Appendix — Williams v. United States

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APPENDIX

APPENDIX A

UNITED STATES of America,

Plaintiff-Appellee,

Vv.

William Archie WILLIAMS,

Defendant-Appellant.

No, 80-3064.

United States Court of Appeals, Fifth Circuit.

Unit A

March 19, 1981

Defendant was convicted in the United States District

Court for the Western District of Louisiana, at Shreveport,

Tom Stagg, J., of one count of misapplication of bank funds

and two counts of check kiting, and he appealed. The

Court of Appeals, Kunzig, J., sitting by designation, held

that: (1) trial judge properly exercised his discretion to

exclude series of exhibits and accompanying testimony of-

fered by defendant in support of his argument that he was

at all relevant times in a net creditor position vis-a-vis

the bank; (2) monthly checking statements, cancelled

checks and deposit slips of defendant which were turned

over by bank president to fe leral agency were admissible;

and (3) indictment sufficiently charged violations of fed-

eral statute.

Affirmed.

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1, Criminal Law (Key) 674

In prosecution which resulted in convictions, inter alia,

of misapplication of bank funds, trial judge properly ex-

ercised his discretion to exclude series of exhibits and ac-

companying testimony offered by defendant in support of

his argument that he was at all relevant times in a net

creditor position vis-a-vis the bank, since proffered evi-

dence failed to shed any light on principal factual contro-

versy whether, and to what extent, defendant lent his

personal funds to bank so that it could meet its financing

commitment. 18 U.S.C.A. § 656; Fed.Rules Evid. Rule 403,

28 U.S.C.A.

2. Searches and Seizures (Key) 7(1)

Searches and seizures conducted without prior issu-

ance of warrant are per se unreasonable under Fourth

Amendment, subject only to a few specifically established

and well-delineated exceptions. U.S.C.A.Const, Amend. 4.

3. Criminal Law (Key) 394.5 (2)

Monthly checking statements, cancelled checks and

deposit slips of defendant which were turned over by bank

president to federal agent were admissible since defendant

could entertain no legitimate expectation of privacy in con-

tents of documentary materials which he placed in custody

of bank and could entertain no legitimate expectation that

bank would not deliver those documents to authorities

for their perusal. U.S.C.A.Const, Amend. 4.

4. Banks and Banking (Key) 509

Defendant’s actions at banks constituted classic inci-

dents of check kiting, so that averments contained in two

counts of indictment sufficiently set forth violations of

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federal statute prohibiting making false statement or will-

fully overvaluing property or security for purpose of in-

fluencing action of bank the deposits of which are insured.

by Federal Deposit Insurance Corporation. 18 U.S.C.A.

§ 1014.

William M, Cady, Tom N. Thompson, Shreveport, La.,

James McPherson, New Orleans, La., Gary G. Grindler,

Nickolas P, Chilivis, Randolph A. Rogers, Kenneth G. Men-

endez, Atlanta, Ga., for defendant-appellant.

Edward L. Shaheen, U. S. Atty., D, H. Perkins, Jr.,

Asst. U.S. Atty., Shreveport, La., for plaintiff-appellee.

Appeal from the United States District Court for the

Western District of Louisiana.

Before AINSWORTH, Circuit Judge, KUNZIG, Judge,*

and RANDALL, Circuit Judge.

KUNZIG, Judge:

William Archie Williams in 1979 was convicted in

federal district court on one count of misapplication of bank

funds and two counts of check kiting. He now appeals upon

several grounds, principally evidentiary. It is our deter-

mination, however, that none of the grounds have merit.

I

In 1975, appellant William Archie Williams, an ex-

perienced businessman from rural Louisiana, purchased the

majority interest in the Pelican State Bank, Pelican, Loui-

siana, He promptly appointed himself bank president.

Pelican is a relatively small bank with only $3,000,000 in

assets.

Bn of the United States Court of Claims, sitting by

on,

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For a number of years prior to Williams’ assumption

of control, Pelican Bank had maintained a_ so-called

“dummy account”, an account used to charge items drawn

on the bank by customers who had insufficient funds in

their individual checking accounts to pay the items. A

check would be paid from the bank’s general pool of assets

and held in the dummy account until the customer had

deposited sufficient funds to cover the check. At this

point, the check would be posted to the customer’s account

and the figure for accumulated checks in the dummy ac-

count correspondingly reduced. The dummy account state-

ment contained a running balance of overdrafts which

at all times equaled the total value of checks held in the

dummy account. Also, upon each business day, the dummy

account statement would be adjusted to indicate total “de-

posits” equal to total overdrafts covered as of the close

of the previous business day. This was merely an account-

ing entry designed to reflect the bank’s loss of use of the

funds which had been applied to paying overdrafts. It

seems that the bank charged no interest for providing this

service.

