Each defendant appeals from judgments of conviction on two counts of conspiracy, two counts of mail fraud and one count of entering a federally insured bank with the intent to commit a felony, entered March 25, 1983 in the United States District Court for the Southern District of New York (MacMahon, J.) after a jury trial.
Mansfield, Kearse and Winter, Circuit Judges.
Albert Pick and Jordan Mittler appeal from judgments of conviction on charges arising out of two separate check-kiting schemes.*fn1 Appellants were convicted by a jury on two counts of conspiracy to commit mail fraud in violation of 18 U.S.C. § 371, two substantive counts of mail fraud in violation of 18 U.S.C. § 1341 and one count of entering a federally insured bank with the intent to commit a felony in that bank in violation of 18 U.S.C. § 2113(a). We affirm.
The evidence, viewed in the light most favorable to the government, Glasser v. United States, 315 U.S. 60, 80, 86 L. Ed. 680, 62 S. Ct. 457 (1942), showed the following. In 1977 Mittler maintained a personal checking account at a branch of the Chemical Bank in Manhattan in addition to a small business checking account. Pick had a checking account in the Hialeah Springs-Miami First State Bank. In January appellants began kiting checks between their respective accounts. Over the next five months Mittler wrote hundreds of checks on his personal Chemical Bank account to Pick, who then deposited these checks in one of his accounts at Hialeah Bank and wrote checks payable to Mittler in corresponding amounts.
Chemical Bank branch operations officer Edward Miller learned of this activity shortly after it began. Mittler had cultivated a business relationship with Miller, sweetened by gratuitous offerings including cash and tickets to sports events and concerts. In the course of this relationship, Mittler had described plants to increase his own business banking at Chemical Bank and to bring in other business accounts to the branch. Miller, eager for the new business, had initially authorized checks that Mittler drew against uncollected funds.*fn2 Miller notified Mittler that the practice could not continue, however, and Mittler promised that no more checks would be presented against uncollected deposits. Nevertheless, the practice continued, with the number of checks and deposits increasing steadily. Although he frequently complained to Mittler about it, Miller nevertheless continued authorizing payment on the presented checks. Finally, in April, 1977, Miller notified Mittler that his account would be closed unless he stopped writing checks against uncollected deposits.
Meanwhile, officers at the Hialeah Bank had become suspicious. On April 18, 1977, operations officer William David examined the transactions on Pick's account at the Hialeah Bank. He noted that most checks drawn by Pick were payable to Mittler and that Pick was depositing checks from Mittler in matching amounts into his account. The Hialeah Bank decided not to pay the most recent checks drawn by Pick and over the next ten days returned numerous checks made payable to Mittler which Chemical Bank had presented for payment. When Pick was notified by David that his checks were not being paid, Pick covered the Hialeah Bank against any loss with two corporate notes, each for $6,280. Pick closed his account at the Hialeah Bank on May 3, 1977.
At Miller's urging, Miller several times re-presented the returned checks to the Hialeah Bank, which continued to refuse to pay. Finally, on May 12 or 13, 1977, Miller told Mittler that $62,000 worth of checks had been returned to Chemical Bank, an amount in excess of Miller's lending authority. Both Pick and Mittler offered partial payments if Miller agreed to delay reporting the loss to his superiors at Chemical Bank. No payments were forthcoming. Upon learning of the losses, Chemical Bank fired Miller.
In 1980 Pick and Mittler resumed their check-kiting activities, utilizing Pick's account at Chase Manhattan Bank under the trade name Colour-Color, and Mittler's corporate account at Bankers Trust Company in the name of his firm, Dabie Paper Company Inc.
In July, 1980 Pick asked Eugene Schirmer, a branch manager for Chase, to authorize him to deposit as cash into the Colour-Color account checks obtained by Pick from various business firms. Chase collected on these checks without incident, and Pick developed a pattern of depositing as cash checks which Schirmer regularly authorized.
In October, 1980, Pick began depositing as cash checks drawn by Mittler on the Dabie account at Bankers Trust. Over the next six months these cash deposits in Pick's Colour-Color account increased in frequency and dollar amount, while legitimate check deposits decreased. The check-kiting activity reached its peak in the six week period from May 1 to June 15, 1981, when $1.8 million passed through appellants' accounts.
Schirmer had regularly warned Pick that the cash deposit practice would have to stop. Pick claimed a business need for cash, and, beginning in January, 1981, both Pick and Mittler sought to overcome Schirmer's resistance by giving him twenty and fifty dollar bills when Dabie checks were deposited as cash. Schirmer continued to allow Pick to deposit checks as cash.
Meanwhile, Gloria Schrumpf, the Bankers Trust officer responsible for Mittler's account, warned Mittler several times about drawing checks against uncollected deposits. In April, 1981, she told him that Bankers Trust would no longer tolerate the practice. However, Schrumpf left on medical leave at the end of April and did not return until mid-June.
When Schrumpf returned, she learned that Mittler's account showed deposits and checks drawn in identical amounts over a three-day period. Schrumpf notified Mittler that Bankers Trust would no longer accept checks from Colour-Color and returned to Chase $70,000 worth of Dabie checks payable to Colour-Color which had been deposited as cash in the Chase account. At Schrumpf's request, Mittler deposited $125,000 into his account. Bankers Trust returned all checks drawn by Mittler, including an additional $70,000 worth of Dabie checks to Chase and placed his funds in a suspense account. ...