Unpublished Disposition, 931 F.2d 898 (9th Cir. 1983)

Jerry L. Burke was convicted in a jury trial of making a false statement to an agency of the United States, pursuant to 18 U.S.C. § 1001. The District Court for the District of Oregon denied his post trial motion for a judgment of acquittal under Fed. R. Crim. P. 29. On appeal he challenges the denial of his Rule 29 motion and the decision of the court to grant the government's post trial motion, under Fed. R. Crim. P. 36, to correct a clerical error in the record. We have jurisdiction under 28 U.S.C. § 1291 and affirm.

Burke, the President of Emerald Empire Banking Company ("Emerald"), was charged in an extensive indictment with violations of various federal banking laws. This appeal concerns only the charge that in an August 19, 1983 letter from Burke to the Federal Reserve Bank of San Francisco ("Fed"), in response to a July 7, 1983 Examination Report of Emerald, Burke made three false statements.

In February 1983 Fed examiners undertook an review of Emerald's operations. The July 7 Examination Report criticized the bank's operations in several respects. Of particular concern was the relationship between Emerald and Oregon developer Gregory Harsch and his firm, Harsch Construction and Development Company ("HCDC"), which the Fed viewed as posing an unacceptable risk to the financial health of the bank.

Emerald loaned more than three hundred thousand dollars to ten persons for the development of residential properties. HCDC was the contractor in each of these projects and funds were paid directly to HCDC by Emerald. The Fed report alleged that these transactions were carried out in violation of two Oregon banking regulations. The loans violated Oregon Rev.Stat. Sec. 708.068 because the entire loan amounts were paid to HCDC prior to construction of the property and not, as the statute requires, "from time to time during the progress of the construction." The report also alleged that Emerald had violated Oregon Rev.Stat. Sec. 708.305 by lending money to Harsch and persons closely associated with HCDC in excess of statutory limits.

A July 7, 1983, letter from the Fed to Emerald's Board of Directors, accompanying the Report of Examination, asked the Board "to assure that appropriate and necessary steps are being taken to remedy the matters subject to criticisms," and requested the Board's written comments on "the status of, and ... plan for improving and/or liquidating, each classified asset of $10,000 or more ... and actions taken to correct the violations of law shown in the report.

In his August 19, 1983 response, Burke addressed the Sec. 708.068 violations that resulted from the bank's association with HCDC. Burke stated

The violations cited have resulted in the Bank changing it's [sic] procedure on the disbursement of the construction loans. It is now obtaining a builder certification and doing a progress inspection on the construction loans. All but two of the loans listed on the violations have closed into permanent take out loans and the majority of these loans have been sold into the secondary market.

(emphasis supplied) The indictment asserted the response was false in three respects: the bank did not begin "progress inspections"; more than two of the ten HCDC-associated loans has not "closed into permanent take out loans"; and none of the loans were sold into the secondary market.

As an initial matter, Burke challenges a post trial order by the district court, pursuant to Fed. R. Crim. P. 36, amending the clerk's record to reflect the admission, nunc pro tunc, of six government exhibits. The court order indicates that "due to omission or oversight" the record failed to list the six exhibits as having been received in evidence. Under Rule 36, "Clerical mistakes in ... the record ... arising from oversight or omission may be corrected by the court...." We review the decision of the district court to correct the record, pursuant to Rule 36, for clear error. United States v. Bergmann, 836 F.2d 1220, 1221 (9th Cir. 1988).

Burke argues the exhibits, including the Report of Examination and Burke's letter to the Fed in response, were never before the jury. As such, the court could not admit them through a Rule 36 clerical correction to the record. This assertion lacks any substance. The government demonstrated to the district court, and has shown here, the parties treated the six exhibits as having been admitted at the time of the argument on Burke's Rule 29 motion. Indeed, in his Rule 29 argument Burke's counsel made several references to the Report and response letter without any indication of objection to their admission. It is not possible the jury arrived at a verdict on the 18 U.S.C. § 1001 count without making reference to the Report and Burke's response. There is no evidence the failure to indicate the admission of the additional four exhibits was the result of anything other than clerical error by the court. Burke's challenge to the Rule 36 order is therefore rejected.

Burke also appeals from the denial of his post trial motion, under Fed. R. Crim. P. 29, for a judgment of acquittal on the count of making a false official statement in violation of 18 U.S.C. § 1001. We will not disturb a jury verdict if, reviewing the evidence in the light most favorable to the prosecution, "any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." United States v. Adler, 879 F.2d 473, 495 (9th Cir. 1988) (citation omitted).

To establish a violation of 18 U.S.C. § 1001, the government must establish Burke (a) intentionally made a statement within the jurisdiction of the fed; (b) the statement was material (i.e., had propensity to influence Fed action); (c) the statement was false; and (d) appellant knew the statement was false. 18 U.S.C. § 1001; see also United States v. Oren, 893 F.2d 1057, 1063-65 (9th Cir. 1990); United States v. Facchini, 874 F.2d 638, 641-44 (9th Cir. 1989); United States v. Vaughn, 797 F.2d 1485, 1490 (9th Cir. 1986); United States v. Green, 745 F.2d 1205, 1208 (9th Cir. 1984). Burke challenges the sufficiency of the evidence supporting the last two of these requirements.

His argument at trial, and on appeal, is that each of the three asserted false statements was not actually false, and even if literally untrue, that he believed them to be true. We find there was sufficient evidence for a rational jury to find each of the three statements was false and that Burke knew it was false.

Burke asserts at the time of his letter to the Fed, a loan purchase agreement between Emerald and Island was complete. We believe a rational jury could have found otherwise. The government demonstrated the terms of the Island offer letter were not sufficiently certain to result in a binding contract.

The jury also must have found that Burke knew the loans had not been sold. It could have inferred such knowledge from his extensive involvement in the attempt to complete the Island loan sale deal. The "offer" letter from Island to Emerald is addressed to Burke and therefore he could be charged with knowledge of the contingencies (e.g., inspection of the loans, title insurance) that caused the deal to fall through. The government also introduced the testimony of a lawyer who deposed Burke in civil litigation relating to the failure of Emerald. The attorney testified that Burke acknowledged Island had never purchased the loans, and that it had not done so because "the down payments on the loans were all notes. There was no hard money down on any of the transactions." The jury reasonably could have inferred from Burke's extensive involvement in the attempted deal with Island, and from his deposition statements, that he knew his August 19 statement to the Fed was false.

The judgment below is AFFIRMED.