It is unclear what, if any, limitations existed upon us-

age of the dummy account. Suffice it to say that Williams,

as controlling shareholder and bank president, apparently

enjoyed completely unhindered usage. We are here pri-

marily concerned with the period from December 1977 to

May 1978. Between December 20, 1977 and May 2, 1978,

Williams drew many personal checks which were paid

from the dummy account. By May 2, 1978, total overdrafts

attributable to this activity had risen to $58,055.44. This

was slightly in excess of 50% of the total overdrafts cov-

ered by the dummy account at that time. It is important

to note that no other officer of the bank made use of the

dummy account during Williams’ presidency. Indeed, the

bank’s board of directors had requested that Williams

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eliminate the dummy account but he failed to take any

action.

On May 8, 1978, state and federal bank examiners ar-

rived at the bank to conduct an audit. They rather quickly

discovered Williams’ heavy drawings upon the dummy ac-

count, but did not immediately approach him. Instead,

they began discreetly to monitor Williams’ personal banking

activity during the next two weeks.

On May 8, 1978—the same day as the commencement

of the bank examination—Williams opened a personal

checking account at Winn State Bank, Winnfield, Loui-

siana, depositing $4,649.97. The deposit was posted to

the account on May 9, 1978.

Also on May 9, 1978, Williams deposited in his personal

checking account at Pelican Bank a check for $58,500 drawn

upon his checking account at Winn Bank. This sum, of

course, far exceeded Williams’ actual balance in Winn Bank

at the time. Pelican Bank thereupon credited Williams’

checking account for the face amount of the deposited

check. At the same time, Pelican Bank posted to Williams’

checking account the group of checks which Williams had

drawn from December 20, 1977 to May 2, 1978 and which

had been cleared through the dummy account—$58,055.44

worth. The overdraft balance in the dummy account fell

correspondingly. At the start of business on May 9, 1978,

Williams’ checking account at Pelican Bank showed a bal-

ance of $8.33. At the close of business, this figure had

risen to $452.89.

On May 10, 1978, Williams deposited in his checking

account at Winn Bank a check for $60,000 drawn on his

personal checking account at Pelican Bank. Again, this

sum far exceeded Williams’ true balance in the drawee

bank. Winn Bank thereupon credited Williams’ checking

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account for the face amount of the deposited check. At

the start of business on May 10, 1978, Williams’ checking

account at Winn Bank showed a balance of $4,649.97. At

the close of business, the balance had increased to $64,647.12

(a debit of $2.85 also having been recorded that day). As

a result, Winn Bank routinely paid Williams’ $58,500 check

of May 9, given to Pelican Bank on that date, when it

cleared for payment on May 12, 1978.

On May 11, 1978, there was presented for payment at

Pelican Bank the $60,000 check which Williams had de-

posited in Winn Bank the day before. Because of insuf-

ficient funds in Williams’ account, Pelican cleared the

check through the dummy account. The overdraft balance

in the dummy account rose correspondingly.

On May 16, 1978, Williams deposited in his checking

account at Pelican Bank a check for $65,000 drawn upon

his combined personal and business checking account at

Sabine State Bank, Many, Louisiana. Williams’ actual

balance in Sabine Bank was only $1,204.81 at the time.

Pelican Bank thereupon credited Williams’ checking ac-

count for the face amount of the deposited check. At the

same time, Pelican Bank posted to Williams’ checking ac-

count the $60,000 check which Williams had deposited in

Winn Bank on May 10, 1978 and which had been cleared

through the dummy account on May 11, 1978. The over-

draft balance in the dummy account fell correspondingly.

At the start of business on May 16, 1978, Williams’ check-

ing account at Pelican Bank showed a balance of $102.89.

At the close of business, the balance had risen to $5,102.89.

Because of insufficient funds in Williams’ checking ac-

count, Sabine Bank refused to make payment on the $65,-

000 check when it was presented for payment on May 17,

1978. Pelican Bank charged Williams’ account accordingly

on May 23, 1978. Williams neutralized the charge-back by

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depositing a $65,000 money order in his Pelican account

the same day. Williams had purchased the money order

from Sabine Bank with the proceeds of a real estate mort-

gage loan which he obtained from Sabine on May 18, 1978.

Negotiations for the loan had presumably commenced some

time earlier but it is not possible to determine from the

record precisely when.

As a result of this intricate banking activity, Williams

was able to obtain for his personal account at Pelican Bank

interest-free credit of $58,500 from May 9, 1978 to May 12,

1978 and $65,000 worth from May 16, 1978 to May 23, 1978.

Further, he was able to obtain interest-free credit of $60,000

at Winn Bank from May 10, 1978 to May 11, 1978. He

was able to do so upon the basis of checks whose face

amount uniformly exceeded the amount of funds backing

them in his personal account at the drawee bank upon the

date when given.

During their audit, lasting approximately two weeks,

the bank examiners followed these activities closely. Even-

tually, they voiced numerous criticisms which culminated

in a special meeting on May 26, 1978 in Shreveport be-

tween the Pelican board and state and federal banking of-

ficials. The state banking commissioner presided. He ex-

pressed his concern over the matters which had been

brought to his attention and requested that Williams re-

sign as president. Williams did so at once.

The United States Attorney in Shreveport—brought

into the case via a criminal referral from FDIC—also was

alarmed by Williams’ conduct and obtained a one-count

indictment on September 21, 1979. A superseding three-

count indictment was obtained on October 19, 1979.

