second criminal prosecution for the same offense after conviction,
and (3) protection against multiple punishment for the same offense
imposed in a single proceeding. United States v. Sanchez-Escareno,
950 F.2d 193 (5th Cir. 1991).
The third prong of protections, the multiple punishment prong,
afforded by the Double Jeopardy Clause has been expanded by the
Supreme Court, which held that a civil fine imposed in addition to
a criminal prosecution, may trigger double jeopardy protection if
that fine is punitive in nature and aimed at the same conduct.
United States v. Halper, 490 U.S. 435, 109 S. Ct. 1892, 104 L.Ed.2d
487 (1989). It is this expanded protection which the defendants
claim affords them protection from the criminal prosecution. This
court must disagree.
The rationale behind the protection of the Double Jeopardy
Clause rests upon the doctrine that the Government or the sovereign
with all of its power should not be allowed to make repeated
attempts to convict an individual for an alleged offense, or
9
subject him to multiple punishments. It is the conduct or actions
of the Government which the Double Jeopardy Clause seeks to limit.
In order for the Double Jeopardy Clause to have any
application, there must be actions by a sovereign, which place an
individual twice in jeopardy. The Double Jeopardy Clause does not
apply to actions involving private individuals. Browning-Ferris
Industries of Vermont, Inc. v. Kelco Disposal, Inc., 492 U.S. 257,
109 S. Ct. 2909, 106 L.Ed.2d 219 (1989); Hansen v. Johns-Manville
Products Corporation, 734 F.2d 1036 (5th Cir. 1984); Breed v.
Jones, 421 U.S. 519, 95 S. Ct. 1779, 44 L.Ed.2d 346 (1975).
The RTC is an entity created by the Federal Government to
handle the affairs of a failed financial institution. Although the
RTC was created by the Government, it has a non-governmental
function in the initial stages of reorganization of a financial
institution. The RTC became a party to the civil action initiated
by the Universal Savings Association when the bank began suffering
from financial problems. The RTC took over the operations of the
bank in its capacity as receiver or conservator.
It is well settled in the law that the RTC may function in a
corporate or regulatory capacity or in a capacity as receiver. The
separateness of these dual identities has been well recognized in
this circuit and others. The RTC as receiver of an insolvent
financial institution stands in the shoes of the bank assuming all
debts of the bank. FDIC v. Wheat, 970 F.2d 124 (5th Cir. 1992);
Texas American Bancshares, Inc. v. Clarke, 954 F.2d 329 (5th Cir.
1992); Landry v. 1984, 486 F.2d 139 (3rd Cir. 1973); FDIC v.
10
Glickman, 450 F.2d 416 (9th Cir. 1971); Downriver Community Federal
Credit Union v. Penn Square Bank, 879 F.2d 754 (10th Cir. 1989);
FDIC v. Harrison, 735 F.2d 408 (11th Cir. 1984).
The uniqueness of the RTC's role as receiver, rather than as
a governmental entity, becomes quite evident in its pursuits. When
the RTC pursues an action in its capacity as a receiver, it is not
represented by the United States Attorney but instead by private
attorneys. The proceeds derived from the successful actions of the
RTC, in its receiver capacity, benefit the creditors and
stockholders of the failed institution which it represents, and do
not go to the United States Treasury. This unique role of the RTC
was created to aid in the management of a failed institution prior
to its complete sale and dissolution. The Government does not
benefit from the judgment entered by the court in favor of the RTC
as receiver but instead, the proceeds benefit all stockholders and
creditors of the bank.
The unique non-governmental role of the RTC as receiver has
become quite essential in the management of failed financial
institutions. In its capacity as receiver, the RTC stands as a
private, non-governmental entity, and is not the Government for
purpose of the Double Jeopardy Clause.
Accordingly, because the RTC assumed the litigation for
Universal in its private, non-governmental capacity as receiver,
the suit was purely an action between private individuals.
Therefore, because no damage award was pursued or imposed by the
Government, the Double Jeopardy Clause has not been implicated or
11
violated. The subsequent criminal prosecution by the United States
does not violate the Double Jeopardy Clause of the Fifth Amendment,
and the district court erred in its finding of such a violation.
III. Single Overarching Conspiracy
The final point of error asserted by the Government involves
the court's dismissal of the indictment against Purdom and Schehin
on the basis that a prior prosecution of these defendants for
conspiracy to defraud the United States by impeding or obstructing
the IRS's collection of 1984 income taxes (H-90-438), bars
prosecution of these same defendants in the subsequent indictment
for conspiracy in the case sub judice. (H-90-343-SS). The
district court found a single overarching conspiracy encompassing
both indictments, and accordingly found that the Double Jeopardy
Clause had been violated. The court also found that the principle
of collateral estoppel bars the subsequent prosecution of the
defendants by the Government.
