DAVID HAMILTON, District Judge
At the May 21, 2004 hearing on defendants' petitions to plead guilty, the court raised questions as to whether there was a factual basis sufficient to support a conclusion that the defendants committed the charged violations of 18 U.S.C. § 215. The court concluded that the information in this case adequately alleged the elements of the charged offenses. The court questioned, however, whether the factual proffer by the government showed that a crime had been committed. More specifically, the court questioned whether the proffered facts would allow a jury to conclude that the defendants acted "corruptly," as required by 18 U.S.C. § 215(a)(1) (2). The government and a newly-appointed attorney for defendant Bourne submitted briefs on the type of evidence needed to satisfy the requirement that the defendant have acted "corruptly." The court has reviewed those briefs, which have been very helpful.
The Federal Rules of Criminal Procedure do not contain a procedure equivalent to the summary judgment procedure available in civil cases. Summary judgment allows the parties to agree to stipulate certain facts and to have the court decide the legal significance of those facts, and/or determine whether there is a sufficient issue of material fact to require a trial. In rare criminal cases, a similar procedure could be useful where there is substantial agreement on the relevant facts. Precedent offers one procedure here short of trial, however, at least if the government does not object to it. In the case of United States v. Risk, 843 F.2d 1059 (7th Cir. 1988), a banker was indicted for violating laws governing the reporting of cash transactions. Judge Barker granted a motion to dismiss the indictment. She made her decision without a trial and essentially on stipulated facts. The Seventh Circuit affirmed that decision and, in effect, treated the factual stipulations as a basis for a Rule 12(b) motion, though it was obviously important that the government had not objected to the procedure until after the court had dismissed the case. See 843 F.2d at 1061 (finding that government objected too late to the procedure, and that district court had acted properly in the "unusual circumstances of this case").
The court believes that in this case, a comparable procedure may be most sensible and most consistent with Rule 2 of the Federal Rules of Criminal Procedure, which provides that the rules are to be interpreted "to provide for the just determination of every criminal proceeding, to secure simplicity in procedure and fairness in administration, and to eliminate unjustifiable expense and delay." If the government objects to the procedure of the motion to dismiss, however, the other option would be a jury trial, which would give the defense the option of filing a motion for judgment of acquittal under Rule 29.
The court therefore proposes the following. Based on the guilty plea hearing and the parties' briefs, the court believes that the parties agree, for purposes of motions practice only, to the facts set forth below, from which the court has removed some of the spin or argument added in the briefs. The court believes the submissions from the guilty plea hearing and the post-hearing briefs amount to a defense motion to dismiss under Rule 12(b) on stipulated facts, as in United States v. Risk. The parties shall advise the court no later than October 18, 2004 whether they agree that the statement of proposed stipulated facts set forth below is correct and sufficient for the court to resolve the case using the variation on Rule 12(b) procedure employed in United States v. Risk, or whether they object to the procedure. If there are objections, the court will confer promptly with counsel and schedule appropriate proceedings.
Proposed Stipulated Facts
1. Defendant Blaine M. Bourne was at relevant times an assistant vice president and loan officer of the Bath State Bank, which is a financial institution within the meaning of 18 U.S.C. § 215 and is located in Franklin County in the Southern District of Indiana. Defendant Phillip P. Lucas was a customer of Bath State Bank.
2. Bourne and Lucas had established an ongoing business relationship in the mid 1990s. Bourne had acted as loan officer on Bath State Bank loans to Lucas for both personal and business purposes. Bourne had also hired Lucas to do general contracting work for Bourne personally.
3. By the spring of 2000, Lucas' financial situation had deteriorated. He had previously reached his loan limit at Bath State Bank when he approached Bourne for another business loan. Bourne told Lucas correctly that his financial situation would prevent bank approval of his latest loan application.