Count I charged that, “Beginning on . . . December 20,

1977 and continuing . . . to May 9, 1978 . . . William Archie

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Williams, being an officer ... of .. . Pelican State Bank

. .. @ bank the deposits of which are insured by [FDIC]

. .. with intent to injure and defraud said insured bank,

did willfully and knowingly misapply . . . monies and

funds ... of said bank, in the amount of $58,055.44 . . . by

converting to his-personal use said sum, all in violation

of [18 U.S.C. § 656 (1976)]....’" This, of course, referred

to Williams’ sizable overdrafts during the period in ques-

tion.

Count II charged that “On... May 9, 1978... William

Archie Williams, did knowingly and willfully overvalue .. .

a security, that is a check dated May 9, 1978, drawn on

the account of W. A. Williams... at the Winn State Bank

... in the amount of $58,500.00 . . . for the purpose of in-

fluencing the Pelican State Bank . . . a bank the deposits

1. The statute provides as follows:

656. Theft, embezzlement, or misapplication by bank of-

cer or employee

Whoever, being an officer, director, agent or employee

of, or connected in any capacity with any Federal Reserve

bank, member bank, national bank or insured bank, or a

receiver of a national bank, or any agent or employee of the

receiver, or a Federal Reserve Agent, or an agent or employee

ofa Federal Reserve Agent or of the Board of Governors of

the Federal Reserve System, embezzles, abstracts, purloins

or willfully misapplies any of the moneys, funds or credits of

such bank or any moneys, funds, assets or securities intrusted

to the custody or care of such bank, or to the custody or

care of = agent, officer, director, employee or receiver,

shall be fined not more than $5,000 or imprisoned not more

than five years, or both; but if the amount embezzled, ab-

stracted, purloined or misapplied does not exceed $100, he

shall be fined not more than $1,000 or imprisoned not more

than one year, or both.

As used in this oe term “national bank” is

synonymous with “national king association”; ‘member

bank” means and includes any national bank, state bank, or

bank and trust company which has become a member of

> oP oe bake eee associatic > ~ Lege iho

cludes any g ation, company, sa

bank, or other banking institution, the deposits of which are

insured by the Federal t Insurance Corporation.

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of which are insured by [FDIC] . . . upon an advance of

money and extension of credit in that the Defendant pre-

sented said check for deposit at Pelican State Bank...

and represented . . . to said bank that said check was of a

value equal to the face amount of the check, when in truth

and fact, as the Defendant then well knew, there were no

sufficient funds in the account of W. A. Williams at the

Winn State Bank . . . to cover said check, all in violation

of [18 U.S.C. § 1014 (1976)]... .’”

Count III charged under the same statute and for the

same type of offense as in Count II, but applied to Williams’

May 10, 1978 transaction at the Winn Bank.

2. The statute provides as follows:

§ 1014. Loan and credit applications generally; renewals and

discounts; crop insurance

Whoever knowingly makes any false statement or report,

or willfully overvalues any land, property or security, for the

purpose of influencing in any way the action of the Recon-

struction Finance Corporation, Farm Credit Administration,

Federal Crop Insurance Corporation, Farmers’ Home Corpo-

ration, the Secretary of Agriculture acting through the

Farmers’ Home Administration, any Federal intermediate

credit bank, or any division, officer, or employee thereof, or

of any corporation organized under sections 1131-1134m of

Title 12, or of any regional agricultural credit corporation

established pursuant to law, or of the National Agricultural

Credit Corporation, a Federal Home Loan Bank, the Federal

Home Loan Bank Board, the Home Owners’ Loan Corpora-

tion, a Federal Savings and Loan Association, a Federal land

bank, a joint-stock land bank, a Federal land bank associa-

tion, a Federal Reserve bank, a small business investment com-

pany, a Federal credit union, an insured State-chartered credit

union, any institution the accounts of which are insured by

the Federal Savings and Loan Insurance Corporation, any

bank the deposits of which are insured by the Federal Deposit

Insurance rporation, any member of the Federal Home

Loan Bank S m, the Federal Deposit Insurance Corporation,

the Federal Savings and Loan Insurance Corporation, or the

Administrator of the National Credit Union Administration,

upon any application, advance, discount, purchase, purchase

agreement, repurchase agreement, commitment or loan, or

any change or extension of any of the same, by renewal,

deferment of action or otherwise, or the acceptance, release,

or substitution of we therefor, shall be fined not more

than $5,000 or impriso not more than two years, or both.

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The cause came on for trial in federal district court in

December 1979. The jury found Williams guilty on all

counts. Judgment against him was pronounced on January

14, 1980. He received a prison sentence of six months as

to Count III and five years probation as to Counts I and II

together. This appeal followed.’

II

Appellant’s first assignment of error concerns an evi-

dentiary ruling made under the § 656 charge. He con-

tends that the trial judge improperly excluded certain ex-

hibits and testimony relevant to the issue of fradulent in-

tent. It is our determination, however, that the trial judge

properly exercised his discretion in refusing to admit the

proffered evidence.

