United States v. Gordon B. Carlson

616 F.2d 446, 1980 U.S. App. LEXIS 18942

• Court: Court of Appeals for the Ninth Circuit
• Decided: April 4, 1980
• Docket: 79-1341
• Status: Published

Opinions

MERRILL, Circuit Judge:

Appellant was convicted of three counts (counts X, XVI and XVII of the grand jury indictment) of misapplying bank funds in violation of 18 U.S.C. § 656.¹ Count X read as follows:

“On or about the 25th day of March, 1976, in the District of Montana, GORDON B. CARLSON, being an officer, that is President of the 1st National Bank of Hinsdale, a member Bank of the Federal Reserve System, with intent to injure and defraud the said 1st National Bank of Hinsdale, did wilfully and knowingly misapply and cause to be misapplied moneys and funds of the said Bank in the amount of $20,000.00 by fraudulently causing to be disbursed by the said Bank, and converting to his personal use, monies from a promissory note number 25042 of the 1st National Bank of Hinsdale dated March 25, 1976, in the amount of $21,000.00, said sum purportedly representing a loan to Roger Blake, in violation of 18 U.S.C. § 656.” (Emphasis added).

Counts XVI and XVII were identical, save as to amount, date and number of the promissory note and name of the purported borrower.

At trial, the government sought to prove that appellant, on these occasions, had purported to make bank loans to the third persons named in the indictment but that the proceeds of those loans had wound up in his own bank account. The government also contended that one of the loans was not adequately secured. Appellant’s defense was that he had had no intent to defraud. He also denied that the one loan was inadequately secured.

Over objection by appellant the district court, in instructing the jury, charged that misapplication may be committed:

“1. By an officer or director of a national bank causing a loan to be made for his own benefit or the benefit of someone other than the purported borrower and concealing his interest or the real party’s interest in the loan from the bank;

2. By an officer or director of a national bank causing a loan to be made, knowing that the loan is insufficiently secured and concealing that fact from the bank.”

It is contended by appellant that the instruction impermissibly broadened the scope of the indictment to permit conviction of appellant for acts of misapplication other than that for which he was indicted by the grand jury. We agree.

We have no quarrel with the rules of law stated in the challenged instructions and assume, without deciding, that they correctly state the law. The difficulty is that the grand jury, in its indictment, has precisely spelled out the form of misapplication for which it concluded appellant should stand trial: that set forth in paragraph 1 of the quoted instruction. The instructions as given, in adding paragraph 2, permitted the petit jury to find appellant guilty of misapplication of funds based upon misconduct other than that upon which the grand jury based its charge.

That the jury was invited — indeed urged — to find appellant guilty by reason of such misconduct appears from the government’s closing statement. It might be added that the government’s case of conversion was complex. It required the jury to trace funds through many hands and transactions. The case of lack of security, on the other hand, was comparatively simple. We feel that it is not improbable that on one or more of the counts where guilt was found the jury took the easy road to a verdict.

In Howard v. Daggett, 526 F.2d 1388 (9th Cir. 1975), appellant was charged with inducing two named women to engage in prostitution and with travelling interstate in furtherance of that activity. This court stated:

“The effect of the supplemental instruction [to the effect that the jury could disregard as surplusage language of the indictment specifying the two named women] was to permit the jury to convict appellant on the basis of evidence introduced at trial regarding women other than the two named in the indictment.

The grand jury might have indicted appellant in a general allegation, without specifying the women to whom his alleged illegal acts or purposes related. But it did not do so. To allow the jury to consider the evidence respecting the other alleged prostitutes was to allow the jury to convict of a charge not brought by the grand jury. The supplemental instruction constituted an impermissible amendment of the indictment that ‘destroyed the defendant’s substantial right to be tried only on charges presented in an indictment returned by a grand jury.’ Stirone v. United States, 361 U.S. 212, 217, 80 S.Ct. 270, 273, 4 L.Ed.2d 252 (1960).”

526 F.2d at 1390.

The same is true here.²

Reversed and remanded for new trial.

1 . That section makes it a crime for an officer, director, agent or employee of any Federal Reserve Bank, member bank, national bank or insured bank to embezzle, abstract, purloin or willfully misapply any money, funds or credits of such bank.

2 . In United States v. Dawson, 516 F.2d 796 (9th Cir.), cert. denied, 423 U.S. 855, 96 S.Ct. 104, 46 L.Ed.2d 80 (1975), this court discussed the development in this circuit of the law dealing with amendment of indictments, either directly or by instruction to the jury. We held that the amendment in that case was permissible. The case, however, is distinguishable from the one before us. There, the indictment in a single count charged the defendant with offering money to one with the intent to influence his testimony in two then pending burglary trials. The district court, following trial, instructed the jury that the conduct of the defendant in connection with one of those cases was removed from its consideration. In holding this amendment permissible, this court stated:

“At most, the judge’s instruction merely removed from jury’s consideration a charge not supported by the evidence.”

516 F.2d at 804. However, the indictment as amended continued to charge a specific crime and it was of that charged crime that defendant was found guilty.