United States v. Loe

248 F.3d 449
CourtCourt of Appeals for the Fifth Circuit
DecidedApril 17, 2001
DocketNos. 99-40454, 99-40495, 99-41470 and 00-40690
StatusPublished
Cited by89 cases

This text of 248 F.3d 449 (United States v. Loe) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Loe, 248 F.3d 449 (5th Cir. 2001).

Opinions

PATRICK E. HIGGINBOTHAM, Circuit Judge:

Appellants seek reversal of their convictions for conspiracy, wire fraud, mail fraud, tax fraud, and money laundering. They further challenge the sentence imposed by the district court. We are unpersuaded by the majority of their numerous assertions of error. However, as the evidence was insufficient to support a conviction on three of the money laundering charges, we affirm in part, reverse in part, and remand for resentencing.

I

Loe’s Highport, Inc. operated Loe’s Highport Marina, reputedly the largest inland marina in the world. Situated on Lake Texoma, the marina contains hundreds of boat slips, facilities for the sale of boats, a disco, a corporate office, and other facilities. Appellants Cornelius and Babo Loe ran the marina, which was located on property leased from the U.S. Corps of Engineers. Under the lease, the Corps was to receive a percentage of marina revenues.

In 1990, the lake experienced the greatest flood in its history. Appellants submitted millions of dollars in claims to their insurers, Lexington Insurance Company and Chubb Insurance Company. In the wake of damage caused by a tornado in 1994, Appellants . submitted additional claims to Continental Insurance Corporation.

In 1995, a disgruntled customer of LHI contacted the Federal Bureau of Investigations, claiming to be the victim of fraud. Further investigation by the FBI indicated that Appellants were underreporting boat sales to the Internal Revenue Service and the Corps. The FBI obtained a search warrant and seized thousands of documents from the marina.

On September 11, 1997, a grand jury sitting in the Eastern District of Texas indicted Appellants and three other indi-[455]*455victuals1 on various conspiracy, tax fraud, wire fraud, mail fraud, and money laundering charges. A 1998 superseding indictment charged Appellants on thirty-one counts.2 The Government alleged that Appellants faded to report millions in boat sales to the IRS and the Corps. Appellants were also accused of having defrauded their insurers, who collectively suffered millions of dollars in damage due to Appellants’ submission of altered or fabricated invoices for losses and mitigation costs. The indictment alleged that Appellants conspired to undertake these unlawful activities, and that they used the proceeds of the fraud to acquire various forms of property, including a house in Florida.

The district court severed the counts and held two trials. Appellants were each convicted on some counts and acquitted on others. The district court sentenced Cornelius and Babo Loe to jail and required the Loes and LHI to pay large fines and restitution damages.

II. CORNELIUS LOE

A

Cornelius Loe argues that his conspiracy conviction should be reversed, asserting that his prosecution was barred by the statute of limitations. The government alleged only one act in furtherance of the conspiracy that fell within the five-year statute of limitations.3 Cornelius Loe argues that the overt act alleged in the indictment could not support a conviction.

The indictment alleged that the defendants conspired to commit the following acts: “To devise and intend to devise a scheme and artifice to defraud insurance companies and to obtain money and property by means of false and fraudulent pretenses and promises and [to do so in violation of 18 U.S.C.A. § 1341 (mail fraud) and in violation of 18 U.S.C.A. § 1343 (wire fraud) ].” Given the statute of limitations, the Government had to prove an act in furtherance of the conspiracy after September 11, 1992. The indictment alleged: “On or about December, 1992, BABO BEAZLEY LOE, C.D. LOE, JR. and LOE’s HIGHPORT, INC. effected a settlement of the lawsuit and received a portion of the fraudulently obtained insurance proceeds.”

These allegations arose out of the following circumstances: In July 1991, the Loes’ insurer, Lexington, interpleaded $638,388.34 in state court to determine the portion of proceeds due to the Loes and one of their tenants, David Hull. Hull apparently had refused to endorse Lexington insurance checks that he received, checks made out jointly to him and the Loes.4 According to the Government, the vast majority of the interpleaded funds resulted from the insurance fraud undertaken by the Loes. On March 27, 1991, the state court ordered that $624,867.795 be paid to [456]*456the Loes and that $15,520.55 be retained in the court registry. The court’s calculation was incorrect, as these amounts sum to $640,388.34. The investment firm handling the proceeds consequently paid the Loes only $622,867.79. By subsequent order, the court awarded Hull $13,520.55, leaving $2,000 in the account. All of these events occurred before September 11, 1992.

Meanwhile, the Loes sued Hull over a debt. In November or December, 1992, Hull’s attorney and the Loes’ attorney negotiated a possible settlement of litigation between the two parties. Hull’s attorney proposed a disposition of the funds remaining in the registry account from this and earlier interpleader actions. Following this conversation, Hull’s attorney asked the court to disburse $17,500 from an earlier interpleader to the Loes, plus the $2,000 remaining by mistake, and to disburse the remainder to Hull. The motion explained that the $17,500 was actually owed to Hull, but should be given to the Loes to settle the debt litigation. The court entered an order of disbursement on February 10, 1993.6

Based on these facts, Cornelius Loe contends, first, that the $2,000 payment was merely the “result” of the conspiracy, and not its object. He argues that the object of the conspiracy was defrauding the insurance company. As the fraud was completed outside the limitations period, Cornelius argues that the Government can not demonstrate the commission of an overt act in furtherance of the conspiratorial agreement.7

We are unpersuaded by Loe’s argument. Receipt of the money was an object, and not merely a collateral result, of the conspiracy. The indictment so alleged, and a rational trier of fact could have arrived at this conclusion.

Our holding in United States v. Girard8 is instructive. In Girard, we reversed the dismissal of an indictment, which the district court had found barred by the statute of limitations. The defendant in that case had allegedly conspired to defraud the government by rigging contract bids. Only the final payment was within the statute of limitations; the bid rigging had occurred long before.9 We held that the receipt of the money was properly alleged as an object of the conspiracy, which did not end until the last payment was made. Girard’s overt act was the acceptance and retention of the payment.10 We made the common sense observation that the object of the conspiracy was not the making of rigged bids itself, but the subsequent receipt of the proceeds.11 Similarly, receipt [457]*457of the $2,000 in this case constituted an overt act falling within the limitations period.

Cornelius Loe also contends that actions taken by Hull’s attorney are not actions taken by conspirators and therefore cannot be actions taken in furtherance of a conspiracy.12

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Bluebook (online)
248 F.3d 449, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-loe-ca5-2001.