This circuit has identified the four essential elements

of a violation of 18 U.S.C. § 656 (1976) as follows:

(1) that the accused was an officer, director, etc.

of a bank,

(2) that the bank was connected in some way with a

national or federally insured bank,

(3) that the accused willfully misapplied the money,

funds, etc. of said bank, and

(4) that the accused acted with intent to injure and

defraud said bank.

3. There is also pending in this court an appeal from a

post-conviction denial of Williams’ motion for a new trial based

on the ground of newly discovered evidence. See United States

v. Williams, No. 80-3969 (5th Cir. Jan. 13, 1981) (order remand-

ing to district court for consideration of Williams’ motion for ex-

tension of time to file notice of appeal.)

All

United States v. Tidwell, 559 F.2d 262, 265 (5th Cir. 1977),

cert. denied, 435 U.S. 942, 98 S.Ct. 1520, 55 L.Ed.2d 538

(1978). See supra at 1314n.1.‘

An important component of Williams’ defense to the

§656 charge was to attempt to negative the intent element

by showing as one of the relevant facts and circumstances

that at all pertinent times he maintained credits at Pelican

Bank which exceeded his drawings upon the dummy ac-

count. See, e.g., United States v. Tidwell, 559 F.2d 262, 266

(5th Cir. 1977), cert. denied, 435 U.S. 942, 98 S.Ct. 1520, 55

L.Ed.2d 538 (1978); United States v. Riley, 550 F.2d 233, 236

(5th Cir. 1977); United States v. Sorensen, 330 F.Supp.

642 (D.Mont.1971). But see United States v. Duncan, 598

F.2d 839, 860 (5th Cir.), cert. denied, 444 U.S. 871, 100 S.Ct.

148, 62 L.Ed.2d 96 (1979); United States v. Southers, 583

F.2d 1302, 1305 (5th Cir. 1978).

Williams testified first for the defense. He stated that

prior to the events in question Pelican Bank had entered

into an agreement with General Motors to finance the pur-

chase of new car inventory by Taylor Motor Company, a

local car dealership. This was apparently a standard floor

planning arrangement.

Williams further related that in November 1977 the

Pelican board voted to terminate this financing relationship.

General Motors purportedly responded that Pelican re-

mained obligated on cars still in transit or already de-

livered. Williams testified that he then undertook to ad-

vance Pelican whatever funds would be necessary to meet

4. The statute does not expressly mention the specific intent

to injure and defraud. See supra at 1314n.1. “Rather, the intent

a rement has been judicially read into the statute on the basis

of its legislative history.” United States v. Tidwell, 559 F.2d 262,

265 n.2 (5th Cir. 1977), cert. denied, 435 U.S. 942, 98 S.Ct. 1520

55 L.Ed.2d 538 (1978); see United States v. Docherty, 468 F.2d

989, 994-995 (2d Cir. 1972).

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the financing commitment to General Motors. Williams

stated that he did so in order to avert a lawsuit which could

have impeded the bank’s chances to obtain approval for

the opening of a branch in Mansfield, Louisiana, Accord-

ing to Williams, the bank’s total indebtedness to him

amounted to $77,000 by May 9, 1978 as a result of his under-

taking.

On cross-examination, Williams admitted that he did

not have any notes for the loans he had allegedly made to

the bank. He also answered evasively when questioned

whether the bank’s records contained any entries proving

his assertion that he was a substantial creditor of the

bank.

Stephen Roberts, a certified public accountant, was

next on the stand for the defense. He testified that he

found that between December 1977 and March 1978 ap-

proximately $56,000 had been injected into the bank but

he could not unequivocally identify the source of the funds.

He also indicated that the bank held a corresponding note

from Taylor Motor Company for each injection and that

the notes totaled to an amount equal to the amount of in-

jected capital.

On rebuttal, the Government first introduced F. N.

Gallaspy, chairman of the board of Pelican Bank during

the period December 1977—May 1978 and also chairman of

the audit committee of the bank during that time (and

president of the bank after Williams’ resignation). When

asked whether Williams had been a creditor of the bank

during the December—May period, he replied: “No sir.

The reverse was true.”

Next in rebuttal, the prosecutor presented Ollie Stone,

a cashier at Pelican Bank during the period December

1977—May 1978. He testified that to the best of his recol-

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lection William Archie Williams had never been a creditor

of the bank; instead, the reverse was true.

The prosecutor next called Ken Smith, a federal bank

examiner who had participated in the audit of Pelican

Bank in May 1978. He asserted that he did not discover

any evidence at that time that Pelican Bank owed Williams

large amounts of money.

Finally, the Government called Jessie Bridges, asso-

ciated with Taylor Motor during the period in question.

He testified that Taylor had owed Pelican a substantial

amount of money during this period; to the best of his

knowledge, however, Taylor had never been indebted to

Williams. He stated that Taylor would give Pelican an

interest-bearing note to cover the financing of each auto-

mobile. He indicated that he had no information that

Williams may have been supplying Pelican with the funds

it was using to meet its financing commitment on Taylor’s

inventory.

