D.C. No. C.R. S-94-242-WBS
Before: Warren J. Ferguson and Sidney R. Thomas, Circuit Judges and Donald W. Molloy,* District Judge.
The opinion of the court was delivered by: Molloy, District Judge:
Appeal from the United States District Court for the Eastern District of California William B. Shubb, District Judge, Presiding
Argued and Submitted March 10, 1998--San Francisco, California
Opinion by Judge Molloy; Partial Concurrence and Partial Dissent by Judge Ferguson
Richard Harold Stoddard ("Stoddard") was tried on a four count indictment stemming from his activities as a banker and land developer in California. A jury convicted him on two counts.*fn1 The jury could not decide on two counts and hung on charges of wilfully misapplying funds of a federally insured financial institution. The government dismissed both of these counts.
In this appeal, Stoddard claims there is insufficient evidence to support the jury verdict. He also challenges his sentence. We affirm the district court in all respects except the issue of restitution.
Stoddard was a stockholder in Gold River Federal Savings Bank ("Gold River Savings"). He also served on its board of directors. In 1988, Gold River Savings formed a wholly-owned service corporation, Gold River Investments. Gold River Investments was formed to invest in and to develop real estate. Gold River Investments had no employees. Officers of Gold River Savings held the same positions in Gold River Investments. Gold River Investments relied on Stoddard to act on its behalf in finding and in negotiating real estate deals. Stoddard arranged for transfers of funds related to any real estate deals through Jack Daybell, the Chief Financial Officer of Gold River Savings.
In August 1988, the Gold River companies entered into a Supervisory Agreement with the Office of Thrift Supervision ("OTS"). By virtue of the agreement, Gold River Savings could not commit to further credit extensions without the prior approval of the Supervisory Agent. In a December 13, 1989 letter, OTS declared Gold River Savings a "troubled institution." It was ordered not to increase its liabilities. Stoddard calls this the lock-down" letter.
The transactions underlying the offenses of conviction involved properties known as Laguna Parklands and Foxboro Gardens. In October 1988, Stoddard contracted to purchase Laguna Parklands. The contract called for an initial escrow deposit of $25,000. Stoddard sent the purchase letter contract to Jack Daybell and others on November 4, 1988. The same day, Stoddard wrote to Jack Daybell telling him to deposit $25,000 with Connie Harling at First American Title, the money to be deposited in escrow account #901943. Four days later, Daybell sent a $25,000 check on behalf of Gold River Investments payable to First American Title.
The Laguna Parklands deal was subject to the removal of certain contingencies. These were never removed so the deal fell through. On April 28, 1989, Live Oak Associates, the seller, authorized release of the $25,000 in escrow account #901943 to Connie Harling at First American Title. Stoddard was sent a copy of this letter.
In September 1988, Stoddard was also negotiating to buy Laguna Estates, an eight acre tract adjacent to Laguna Parklands. Stoddard struck a deal with John Murier, of John Murier Construction, Inc., for Laguna Estates on St. Patrick's Day in 1989. The terms included an initial escrow deposit of $20,000 until removal of the buyer's contingencies. The contract named the buyer as "Richard Stoddard, et/or assigns."
Escrow number 902149 was opened for the sale of Laguna Estates on March 21, 1989. On May 1, 1989, Stoddard wrote to Connie Harling at First American Title asking that she transfer $20,000 from the first escrow account number 901943 (set up for the never-consummated Laguna Parklands sale) to the second escrow account number 902149 (set up for the Laguna Estates sale).
The Laguna Estates contract provided that upon removal of the buyer's contingency the $20,000 would pass through escrow to the seller. Stoddard authorized Connie Harling to disburse the $20,000 to John Mourier Construction in early August 1989. The sale was concluded on or near October l7th of the same year. Stoddard-Buhler Land Company was the purchaser. The same property was sold over a year later in November 1990 at a profit of $19,780. Going back to September of 1988, Stoddard was also trying to buy a parcel of land known as Foxboro Gardens. His offer letter of October 20, 1988, called for a cash deposit of $5,000, again payable after the buyer's contingency was removed. On November 8, 1988, Stoddard wrote to Jack Daybell instructing him that a $5,000 deposit should be sent to Connie Harling at First American Title for escrow account number 901945. Eight days later, Daybell wrote to Harling and enclosed a deposit "in the amount of $5,000 for Escrow 901945 - 10.2 acres - Foxboro Gardens, Galt, California." The title company deposited the $5,000 in an interest bearing account with Imperial Bank.
The Foxboro sale was canceled on June 5, 1989. The buyer's contingency had not been satisfied. The sale was resurrected by an amended purchase letter agreement on June 23rd. The deal was closed on October 2, 1989. This property was purchased in the name of Stoddard-Buhler Land Company. In October 1990, the property was resold at a profit of $107,416.
On February 6, 1990, Jack Daybell sent a fax copy to Stoddard of an interest statement on the escrow accounts for calendar year 1989. Daybell thought there was a mistake in the interest computation. On February 9, 1990, Daybell wrote to Harling at First American Title requesting immediate return of funds in the amount of $30,000 deposited with the title company in November 1988 by way of check number 1035 ($25,000) and check number 1040 ($5,000). Later, Daybell followed-up and asked Harling to provide all documentation, disbursements or any other information in her possession regarding escrows opened with check numbers 1035 and 1040.
Harling notified Stoddard on February 20, 1990, that Daybell wanted return of the escrowed $30,000 together with an accounting. Stoddard wrote to Connie Harling acknowledging that Gold River Investments had made the $30,000 escrow payments. He observed that Gold River Investments "is not able to be a property purchaser at this time . . . . " Stoddard wanted the deposits returned to Gold River Investments with interest, a total refund of $32,180.91. The day these transactions happened, February 20, 1990, Stoddard sent Harling a check in the amount of $22,500 for deposit to another escrow account, number 902314. A second check in the amount of $8,500 was to follow shortly. One day later, Stoddard sent the $8,500 to Harling.
Daybell submitted a Criminal Referral Form to the Federal Home Loan Bank Board on a suspected violation of misappropriation of escrow funds. He did so on February 28, 1990 following the transactions set forth above.
A. Did the District Court err by denying Stoddard's Rule 29 Motion for ...