United States v. Melawer

• Court: Court of Appeals for the Fifth Circuit
• Decided: December 28, 1999
• Docket: 98-20758
• Status: Unpublished

Opinion

IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT _______________

m 98-20758 _______________

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

VERSUS

ABRAHAM MELAWER; MARK R. SKELTON; KENNETH R. BURROUGHS; and MARK E. BURROUGHS,

Defendants-Appellants.

_________________________

Appeals from the United States District Court for the Southern District of Texas (H-97-CR-169-2) _________________________

December 21, 1999

Before GARWOOD, SMITH, and I. BENAVIDES, Circuit Judges. The defendants were indicted for bank fraud in violation of 18 U.S.C. § 1344(1), JERRY E. SMITH, Circuit Judge:* based on banking activity at Westheimer Na- tional Bank (“WNB”).2 Skelton was senior Mark Skelton, Abraham Melawer, Kenneth vice president of WNB, and the other three Burroughs, and Mark Burroughs challenge defendants were customers. The three their bank fraud convictions. We affirm Skel- indictment counts share one common element: ton’s conviction on count one but reverse the Skelton is charged with bank fraud for remaining convictions. defrauding WNB through involvement in a check kiting scheme. In count one, the other participants in the alleged scheme are Ira and * Pursuant to 5TH CIR. R. 47.5, the court has 2 determined that this opinion should not be Section 1344(1) prescribes criminal penalties published and is not precedent except under the for anyone who “knowingly executes, or attempts limited circumstances set forth in 5TH CIR. R. to execute, a scheme or artifice . . . to defraud a 47.5.4. financial institution . . . .” James Finlay; in count two the other Melawer or the Burroughses, respectively. participant is Melawer; and in count three the Skelton allegedly approved the payment of other participants are Kenneth and Mark checks when there were insufficient funds in Burroughs.3 The Finlays pleaded guilty to bank their accounts, approved immediate credit on fraud under a plea agreement requiring them to deposits, and deceived the board with respect cooperate in the prosecution of Skelton, to the true nature and extent of unsecured against whom they then testified. credit thus extended. This inflated the account balances and put them at defendants’ disposal, Count one alleges that over a period of ap- allowing the accounts to become overdrawn. proximately one and one-half years, Skelton Melawer and the Burroughses allegedly know- approved the payment of checks when there ingly wrote checks drawn on accounts with were insufficient funds in the Finlays’ insufficient funds; they would deposit these accounts, approved immediate credit on checks into a WNB account at the end of the deposits and automobile drafts, and deceived month to create the appearance of a positive the board of directors of WNB with respect to balance during the float.4 the true nature and extent of unsecured credit thus extended. These actions allegedly inflated II. the Finlays’ account balances and put those The defendants claim there is insufficient inflated balances at their disposal, permitting evidence to support their convictions. “In the Finlays’ accounts to become overdrawn. evaluating a challenge to the sufficiency of the evidence, we view the evidence in the light most favorable to the verdict and uphold the Counts two and three allege almost verdict if, but only if, a rational juror could identical schemes, count two involving Skelton have found each element of the offense beyond and Melawer and count three involving a reasonable doubt.” United States v. Brown, Skelton and the Burroughses. Both schemes 186 F.3d 661, 664 (5th Cir. 1999). This allegedly took place over a period of slightly review is de novo, and “[i]f the evidence less than one year. viewed in the light most favorable to the pro- secution gives equal or nearly equal Melawer and the Burroughses had several circumstantial support to a theory of guilt and accounts at WNB and other financial a theory of innocence, a defendant is entitled institutions, some of which were in the names to a judgment of acquittal.” Id. (internal of corporate entities controlled by either quotation marks omitted). Based on this standard of review, we conclude that the evidence is sufficient to sustain Skelton’s 3 conviction on count one but that there is There was also a count four involving crim- inal forfeiture pursuant to 18 U.S.C. § 982, but insufficient evidence to sustain the remaining this count was dismissed in a post-trial proceeding. Count two alleges that Skelton and Melawer 4 knowingly executed and attempted to execute a The “float” is the time between when the scheme and artifice to defraud WNB, each aiding funds are registered in the account and when and abetting the other. The allegation in count payment is received by the bank. If immediate three is identical as between Skelton and the credit is available, funds can be withdrawn even if Burroughs. payment will never be received.