4. Bourne and Lucas then entered into an agreement whereby Bourne would borrow money from the Bath State Bank in his own name, and would then in turn lend that money to Lucas. On March 28, 2000, Bourne obtained a loan of $35,000 from Bath State Bank. An executive vice president of Bath State Bank, senior to Bourne, approved Bourne's loan application. Bourne signed the documents and was legally liable to repay the bank for principal and interest.
5. After the bank issued Bourne a check for $35,000, Bourne wrote a personal check for $35,000 to Lucas' construction company. About six weeks later, on or about May 5, 2000, a check for $40,000 on a Lucas checking account was provided to Bourne and was deposited into Bourne's personal account with a different bank, Star Bank. The $5,000 difference was compensation to Bourne for his role in the transaction. Bourne then paid off the personal loan from Bath State Bank to him in the amount of $35,400.82, which included both principal and interest.
6. At about the time that Bourne repaid the first loan to Bath State Bank, he obtained a second loan in the amount of $30,000, which the bank disbursed on May 5, 2000. The same executive vice president of the bank approved the loan. Bourne signed a 90-day promissory note for the second loan. The next day, Bourne wrote a personal check to Lucas' construction company for $30,000. Again, Bourne was legally liable to repay the bank for principal and interest on his loan from the bank.
7. Approximately two months later, Lucas' financial situation had continued to deteriorate, and Lucas told Bourne that he was not able to pay him back on his second loan. Lucas paid Bourne $3,000 on August 25, 2000, and that payment compensated Bourne for his role in the transaction. Lucas never paid the principal on this second loan from Bourne, but the loan was eventually repaid by a third party who obtained an interest in Lucas' construction company. Bourne repaid Bath State Bank for the principal and interest owed on the bank's second loan to him.
8. In applying for the two loans, Bourne did not make any false statements to the bank. For the purposes of the loans, he wrote only that one was "personal" and the other was "business." The bank did not inquire further about the purposes of the loan because, as the executive vice president who approved both loans to Bourne would testify, Bourne was known and trusted as an officer of the bank. If an outside applicant had sought the same loans, the bank would have sought additional detail about the purpose of the loans. The same bank official would testify that if he had known that Bourne intended to use the loan proceeds to make his own loans to Lucas, the bank would not have made the loans to Bourne.
9. Bourne realized that the bank would not have made the loans to him if he had told the bank specifically that he intended to lend the proceeds to Lucas. Also, Lucas understood that Bourne was borrowing money from the bank, which he was in turn lending to Lucas.
10. Bourne did not have any financial interest in Lucas' construction business. Lucas was not a bank insider such as an officer or director or shareholder. Also, further loans by the bank directly to Lucas would not have violated any legal limits on the amount that could have been loaned to him or his businesses. The bank's reasons for being unwilling to lend more money to Lucas in the spring of 2000 were based solely on whether Lucas was a good credit risk.
11. At the time of the events in question, Bath State Bank had a written code of conduct that provided in part as follows:
1. Conflicts of Interest
All employees, officers, and directors must refrain from any activity or involvement that could lead to a conflict or potential conflict of interest. All employees, officers, and directors should not commence or continue any relationships with
outsiders that might, even by implication, cause embarrassment to themselves or impair the bank's best interest or public position. Employees are to avoid conflicts involving business opportunities which come to their attention as a result of their duties with the bank. . . .
* * *
3. Receipt of Gifts
Gifts to employees from customers generally are intended as sincere expressions of friendship and appreciation based on the personal relationships that often develop in the normal conduct of business. Nevertheless, substantial gifts ($50.00) or more of any kind, whether in the form of food, merchandise, unusual discounts, entertainment or the undue use of customer or supplier facilities should be courteously declined as contrary to policy. Any doubt about the proper course of action should be discussed with thee employee's department head.
The parties should note, the court is not asking the defendants to stipulate to the foregoing facts for purposes of trial, if a trial should occur. The question for the parties is whether they are willing to stipulate to the foregoing facts for purposes of a Rule 12(b) motion substantially similar to the procedure used in United States v. Risk.
So ordered.