United States v. Lundstrom - 880 F.3d 423 (8th Cir. 2018)

Rule:

Circumstantial evidence alone can prove the elements of conspiracy, including knowledge. Even when there is no direct proof of a conspiracy, the jury is free to consider all the evidence—direct and indirect—presented of the defendant's statements and actions and they may draw reasonable inferences from the evidence presented about what the defendant's state of mind was when he did or said the things presented in the evidence. Moreover, conspiracy may be implied by the surrounding circumstances or by inferences from the actions of the parties. Similarly, an intent to defraud need not be shown by direct evidence, but may instead be inferred from all the facts and circumstances surrounding the defendant's actions.

Facts:

Gilbert Lundstrom, the former Chief Executive Officer and Chairman of the Board of TierOne Bank, was charged in a thirteen-count indictment with conspiracy to commit wire fraud affecting a financial institution, to commit securities fraud, and to falsify bank entries, 18 U.S.C. §§ 1349, 371; wire fraud affecting a financial institution, id. § 1343; securities fraud; id. § 1348; and falsifying bank entries, id. § 1005. The superseding indictment alleged that beginning in or around 2008, Lundstrom and others at TierOne devised and executed a scheme to defraud the bank's shareholders and to mislead its regulators by concealing millions of dollars in losses related to the failure of certain real estate loans. TierOne's former President and Chief Operating Officer, James Laphen, and former Senior Vice President and Chief Credit Officer, Don Langford, pleaded guilty to their roles in the conspiracy and, along with other witnesses, testified at the three-week jury trial that resulted in Lundstrom's conviction on twelve counts. Lundstrom challenged his conviction. 

Issue:

Were the evidence sufficient to convict Lundstrom of the crimes charged? 

Answer:

Yes.

Conclusion:

The Court noted that circumstantial evidence alone can prove the elements of conspiracy, including knowledge. Even when there was no direct proof of a conspiracy, the jury was free to consider all the evidence—direct and indirect—presented of the defendant's statements and actions and they may draw reasonable inferences from the evidence presented about what the defendant's state of mind was when he did or said the things presented in the evidence. Moreover, conspiracy may be implied by the surrounding circumstances or by inferences from the actions of the parties. In this case, the Court held that the evidence was sufficient for the jury to find beyond a reasonable doubt that defendant possessed the knowledge and intent required to sustain his 12 convictions. The Court further found that the Office of Thrift Supervision's (OTS) reports were admissible as business records under Fed. R. Evid. 803(6) because the reports were created for the administration of the OTS's affairs and not for the purpose of establishing facts at trial. Accordingly, the judgment was affirmed.