Prior to the indictment sub judice, Schehin and Purdom, along
with other defendants, were charged with conspiracy and tax evasion
(H-90-438). The conspiracy in H-90-438 involved seven individuals,
including Schehin and Purdom, who devised a scheme to funnel money
into Texas City Joint Venture (TCJV) and later called the
distributions from that corporation "loans" to avoid paying taxes.
The events and transactions which form the basis of the indictment
occurred in 1984 and 1985. In short, the defendants contracted to
purchase eighty-nine acres of land in Texas City in July, 1984, but
in November, 1984, TCJV actually conducted the purchase. TCJV
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temporarily took title and flipped the property to another
investment group, making a profit of $887,864.21. The money was
placed in the TCJV checking account and was treated as a loan. No
taxes were paid on this income.
In order to prove a violation of double jeopardy, the
defendants have the burden of demonstrating that the two
conspiracies charged are actually one overarching conspiracy.
United States v. Henry, 661 F.2d 894 (5th Cir. 1981), cert. denied,
102 S. Ct. 1614 (1982). Once the defendant makes out a prima facie
double jeopardy claim, the burden shifts to the Government to prove
that separate offenses are charged. United States v. Strickland,
591 F.2d 1112 (5th Cir. 1979) cert. denied, 100 S. Ct. 449 (1979);
United States v. Nichols, 741 F.2d 767 (5th Cir. 1984), cert.
denied, 105 S. Ct. 1186 (1985).
To determine whether the Double Jeopardy Clause has been
violated by a successive conspiracy prosecution, the district court
must review the entire record in view of five factors: (1) time,
(2) persons acting as co-conspirators, (3) the statutory offenses
charged in the indictments, (4) the overt acts charged by the
Government or any other description of the offense charged which
indicates the nature and scope of the activity which the Government
sought to punish in each case, and (5) places where the events
alleged as part of the conspiracy took place. United States v.
Marable, 578 F.2d 151 (5th Cir. 1978).
13
In examining the five factors as applied to the facts of this
case, it is evident that the two charged conspiracies do overlap in
time. However, such a factor alone is not dispositive. The
co-conspirators are not the same except for Purdom and Schehin.
The activities of Purdom and Schehin in each of these conspiracies
were similar in some respects involving the arrangement of funds as
earnest money and the transfer of funds for purchases, but were
different in object and scope.
The statutory offenses charged and the overt acts in the
conspiracies negate a finding of a single overarching conspiracy.
Factually, the objects of the two conspiracies are different and
the manners in which the defendants sought to pursue their goals
were separate and distinct. Additionally, there were completely
separate transactions in each charged conspiracy which further
support the conclusion that separate conspiracies, rather than one
overarching conspiracy existed.
The examination of the conspiracies in light of the five
factors does not support a finding of a single conspiracy, and the
district court's finding of such, and dismissing the indictment on
that basis, is in error.
Along with its finding of one overarching conspiracy
encompassing the two indictments, the district court found that the
jury's verdict acquitting Schehin and Purdom of fraudulently
obtaining money and cheating on their taxes, which required a
finding of guilt for merely counselling, inducing or procuring the
commission of a crime, required the jury to necessarily find that
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Purdom and Schehin did not have the intent to defraud.
Accordingly, the court found that the Government was collaterally
estopped from relitigating the issue of intent in any subsequent
prosecution.
The doctrine of collateral estoppel bars relitigation of
issues of ultimate fact which have already been determined by a
valid and final judgment. Ashe v. Swenson, 397 U.S. 436, 90 S. Ct.
1189, 25 L.Ed.2d 469 (1970).
This court did not find that there was one overarching
conspiracy encompassing the two indictments, and accordingly must
examine the issue of intent as to both indictments to determine
whether a finding of no intent to defraud in one indictment
necessarily requires a similar finding in the other indictment.
The defendants have failed to prove that the jury's acquittal
was based upon a finding of a lack of intent to defraud, and not
upon another element. The nature and object of the intent in each
conspiracy are not the same, and such a conclusion cannot be
presumed. Various inferences can be drawn from the jury's
acquittal and the defendants are not able to eliminate all other
possible findings to conclude that the jury's verdict was based
upon the defendants' lack of intent. Accordingly, the court's
dismissal of this indictment based upon collateral estoppel is in
error.
The district court's order dismissing the indictment on all
grounds is REVERSED AND REMANDED.
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