2 convictions of Skelton and the convictions of the account holder an unsecured loan), it was Melawer, Kenneth Burroughs, and Mark not a criminal decision.5 Burroughs. For Skelton’s argument to succeed, the en- A. tire bank entity had to be behind the “policy,” Because some of the evidence is not for we have previously held that bank officers admissible against the customer defendants, “with authority to bind their banks to others we first consider Skelton’s sufficiency claim as can nevertheless defraud the institutions they to count one. To convict under § 1344(1), the serve.” United States v. Saks, 964 F.2d 1514, government must prove beyond a reasonable 1518 (5th Cir. 1992). Thus, in Saks doubt that the defendant knowingly executed defendants who had colluded with bank or attempted to execute a scheme or artifice to officers who were co-chairmen of the board defraud a financial institution. Defendants do and owned a controlling interest in the not contest their participation in the kiting institution were found guilty of bank fraud: “It schemes; rather, they argue a defense of lack is the financial institution itselfSSnot its of intent to defraud. officers or agentsSSthat is the victim of the fraud the statute proscribes.” Id.; see also Skelton contends that in 1989, WNB was in United States v. Aubin, 87 F.3d 141, 146-47 financial straits and in danger of closing and (5th Cir. 1996). Likewise, bank customers required some source of increased income, so “who collude with bank officers to defraud WNB's management made a decision that fee banks may also be held criminally accountable income would be the bank's main thrust. In either as principals or as aiders and abettors.” particular, it would focus on fees generated by Saks, 964 F.2d at 1518-19. paying checks that otherwise would be returned for insufficient funds, known as The government presented sufficient “NSF” checks. The bank also would pay evidence to enable a rational juror to reject checks that were drawn against uncollected Skelton’s “bank policy” claim. Skelton pushed balances, which occur when a customer makes the Finlays and all three co-defendants to a deposit but payment has not yet been “clear” their overdrafts as of the last day of received from the bank on which the deposit is each month, meaning that those overdrafts drawn. would not appear on the monthly report to the board of directors. The customers repeatedly Creating overdrafts by paying NSF checks used checks drafted from accounts with and making deposited funds immediately avail- insufficient funds for this purpose, and able allowed profitable and continuous check therefore in a manner of days the WNB kiting. Skelton claims that these practices account would once again return to overdraft were successful in producing much-needed status. income, and further urges that even if the policy was a poor banking decision (as allowing the kiting can lose money in interest paid on the inflated amounts and in effect gives 5 In other words, Skelton’s characterization is that the bank knew of the kiting and remained silent because it collected fees in exchange for giving preferred customers off-the-books loans.

