United States v. Sapp

989 F. Supp. 1093, 1997 U.S. Dist. LEXIS 21291, 1997 WL 816251
District Court, D. Kansas·Decided December 8, 1997·No. Nos. 93-20064-01-DES, 97-3181-01-DES·Published·Cited by 3 cases

Opinion

MEMORANDUM AND ORDER

SAFFELS, District Judge.

This matter is before the court on defendants’ Motion Under 28 U.S.C. § 2255 to Vacate, Set Aside, or Correct Sentence by a Person in Federal Custody (Doc. 120), defendants’ Motion for New Trial, defendants’ Motion to Authorize Discovery (Doc. 137), defendants’ Motion to Expand the Record and for Other Appropriate Relief (Doc. 136), defendants’ Motion for Evidentiary Hearing (Doc. 140), and defendants’ Motion for Pre-Trial Conference (Doc. 143). For the reasons discussed below, all of the above motions are denied.

I. INTRODUCTION

The defendants are brothers who jointly operated a number of businesses.. In 1990, the defendants began experiencing financial difficulties. After the defendants defaulted on some of their loans at First State Bank (“First State”), they began negotiating for additional funds from Midland Bank (“Midland”) to pay off some of their debts at First State. At the same time, defendants attempted to persuade First State to discount some of their delinquent loans.

First State agreed to discount some of defendants’ outstanding loans by approximately $279,000, leaving them $280,000 in [1098] debt on the discounted loans, which First State thought would be paid by funds that the Sapps were going to obtain from Midland. This agreement also allowed the defendants to bring other loans current and to turn over the collateral in full satisfaction of other loans. Meanwhile, defendants reached an agreement with Midland that allowed “$850,000 to be made available to [defendants] to settle pending litigation and their indebtedness at First State.” In order to draw on the funds, the Midland agreement stated that the defendants needed both Midland’s approval and releases of their indebtedness with other creditors.

Defendants then forged a letter from First State to Midland. The forged letter requested payment of approximately $405,000 to settle defendants’ debt to First State, which was $125,000 more than was needed to pay off the discounted loans. Before disbursing the loan monies, however, Midland discovered the discrepancy between the amount requested in the letter and the amount First State expects ed the Sapps to request to pay off the discounted loans. When confronted with the forgery, the defendants admitted forging the letter.

The defendants were charged with violating 18 U.S.C. §§ 1014 and 1344(2). The jury found the defendants guilty of bank fraud in violation of 18 U.S.C. § 1344(2), but acquitted them of making a false statement to a federally insured financial institution in violation of 18 U.S.C. § 1014. The defendants were each sentenced to twenty-one months incarceration and were ordered to pay $279,000 jointly in restitution to First State. Defendants appealed their convictions and sentences to the Tenth Circuit Court of Appeals, which affirmed the results reached by the trial court.

II. DISCUSSION

• A. Ineffective Assistance of Counsel Because Trial Counsel Failed to Present Certain Testimony and Evi'dence

The defendants claim that they were denied the effective assistance of counsel in violation of the Sixth Amendment of the United States Constitution. To establish a claim of ineffective assistance of counsel, the defendants must show: (1) “that counsel’s representation fell below an objective standard of reasonableness,” Strickland v. Washington, 466 U.S. 668, 688, 104 S.Ct. 2052, 2064-65, 80 L.Ed.2d 674 (1984); and (2) “that the deficient performance prejudiced the defense.” Id. at 687, 104 S.Ct. at 2064. In order to meet the second prong of this test, the defendants must demonstrate “that counsel’s errors were so serious as to deprive the defendants] of a fair trial, a trial whose result is rehable.” Id. There is a presumption that the attorney’s conduct comes within “the wide range of reasonable professional assistance.” Id. at 689, 104 S.Ct. at 2065.

In this ease, the defendants make the following allegations to support their ineffective assistance of counsel claim: (1) that their trial counsel should have presented testimony from James Wirken and Brian McCallis-ter, attorneys who represented the defendants in negotiations to settle lender liability claims against Midland; (2) that their trial counsel should have presented testimony from Chris Henry, the attorney who represented Midland during the negotiations of the lender liability claims; (3) that their trial counsel should have presented testimony from Lee Greif, chairman and majority shareholder of Midland who participated in the negotiations of the lender liability claims; (4) that their trial counsel should have presented evidence that Bruce Rhoades, a government witness and president of Midland, was under investigation for conduct for which he was eventually banned from employment in the banking industry; and (5) that their trial counsel should have elicited testimony from Larry Morris, a CPA who testified on behalf of the defendants, that the figures in the forged letter were an accurate reflection of the settlement agreement that the defendants had with First State.

To support defendants’ first and second allegations on this claim, the defendants assert that James Wirken, Brian McCallister, and Chris Henry would have testified that they,' along with the Sapps and Lee Greif, were the parties involved in negotiating the settlement which revolved around the $850,-[1099]*1099000 line of credit, which was at issue in this case, and that Bruce Rhoades was not involved in the negotiations as he testified at trial. Furthermore, the defendants assert that these three attorneys would have testified that the line of credit was part of the settlement of the Sapps’ lender liability claims against Midland, that it was the intent of the parties that the Sapps would have personal access to part of the line of credit, and that the line of credit would be used to pay off other creditors besides First State, in opposition to the testimony of Bruce Rhoades.

The court has extensively reviewed Bruce Rhoades’ testimony in connection with this and other claims made by the defendants and concludes that the defendants were not prejudiced by the failure of trial counsel to call these witnesses to rebut the testimony of Bruce Rhoades. Rhoades himself admitted, on cross-examination, that he was not personally involved in all of the negotiations for the $850,000 line of credit at Midland, Rhoades Tr. at 72-73; that the line of credit was established, in part, to prevent the Sapps from suing Midland, Id. at 72; and that money from that line of credit was, in fact, disbursed to the Sapps personally and to other creditors. Id. at 78.

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United States v. Sapp, 989 F. Supp. 1093, 1997 U.S. Dist. LEXIS 21291, 1997 WL 816251 (D. Kan. 1997).

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