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United States v. Clark

June 10, 1985

UNITED STATES OF AMERICA, APPELLEE,
v.
BARRY D. W. CLARK, AND ANDREW THOMAS COOK, DEFENDANTS-APPELLANTS



Appeal from judgments of the Western District of New York, John T. Elfvin, Judge, convicting appellants of aiding and abetting a bank officer's misapplication of federally-insured bank funds, 18 U.S.C. §§ 656 and 2, and of interstate transportation of fraudulently taken and converted bank checks, 18 U.S.C. §§ 2314 and 2. Appellant Clark also appeals from a conviction for conspiracy, 18 U.S.C. § 371, and appellant Cook also appeals from a conviction for aiding and abetting the entry of false statements in bank records, 18 U.S.C. §§ 1005, 2. Affirmed.

Author: Mansfield

Before: MANSFIELD and PIERCE, Circuit Judges, and BARTELS, Senior District Judge.*fn*

MANSFIELD, Circuit Judge:

Barry D. W. Clark and Andrew T. Cook appeal from judgments of the Western District of New York, John T. Elfvin, Judge, convicting them after a four-week jury trial of aiding and abetting a bank officer's misapplication of federally-insured bank funds in violation of 18 U.S.C. §§ 656 and 2,*fn1 and of interstate transportation of fraudulently-taken and converted checks of a federally-insured bank in violation of 18 U.S.C. § 2314*fn2 and 2. In addition, Clark appeals from a judgment convicting him after the same trial of conspiracy to commit the foregoing offenses, 18 U.S.C. § 371, and Cook appeals from a conviction for aiding and abetting the entry of false statements in bank records, 18 U.S.C. §§ 1005, 2.*fn3 Appellants' principal claims of error are that the trial judge erroneously instructed the jury as to elements of the crime of willful misapplication of bank funds and that the evidence was insufficient to support their convictions of that crime. We affirm.

The bank officer involved was Charles F. Edmunds, Assistant Vice-President and Manager of the Lockport, N.Y., branch of the Manufacturers & Traders Trust Co. (M&T), a bank insured by the Federal Deposit Insurance Corp. Edmunds was authorized by that bank to lend without any superior's prior approval up to $75,000 of the bank's funds to any individual borrower. The $75,000 limit applied to the aggregate of loans made to any related or affiliated group of borrowers, such as a corporation, partnership, or other business entity and persons controlling or holding an office in it.

Beginning in the summer of 1979 and continuing well into 1980, Edmunds, with the knowledge and participation of Clark and Cook, was induced by them to violate these limits by lending them without supervisory approval bank funds in excess of $75,000 for use by them or their affiliated businesses. The businesses were (1) National Lease Company, in which Clark was one two general partners, (2) Cook, Clark & Co. (CCC), an accounting firm in which Clark and Cook were at one time partners but which no longer included Cook, (3) Summit Metals, a corporation owned and controlled by Clark, and (4) Rutter, Cook, Rutter (RCR), a company in which Cook was one of three partners. Clark and possibly Cook invested some of the loan proceeds in Monex International, Ltd., a non-affiliated company.

In some instances, in order to continue lending money to the defendants, who had exceeded their lending limits, the loans were made to affiliated businesses whose ties to one or the other defendant though known to Edmunds were not revealed in bank records. In other instances, loans were made to Clark and Cook at points when each had less than $75,000 in loans outstanding individually, even though each was ineligible because of loans outstanding to affiliated companies. In still other instances, loans were ostensibly made to friends of Clark and Cook (e.g., Kathy Logan, a secretary employed by National Lease; Jacqueline H. Cuillo, a former secretary for CCC; Andes Contracting, Inc., a dormant company formed by Cook's father, Hubert Cook) with the monies actually going to Clark, Cook or their affiliated business, all ineligible at the time of the loans. In none of the latter instances did the nominal borrowers at any time have the financial resources needed to repay the loans.

The following is schedule of the principal loans, which shows the identity of the person or entity officially represented to the bank as the borrower, the person who signed the papers for the official recipient, the actual recipient of the funds, and the amount:

Officially Named Real

Borrower Date Signatory Recipient Amount

Nat'l 6/22/79 Leventhal Clark & $72,000

Leventhal

CCC 7/11/79 Clark Clark $71,000

Kathy Logan 9/10/79 Logan National $25,000

Lease Co.

Kathy Logan 10/2/79 Logan National $70,000

Lease Co.'s

debts

Clark 11/16/79 Clark CCC loan $75,000

Clark 11/23/79 Clark CCC, Clark & ...


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