The trial judge held inadmissible a series of exhibits

and accompanying testimony offered by appellant in sup-

port of his argument that he was at all relevant times in

a net creditor position vis-a-vis Pelican Bank. The exhibits

consisted of: 1) a letter of November 10, 1977 from Pelican

to General Motors informing the latter that Pelican no

longer intended to finance the purchase of new car in-

ventory by Taylor Motors; 2) several promissory notes

from Taylor Motors to Pelican Bank, dating from November

and December 1977, each having a face value of several

thousand dollars; 3) a number of bank money orders and

bank memoranda, dating from December 1977 to March

1978, evidencing total payments during this period of $56,-

393.87 from Taylor’s account at Pelican to General Motors;

4) miscellaneous documentation relating to Taylor’s new

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car purchases in the November—December 1977 period and

the financing thereof by Pelican. The notes and payments

are clearly related transactions, linked by Pelican’s res-

idual commitment to finance new car acquisitions by

Taylor. The proffer indicates that cash was being injected

into Pelican Bank during December 1977—March 1978 so

that Pelican could honor its financing commitment. The

proffer, however, contains no solid evidence as to the source

of these injections.°

{1] Appellant contends that the exclusion of the

above items constitutes reversible error as to the § 656

charge. Under Fed.R.Evid. 403, the trial judge has discre-

tion to exclude relevant evidence “if its probative value

is substantially outweighed by the danger of unfair preju-

dice, confusion of the issues, or misleading the jury, or

by considerations of undue delay, waste of time, or needless

presentation of cumulative evidence.” In our view, the

trial judge properly exercised his discretion under Rule

403 to exclude the proffered evidence.

It is easily seen that the proffered evidence fails to

shed any light upon the principal factual controversies

left open by the evidence which was admitted: whether,

and to what extent, William Archie Williams lent his per-

sonal funds to Pelican Bank so that it could meet its

financing commitment to General Motors. Instead, the

proffer is needlessly cumulative; that is, it merely leads

to factual conclusions already amply supported in the rec-

ord (and which the jury apparently discounted). Worse,

the proffered evidence would likely serve as a source of

confusion. The record would be cluttered with numerous

details of business transactions only tangentially related

to the question of Williams’ overdrafts. In a case already

5. Defendant's Offer of Proof; Supp.R.I.

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abounding with detail, such a prospect becomes especially

undesirable.

In short, procedural costs more than substantially out-

weigh probative value. The trial judge acted correctly

in excluding the proffered evidence from consideration

under the § 656 count.°

III

Appellant next excepts to the denial of his motion

to suppress with respect to certain documentary materials

allegedly obtained by the Government in violation of his

Fourth Amendment rights. We are unable, however, to

find any Fourth Amendment violation in this case.

In mid-1978, the U. S. Attorney in Shreveport and

the FBI together undertook an investigation of Williams’

personal banking activity. On October 12, 1978, FBI agent

Thomas Ray arrived at Pelican Bank to speak.with F.

N. Gallaspy, then president of the bank and successor

to Williams in this post (at this time, Williams’ only offi-

cial position at the bank was member of the board of

directors). The meeting concerned an earlier request by

Ray for any records in the possession of the bank which

could prove useful to the investigation.

It had been established practice for the bank to hold

Williams’ monthly banking statements rather than mail

them to him. Williams would come for them at random

6. Appellant also contends that the exclusion of the prof-

fered evidence represents reversible error as to the two § 1014

counts. The § 1014 counts relate to events which occurred on

May 9 and May 10, 1978. The excluded evidence relates to events

which transpired several months earlier. As such, the proffer was

not relevant to the factual issues raised by the § 1014 counts. The

trial judge acted properly in excluding the proffer from consia-

eration under these counts. See Fed.R.Evid. 402, 403. We note

that appellant’s counsel conceded during the trial that the prof-

fered evidence was irrelevant to the § 1014 counts.

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intervals, sometimes months after the issuance of a state-

ment. The statements were apparently kept in a wire

basket located on a window ledge alongside the bank’s

main work space.

Preparatory to agent Ray’s arrival, Gallaspy gathered

from the window ledge five unsealed envelopes containing

monthly checking statements, cancelled checks and deposit

slips of William Archie Williams. The stetements applied

to Williams’ checking activity at Pelican Bank from April

through September 1978. Gallaspy delivered these docu-

ments to Ray after the latter’s arrival. Gallaspy exercised

custody over the documents by virtue of his position as

bank president. Consequently, he had never actually

sought Williams’ permission.

Agent Ray had no search warrant covering the docu-

ments which came into his possession at Pelican Bank

on October 12, 1978.

Before trial, Williams entered a motion to suppress,

arguing that the Government’s taking of his bank state-

ments, checks and deposit slips represented a warrantless,

illegal “search and seizure”. An evidentiary hearing was

conducted before a magistrate, who recommended that

the motion be denied. The trial judge accepted the recom-

mendation, finding that no reasonable or legitimate ex-

pectation of privacy had been violated. Williams now

challenges the denial of his motion to suppress. We be-

lieve, however, that the lower court’s rationale and result

were sound.

