As hereinabove mentioned, there can be no serious dispute relative to the falsity of certain information contained in the statement, but whether defendant knew this and still submitted it intending to influence favorable action is another matter.
Knowledge and intent are rarely capable of direct proof and may be inferred from a defendant's conduct, statements, and all surrounding circumstances. Moreover, such circumstantial evidence need not conclusively exclude every other reasonable hypothesis, nor negative all possibilities, except guilt. Holland v. United States, 348 U.S. 121, 75 S. Ct. 127, 99 L. Ed. 150 (1954). In the present case we have a defendant of wide and extensive experience in the home construction industry and its related financial aspects who decided to construct a 200-bed nursing home and formed a separate corporation to accomplish it; who needed to obtain a substantial loan of $1,500,000.00 for this corporation from private lenders in order to finance the same; who had transferred large sums of money from corporate accounts to his private account five days before the loan application was to be submitted to the Association's executive committee; who borrowed $250,000 from Commonwealth National Bank and purchased a like amount of Treasury Bills, which were used as collateral therefor, some four days before the proposed submission; whose corporate loan application had been temporarily held up by the executive committee pending the submission by him of a certified personal financial statement; who, faced with the urgency of the situation and the anticipated delay in obtaining such a statement from his accountant, prepared the statement himself on the advice of the Association's President and who submitted the statement, while the loan application was pending, which contained erroneous information concerning his personal savings account, U.S. Treasury Bills and the amount of U.S. Bonds owned by him that would have the tendency to mislead or deceive others into believing that defendant's net worth was much greater than it was. These events constitute strong circumstantial evidence that defendant knowingly made a false financial statement for the purpose of influencing the approval of the loan. Defendant asserts to the contrary and contends that he transferred the corporate money to his own account because, for more than a month prior to June 30th, he had been in contact with Commonwealth National concerning the purchase of U.S. Treasury Bills and planned to use this cash in that transaction but changed his mind between June 29th and June 30th and decided not to use any cash in this purchase. He ascribed the omission of any reference to this money having been borrowed from his corporations as a "slip up." As to his failure to list the $250,000 note payable to Commonwealth National, defendant testified that he had prepared the Financial Statement in longhand and had left it with his Secretary to be typed and that he had listed this indebtedness but his Secretary inadvertently failed to type it into the statement. To support his assertion defendant produced a handwritten financial statement which he identified as the one he left with his Secretary but its reliability is undermined inasmuch as the $250,000 indebtedness is listed therein as payable to the Fulton National Bank
and not the true obligee, Commonwealth National. Defendant explains this as personal confusion resulting from the fact that he had accounts at both banks. Defendant testified further that he thought he had $80,000 in U.S. Bonds because he had been purchasing and accumulating them for many years. Finally, he explained that he thought he was worth two million dollars on paper and, furthermore, didn't think the Financial Statement was very important because the loan was to be made to the corporation and not to him personally.
However, defendant, with his long and diverse business experience, must have known that the Financial Statement was important. Indeed, he had such forms in his office so that his familiarity with their purpose cannot be minimized. By his own description he was a "one man operation." He was sufficiently knowledgeable in commercial and banking matters to anticipate that he, as the acknowledged owner of the Corporation, may be required to show his personal net worth. His borrowing of the full amount needed to purchase the Treasury Bills was admittedly a losing proposition as the interest on the note would be greater than the yield on the bills. His explanation that he had a credit limit of $80,000 with the Fulton Bank and was interested, as a businessman, in increasing it by the use of Treasury Bills as collateral was unpersuasive. Similarly unpersuasive was his insistence that the transfer of corporate funds to his personal account was in connection with this proposed credit experiment with the bank.
The Federal Government certainly has the right to protect itself from fraudulent statements by enacting legislation requiring that information supplied to such institutions as a Federal Savings and Loan Association be given in good faith and not falsely with intent to mislead. Kay v. United States, supra. It is conduct such as appears in this case that the Statute was designed to cover. After carefully considering all the evidence, I am satisfied that the Government has established defendant's guilt beyond a reasonable doubt.