United States v. McCauley

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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 00-20385
MAX GLEN MCCAULEY
MOHAMED CHENDEKA
Defendants-Appellants
VERSUS
UNITED STATES OF AMERICA
Plaintiff-Appellee
Appeal from the United States District Court
for the Southern District of Texas
June 7, 2001
Before POLITZ and BARKSDALE, Circuit
Judges, and FALLON, District Judge.*
FALLON, District Judge:
Max Glen McCauley and Mohamed
Chendeka appeal their convictions for bank
fraud and conspiracy to commit bank fraud
arguing that the evidence produced at trial
was insufficient to support the jury verdict.
Chendeka additionally challenges the
sentencing enhancement for obstruction of
justice imposed by the district court. We
* District Judge of the Eastern
District of Louisiana, sitting by designation.

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affirm both convictions and Chendeka's
sentence.
I.
In April of 1999, Cornelius Fields and his
sister Latrinda Fields conspired to divert
funds from a Chase Bank account to a
MetroBank account using an unauthorized
electronic wire transfer. Latrinda, an
employee in the accounting department of
Western Atlas International, a division of the
Baker Hughes company, agreed to prepare a
request for the treasury department of Baker
Hughes to wire funds from its Chase Bank
account to the bank account of a false
company. Cornelius was responsible for
obtaining the documentation necessary to
establish a corporation and bank account
able to receive the transfer.
Cornelius Fields contacted his former co-
worker Max Glen McCauley to create the
fraudulent bank account. McCauley solicited
the assistance of Mohamed Chendeka to
execute the scheme. Chendeka introduced
McCauley to his co-worker Derick Jones
who had agreed to prepare the documents
required to create a corporation and a bank
account.2
Jones completed a "doing business as"
(d/b/a) certificate of operation for a sole
proprietorship named "D & M Impex." He
then opened a bank account for D & M
Impex at MetroBank on May 5, 1999. When
a bank employee questioned Jones about the
company, he explained that it had been
operating for one year. Jones also made two
deposits of $100 and $400 with money
provided by Chendeka, McCauley, and
Cornelius and Latrinda Fields.
Jones provided the corporate documents
and bank account information on D & M
Impex to Chendeka who copied the
documents for McCauley.3 McCauley then
delivered the documentation to Cornelius
Fields who in turn provided it to Latrinda
Fields to initiate the wire transfer.
On May 17, 1999, Latrinda Fields
volunteered to facilitate wire transfers from
Baker Hughes' treasury department to Chase
Bank of Texas although she did not normally
handle such transfers. She faxed an invoice
requesting that Baker Hughes transfer
$150,000 for "lost equipment" from its
Chase Bank account to D & M Impex's
MetroBank account.4 The request listed
several serial numbers for the equipment and
included authorizing signatures from other
employees.5 On the basis of the apparently
authorized request, the Baker Hughes
treasury department finalized the wire
transfer and funds were transferred from its
Chase account to the D &M Impex account
2 Chendeka and Jones had previously
discussed starting an import/export business.
Chendeka explained to Jones that his father
would wire money from Africa to fund their
venture if Jones prepared the documents
required to start the company. Chendeka,
however, refused to accompany Jones to
complete the paperwork or to be named on
any of the documents.
3 Chendeka explained to Jones that
his father would wire $150,000 into the
account in one week to begin their business.
4 The wire transfer request
mistakenly listed "D & M Impex
Construction" as the payee.
5 Serial numbers for the equipment
matched numbers listed on a legitimate
invoice Fields had prepared earlier. The
requesting and authorizing signatures were
from employees who testified that they never
signed the document.