{[2] The Fourth Amendment guarantees “[t]he right

of the people to be secure in their persons, houses, papers,

and effects, against unreasonable searches and seizures.”

Searches and seizures conducted without the prior issuance

of a warrant “are per se unreasonable under the Fourth

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Amendment—subject only to a few specifically established

and well-delineated exceptions.” Katz v. United States,

389 U.S. 347, 357, 88 S.Ct. 507, 514, 19 L.Ed.2d 576 (1967);

see, e. g., Johnson v. Wright, 509 F.2d 828, 829 (5th Cir.),

cert. denied, 423 U.S. 1014, 96 S.Ct. 445, 46 L.Ed.2d 384

(1975). The Supreme Court has uniformly “held that

the application of the Fourth Amendment depends on

whether the person invoking its protection can claim a

‘justifiable,’ a ‘reasonable,’ or a ‘legitimate expectation of

privacy’ that has been invaded by government action.”

Smith v. Maryland, 442 U.S. 735, 740, 99 S.Ct. 2577, 2580,

61 L.Ed.2d 220 (1979); see Katz v. United States, 389

U.S. 347, 88 S.Ct. 507, 19 L.Ed.2d 576 (1967).’

This inquiry, as Mr. Justice Harlan aptly noted in

his Katz concurrence, normally embraces two discrete

questions. The first is whether the individual, by

his conduct, has “exhibited an actual (subjective) ex-

pectation of privacy,” ...- - - whether, in the words

of the Katz majority, the individual has shown that

“he seeks to preserve [something] as private.” ....

The second question is whether the individual’s subjec-

tive expectation of privacy is “one that society is pre-

pared to recognize as ‘reasonable,’” .. . - - - whether,

in the words of the Katz majority, the individual’s

expectation, viewed objectively, is “justifiable” under

the circumstances.

Smith v. Maryland, 442 U.S. 735, 740, 99 S.Ct. 2577, 2580,

61 L.Ed.2d 220 (1979).

7. In this case, the actual taking of the banking documents

was carried out by a private employee of the bank. This indi-

vidual, however, acted at the request of the FBI. In view of this,

he is to be deemed an “agent” of the FBI for purposes of this

case, so as to render the taking of the documents governmental

action under the Fourth Amendment. See Smith v. Maryland,

442 U.S. 735, 739 n.4, 99 S.Ct. 2577, 2579, 61 L.Ed.2d 220 (1979).

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The Supreme Court has squarely held that a bank

customer has no legitimate expectation of privacy in the

contents of original checks, deposit slips and financial state-

ments pertaining to his account. United States v. Miller,

425 U.S. 435, 440-443, 96 S.Ct. 1619, 1622, 48 L.Ed.2d 71

(1976).

The checks are not confidential communications but

negotiable instruments to be used in commercial trans-

actions. All of the documents obtained, including fi-

nancial statements and deposit slips, contain only in-

formation voluntarily conveyed to the banks and ex-

posed to their employees in the ordinary course of

business. The lack of any legitimate expectation of

privacy concerning the information kept in bank rec-

ords was assumed by Congress in enacting the Bank

Secrecy Act, the expressed purpose of which is to

require records to be maintained because they “have

a high degree of usefulness in criminal, tax, and regula-

tory investigations and proceedings.” 12 U.S.C.

§ 1829b(a) (1)....

Id. at 442-443, 96 S.Ct. at 1624.

Further, we note that the Supreme Court has “con-

sistently .. . held that a person has no legitimate expecta-

tion of privacy in information he voluntarily turns over

to third parties.” Smith v. Maryland, 442 U.S. 735, 743-

744, 99 S.Ct. 2577, 2582, 61 L.Ed.2d 220 (1979). The same

reasoning should apply when, as here, an individual vol-

untarily places his personal papers in the custody of a

third party who is also recognized to be familiar with their

contents. The individual “assumes the risk” that these

papers will be turned over to the authorities for their

examination. Id. at 744, 99 S.Ct. at 2582. While his con-

fidence may have been betrayed, his “legitimate” or “rea-

sonable” expectation of privacy has not been violated.

Al9

[3] Miller and Smith, supra, engender the following

two conclusions pertinent to this case. First, Williams

could entertain no legitimate expectation of privacy in the

contents of the original checks, deposit slips and financial

statements which he placed in the custody of Pelican

Bank. Second, he could entertain no legitimate expecta-

tion that Pelican would not deliver these documents to the

authorities for their perusal. These considerations effec-

tively refute Williams’ Fourth Amendment claim. No

legitimate expectation of privacy has been invaded. The

motion to suppress was properly denied.

IV

Appellant’s next assignment of error relates to the

alleged insufficiency of the indictment to charge violations

of 18 U.S.C. § 1014 (1976). Section 1014 provides in per-

tinent part:

Whoever knowingly makes any false statement

or ... willfully overvalues any . .. property or security,

for the purpose of influencing in any way the action of

... any bank the deposits of which are insured by the

Federal Deposit Insurance Corporation [FDIC] ...

upon any... advance... or loan... or extension of

. . . the same .. . shall be fined not more than

$5,000 or imprisoned not more than two years, or both.

