IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
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No. 94-30083
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UNITED STATES OF AMERICA, Plaintiff-Appellee,
versus
THOMAS S. WALDRON, Defendant-Appellant.
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Appeal from the United States District Court for the
Middle District of Louisiana
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(March 18, 1995)
Before REAVLEY, DUHÉ and PARKER, Circuit Judges.
ROBERT M. PARKER, Circuit Judge:
Thomas S. Waldron ("Waldron") appeals his conviction and
sentence on six counts of making a false statement on loan
documents to a bank in violation of 18 U.S.C. § 1014. We affirm.
FACTS AND PROCEDURAL HISTORY
In 1981, Waldron, a real estate developer in Florida,
purchased property near West Palm Beach for $1,850,000.00 through
his corporation Marpalm Ranch and Farm, Inc. ("Marpalm"). When
Waldron began experiencing financial problems, he asked two
business associates, Larry Reger ("Reger") and Harry Williams
("Williams"), if they wanted to buy into the venture and assume the
mortgage payments on the property.
On March 9, 1982, Waldron signed a Contract for Sale and
Purchase, which was an agreement between Richard Harris ("Harris"),
Reger and Williams's attorney acting as trustee, and Marpalm to
sell the property. The contract contained an arrangement for a
closing in escrow. On that same day, Waldron also executed a
warranty deed to the trustee and a warranty deed with the grantee
left blank. The contract gave the purchaser sole discretion to
decide which of the two warranty deeds would be recorded. The
contract also disclosed four pending disputes over environmental
issues affecting the property.1
At closing, Waldron's documents were delivered to Harris's law
firm, as escrow agent, to remain in escrow until April 1, 1992.
Waldron received nearly $132,000.00 to compensate Marpalm for
interest it had paid on the note. Sometime after the closing in
1982, Harris prepared an unsigned Land Trust Agreement, which was
referred to in the warranty deed to the trustee.
In 1985, Waldron was introduced to Wendell Shelton
("Shelton"), the Chairman of the Board of Sun Belt Federal Bank
("Sun Belt"), a federally insured savings bank. Originally,
Shelton proposed a $3,000,000.00 loan to Waldron based upon a
mortgage of the Marpalm property. Shelton falsified Board minutes
to obtain a commitment letter without the approval of the Board of
Directors.2 However, the loan negotiations broke down at closing
1
Those issues were as follows: (1) a claim asserted by
South Florida Water Management District; (2) a claim from the
Florida Department of Environmental Regulation; (3) a claim from
the United States Department of the Army; and (4) matters set
forth in a final order issued by the Assistant Secretary of the
State of Florida Department of Environmental Regulation.
2
In a separate proceeding, Shelton pleaded guilty to
charges arising out of that conduct. Waldron was charged as an
2
because the structure of the loan violated usury laws. Shelton and
Waldron then agreed that Sun Belt would make three separate
$1,000,000.00 loans to three corporations created by Waldron.
Waldron installed three nominees in the three newly formed
corporations to sign the applicable Sun Belt loan documents.
Neither the nominees nor Sun Belt was told of the existence of the
1982 Contract for Sale and Purchase, the two warranty deeds, or the
pending environmental proceedings.
On three successive Fridays in May 1985, each nominee signed
a loan agreement and two affidavits.3 When Harris found out about
the Sun Belt loans involving the Marpalm property, he notified
Clarence Rautenstrauch ("Rautenstrauch"), a representative employee
of Reger. Rautenstrauch instructed Harris to record the deed.
On June 27, 1985, Harris sent a letter to Waldron informing
Waldron of his clients' concern over the Sun Belt loans. Then on
July 1, 1985, Harris notified Sun Belt by letter of his clients'
intentions to record their 1982 warranty deed. On July 10, 1985,
Harris filed the warranty deed to the trustee. Based upon Harris's
accomplice, but was acquitted.
3
Each loan agreement contained representations that:
No litigation or governmental proceeding is pending or
threatened against or affecting Borrower or the Land
which may result in any material adverse change in
Borrower's business, operations or the title to the
Land or prevent or alter the use of the Land for any
purposes; (and)
The Land is not subject to any lien, security interest
or other encumbrance except the first mortgage on
Parcel A described in the mortgage title binder.
3
actions in filing the deed, Sun Belt stopped funding the loans.
Waldron was indicted by a grand jury on February 4, 1993. The
indictment charged one count of bank fraud and aiding and abetting,
one count of aiding and abetting false entry into bank records, and
eight counts of false statements and aiding and abetting. At the
conclusion of a jury trial in October 1993, Waldron was acquitted
on bank fraud, false entry, and two counts of making false
statements. He was convicted on the remaining six counts of making
false statements. The district court denied a post-trial motion
for judgment of acquittal and a new trial on February 2, 1994. On
that same date, Waldron was sentenced to two consecutive 18-month
terms of imprisonment on two counts, fined $2,000,000.00, and
placed on five years probation following his release. His sentence
was suspended on the remaining counts.