3 Skelton does not contest that he urged the Skelton also received cash and in-kind pay- Finlays and other defendants to clear their offs from Ira Finlay: In addition to certain overdrafts at the end of each month, but he trailers and perhaps overly generous deals on contends that he had no criminal motive in vehicles, Finlay gave Skelton approximately doing so. Ira Finlay testified, however, that $500 per week ($100 a day) throughout the Skelton informed him that the reason that period in which the Finlays engaged in the accounts must not be overdrawn on the last kiting activity. Ira Finlay testified that he with- day of the month is that such overdrawn held cash from checks he deposited in his accounts would appear on the monthly report. WNB account, put the cash in a plain Further, James Finlay testified that he informed envelope, and presented the envelope to Skelton that they were using floated funds to Skelton. This testimony was corroborated by cover their monthly overdrafts. two other witnesses: a bank employee who recalled that Ira Finlay often requested cash Skelton’s desire to keep the overdrafts from back from his deposits in hundred dollar bills appearing on the monthly board report might and requested an envelope at those times; and not be independently sufficient to demonstrate an employee of Ira Finlay’s who both that kiting was not bank policy, but there is witnessed Finlay giving an envelope to a man abundant other evidence in this regard. Skel- at WNB and took an envelope to a secretary at ton was also involved in the deletion of certain WNB on behalf of Finlay three or four times. references to Finlay overdrafts in a quarterly report, and WNB’s cashier, Glenda Mayo, tes- tified that Duff informed Skelton of his As to the board’s knowledge of Skelton’s concern with the Finlays’ situation numerous “policy,” the board did not have daily times and expressed concern with the overdraft information in its monthly report. Burroughs and Melawer accounts. In fact, The board chairman, Champion Traylor, Jr., Skelton falsely assured Mayo and other bank testified that he was surprised to learn the employees that the situations either would not status of the Finlay accounts when it was continue or that the relevant customers would uncovered by bank regulators and that he did deposit sufficient collateral to cover the risks not previously know of any such pattern of of their accounts. immediate credit and large overdrafts. He feels that he was misled as to the financial Mayo further testified that Skelton often status of the bank and would have tried to stop waived the $25 NSF check fee for the the overdraft situation had he known of it. defendants, making it unlikely that focusing on Another member of the board, Doyle Graham, such fee income was the bank’s policy. Lastly, Jr., testified that he was shocked to learn of she testified that the bank wanted account the Finlay situation and that the board had no overdrafts cleared at any time during the information from which it could have predicted month (not just as of the last day of the that situation until it was uncovered by outside month), and that such “clearing” was not regulators. supposed to be done with an NSF check that would create another overdraft. A federal bank examiner, Bryan Heath, likewise testified that in reviewing the board reports, he found nothing that would arouse

4 suspicion as to the true state of the accounts at substantial number of NSF checks being paid issue. He further testified that most banks to generate that much fee income, the resulting earn a significant amount of money from NSF overdrafts were consistently cleared with legit- and similar fees and that, in his professional imate funds in relatively short periods of time, opinion, Skelton’s conduct caused the leaving the bank in a comparatively low-risk overdrafts to be unknown to the board. situation. In fact, this was not the case.

Notwithstanding this evidence, Skelton in- As we have said, sists that it was bank policy to clear overdrafts at the end of each month; he stresses that there [c]heck kiting is a scheme designed to was nothing preventing the other board separate the bank from its money by members from perusing the bank’s daily tricking it into inflating bank balances reports if they so desired. Skelton cites and honoring checks drawn against ac- evidence that Duff, Skelton, and Mayo met counts with insufficient funds. Section every day to review all pending NSF checks 1344(1) does not require a specific and checks presented for payment against intent to permanently deprive the bank uncollected balances. Therefore, the senior of its funds. It is sufficient to knowingly officers of WNB and at least two members of participate in a scheme to trick the bank the board (Duff and Skelton) were aware of into inflating bank balances by kiting Skelton’s actions. As noted above, however, checks between two or more banks. there was at least some controversy among The bare act of check kiting defrauds these individuals regarding defendants’ the bank by temporarily placing the accounts, and Skelton presented no evidence bank’s funds at the disposal of the from Duff or other board members that such account holder. activity was bank policy. United States v. Frydenlund, 990 F.2d 822, Skelton also points out that in 1992, over 824 (5th Cir. 1993) (internal quotation marks 66% of the bank's income came from NSF and citations omitted). Under this test, a ra- charges, and therefore he argues that the board tional juror could find that the government must have been aware of his activities. Such a proved Skelton’s guilt on count one beyond a conclusion simply does not follow: An NSF reasonable doubt; the evidence makes it check for $3 that is cleared the next day earns rational to reject Skelton’s contention that the same $25 fee as an NSF check for $1,000 there was never any intention to “trick” the that is not cleared for three months. As far as bank. the information given to the board indicated, the bank was earning substantial income from B. NSF fees, and only a relatively small number While some of the evidence discussed of customers were still in overdraft status at above also is relevant to the culpability of the end of each month (and those not by a Melawer and the Burroughses, much of it is significant dollar amount). not, and there is not sufficient evidence for a rational juror to find that beyond a reasonable Therefore, the board had every reason to doubt these defendants intended to defraud believe that, although there must be a WNB. The government presented no

