United States v. Jobe

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

_______________________

No. 94-50646
_______________________

United States of America,

Plaintiffs-Appellee,

versus

Billie Mac Jobe, Stephen Taylor, Philip Mark Sutton, Stanley
Pruet Jobe, and Fernando Novoa,

Defendants-Appellants.

_________________________________________________________________

Appeal from the United States District Court
for the Western District of Texas
_________________________________________________________________

July 24, 1996

Before JONES and STEWART,* Circuit Judges.

EDITH H. JONES, Circuit Judge:

In their petition for rehearing, the appellants Billie

Mac Jobe (“Billie Mac”), Stanley Pruet Jobe (“Stanley”), Stephen

Taylor, Philip Mark Sutton, and Fernando Novoa raise a number of

issues, some of which require further analysis by this court.

Specifically, the Supreme Court’s holding in Ray v. United States,

481 U.S. 736, 107 S. Ct. 2093 (1987) prevents this court from

invoking its concurrent sentence doctrine when a $50 special

Like the panel opinion, this amendment is issued by a quorum.
assessment is imposed on each count of conviction.1 As a result,

this court’s original opinion, United States v. Jobe, 77 F.3d 1461

(5th Cir. 1996), is hereby amended as follows. After carefully

considering all of the challenges raised by the appellants and the

underlying record, this court AFFIRMS all remaining convictions,

except that it REVERSES Stanley’s conviction as charged in Count 5

for making false statements on a loan application, and REMANDS

Novoa for resentencing.2

DISCUSSION

I. Conspiracy to Commit Bank Fraud: Count 1

All of the defendants were convicted under Count 1 of

conspiring to commit bank fraud in violation of 18 U.S.C. §§ 1344,

1005, 1014, and 371. All of the defendants urge that their

convictions under Count 1 must be reversed because the district

court neglected to instruct the jury that materiality was an

element of the offense of conspiracy and that, as a result, their

constitutional rights were violated when the district court failed

1
See also 18 U.S.C. § 3013 (providing that district courts shall
assess a monetary charge “on any person convicted of an offense against the
United States.”).
2
The practical impact of this court’s opinion on rehearing will be
negligible as each count of conviction supports precisely the same prison
sentence. Because the government can collect $50 on each count from each of the
appellants, however, Ray requires that this court address convictions that, even
if reversed, would have no impact on the prison term of any of the appellants.
We echo the concerns recently articulated by Judge Easterbrook for the wisdom of
such a requirement:
But here we are: the prosecution has invested tens of
thousands of dollars to obtain the conspiracy
convictions . . . and now we are grappling with some
thorny issues to determine whether the $50 assessments
stand. All to what end? . . . So we trudge on, but with
grave doubt the public resources have been wisely
deployed.
United States v. Duff, 76 F.3d 122, 124 (7th Cir. 1996).

2
to tender this issue to the jury.3 Further, three of the

defendants, Novoa, Taylor, and Stanley Jobe, contend that their

convictions under Count 1 must also be reversed for lack of

sufficient evidence. Upon close examination, neither of these

arguments has any merit nor requires reversal of the Count 1

convictions.

All of the appellants contend that the Supreme Court’s

recent decision in United States v. Gaudin, ___ U.S. ___, 115 S.

Ct. 2310 (1995), requires reversal of their convictions under Count

1. In Gaudin, the Supreme Court explained that where materiality

is an element of the charged offense, the district court’s failure

to submit the question of materiality to the jury violates the

defendant’s Fifth and Sixth Amendment rights. Id. at ___, 115 S.

Ct. at 2320. Although they cite no controlling precedent, the

appellants suggest that materiality is an element of their

convictions for conspiring to commit bank fraud. Because the jury

was not explicitly instructed to determine the question of

materiality under Count 1, the appellants conclude that after

Gaudin, their convictions under Count 1 must be reversed.