ANALYSIS
Disclosure of a Valid Claim or Interest
Waldron contends that his statements on the Sun Belt loan
documents were true because under Florida law, neither Harris nor
his clients had any valid claims or interests, recorded or
unrecorded, in the Marpalm property. He argues that the language
of the unsigned Land Trust Agreement left no doubt that the
conveyance of the property was tied to execution of that agreement.
Therefore, the 1982 Contract for Sale and Purchase and the two
warranty deeds, in absence of the execution of the Land Trust
Agreement, did not constitute a claim, encumbrance, or adverse
4
interest.4
We will reverse the district court's denial of a motion for
judgment of acquittal only if no rational finder of fact could have
found sufficient evidence, whether direct or circumstantial, to
support a conviction, with all reasonable inferences drawn in the
light most favorable to the verdict. United States v. Faulkner, 17
F.3d 745, 768 (5th Cir.), ___U.S.___, 115 S.Ct. 193, 130 L.Ed.2d
125 (1994).5
Even assuming the 1982 Contract for Sale and Purchase and two
warranty deeds were contingent upon the unexecuted Land Trust
Agreement, we find that their existence was material to whether Sun
Belt would risk extending the three $1,000,000.00 loans. The 1982
Contract for Sale and Purchase specifically states that conveyance
of title shall be by "recordable Warranty Deed" and that
"[p]ossession of the premises shall be delivered on April 1, 1982."
4
Waldron's argument that a literally true answer is not a
criminally false statement relies heavily on United States v.
Chapman, 7 F.3d 66 (5th Cir. 1993), cert. denied, ___U.S.___, 114
S.Ct. 2713, 129 L.Ed.2d 839 (1994). In Chapman, the defendant
appealed a conviction of making false statements in connection
with the acquisition of firearms. While he was appealing another
criminal conviction, the defendant purchased a pistol, answering
that he was not a "convicted felon" on the ATF forms. This Court
reversed in part on the ground that under Texas law, the
defendant was not a "convicted felon" during the pendency of his
appeal. The Court concluded, therefore, that the defendant's
statement was actually true. We find, however, that Chapman does
not control in this case because the existence of the 1982
contract and two warranty deeds had an effect on the Sun Belt
loans.
5
To sustain a conviction under 18 U.S.C. § 1014, the
Government must prove that defendant knowingly and willfully made
a false statement to a financial institution for the purpose of
influencing the financial institution's action. See United States
v. Bowman, 783 F.2d 1192, 1197-98 (5th Cir. 1986).
5
It also states that at closing in escrow, "seller shall execute any
and all...documents reasonably required to be executed in
connection with the transfer of title to the property." The
contract makes no mention of the Land Trust Agreement, which was
never executed, but specifically gives the purchaser the discretion
of filing either warranty deed. Once Harris became aware of the
Sun Belt loans and notified his clients, he was instructed to and
filed the warranty deed to the trustee. Therefore, the jury could
reasonably find the contract and warranty deeds constituted a
claim, encumbrance, or adverse interest in the Marpalm property
that Waldron was required to reveal to Sun Belt.
Disclosure of Environmental Proceedings
Waldron contends that no reasonable jury could conclude that
he knowingly made a false statement with regard to the ongoing
environmental proceedings because the Government failed to present
any evidence that Waldron knew that the loan statements prepared by
his attorney, George Bailey, would omit the information.6
Our review of the record reveals that Waldron was present at
the Sun Belt loan proceedings, giving him the opportunity to read
the loan applications and discover the omitted information. In
addition, in reviewing the loan documents, Waldron would have read
the representation, which was in all three loan agreements, that
"no litigation or governmental proceeding [was] pending."
Therefore, we find a reasonable jury could have inferred that he
6
Waldron did disclose the environmental litigation to
Harris and his clients in the 1982 Contract for Sale and
Purchase.
6
had knowledge that the ongoing environmental proceedings were
omitted from the loan documents and failed to disclose that
omission to Sun Belt.
Opinion Testimony and Exclusion of Documentary Evidence
Waldron contends that the district court erroneously allowed
Harris to testify as to his legal opinion on the ultimate fact in
this case (whether, in light of the contract and deeds, Waldron's
answers were false), and that the court did not cure the error by
instruction because the judge failed to tell the jury to disregard
Harris's testimony. Waldron also argues that the court abused its
discretion when it admitted an unsigned, undated copy of the Land
Trust Agreement that was central to his defense and then eliminated
it the very next day.
Our review of the record reveals that Harris did not testify
as to the ultimate issue of whether Waldron knowingly made false
statements. Even if his testimony was erroneously admitted, the
district judge cured the error by instructing the jury that Harris
was not the judge of the law; the judge was. As for the court's
admittance and subsequent exclusion of the unexecuted Land Trust
Agreement, again, we find no abuse of discretion in light of the
court's explanation and instruction given to the jury for his
decision to exclude the evidence at a later time.
Our review of Waldron's remaining issues on appeal reveals no
reversible error on the part of the district court. Therefore, we
find that Waldron's remaining claims have no merit.
CONCLUSION
7
For the reasons articulated above, Waldron's conviction and
sentence are AFFIRMED.
8