5 convincing evidence that Melawer and the Burroughses were doing anything more Skelton had business relationships with sinister than banking pursuant to policies Melawer and the Burroughses beyond their expounded by their friend Skelton in his banking concerns; the defendants do not deny official capacity. that they might be considered friends in this regard. The evidence also made clear that both Melawer and the Burroughses knowingly “cleared” overdrafts with bad checks, and the defendants presented no evidence that they were in fact told that this was acceptable bank policy.

The government bears the burden of proof, however, and must therefore prove that these defendants had the intent of tricking the bank. There is no evidence in this regard. Although the customer defendants engaged in conduct in a repeated pattern that ultimately caused WNB to lose money, there is no evidence that they did so without the authority of the bank, or at least without the apparent authority of the bank through Skelton. Therefore, no rational juror could have found that the government proved the guilt of Melawer, Kenneth Burroughs, or Mark Burroughs beyond a reasonable doubt; we therefore reverse their convictions based on insufficiency of the evidence.

C. Having reversed the convictions of Mela- wer and the Burroughses, we must also reverse the conviction of Skelton on counts two and three. The government alleged execution of a scheme to defraud WNB through the actions of Melawer and the Burroughses. Having found insufficient evidence of criminal intent motivating those actions, we find insufficient evidence that Skelton aided and abetted any scheme to defraud WNB in counts two and three.

6 III. there is no substantial identity of participants Skelton claims several other issues on ap- to satisfy the rule.7 peal. None presents reversible error. Therefore, to satisfy rule 8(b) there must be A. a substantial identity of facts among the Skelton claims that the district court erred defendants’ offenses. in finding that defendants were properly joined under FED. R. CRIM. P. 8(b),6 and alternatively Whether or not separate offenses are that the court abused its discretion in denying part of a ‘series of acts or transactions’ his motion to sever pursuant to FED. R. CRIM. under 8(b) depends on the relatedness of P. 14. A claim of misjoinder is reviewable on the facts underlying each offense. When appeal as a matter of law; if the limits of the facts underlying each offense are so rule 8(b) are exceeded, severance will be closely connected that proof of such granted unless the court concludes that the facts is necessary to establish each error was harmless. See United States v. offense, joinder of defendants and Maggitt, 784 F.2d 590, 595 (5th Cir. 1986). offenses is proper.

The defendants did not participate in the Welch, 656 F.2d at 1049. This court has pre- same act or transaction, and therefore for viously found joinder to be improper where joinder to be proper under the rule, they must multiple defendants were joined without the have participated in “the same series of acts or requisite substantial identity of facts. See, e.g., transactions constituting an offense or of- Lane, 735 F.2d at 799; Levine, 546 F.2d fenses.” In United States v. Marionneaux, at 658. 514 F.2d 1244, 1248-49 (5th Cir. 1975), this court defined the phrase “the same series of We need not decide this issue, however, acts or transactions” as requiring a “substantial because even if misjoinder did occur, it was identity of facts or participants” between two harmless as to Skelton. “[A]n error involving offenses. Because the only identity of misjoinder affects substantial rights and participants is Skelton’s role in all counts, requires reversal only if the misjoinder results in actual prejudice because it had substantial and injurious effect or influence in determining the jury's verdict.” Lane, 474 U.S. at 449 (internal quotation marks omitted). 6 Rule 8(b) provides: Melawer and the Burroughses were tried for bank fraud based on their banking Two or more defendants may be charged in the same indictment or information if they are alleged to have participated in the same 7 act or transaction or in the same series of See United States v. Lane, 735 F.2d 799, acts or transactions constituting an offense 804-05 (5th Cir. 1984), rev'd on other grounds, or offenses. Such defendants may be 474 U.S. 438 (1986); United States v. Welch, charged in one or more counts together or 656 F.2d 1039, 1049 (5th Cir. Unit A Sept. 1981); separately and all of the defendants need not United States v. Levine, 546 F.2d 658, 664-66 (5th be charged in each count. Cir. 1977).