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at MetroBank.
With the transfer complete, Cornelius
Fields, McCauley, Chendeka, and Jones
organized to retrieve the money from the
MetroBank account. First, Chendeka and
Jones went to a MetroBank location to
withdraw $25,000 for alleged business
expenses. When Jones submitted a
withdrawal slip, the teller inquired about the
nature of the business, requested
identification, and told Jones that he would
need to speak with the manager before
completing the withdrawal. The manager,
suspicious of the lack of activity in the
account, informed Jones that he could not
access the money unless he received
confirmation from the transferor that he was
entitled to the funds.6
After failing to withdraw $25,000 from
this branch, Chendeka and Jones attempted
to collect $1,000 from another MetroBank
location. Bank employees indicated to
Jones, however, that their computers could
not complete the transaction.
MetroBank, suspicious of these attempts
to withdraw money, contacted Chase Bank
and the FBI about the wire transfer. FBI
agents told MetroBank not to release the
funds to Jones. When Jones returned to
MetroBank with new corporate documents
for "D & M Impex Construction," he was
met by FBI agents, interviewed, and invited
to cooperate in an investigation.
At the request of the agents, Jones
contacted Chendeka and explained that he
had withdrawn the money and wanted to
meet. Jones met Chendeka at a parking lot,
gave him the money, and then FBI agents
arrested both men. After his arrest,
Chendeka agreed to contact Cornelius Fields
and McCauley and arrange a meeting.
Chendeka met Cornelius Fields and
McCauley at McCauley's home where they
all were arrested.
McCauley and Chendeka were tried by a
jury and each convicted of bank fraud and
conspiracy to commit bank fraud. They
moved for acquittal which the district court
denied. McCauley was sentenced to thirty-
three months imprisonment and three years
supervised release, and Chendeka was
sentenced to twenty-four months
imprisonment and three years supervised
release.
Both defendants now appeal their
convictions on the sufficiency of the
evidence. Chendeka also argues that district
court erred by increasing his sentence for
obstruction of justice. We first consider the
challenges to the convictions.
II.
McCauley and Chendeka argue that the
evidence presented by the government was
insufficient to prove beyond a reasonable
doubt that they committed bank fraud and
conspiracy to commit bank fraud.
This Court reviews jury verdicts with
great deference and evaluates "the evidence
in the light most favorable to the verdict and
'afford[s] the government the benefit of all
reasonable inferences and credibility
choices.'" United States v. Odiodio, 99-
11202, 2001 WL 242478, at *2 (5th Cir.
Mar. 9, 2001) (quoting United States v.
Gray, 96 F.3d 769, 772 (5th Cir. 1996)). A
district court's denial of motions for
judgment of acquittal is reviewed de novo.
United States v. De Leon, 170 F.3d 494, 496
6 The manager of MetroBank also
testified that she had received a cryptic
telephone message on May 18, 1999
requesting that funds be released to "D & M
Construction" for shipping and construction
costs. Chendeka later admitted to FBI
agents that he had left the message.

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(5th Cir. 1999).
When considering a challenge to the
sufficiency of the evidence for a conviction,
the Court considers "whether, viewing the
evidence in the light most favorable to the
government, a rational trier of fact could
have found the essential elements of the
offense beyond a reasonable doubt." Id.
"All reasonable inferences from the evidence
must be construed in favor of the jury
verdict." United States v. Martinez, 975
F.2d 159, 161 (5th Cir. 1992) (citing Glasser
v. United States, 315 U.S. 60, 80, 62 S.Ct.
457, 469, 86 L.Ed. 680 (1942)). "An
appellate court will not supplant the jury's
determination of credibility with that of its
own." Id. (citing United States v. Barron,
707 F.2d 125, 127 (5th Cir. 1983)).
Appellants question the government's
proof of intent and of loss, both of which
must be proved beyond a reasonable doubt
to support convictions for bank fraud and
conspiracy to commit bank fraud.
A.
McCauley and Chendeka first argue that
the evidence does not prove that they
knowingly participated in a scheme to
defraud Chase Bank or MetroBank.
McCauley explains that he did not make
misrepresentations to MetroBank to obtain
account information. Chendeka maintains
that his attempts to withdraw money from
MetroBank were not material
misrepresentations.
In order to establish the elements of bank
fraud under 18 U.S.C. § 1344, the
government must prove beyond a reasonable
doubt
that the defendant[s] knowingly
executed or attempted to execute a
scheme or artifice 1) to defraud a
financial institution or 2) to obtain
any property owned by, or under the
custody or control of a financial
institution by means of false or
fraudulent pretenses, representations
or promises.
Odiodio, 2001 WL 242478, at *2. A
scheme to defraud includes using false
pretenses or representations to obtain money
from the institution to be deceived. See
United States v. Doke, 171 F.3d 240, 243
(5th Cir. 1999). "The requisite intent to
defraud is established if the defendant acted
knowingly and with the specific intent to
deceive, ordinarily for the purpose of causing
some financial loss to another or bringing
about some financial gain to himself." Id.
The evidence clearly demonstrates that
McCauley and Chendeka executed or
attempted to execute a scheme or artifice to
defraud a financial institution. McCauley
and Chendeka attempted to defraud Chase
Bank and MetroBank, financial institutions
insured by the Federal Deposit Insurance
Corporation ("FDIC"), by aiding in the
creation of a fraudulent bank account for a
fictitious vendor company. They made false
representations to MetroBank to induce it to
release fraudulently transferred funds. All of
these actions were done in furtherance of a
scheme demonstrated to defraud the banks in
violation of § 1344.
Appellants also contend that the mere act
of instructing a bank to transfer funds is not
a misrepresentation constituting bank fraud
under § 1344(2). In United States v. Briggs,
this Court held that an employee who falsely
represents having the authority to transfer
funds does so under false pretenses in
violation of the statute. See 965 F.2d 10 (5th
Cir. 1992). In the present case, McCauley
and Chendeka participated in a scheme in
which Latrinda Fields misrepresented her
authority to falsify a wire transfer.
Appellants contributed to this conspiracy