See supra at 1314n.2. Appellant argues that the averments

contained in Counts II and III® of his indictment cannot

fairly be deemed to set forth violations of this statute.®

[4] This argument is simply without foundation.

Williams’ actions at Pelican Bank and Winn Bank on May

8. Supra at 1315-1319.

9. Appellant at no time raised this argument before the

court below; it is being raised for the first time on this appeal.

A20

9 and May 10, 1978 constitute classic incidents of check

kiting.

“Check kiting . . . involves more than the mere use of

a check with insufficient funds in the bank to meet it.

It involves a series of acts which taken together con-

stitute a scheme, a studied device, false pretenses built

upon a series of false representations designed to lull

the banks involved into a feeling of confidence and

security. A bad check is given. Money or credit is

received from a bank other than the one on which the

check is drawn. If credit is taken, that credit is usually

drawn on immediately. The check kiter then de-

posits a check in the bank upon which the first check

is drawn before the first check arrives there. The

second check is drawn on the bank from which the

first money or credit is received. Credit is taken for

it and that credit covers the first check when it comes

in and possibly additional credit. Then the process

is carried on, back and forth, until the scheme is

discovered.”

United States v. Payne, 602 F.2d 1215, 1219 (5th Cir. 1979),

cert, denied, 445 U.S. 903, 100 S.Ct. 1079, 63 L.Ed.2d 319

(1980), quoting Fidelity and Casualty Co. of New York v.

Bank of Altenburg, 216 F.2d 294, 302-303 (8th Cir. 1954),

cert. denied, 348 U.S. 952, 75 S.Ct. 440, 99 L.Ed. 744 (1955).

Recently, this court held that check kiting violates § 1014.

United States v. Payne, 602 F.2d 1215, 1216 (5th Cir. 1979),

cert. denied, 445 U.S. 903, 100 S.Ct. 1079, 63 L.Ed.2d 319

(1980). Thus no question as to the sufficiency of the in-

dictment can be raised.

A21

Vv

All other arguments and exceptions raised by appel-

lant, although not directly addressed by this opinion, have

been considered and found to be without merit.

Accordingly, after consideration of the record and the

submissions of the parties, with oral argument of counsel,

the judgment of conviction is affirmed.

AFFIRMED

A22

APPENDIX B

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 80-3064

D. C, Docket No. CR 79-50016-01

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

WILLIAM ARCHIE WILLIAMS,

Defendant-Appellant.

Appeal from the United States District Court for the

Western District of Louisiana

Before AINSWORTH, Circuit Judge, KUNZIG, Judge,*

and RANDALL, Circuit Judge.

JUDGMENT

This cause came on to be heard on the transcript of

the record from the United States District Court for the

Western District of Louisiana, and was argued by counsel;

ON CONSIDERATION WHEREOF, It is now here

ordered and adjudged by this Court that the judgment of

the said District Court in this cause be, and the same is

hereby, affirmed.

MARCH 19, 1981

ISSUED AS MANDATE:

A23

APPENDIX C

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

UNIT A

No. 80-3064

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

WILLIAM ARCHIE WILLIAMS,

Defendant-Appellant.

Appeal from the United States District Court for the

Western District of Louisiana

ON PETITIONS FOR REHEARING AND PETITIONS

FOR REHEARING EN BANC

(Opinion March 19, 1981, 5 Cir., 1981, ........ FE ceessice )

(April 17, 1981)

Before AINSWORTH, Circuit Judge, KUNZIG, Judge,* and

Randall, Circuit Judge.

PER CURIAM:

(X) The Petitions for Rehearing are DENIED and no

member of this panel nor Judge of this Administrative Unit

in regular active service having requested that the Court

—— of the United States Court of Claims sitting by

A24

be polled on rehearing en banc (Rule 35, Federal Rules of

Appellate Procedure; Local Fifth Circuit Rule 16; Fifth Cir-

cuit Judicial Council Resolution of January 14, 1981), the

suggestions for Rehearing En Banc are DENIED.

( ) The Petitions for Rehearing are DENIED and the

judges in regular active service of this Administrative Unit

having been polled at the request of one of said judges

and a majority of said judges not having voted in favor

of it (Rule 35, Federal Rules of Appellate Procedure; Local

Fifth Circuit Rule 16; Fifth Circuit Judicial Council Reso-

lution of January 14, 1981), the suggestions for Rehearing

En Banc are also DENIED.

( ) A member of this Administrative Unit in active

service having requested a poll on the reconsideration in

this cause en banc, and a majority of the judges in active

service of said unit not having voted in favor of it, rehear-

ing en banc is DENIED.

ENTERED FOR THE COURT:

/s/ Robert Ainsworth, Jr.

United States Circuit Judge

A25

APPENDIX D

Question: At any time during your employment

at the Bank did you see Mr. Williams furnish funds for

and on behalf of the Bank to pay a draft for invoices

for Taylor Motor Company? This would be either in

cash or otherwise?

