United States Court of Appeals,
Eleventh Circuit.
No. 95-3335.
UNITED STATES of America, Plaintiff-Appellee,
v.
Steven Dennis GOLDSMITH, Defendant-Appellant.
April 8, 1997.
Appeal from the United States District Court for the Northern
District of Florida. (No. 95-03025-RV), Roger Vinson, District
Judge.
Before EDMONDSON and BLACK, Circuit Judges, and RONEY, Senior
Circuit Judge.
PER CURIAM:
On this appeal, the defendant argues that his conduct—proven
by the Government and to which he admits—did not violate the
federal bank fraud criminal statute. We hold that it did, and
therefore affirm the judgment of conviction based on a jury
verdict.
Defendant Steven Dennis Goldsmith was convicted by a jury on
all counts of a 23-count indictment charging him with a violation
of 18 U.S.C. § 1344, which makes it a crime to knowingly execute a
scheme to defraud a financial institution or to obtain money from
a financial institution by means of false or fraudulent pretenses
or representations. The "scheme" in this case involved 23 vehicles
that Goldsmith purchased with bank financing and then sold without
remitting the proceeds to the bank. Defendant admits that he was
wrong in commingling these funds but has consistently denied any
intent to defraud the bank, arguing that his conduct was at worst
a breach of contract, a business transaction gone bad. Thus, the
facts, uncontroverted on this appeal, must be examined in light of
the meaning of bank fraud under section 1344.
1
The bank fraud statute has two parts. Section 1344(a)(1)
requires the Government to prove that the defendant (1)
intentionally participated in a scheme or artifice to defraud
another of money or property; and (2) that the victim of the
scheme or artifice was an insured financial institution. United
States v. Stavroulakis, 952 F.2d 686, 694 (2d Cir.1992). Section
1344(a)(2) requires the Government to establish three elements:
(1) that a scheme existed in order to obtain moneys, funds or
credit in the custody of the federally insured financial
institution; (2) that the defendant participated in the scheme by
means of false pretenses, representations or promises, which were
material; and (3) that the defendant acted knowingly. United
States v. Falcone, 934 F.2d 1528, 1539-40 (11th Cir.1991), modified
in part, 960 F.2d 988 (11th Cir.), cert. denied, 506 U.S. 902, 113
S.Ct. 292, 121 L.Ed.2d 216 (1992); United States v. Swearingen,
858 F.2d 1555, 1556 (11th Cir.1988), cert. denied, 489 U.S. 1083,
109 S.Ct. 1540, 103 L.Ed.2d 844 (1989).
1
The version of 18 U.S.C. § 1344 in effect when the
defendant was indicted states in pertinent part:
(a) 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, representations, or promises shall be
fined not more than $10,000 or imprisoned not more
than five years, or both.
To satisfy either of these two subsections, the Government
must prove specific intent to defraud. See United States v.
Medeles, 916 F.2d 195, 198 (5th Cir.1990). Under subsection
(a)(1), however, the Government is not required to establish
misrepresentation on the part of the defendant. Medeles, 916 F.2d
at 198.
The indictment charged Goldsmith under both provisions of
section 1334(a), so we must determine if his conduct amounts to a
violation under either subsection. United States v. Briggs, 939
F.2d 222, 225 (5th Cir.1991), cert. denied, 506 U.S. 1067, 113
S.Ct. 1016, 122 L.Ed.2d 163 (1993). If evidence presented at trial
is sufficient to prove either theory of bank fraud, the case may be
submitted to the jury. Where the indictment and instructions to
the jury charge both clauses of the statute, as was done in this
case, the defendant's conviction may be sustained under either
clause. Briggs, 939 F.2d at 225.
The evidence supports the Government's argument that
defendant violated the first section of the bank fraud statute with
the scheme to defraud the bank and to obtain money that rightfully
belonged to the bank for his own account.
For the basic facts, we can look at the indictment. The
defendant essentially concedes on this appeal that the Government
proved the basic facts alleged in the indictment, but argues that
those facts do not prove a violation of either subsection of
1344(a). Paraphrasing the indictment, it alleges as follows:
1. Goldsmith was president of both Sunbelt Assurance Corporation
(SAC), which provided purchaser's automobile financing, and
The Auto Bank, which sold automobiles repossessed by SAC.
2. Goldsmith, doing business as SAC, obtained a line-of-credit from
Citizens and Builders (C & B), a federally insured financial
institution, to fund automobile loans. Citizens and Southern
Trust Company served as escrow agent on behalf of C & B and
SAC for the disbursement of funds against the line of credit
and for the deposit of money collected on the automobile
loans.
3. After the loan was established, SAC would be listed as the
lienholder, would maintain insurance on the collateral, and
would service the loans by collecting the monthly loan
payments and depositing them in the Citizens and Southern
escrow account. SAC would then cause the escrow funds to be
paid to C & B to apply to the line-of-credit. SAC was paid a
fee for servicing the loans.
4. SAC was responsible for reporting to C & B the status of the
individual automobile loans through a "Portfolio Remittance
Report."
The indictment then alleged that Goldsmith executed the
following scheme to defraud the C & B:
5. Goldsmith, through SAC, repossessed 23 automobiles on defaulted
loans, sold the automobiles through the Auto Bank, and
converted the proceeds to his own use without informing C & B
of the defaults or forwarding the proceeds to the bank.
6. To conceal the loan default, repossession, subsequent sale, and
conversion of the proceeds, Goldsmith falsified the "Portfolio
Remittance Report" to make it appear that the automobile loans
were merely delinquent and not yet the subject of
repossession.
7. The indictment then contained a chart of each individual
borrower, and the date each vehicle was sold, and the amount
received by Auto Bank/SAC and converted to Goldsmith's
personal use. The 23 separate dates went from April 1989 to
October 1990, with no sales some months, and one month with 5
sales. Two months intervened between the first sale, and the
second.
Defendant argues on appeal that "the conduct of which
defendant stands convicted, at worst, constitutes a breach of
contract, not a violation of 18 U.S.C. section 1344(a)." He
contends that he had no fraudulent intent, and that the "government
has impermissibly obtained defendant's conviction by
misrepresenting the evidence in its argument and, thus, convincing
the jury to convict him because his business plan failed, not
because he defrauded the bank."
This argument overlooks the significance of the falsification
of the "Portfolio Remittance Report." If, along with the
conversion as recited above, he had honestly reported to the bank
that the collateral had been sold and he simply failed to pay the
bank the proceeds, it would be difficult to infer fraudulent
intent. But that is not what he did. As alleged in the
indictment, he falsely reported that the loan was still
collateralized, thus enabling him to repeatedly sell automobiles
and pocket the proceeds without detection by the bank. This
evidence was sufficient to support a finding by the jury that
Goldsmith intentionally pursued a scheme to defraud the bank to
obtain funds for his own use that rightfully belonged to the bank.
The jury may well have been unable to establish a reason for the
false reports other than that Goldsmith intended to defraud the
bank.
In his brief, the defendant attempts to disconnect himself
from the reports, but a review of the record reflects sufficient
evidence for the jury to find that he was knowingly responsible for
furnishing the bank with false information.
The defendant cites United States v. Briggs, 939 F.2d 222 (5th
Cir.1991), as the best case that supports his position. But in
Briggs, the defendant was not accused, the Government did not
argue, and the court did not decide whether the scheme in question
violated subsection (a)(1). 939 F.2d at 225 n. 7. Thus,
Briggs is
inapplicable to this case. Defendant has provided us with no case
that supports his argument on this appeal.
AFFIRMED.