As this court explained in our original opinion, the

effect of the Gaudin error, if any, on the multiple verdicts

against these defendants is difficult to identify. For instance,

the threshold inquiry whether materiality is an element of the

3
The district court instructed the jury on Counts 3, 5, 7, and 10, but
not on Count 1, that they “need not consider whether the false statement was a
material false statement, even though that language is used in the indictment.
This is not a question for the jury to decide.”

3
convictions for conspiracy to commit bank fraud is subject to

dispute. While bank fraud does require a finding of materiality as

an element of that offense, see, e.g., United States v. Spears, 49

F.3d 1136, 1141 (6th Cir. 1995); United States v. Davis, 989 F.2d

244, 247 (7th Cir. 1993), the parties cite no caselaw expressly

deciding whether materiality is likewise an element of the offense

of conspiring to commit bank fraud.4

However, as previously noted, Count 1 charged each of the

defendants with conspiracy to commit bank fraud in violation of 18

U.S.C. §§ 1344, 1005, 1014, and 371. Section 371 is the general

conspiracy statute, prohibiting any conspiracy to commit an offense

against the United States or to defraud it. The other statutes

referenced in Count 1, if prosecuted as independent offenses, would

require the government to prove and the jury to find materiality.

Section 1005, for instance, prohibits the making of false entries

in any book, report, or statement of a federally insured bank with

the intent to injure or defraud the bank. Materiality is an

element of that offense. See, e.g., United States v. Jackson, 621

F.2d 216, 219 (5th Cir. 1980); United States v. Rapp, 871 F.2d 957,

963-64 (11th Cir. 1989), cert. denied, sub. nom., Bazarian v.

United States, 493 U.S. 890, 110 S. Ct. 233 (1989). Section 1344,

the statutory prohibition against bank fraud and, as discussed

above, § 1014, which criminalizes the knowing use of false

statements in loan applications to federally insured banks, both

4
This court’s own extensive search of the caselaw has also failed to
identify such an authority.

4
require material false statements. See, e.g., United States v.

Kelley, 615 F.2d 378, 380 (5th Cir. 1980); Rapp, 871 F.2d at 964.

Given this statutory framework, while it is likely that

the offense of conspiracy to commit bank fraud would also require

the government to prove materiality, this court need not resolve

that issue. Critically, none of the appellants objected at trial

to the district court’s failure to instruct the jury on materiality

in Count 1 or in any other count. As a result, this court reviews

the Gaudin claim of the appellants for plain error. See, e.g.,

United States v. Randazzo, 80 F.3d 623 (1st Cir. 1996); United

States v. Di Domenico, 78 F.3d 294 (7th Cir. 1996); United States

v. Kramer, 73 F.3d 1067 (11th Cir. 1996); United States v. Keys, 67

F.3d 801 (9th Cir. 1995), reh’g en banc granted, 78 F.3d 465 (9th

Cir. 1996). Under plain error review, before this court can even

consider reversing the appellants’ convictions, the appellants must

demonstrate that (1) there was an error; (2) it was clear or

obvious; and that (3) this error affected their substantial rights.

United States v. Calverley, 37 F.3d 160, 162-64 (5th Cir. 1994) (en

banc) (citing United States v. Olano, 507 U.S. 725, 113 S. Ct.

1770, 1776-79 (1993)), cert. denied, ___ U.S. ___, 115 S. Ct. 1266

(1995). Even if the appellants satisfy this burden, the Supreme

Court has explained that this court need not exercise its

discretion to correct the error unless it seriously affects the

fairness, integrity, or public reputation of judicial proceedings.