7 interactions at WNB. Skelton was tried for and other defendants resulted in spillover pre- bank fraud based on his role in those very judice in the minds of the jurors). interactions. Joinder therefore did not prejudice Skelton, making any misjoinder Skelton argues that a key issue is what he harmless error. told each of the co-defendants regarding the reason for that defendant’s making a deposit at Likewise, the court did not err in denying the end of each month, especially in light of Skelton's motion to sever pursuant to FED. R. the testimony of Ira Finlay that Skelton told CRIM. P. 14. That rule provides: him the monthly board meetings were the reason. By joining Melawer and the Bur- If it appears that a defendant or the gov- roughses, Skelton was prevented from calling ernment is prejudiced by a joinder of of- them as witnesses on his behalf. Likewise, be- fenses or of defendants in an indictment cause there was evidence of payments from the or information or by such joinder for Finlays, Skelton argues that there was an im- trial together, the court may order an plication that payment was made by the other election or separate trials of counts, defendants as well; once again Skelton was grant a severance of defendants or prevented from calling them as witnesses on provide whatever other relief justice his behalf.8 requires. In United States v. Rocha, 916 F.2d 219, Balancing the right of a defendant to a fair 231-32 (5th Cir. 1990), we held that trial against the interests of judicial economy is within the discretion of the court, and we will [e]xculpatory testimony in some cases not reverse absent abuse of discretion. See may provide the basis for a severance. United States v. Morrow, 177 F.3d 272, 290 In order to demonstrate a prima facie (5th Cir.), cert. denied, 120 S. Ct. 333 (1999); case for severance to introduce United States v. Zicree, 605 F.2d 1381, 1388 exculpatory testimony of a co- (5th Cir. 1979). To demonstrate abuse of dis- defendant, a defendant must show: (1) a cretion, the defendant “bears the burden of bona fide need for the testimony; (2) the showing specific and compelling prejudice that substance of the testimony; (3) its resulted in an unfair trial, and such prejudice exculpatory nature and effect; and (4) must be of a type against which the trial court that the co-defendant would in fact was unable to afford protection.” Morrow, testify if severance were granted. 177 F.3d at 290 (internal quotation marks omitted). Skelton contends that he was prejudiced by joinder both because joinder 8 Although Skelton argues that he met the prevented him from calling Melawer and the criteria of rule 14, he does not seem to argue that Burroughses to the stand to give exculpatory regardless of that rule, denial of a severance testimony (because of their Fifth Amendment violated his Sixth Amendment right to compulsory privilege against self-incrimination) and process. Even assuming he has asserted that claim, because of guilt by association (prejudice from he did not establish “specific and compelling evidence admitted with respect to other counts prejudice” necessary to demonstrate a violation of his Sixth Amendment right. See United States v. Villarreal, 963 F.2d 725, 732 (5th Cir. 1992).

