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United States v. Hansen

decided: March 2, 1983.


Appeal from the United States District Court for the Northern District of Indiana, Fort Wayne Division. No. 81 CR 28 -- William C. Lee, Judge.

Cummings, Chief Judge, Wood, Circuit Judge, and Hoffman, Senior Circuit Judge.*fn*

Author: Wood

HARLINGTON WOOD, JR., Circuit Judge.

This is an appeal by defendant-appellant Vincent Hansen of his conviction on five counts of misapplication of bank funds in violation of 18 U.S.C. § 656. Hansen argues as grounds for reversal that the district court improperly refused to tender certain jury instructions concerning requisite intent, that there existed a fatal variance between the indictment and proof at trial, that there was insufficient evidence to support a conviction, that the trial court erroneously refused to provide to him certain putatively exculpatory materials in possession of the government, and that the court erroneously admitted a pre-arrest taped conversation between himself and a co-defendant witness. Finding no cognizable error, we affirm.


The facts below were largely undisputed, and the trial mainly centered on the question of Hansen's intent. The evidence showed that in 1979, Hansen, while an employee and before becoming Vice-President of the Allen County State Bank (whose name was later changed to Allen County Bank and Trust), had arranged several business loans from the Bank for his co-defendant, Robert Moeckel, even though the latter had already exceeded his $10,000 borrowing limit. Hansen circumvented this limit by arranging the loans in the names of some of Moeckel's relatives who neither authorized nor were even aware of the use of their names. Simultaneously, Hansen himself began to experience an increased need for cash as a result of a series of personal asset acquisitions including a home purchase, purchase of a quarter interest in the Bank, and the assumption of debt to finance these acquisitions, all of which left Hansen obligated annually for an amount in excess of his yearly income for debt service alone.

Consequently, while serving as Vice-President of the Bank, Hansen conceived and executed in 1980 a scheme of loans to and kickbacks from Moeckel, the series of activities which forms the subject matter of this case. Pursuant to this scheme, Hansen again caused loans to be made to Moeckel in the names of some of Moeckel's relatives and others, none of whom were aware of the use of their names and none of whom received any of the loan proceeds. Moeckel fraudulently signed each of these names to the respective notes with Hansen's knowledge. A portion of the proceeds of these loans was in turn kicked back to Hansen in line with the previous agreement of the co-defendants.

In 1981, Hansen endeavored to get Moeckel and the other fraudulently named loan recipients to execute affidavits disclaiming Hansen's involvement with this scheme. Moeckel signed one such affidavit, but shortly thereafter contacted the FBI and narrated the above events. During the ensuing FBI investigation, Hansen took part in a recorded conversation with Moeckel, the tape of which was introduced into evidence over Hansen's objection.


A. Jury Instructions

Hansen first argues that the trial court erred in refusing to tender two of his jury instructions concerning the proof of intent necessary to support a conviction under 18 U.S.C. § 656. That section reads in pertinent part: "Whoever, being an officer . . . of . . . any . . . insured bank . . . willfully misapplies any of the moneys, funds or credits of such bank . . . shall be fined not more than $5,000 or imprisoned not more than five years or both. . . ." The intent to defraud required to support liability under this section is minimal; it "exists whenever the defendant acts knowingly and the result of his conduct would be to injure or defraud the bank, regardless of his motive. . . . Reckless disregard of the interests of the bank is equivalent to intent to injure or defraud." United States v. Schoenhut, 576 F.2d 1010, 1024 (3d Cir.), cert. denied, 439 U.S. 964, 58 L. Ed. 2d 421, 99 S. Ct. 450 (1978) (emphasis added). Furthermore, whether the Bank actually suffered a loss is immaterial to a Section 656 charge. United States v. Tokoph, 514 F.2d 597, 604 (10th Cir. 1975).

We take note that in reviewing the adequacy of jury instructions, they are to be construed in their entirety and not judged in artificial isolation. United States v. Baskes, 649 F.2d 471, 479 (7th Cir. 1980). Moreover, it is unnecessary to give a proposed instruction where the essential points are covered in another instruction. United States v. Cina, 699 F.2d 853, 863-64 (7th Cir. 1983); United States v. Kirby, 587 F.2d 876, 883 (7th Cir. 1978). We find that the refusal of the proferred instructions here did not in any way truncate the presentation of the defendant's theory of the case.

The first refused instruction stated, "Intent to injure or deceive is an essential element of the offense of misapplication of bank funds and knowledge of violation of bank's [sic] internal rule is not sufficient." Hansen argues that the excision of this instruction harmed his defense by leaving open the possibility that the jury could reason that requisite intent to injure or defraud could be inferred merely from Hansen's violation of the Bank's internal lending limits vis a vis Moeckel, an inference which is impermissible under such cases as United States v. Docherty, 468 F.2d 989, 992, 993 (2d Cir. 1972). This is a most curious objection, since the government's theory of the case and the evidence focussed entirely on the fraudulent use of straw names and the conversion of the funds to Hansen's personal use, not the violation of any of the Bank's lending limits. Moreover, an examination of the entire set of jury instructions makes clear that the jury was adequately admonished that no technical rule violation could serve as a basis for liability without independent evidence of unlawful intent:

To "misapply" a bank's money or property means a willful conversion or taking by a bank employee of such money or property to his own use and benefit, or the use and benefit of another, whether or not such money or property has been ...

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