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United States v. Robichaux

decided as corrected.: July 1, 1993.

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,
v.
EDWARD ROBICHAUX, DEFENDANT-APPELLANT.



Appeals from the United States District Court for the Eastern District of Louisiana. D.C. DOCKET NUMBER CR-91-442-J. JUDGE Patrick E. Carr

Before Wisdom, Davis, and Smith, Circuit Judges.

Author: Wisdom

WISDOM, Circuit Judge.

This criminal case involves mail and wire fraud which led to the failure of an insurance company. We AFFIRM the conviction on all three counts and also AFFIRM the sentence.

I.

Edward Robichaux was the CEO of North American Financial Corporation (NAFC). Edward Street was the CEO of Windmier Financial Services (Windmier). In April 1989, Robichaux and Street formed a joint venture, N.W. Venture.

To fund this venture, Street contributed approximately $13 million in Federal National Mortgage Company securities (FNMAs or "Fannie-Maes"). These securities did not belong to Street but were held in trust by several banks. Street learned the identification numbers of these securities and through this information was able to act as if he had control over these securities. Street's financial manipulations led to his conviction for bank fraud and wire fraud. Robichaux did not pay anything for these securities.

In June 1989, Robichaux attempted to secure a $2.2 million dollar loan from the People's Bank in Biloxi. He proposed to use one of the FNMA's as collateral. On June 8, 1989, Robichaux faxed a letter of guarantee to the People's Bank reflecting that he did own the securities. This conduct forms the substance of count three. The loan was not completed because Robichaux could not produce the securities.

Shortly thereafter, Robichaux entered into an agreement with Gordon L. Rush, who owned Presidential Fire and Casualty Company (Presidential). Robichaux assigned the Fannie-Maes to G.L.R., Inc., (GLR) in exchange for various GLR assets, including GLR stock. GLR then assigned these FNMAs to Presidential as a capital contribution. Without incurring any corresponding debt, Presidential placed the FNMAs on its books. The effect of this assignment was to make Presidential appear to be solvent. Presidential continued to issue insurance policies (and collect premiums) for without this $13 million Presidential would have been undercapitalized and thus barred from any further insurance business.

At this time, Rush wrote personal checks to Robichaux for commissions totaling $86,000, which was funded by Presidential.

On October 2, 1989, Robichaux faxed to the Texas State Board of Insurance (Texas) a letter verifying that approximately $12.78 million in Fannie-Maes was held by NAFC on behalf of GLR, free and clear of any encumbrance. Count two of the indictment is based on this misrepresentation.

In December 1989, the Louisiana Insurance Commission (Commission) retained Deloitte & Touche (Touche) to audit Presidential. Touche asked Robichaux to verify Presidential's ownership of the FNMAs. Robichaux verified that the FNMAs were held by him for GLR by letter on December 18, 1989. Count one of the indictment is based on this verification. Touche relied on Robichaux's verification and issued a favorable audit. On November 12, 1991, Presidential was declared insolvent.

Gordon Rush and Edward Street have been convicted of charges related to Robichaux's. Rush is awaiting sentencing, and Street's appeal is pending before this Court.

Robichaux was indicted on September 13, 1991 for mail fraud (count one) and two counts of wire fraud (counts two and three). After a four day trial, a jury found Robichaux guilty on all counts. The district court sentenced Robichaux to fifty-seven months in jail.

II.

Robichaux raises numerous points of error. We have arranged them in seven categories:

A. 404(b) Evidence.

B. Failure to Disclose Grand Jury ...


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