8 Skelton has not indicated, and a review of the It is beneficial not because of the complexity record does not reveal, that any such showing of its underlying operations, but because it can was made. Therefore, the court did not abuse tally the results when a large number of its discret ion in denying severance on this transactions (deposits and withdrawals) are ground. involved. Skelton claims that the evidence was irrelevant and prejudicial and that the There is no merit to Skelton’s claim of spill- district court abrogated its gatekeeping role over prejudice resulting from evidence that under Daubert and its progeny. See Kumho would have been inadmissible against him had Tire Co. v. Carmichael, 526 U.S. 137 the defendants/counts not been joined. “The (1999);General Elec. Co. v. Joiner, 522 U.S. test for severance under Rule 14 is whether the 136 (1997); Daubert v. Merrell Dow Pharms., jury could sort out the evidence reasonably Inc., 509 U.S. 579 (1993). and view each defendant and the evidence re- lating to that defendant separately. If We have described the gatekeeper role as cautionary instructions are deemed sufficient, follows: severance is not required.” United States v. Merida, 765 F.2d 1205, 1219 (5th Cir. 1985). The district judge must first determine Skelton does not identify any evidence whether the proffered testimony is admissible only against his co-defendants that reliable, requiring an assessment of prejudiced him, nor any evidence admissible whether the reasoning or methodology only on one count that prejudiced him on other underlying the testimony is scientifically counts in light of his common modus operandi valid. Second, the district judge must in all three counts. Therefore, the court did determine whether that reasoning or not abuse its discretion in denying severance. methodology can be properly applied to the facts in issue; that is, whether it is B. relevant. Skelton claims the court erred in admitting evidence of, and evidence produced by, the Curtis, 174 F.3d at 668. The government in- government’s use of computer software in troduced pedigree information on CKAS analyzing the check kites. We review through its expert, most significantly that in his evidentiary rulings for abuse of discretion. See experience with the program he had found its Curtis v. M&S Petroleum, Inc., 174 F.3d 661, results to be consistent with manual 667 (5th Cir. 1999). calculations, and that its underlying theory made it little different from a glorified Special Agent Morehart, an expert in calculator. financial crimes, testified on behalf of the government. His testimony included his When complex scientific or other expert manual analysis of the defendants’ account evidence is at issue, the district court must activity and a computer analysis performed by scrutinize whether the reasoning or software named “Check Kite Analysis methodology underlying it is valid; there is no System,” or CKAS. CKAS, developed by the such issue regarding CKAS. Morehart’s FBI, is apparently a relatively simple program testimony regarding its functionality, and his used to analyze possible check kiting activity.

9 experience with its results, adequately D. demonstrate its reliability. Skelton claims the court erred by not granting a new trial based on, or at least The second part of the gatekeeper role, holding an evidentiary hearing to investigate, whether that reasoning and methodology are information that one of the jurors was relevant, is also straightforward: The expert prescribed a muscle relaxant during the trial, described his use of the program, its results, that the jurors discussed the case in groups the results of his manual analysis, and the during the course of the trial, and that a juror relevance of each. The testimony was neither approached a prospective defense witness irrelevant nor improperly prejudicial. regarding the trial. We review the denial of a Therefore, the court did not abuse its motion for new trial for abuse of dis- discretion in allowing the testimony. cretionSSthe procedures used to investigate allegations of juror misconduct and the C. decision as to whether to hold an evidentiary Skelton claims the court erred in admitting hearing are matters within the sound discretion evidence of internal WNB rule violations and of the district court. See United States v. federal regulatory violations. The government, Jobe, 101 F.3d 1046, 1057-58 (5th Cir. 1996). over objection, introduced evidence of the in- ternal lending limit imposed on Skelton by the board of directors, the loan limit to a single Skelton argues that he was effectively im- customer imposed on WNB as a whole, and a properly tried by a jury of only eleven, because statement by an employee of the Office of the a juror imbibed a prescription muscle relaxant Comptroller of the Currency (“OCC”) that that caused her to “doze off during trial.” This overdrafts were not a safe banking practice. information was disclosed to Skelton’s counsel through “an unsolicited telephone call after the All three elements are relevant trial,” which call also apparently included in- circumstantial evidence regarding why Skelton formation that the jurors had discussed the might have allowed the “loans” through kiting case in groups of two or three throughout the and why he did not want the amounts reflected trial. on the monthly board report. There is no evidence that this testimony was introduced or Skelton contends that the court erred in used in any manner that would lead the jury to failing to hold an evidentiary hearing believe that violation of those regulatory prin- ciples was equivalent to a criminal violation. Therefore, United States v. Christo, 614 F.2d (...continued) 486 (5th Cir. 1980), is inapposite, and the regarding the regulatory violations focused the court did not abuse its discretion in admitting jury's attention on those prohibitions and made it the evidence.9 impossible for this court to tell whether Christo had been found guilty under the criminal section at issue or merely for the regulatory violations. See 9 In Christo, regulatory violations were not only Christo, 614 F.2d at 491-92. Nothing even included in the indictment and emphasized remotely akin to that level of emphasis occurred in throughout the trial, but the court's instructions this case. See United States v. Saks, 964 F.2d (continued...) 1514, 1522-23 (5th Cir. 1992).

