Hastie, Chief Judge, and Freedman and Van Dusen, Circuit Judges. Van Dusen, Circuit Judge (dissenting in part).
Louis Heithaus is here appealing from his conviction on two counts of an indictment wherein he was charged with knowingly making or causing to be made false statements for the purpose of obtaining bank loans insured by the Federal Housing Administration, in violation of Section 1010 of Title 18, United States Code. Each count was based upon a different loan but both involved the same alleged wrongdoers and the same alleged scheme of operation.
Three defendants were convicted in a single trial. Two of them, Heithaus and Sheldon Selikoff, owned and conducted the affairs of a small corporation engaged in the business of finding prospective borrowers and assisting them in obtaining F.H.A. insured loans. The conviction of Selikoff was appealed to this court and affirmed in United States v. Heithaus and Selikoff, 3d Cir. 1967, 377 F.2d 484. We now consider the separate appeal of Heithaus on the same trial record that we reviewed on Selikoff's earlier appeal.
The principal contention of Heithaus is that the record contains no evidence that he had knowledge that false statements were made or contemplated such as would justify submitting the case against him to the jury. Accordingly, we have reviewed the evidence with care.
We have reconsidered and now repeat as fully warranted by the present record the following statement of relevant events as set out in our Selikoff opinion:
"Each loan resulted from essentially the same sequence of events. A codefendant, Racanelli, published a series of advertisements in a White Plains, New York, newspaper soliciting the business of would-be applicants for home improvement loans. The co-defendant would take or send the person who answered the advertisement to Selikoff. Selikoff then asked the prospective borrower questions to obtain information necessary or appropriate for inclusion in a loan application and, as answers were given, he made notations on what was described as a 'work sheet'. In addition, he had the applicant sign a blank application form. There was evidence that the application, thus signed in blank, and the 'work sheet' were then sent to a Michael Goldberg who completed the application and transmitted it to the lending bank. In each case covered by the indictment the completed application contained information substantially different from that which the borrower had given Selikoff with reference to the borrower's circumstances or the purpose for which the loan was desired.
"The bank made each loan by delivering to Goldberg a check payable to the borrower for the amount of the loan. The amount loaned was $3,500 in each case covered by this indictment. When the check reached Selikoff or his business partner Heithaus, one of them would deliver it to the borrower, at the same time requiring the borrower to pay him a fee of $600. There was evidence that $100 of each fee was distributed to Racanelli, $125 to Goldberg and the remaining $375 retained by Selikoff and his business partner." 377 F.2d at 485.
It will be observed that the falsification upon which this conviction is based is evidenced by serious discrepancies between information loan applicants supplied orally to Selikoff and the data Goldberg inserted in application forms signed in blank by the applicants at Selikoff's request. It does not appear that Heithaus participated in this process of preparing loan applications either in the cases involved in this indictment or in any others. In his testimony he described his role as that of making contacts with lending institutions and obtaining credit reports on prospective borrowers. He did admit knowledge of the procedure under which Selikoff obtained the signatures of borrowers on blank loan application forms and forwarded these, with information supplied by the borrowers, to Goldberg for the completion of the applications and their submission to the lending institutions. He added that this was done at Goldberg's request.
Heithaus also knew that he and Selikoff were charging large fees for successfully arranging for loans and that they were sharing these fees with Goldberg. In the case upon which one count is based, he collected the fee.
In Selikoff's appeal, we pointed out that "in some cases the information given Selikoff by the prospective borrower was such as to indicate to a person in the business of handling such transactions that the loan application could not qualify for favorable action. Yet he made no mention of this to the applicants but passed the papers on to Goldberg for completion and submission." This indication of guilty complicity in a fraudulent scheme is lacking in the case of Heithaus who is not shown to have known what data any applicant supplied. All that appears is that Heithaus knew forms signed in blank were being forwarded with relevant information to Goldberg for completion. From this fact and the additional fact that he knew how much applicants were charged and how the money was divided, it is arguable that his participation was such as to make a fact finder suspicious that he may have known more than the record shows. But suspicion falls short of proof beyond reasonable doubt.
The evidence of Selikoff's guilty complicity in preparing false applications, though not overwhelming, was in our judgment sufficient to make the issue a jury question. But the conviction of Heithaus required ...