Olano, 507 U.S. at ___, 113 S. Ct. at 1778. Hence, as this court

detailed in its original opinion, even if we assume that Gaudin

5
error was plain because it became so after the trial and only on

appeal, and even if we assume that the failure to instruct the jury

on materiality was a “structural error” such that the appellants

are not required to show prejudice, see Keys, supra, 67 F.3d at

810-11, we may still decline to exercise discretion to reverse the

convictions. As noted in the previous opinion, this court

thoroughly considered the record and the overwhelming evidence

adduced by the government at trial. Although much of the evidence

is circumstantial as to the existence of a conspiracy, it is more

than sufficient to support the convictions under Count 1. The fact

that none of the appellants seriously contested the materiality of

false statements or entries, moreover, strongly suggests that

materiality was indisputable. Consistent with our previous

determination regarding Count 2, this court declines to exercise

discretion to correct for the appellants the alleged Gaudin error

on Count 1 by reversing their convictions. This result does not

effect a fundamental miscarriage of justice.

Having declined to exercise our discretion to correct any

alleged Gaudin error in Count 1, the only remaining challenge to

the convictions for conspiracy to commit bank fraud suggests that

the evidence against Novoa, Taylor, and Stanley Jobe is

insufficient to support these convictions. In order to establish

a conspiracy under 18 U.S.C. § 371, the government must prove

beyond a reasonable doubt the existence of an agreement between two

or more people to violate a law of the United States and that any

one of the conspirators committed an overt act in furtherance of

6
that agreement. See, e.g., United States v. Faulkner, 17 F.3d 745,

768 (5th Cir. 1994), cert. denied, ___ U.S. ___, 115 S. Ct. 193

(1994); United States v. Chaney, 964 F.2d 437, 449 (5th Cir. 1992).

The government must also prove that the defendant knew of the

conspiracy and voluntarily participated in it. Chaney, 964 F.2d at

449.

Given this burden and the extensive evidence in this

case, the challenge raised by Novoa, Taylor, and Stanley Jobe to

the sufficiency of the evidence supporting their convictions is

meritless. The standard of review is whether, viewing the evidence

and all reasonable inferences to be drawn therefrom in the light

most favorable to the government, a “reasonable trier of fact could

have found that the evidence established guilt beyond a reasonable

doubt.” United States v. Mergerson, 4 F.3d 337, 341 (5th Cir.

1993), cert. denied, ___ U.S. ___, 114 S. Ct. 1310 (1994). This

court’s original opinion carefully details the extensive evidence

supporting the convictions of Novoa, Taylor, and Stanley Jobe.

From all of the evidence and testimony presented to the jury in

this case, a rational trier of fact could easily have decided that

Novoa, Taylor, and Stanley Jobe conspired to commit bank fraud.

Put differently, a rational jury could have concluded that Novoa,

Taylor, and Stanley Jobe were knowing, voluntary participants in an

agreement to commit bank fraud and that overt acts were committed

in furtherance of that agreement; their convictions under Count 1

are affirmed.

7
II. Making False Bank Entries: Counts 4, 6, and 16

The jury convicted Sutton under Counts 4 and 6 of making

false bank entries. Taylor was also convicted of a similar offense

under Count 16. Finally, Stanley Jobe was convicted under Count 6

of aiding and abetting the making of a false bank entry. The three

appellants raise two broad challenges to their convictions: the

first, a Gaudin claim; the second, a challenge to the sufficiency

of the evidence underlying the jury’s verdicts. Specifically,

Sutton raises a Gaudin challenge to his convictions under Counts 4

and 6, and Stanley Jobe echoes this challenge to his conviction

under Count 6. Taylor argues that there was insufficient evidence

to sustain his conviction under Count 16, while Stanley Jobe

similarly challenges the sufficiency of the evidence for his Count

6 conviction.

Count 4 charges that Sutton made false entries in the

books, reports, and statements of Continental National Bank (“CNB”)

with the intent to deceive the national bank examiners, in

violation of 18 U.S.C. §§ 1005 and 2. Count 6 makes similar

allegations under the same statutes, charging that Sutton made a

material false entry with regard to the Deer Creek Spice loan in

the records of Continental National Bank and that this entry was

aided and abetted by Stanley Jobe. As discussed earlier,

materiality is an element of the offense proscribed by § 1005.