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by creating a bank account on behalf of a
fictitious company and by attempting to
retrieve the funds. The evidence
demonstrated that they knowingly
misrepresented information to MetroBank to
influence it to release funds transferred by
Chase Bank. See United States v. Foster,
229 F.3d 1196, 1197 (5th Cir. 2000).
Therefore, we find the evidence sufficient to
support the jury's finding that McCauley and
Chendeka knowingly participated in a
scheme to defraud financial institutions.7
B.
McCauley and Chendeka secondly argue
that neither Chase Bank nor MetroBank
were exposed to civil liability or risk of loss
from the scheme. They explain that the acts
of Latrinda Fields put the funds of her
employer, Western Atlas, at risk rather than
the funds of either bank. Because these
financial institutions never faced civil liability
nor suffered financial losses, appellants
contend that they cannot be found guilty of
bank fraud.
In order to prove bank fraud, the
government must demonstrate that the
defendants placed the financial institution at
risk of civil liability or financial loss and that
the bank was insured by the Federal Deposit
Insurance Corporation. See Odiodio, 2001
WL 242478, at *2 (internal citations
omitted). It is not necessary, however, for
the government to prove that banks actually
suffered civil liability or financial loss in
order to obtain bank fraud convictions. See
United States v. Waldrip, 981 F.2d 799, 806
(5th Cir. 1993) (explaining that "loss need not
be proven to convict a defendant for bank
fraud or making a false statement to a bank"
and evidence that there was no loss is not a
defense to either crime); Briggs, 965 F.2d at
12. Cf. United States v. Sprick, 233 F.3d
845, 853 (5th Cir. 2000) (expressing no
opinion on bank's civil liability when
government failed to offer evidence of
liability when a financial advisor misused
client's funds).
We dismissed the risk of loss argument
made by appellants in United States v.
Briggs when we considered a similar scheme
in which an employee diverted millions of
dollars from a corporate account to a
personal bank account using unauthorized
wire transfers. See 965 F.2d at 11. Briggs,
like McCauley and Chendeka, claimed never
to have made any overt misrepresentations
or false statements to any financial
institution. See id. Yet, Briggs acted
similarly to Latrinda Fields in this case by
failing to disclose her lack of authority to
make the unauthorized transfer. See id.
We found in Briggs that such a scheme
clearly put financial institutions at risk even
though the record may not indicate that they
were actually threatened with civil liability.
See id. at 13. McCauley and Chendeka
participated in a factually similar conspiracy,
and, clearly placed Chase Bank and
MetroBank at a risk of loss. See id.
The government need only prove a risk
of loss to support McCauley's and
7 The evidence also supports the
conspiracy convictions against appellants.
To establish a conspiracy, the government
need prove “(1) an agreement between two
or more persons (2) to commit a crime, and
(3) an overt act committed by one of the
conspirators in furtherance of the
agreement.” United States v. Bruton, 126
F.3d 666, 670 (5th Cir. 1997). The scheme
outlined above and engaged in by appellants
satisfies the elements of a conspiracy under
18 U.S.C § 371 because it included overt
acts by more than one person to transfer and
procure fraudulent funds.