10 regarding, or accept his motion for new trial Although in Jobe the district court did have based on, this information. He admits to an affidavit of the juror, the critical difference finding no case on point, but states that “[i]f a between Jobe and the instant case is that here, person is advised not to drive or operate heavy there is no evidence of any extrinsic machinery, a common warning with muscle information’s reaching any juror. The Jobe relaxers [relaxants], it seems self evident that court recognized a presumption of jury the juror had to rely on the recollections of impartiality that may be defeated through other jurors and could not have formed her evidence that extrinsic factual matter tainted own opinion based on all the evidence.” Such the jury’s deliberations. See id. at 1058. We a generic claim does not rise to a level therefore stated that a court “must investigate requiring a court to investigate further, the asserted impropriety only when a colorable especially in light of the limited ability of a showing of extrinsic influence is made.” Id. court to inquire into jury deliberations under FED. R. EVID. 606(b), and therefore the district Skelton made no such showing: The court did not abuse its discretion. information presented to the court indicated that no extrinsic evidence was communicated, Skelton also raises, but does not argue, er- and the court had no reason to believe the ror based on the court's handling of juror con- situation was otherwise. Therefore, the court tact with a potential witness. During trial, the did not abuse its discretion in choosing to court was informed by the government that admonish the jury not to discuss the case with one of the jurors had approached a potential anyone. defense witness, Sam Goldman of the OCC, at a school track meet. The juror apparently E. asked Goldman whether he knew anything Skelton claims the court erred in limiting about WNB. Goldman responded that he was the scope of his expert’s testimony. During not going to discuss that issue and that the government voir dire, Sam James Pierce juror should not be asking that question. testified that he was qualified as an auditor (He is a certified public accountant and had Instead of questioning the juror about the experience as an auditor with the FDIC and incident, the court admonished the jury not to other organizations.) but was not qualified to discuss the case with anyone. Skelton investigate fraud, had never been a bank contends that this constituted error. In Jobe, examiner or lending officer, and had very little 101 F.3d at 1057-59, we considered a similar experience with check kiting. The court challenge on very different facts. Billie Mac therefore limited him to testifying on matters was convicted of, inter alia, bank fraud. Dur- of accounting. ing trial, one of the jurors discussed the case with a relative and was told that Billie Mac We review the exclusion of expert had previously been convicted in another bank testimony for abuse of discretion. See United fraud case. Even though this “knowledge” States v. Willis, 38 F.3d 170, 174 (5th Cir. was technically incorrect, and the district court 1994). Skelton rests his argument on an ir- denied an evidentiary hearing to investigate relevant premise: that when the government and denied a new trial, we affirmed. has been allowed to present its version of how banks should be operated, the defense should