See, e.g., Jackson, 621 F.2d at 219; Rapp, 871 F.2d at 963-64

8
(1989).5 By contrast, § 2 simply provides in relevant part that

those who aid or abet an offense against the United States will be

criminally liable as principals. As this court explained in its

original opinion in this case, materiality is not a prerequisite to

convictions for aiding and abetting under § 2. See Jobe, 77 F.3d

at 1475 (although bank fraud requires materiality, aiding and

abetting bank fraud has no such requirement).

Because § 1005 requires the government to prove

materiality, Sutton’s Gaudin challenge is the sole plausible

constitutional attack on his convictions for Counts 4 and 6, and

since neither Sutton nor any of the other appellants objected at

trial to the district court’s failure to instruct the jury on

materiality in Counts 4 or 6, the attack is limited to plain error.

Sutton has never questioned the sufficiency of the evidence to

support these convictions. We decline to grant relief to Sutton

for the Gaudin error.

But Stanley Jobe challenges Count 6 for Gaudin plain

error and on the additional ground that there is insufficient

evidence to support his conviction for aiding and abetting the

making of a materially false bank entry. After reviewing the

evidence and all of its reasonable inferences in the light most

favorable to the government, we are persuaded that a reasonable

jury could have concluded that Stanley Jobe aided and abetted the

making of a materially false bank entry at CNB. Though we need not

5
The language of the indictment in both Counts 4 and 6 also charges
that the false entries were material.

9
recount the evidence adduced at trial,6 the jury could have

reasonably concluded that Stanley Jobe had aided and abetted the

making of the materially false statement in CNB records that the

purpose of the Deer Creek Spice loan was to finance the acquisition

of inventory; hence, his conviction under Count 6 is supported by

sufficient evidence. The strength of the evidence that Stanley

assisted his father and Sutton in procuring the Deer Creek Spice

loan under false pretenses persuades us that appellate discretion

need not be exercised to correct the lack of a materiality charge.

The sole, remaining challenge to a false entry conviction

is raised by Taylor, who urges that his conviction under Count 16

is not supported by sufficient evidence. Count 16 alleged that on

December 29, 1989, Taylor signed and issued a cashier’s check for

over $3,500,000 to Billie Mac Jobe, yet failed to disclose and

detail this transaction in El Paso State Bank records until several

days later on January 4, 1990. The trial was replete with evidence

supporting Taylor’s conviction under Count 16 and after examining

the record and evidence in the light most favorable to the

government, this court affirms the conviction as a reasonable trier

of fact could have concluded that Taylor made a materially false

entry in the EPSB records.

III. Making False Statements on a Loan Application: Count 5

Stanley Jobe was the sole defendant convicted by the jury

under Count 5 of making false statements on a loan application, in

6
This court’s original opinion contains a thorough summary of the
evidence and testimony at trial.

10
violation of 18 U.S.C. § 1014. Stanley Jobe attacks his conviction

under Count 5, contending that it is infirm both because of Gaudin

error and because it is plagued by insufficient evidence.

To prove a violation of 18 U.S.C. § 1014, the government

must demonstrate beyond a reasonable doubt that “(1) the defendant

made a false statement to a financial institution; (2) the

defendant made the false statement knowingly; (3) he did so for the

purpose of influencing the financial institution’s action; and (4)

the statement was false as to a material fact.” United States v.

Thompson, 811 F.2d 841, 844 (5th Cir. 1987). Even viewing the

evidence in the light most favorable to the government, Stanley

Jobe’s conviction for making a false statement on a loan

application is not supported by sufficient evidence.

Under Count 5, the government’s theory of false statement

is that Stanley Jobe misrepresented that the purpose of the Deer

Creek Spice loan was to finance the acquisition of inventory, when

its real purpose was to Billie Mac’s overdrawn account. The

government further suggests that this intentional misrepresentation

was entered on a loan application made by Stanley Jobe at CNB,

dated May 18, 1990. CNB was allegedly influenced by the false

statement, which was relied upon by bank officers in the bank’s

loan approval committee.