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Chendeka's convictions for bank fraud and
conspiracy to commit bank fraud. See id. at
12-13. We also note that the government
need not prove a substantial likelihood of
risk of loss to support the convictions. See
United States v. Barakett, 994 F.2d 1107,
1111 (5th Cir. 1993) (holding that deposits of
forged checks exposed banks to risk of loss
even though they recovered the funds);
United States v. Saks, 964 F.2d 1514, 1519
(5th Cir. 1992) (holding that fraudulent loan
transaction exposed financial institutions to
risk of loss even though loan was secured);
United States v. Lemons, 941 F.2d 309, 316
(5th Cir. 1991) (finding risk of loss to bank
from forged endorsed check even though
bank suffered no harm); United States v.
Church, 888 F.2d 20, 23-24 (5th Cir. 1989)
(affirming bank fraud conviction for
fraudulent overdrafts although "plan was no
more likely to succeed than a request that the
Bank exchange monopoly money for its face
value in U.S. currency"). Cf. Odiodio, 2001
WL 242478, at *2 (finding no risk of loss
when financial company rather than bank
handled fraudulent instrument).
The government satisfied its burden in
this case by presenting evidence at trial that
Chase Bank lost its ability to earn interest on
$150,000 because the funds were transferred
to MetroBank for more than one day.
Furthermore, Chase Bank and MetroBank
were certainly exposed to a risk of loss
because McCauley and Chendeka aided in
the attempt to withdraw the fraudulently
transferred funds. Because we find the
evidence presented at trial sufficient to
support the jury's verdict, we affirm
McCauley's and Chendeka's convictions for
bank fraud and conspiracy to commit bank
fraud.
III.
Chendeka separately argues that the trial
court erred at sentencing by granting the
government’s request for a two point
increase for obstruction of justice based on
his alleged perjury at trial.8 Chendeka
explains that he was not aware of the
conspiracy and believed that McCauley
requested bank account information from
him to procure a loan for legitimate business
purposes.
The standard of review for findings of
fact in applying sentencing guidelines is
"clearly erroneous." See United States v.
Greer, 158 F.3d 228, 233 (5th Cir. 1998).
The district court sentenced Chendeka to
twenty-four months imprisonment followed
by three years supervised release. Finding
that Chendeka made pretrial statements that
significantly contradicted his trial testimony,
the district court sustained the government's
objection to the presentence investigation
report and accepted a two point
enhancement for perjury pursuant to United
States Sentencing Guideline § 3C1.1.9 We
8 McCauley does not appeal his
sentence.
9 Chendeka's knowledge of the
scheme is indicated by his pretrial
statements. During a tape recorded
conversation between Chendeka, Jones, and
Cornelius Fields, Chendeka stated, "Max
asked me to get the account set up and I set
it up." Govt.'s Ex. 25A at 6. In addition,
Chendeka admitted to FBI agents after his
arrest that McCauley had asked him to
provide an account into which $150,000
could be deposited, that McCauley would
pay him $10,000 once the deposit had been
made, and that Chendeka knew that the wire
scheme was illegal. See Tr. Vol.7 at 131-33,
136-37.

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find that on the basis of Chendeka's
statements before and at trial, the district
court did not commit clear error in sustaining
the government's objection for obstruction of
justice against Chendeka.10 Therefore, we
affirm Chendeka's sentence.
IV.
For the foregoing reasons, we affirm
McCauley's and Chendeka's convictions for
bank fraud and conspiracy to commit bank
fraud as well as Chendeka's sentence.
AFFIRM.
In contrast to his statements before
trial, Chendeka testified at trial that his
understanding and involvement in the
conspiracy was limited to an attempt to
obtain a $15,000 loan from McCauley to
start his business venture with Jones. He
also testified that he believed that McCauley
deposited large amounts of money into the
account to hide them from his wife. See id.
Vol. 8 at 79, 142-43.
10 We note, as did the district court,
that Chendeka's sentence of twenty-four
months imprisonment is within the
appropriate Guideline range regardless of
whether the two point enhancement is
applied to his sentencing recommendation.
See Sent. Tr. at 5.

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