Stone: No, sir. I can remember Mr. Williams

having some money in his bank box, his safety deposit

box and buying a money order. I don’t remember if

it was Taylor Motor Company, it could have been but

I just don’t really remember.

Question: But that could likely have occurred?

Stone: It could very likely have.

[SR, I, p. 8 (excluded from evidence) ].

*_ * *

Question: Okay. On the date as shown—on the

page that is dated December 19, 1977, I see a notation

here in Mr. Williams’ name, right here (Indicating),

Mr. Stone, can you tell me what that is? Would you

interpret that bookkeeping system for the record?

Stone: Yes. Let me study this for a minute.

This looks like American Bank carried eighty percent

of this Taylor Motor funding and Mr. Williams carried

twenty percent of it.

Question: That would be your interpretation?

Stone: Yes, sir. I cannot remember the intricate

details of this thing, I am not sure exactly how this

worked because it was pretty confusing—

A26

Question: But that would be your interpretation?

Stone: Yes, sir.

[SR, I, pp. 9-10 (excluded from evidence) ].

Question: Now if you assume that Taylor Motor

Company was receiving automobiles and that the

Pelican Bank was required to pay them, and Mr, Wil-

liams out of the goodness of his heart then put up

thousands and thousands and thousands of dollars to

pay for these automobiles, sir, how would that have

been handled in the bank’s books?

Stone: Idon’t know. With Mr. Williams handling

it and us handling it--and one instance here. With this

one right here I see what was done and that was

basically that American Bank carried eighty percent

of it and Mr. Williams twenty percent.

Question: And this is the only instance like this

right here?

Stone: Well I don’t know about that, There

might be a few more like that in there.

(SR, I, p. 12 (excluded from evidence) ].

A27

APPENDIX E

Rule 403, Federal Rules of Evidence. Exclusion of

Relevant Evidence on Grounds of Prejudice, Con-

fusion or Waste of Time

Although relevant, evidence may be excluded if its

probative value is substantially outweighed by the danger

of unfair prejudice, confusion of the issues, or misleading

the jury, or by considerations of undue delay, waste of time,

or needless presentation of cumulative evidence.

Title 18, United States Code, § 656. Theft, embezzle-

ment, or misapplication by bank officer or em-

ployee

Whoever, being an officer, director, agent or employee

of, or connected in any capacity with any Federal Reserve

bank, member bank, national bank or insured bank, or

a receiver of a national bank, or any agent or employee

of the receiver, or a Federal Reserve Agent, or an agent

or employee of a Federal Reserve Agent or of the Board

of Governors of the Federal Reserve System, embezzles,

abstracts, purloins or willfully misapplies any of the

moneys, funds or credits of such bank or any moneys,

funds, assets or securities intrusted to the custody or care

of such bank, or to the custody or care of any such agent,

officer, director, employee or receiver, shall be fined not

more than $5,000 or imprisoned not more than five years,

or both; but if the amount embezzled, abstracted, pur-

loined or misapplied does not exceed $100, he shall be

fined not more than $1,000 or imprisoned not more than

one year, or both.

As used in this section, the term “national bank” is

synonymous with “national banking association”; “member

bank” means and includes any national bank, state bank,

A28

or bank and trust company which has become a member

of one of the Federal Reserve banks; and “insured bank”

includes any bank, banking association, trust company,

savings bank, or other banking institution, the deposits

of which are insured by the Federal Deposit Insurance

Corporation.

Title 18, United States Code, § 1014. Loan and credit

applications generally; renewals and discounts;

crop insurance

Whoever knowingly makes any false statement or re-

port, or willfully overvalues any land, property or security,

for the purpose of influencing in any way the action of

the Reconstruction Finance Corporation, Farm Credit Ad-

ministration, Federal Corp Insurance Corporation, Farm-

ers’ Home Corporation, the Secretary of Agriculture acting

through the Farmers’ Home Administration, any Federal

intermediate credit bank, or any division, officer, or em-

ployee thereof, or of any corporation organized under sec-

tions 1131-1134m of Title 12, or of any regional agricultural

credit corporation established pursuant to law, or of the

National Agricultural Credit Corporation, a Federal Home

Loan Bank, the Federal Home Loan Bank Board, the Home

Owners’ Loan Corporation, a Federal Savings and Loan

Association, a Federal land bank, a joint-stock land bank,

a Federal land bank association, a Federal Reserve bank,

a small business investment company, a Federal credit

union, an insured State-chartered credit union, any institu-

tion the accounts of which are insured by the Federal

Savings and Loan Insurance Corporation, any bank the

deposits of which are insured by the Federal Deposit In-

surance Corporation, any member of the Federal Home

Loan Bank System, the Federal Deposit Insurance Corpora-

tion, the Federal Savings and Loan Insurance Corporation,

or the Administrator of the National Credit Union Adminis-

A29

tration, upon any application, advance, discount, purchase,

purchase agreement, repurchase agreement, commitment,

or loan, or any change or extension of any of the same,

by renewal, deferment of action or otherwise, or the ac-

ceptance, release, or substitution of security therefor, shall

be fined not more than $5,000 or imprisoned not more

than two years, or both.