But the record does not support the government’s

assertion that Stanley Jobe made a false statement on a loan

application at CNB. In fact, it is undisputed that Stanley made no

11
direct representations concerning the loan.7 He was neither the

borrower nor the payee of the proceeds, although he was a

guarantor. Moreover, Stanley Jobe did not sign any loan

application at CNB on May 18, 1990; in fact, there was no loan

application whatsoever, but only a loan presentation form that was

compiled by CNB employees and unsigned by Stanley. The promissory

note was actually signed by Frank Owen. At no time during trial

did the government introduce into evidence a loan application on

which Stanley Jobe made a false statement. The government never

offered testimony that Stanley directly caused a bank officer or

anyone else to place false information on the loan application.

Because the government’s evidence at trial was insufficient to

allow a reasonable juror to conclude that Stanley was guilty of

making false statements on a loan application, his Count 5

conviction is reversed.8

IV. Novoa’s Sentence Enhancements

On rehearing, Novoa again urges that the district court

erred in applying a two level enhancement under § 3B1.1(c) because

he did not manage or supervise any other criminal participant in

the check-kiting scheme. Novoa relies on the language in the

commentary accompanying § 3B1.1(c) that indicates that he must

7
The record demonstrates that bank examiners investigating this loan
at CNB did not suspect Stanley Jobe of criminal activity.
8
While this court holds that no reasonable jury could conclude that
Stanley Jobe made false statements on a loan application as charged in Count 5,
as we have already explained, a reasonable jury could have concluded that Stanley
aided and abetted the making of false statements on the Deer Creek Spice loan as
charged in Count 6.

12
supervise, manage, or control another co-defendant in order to

qualify for the enhancement.

As this court explained in its original opinion, the

record supports the conclusion that Novoa exercised management

responsibility over the Jobe accounts. This type of managerial

control may warrant an upward departure from the sentencing range

under the management of assets theory described in USSG § 3B1.1(c),

comment., n.2.

Novoa has correctly pointed out that the district court

did not impose a departure, and this court’s reasoning in adverting

to grounds for a departure. The district court imposed a two-level

upward adjustment under § 3B1.1(c) for Novoa’s alleged role as an

organizer, leader, manager, or supervisor of criminal activity.

However, such an adjustment is proper only if Novoa was the

organizer or leader of at least one other participant in the crime

and if he asserted control or influence over at least that one

participant. See United States v. Ronning, 47 F.3d 710, 711-12

(5th Cir. 1995). Because the record contains no evidence that

Novoa managed or supervised any of his co-defendants or any other

people in connection with the illegal check kite, this court must

vacate the district court’s upward adjustment of Novoa’s sentence

and remand for resentencing.

V. Factual Clarification

In this court’s original discussion of the facts of this

case, we noted that “in late 1989, Jobe Concrete Products purchased

a spice plant from the Baltimore Spice Co. for nearly $3,500,000

13
and Cal-Tex Spice Co.” Jobe, 77 F.3d at 1466. The appellants now

explain that this is technically incorrect, as Jobe Concrete

Products was not actually the legal entity that purchased the

relevant spice plant. Instead, the spice plant was purchased by

Cal-Tex Spice Co., owned by Billie Mac Jobe and Frank Owen V.

Because the appellants allege that this technical misstatement may

somehow affect Jobe Concrete Products, Inc., our original opinion

is hereby amended to clarify that the purchaser of the spice plant

was actually Cal-Tex Spice Co. This factual amendment has no

effect whatsoever on any of the reasoning or legal conclusions of

either the original opinion or the instant one.

VI. Other Issues raised on Rehearing

The court has carefully considered other issues raised on

rehearing by appellants and finds them meritless.

CONCLUSION

For the foregoing reasons, this court on rehearing

AFFIRMS all of the remaining convictions, except that it REVERSES

Stanley’s conviction as charged in Count 5 for making false

statements on a loan application, and REMANDS Novoa for

resentencing.

14