11 be afforded the same opportunity. The court We review the sufficiency of an indictment did not deny that opportunity in this caseSSit do novo. See United States v. Crow, 164 F.3d merely required that Skelton present a witness 229, 234 (5th Cir.), cert. denied, 119 S. Ct. qualified to testify to such matters. The court 2051 (1999). The indictment must conform to did not abuse its discretion in limiting Pierce’s minimal constitutional standards, and “[t]he testimony to his area of expertise. proper test for determining the validity of the indictment is whether or not the defendant has F. been prejudiced by the alleged deficiency.” Id. Skelton claims he is entitled to a new trial at 234-35. based on the cumulative error doctrine. In United States v. Canales, 744 F.2d 413, 430 An indictment is sufficient if it contains (5th Cir. 1984), we recognized that “the the elements of the offense charged, fair- cumulative effect of several incidents of . . . ly informs the defendant what charge he misconduct may require reversal, even though must be prepared to meet, and enables no single one of the incidents, considered the accused to plead acquittal or alone, would warrant such a result.” As in conviction in bar of future prosecutions United States v. Moye, 951 F.2d 59, 63 n.7 for the same offense. An indictment is (5th Cir. 1992), because there is no merit to read for its clear meaning and any of Skelt on’s claims of error, his claim of convictions will not be reversed for cumulative error must also fail. minor deficiencies that do not prejudice the accused. G. Skelton claims the indictment either United States v. Shelton, 937 F.2d 140, 142 provided inadequate notice or was (5th Cir. 1991) (internal citation and quotation constructively amended. First, he avers that marks omitted). the indictment alleges that he deceived the board of directors, when the crime is to Not only would the minor issues raised by deceive WNB itself. Second, he contends that Skelton not have prejudiced his defense, but the indictment did not adequately allege how the indictment was not in fact flawed. It does he deceived the board or how he aided and allege that Skelton defrauded WNB and does abetted Melawer and the Burroughses in describe the manner in which he executed the executing a scheme to defraud. Lastly, schemes to defraudSSnamely, by allowing Skelton contends that the indictment was overdrafts, granting immediate credit, and en- constructively amended at trial, because the couraging “removal” of the overdraft on the indictment alleges that he made immediate last day of the month. credit available to persons (Melawer and the Burroughses), but he was convicted of making “A constructive amendment occurs when immediate credit available to corporations the jury is permitted to convict the defendant (Some accounts were held in the name of cor- upon a factual basis that effectively modifies porations that Melawer or the Burroughses an essential element of the offense charged. If controlled.). All three claims are meritless. we find that the indictment has been constructively amended, we must reverse the conviction.” United States v. Holley, 23 F.3d

12 902, 912 (5th Cir. 1994) (internal citations and REVERSED and REMANDED for entry of quotation marks omitted). judgments of acquittal.10

There was no constructive amendment. The evidence demonstrated that Skelton made immediate credit available to the accounts at issue; some of those accounts were held in the name of corporations control led by defendants. In this manner, Skelton made immediate credit available to the corporations and thus to those controlling the corporations, which persons did in fact exploit that credit as alleged. Skelton does not claim that any of the corporations at issue were not controlled by the named defendants, but merely that the jury was allowed to convict him for making immediate credit available to corporations when the indictment charged that he made that credit available to the persons controlling those corporations. This does not constitute modification of an “essential element of the offense charged,” and therefore no constructive amendment occurred.

H. Skelton claims that he was improperly con- victed on the basis of the uncorroborated testi- mony of an accomplice, Ira Finlay. This claim has no meritSSFinlay’s testimony was corroborated by bank records and substantial other evidence. Even Finlay’s testimony regarding the payoffs was corroborated by testimony of a bank employee and of Finlay’s employee. See part II.A., supra.

In summary, Skelton’s conviction on count one is AFFIRMED; his conviction on counts two and three and the convictions of Melawer, Kenneth Burroughs, and Mark Burroughs are

10 Skelton’s convictions on counts two and three did not affect the guideline range on count one, but resentencing is necessary to allow recalculation of the special assessment and amount of restitution.

13 14