                                    ___________

                                    No. 95-2240
                                    ___________

Steven C. Willis,
                                         *
              Appellant,                 *
                                         *    Appeal from the United States
     v.                                  *    District Court for the
                                         *    District of South Dakota.
United States of America,                *
                                         *
              Appellee.                  *
                                    ___________

                     Submitted:     March 15, 1996

                           Filed:   July 1, 1996
                                    ___________

Before FAGG, JOHN R. GIBSON, and WOLLMAN, Circuit Judges.
                               ___________


WOLLMAN, Circuit Judge.


     Steven C. Willis was tried for bank fraud, found guilty on all
counts, and sentenced to two concurrent terms of thirty-six months'
imprisonment and to thirty-six months' supervised release.        He was also
ordered to pay restitution in the amount of $23,806.74.        We affirmed his
conviction on direct appeal.        United States v. Willis, 997 F.2d 407 (8th
Cir. 1993), cert. denied, 114 S. Ct. 704 (1994).


     Thereafter, Willis brought this section 2255 motion, which the
district court1 referred to a magistrate judge.2         The magistrate judge
recommended dismissing Willis's motion without an evidentiary hearing.     The
district court accepted that recommendation and entered an order denying
the motion.    Willis now appeals from that




     1
     The Honorable Richard H. Battey, United States District Judge
for the District of South Dakota.
         2
       The Honorable Marshall P. Young, United States Magistrate
Judge for the District of South Dakota.
order, arguing by way of alternative relief that the order be reversed and
the case remanded for an evidentiary hearing.


                                    I.


     Willis is a well-educated man.       He holds degrees in law (J.D.) and
business (M.B.A.) and is a certified public accountant.      The scheme that
led to Willis's conviction began with his formation of a partnership called
Rec Co, with Steve Ettles and Charles Hopp, for the purpose of purchasing
a Sioux Falls bowling alley.


     Willis's and Hopp's share of the purchase price was financed by First
Federal Savings Bank (First Federal), where Ettles worked as a loan
officer.   The deception began immediately upon the formation of the
partnership when, contrary to bank policy, Ettles failed to inform the bank
of his affiliation with Willis and Hopp before extending loans to them.


     The deception escalated when the partnership began to experience
financial difficulties and Ettles became reluctant to loan more of First
Federal's money directly to the partnership.       The three partners began
recruiting friends and employees to borrow additional money for Rec Co's
benefit.   The partners then guided the borrowers through the application
process, using Ettles' position at First Federal to ensure that the
applications would be successful.   The nominee borrowers had no intention
of personally repaying the loans; they simply allowed the partners to use
their names and financial information to obtain the loans.   To conceal from
First Federal the true purpose of these loans, false information was
provided on the loan application forms.


     The nominee borrowers were assured that the true beneficiaries of the
loans, Rec Co or the partners, would repay the loans.        Some borrowers
received kickbacks for their role in obtaining money for Rec Co.    When the
loans became due and the partners could not repay




                                    -2-
as promised, they secured new nominee loans to meet these obligations, thus
driving Rec Co deeper and deeper into debt.           Finally, when several of the
loans became past due and the nominee borrowers began to face repercussions
from the outstanding loans, the bank was alerted to the scheme.


       Prior to Willis's indictment, Ettles pleaded guilty to three felony
counts and, pursuant to a plea agreement, agreed to testify for the
government.    Hopp later pleaded guilty to one count of conspiracy to commit
bank fraud and agreed to testify against Willis.


                                          II.


       Willis alleges that he received ineffective assistance of counsel,
arguing that trial counsel failed to conduct an adequate investigation of
Ettles' plea agreement and failed to effectively cross-examine Ettles
concerning that agreement.            On direct appeal, Willis's trial counsel
acknowledged that he knew of Ettles' plea agreement, which on its face
stated that it was the full agreement between the parties.                   He argued,
however, that the government had violated Brady v. Maryland, 373 U.S. 83
(1963), by failing to turn over Ettles' sentencing transcripts, which
showed that the government had dropped eighteen counts against Ettles in
exchange for his plea and further cooperation with the government.                   We
rejected this claim, holding that the government had no duty to turn over
documents that counsel could have discovered by investigating the district
court file.    See Willis, 997 F.2d at 412.         Willis now renews this claim on
collateral attack as the basis for a finding of ineffective assistance of
counsel.


       To prevail on an ineffective assistance of counsel claim, Willis must
show that his attorney's performance was constitutionally deficient and
that   his    right   to   a   fair   trial   was   prejudiced   by   that    deficient
performance.     Strickland v.




                                          -3-
Washington, 466 U.S. 668, 687 (1984).


       We first address Willis's claim that counsel was ineffective for
failing to adequately cross-examine Ettles.       Counsel's cross-examination,
which spans forty-two pages of the record, provided the jury with a
detailed picture of where Ettles' loyalties lay.     Counsel began by inducing
Ettles to admit that he had refused to speak with an investigator sent by
Willis's counsel before trial because he did not want to give the defense
"any   ammunition."   He   further   questioned   Ettles   regarding   his   plea
agreement, eliciting an admission from Ettles that his guilty plea involved
charges unrelated to his partnership with Willis.          Willis's attack on
counsel's cross-examination in substance boils down to counsel's failure
to follow up his questions concerning the plea agreement with the question,
"Isn't it true that if you do not testify as the government wishes, you
might be subject to prosecution for claims that have been dropped?"          Even
if an affirmative answer to this question would have been certain, and it
is not a foregone conclusion that it would have been, counsel's failure to
ask it is not the type of error, if indeed it was error at all, that the
Sixth Amendment functions to correct.      In hindsight, there are a few, if
any, cross-examinations that could not be improved upon.      If that were the
standard of constitutional effectiveness, few would be the counsel whose
performance would past muster.        Accordingly, we conclude that trial
counsel's cross-examination did not fall short of effective assistance.


        Turning to the failure-to-investigate claim, on direct appeal we
characterized counsel's actions as a "fail[ure] to exercise diligence in
investigating the file."     Willis, 997 F.2d at 413.      We need not decide
whether this failure rose to the level of constitutionally deficient
performance, because we find, as we will discuss below, that even if
counsel's performance was deficient, Willis was not prejudiced by it.        See
Schneider v. Delo, No. 95-2969, slip op. at 3 (May 30, 1996).




                                     -4-
     To establish prejudice, Willis must show that counsel's alleged
errors were "so serious as to deprive defendant of a fair trial, a trial
whose result is reliable."    Strickland, 466 U.S. at 687.


     Willis attempts to characterize the trial as a simple credibility
contest between himself and Ettles--Ettles claiming that Willis had
knowledge of the fraud, and Willis claiming that he did not.   Willis argues
that despite counsel's exhaustive cross-examination of Ettles, further
impeachment of Ettles would likely have tilted the credibility balance in
Willis's favor by alerting the jury to the possibility that the dropped
charges could have been revived had Ettles not cooperated sufficiently.
Although Willis's intent to defraud was a key issue at trial, his claim
that this issue turned entirely on his and Ettles' testimony is belied by
the record, which contains other evidence of Willis's knowledge of and
participation in the fraud.


     For example, Ettles' testimony that Willis had knowingly falsified
loan documents was supported by Becky Hewitt, one of the nominee borrowers
and an employee of Willis's drycleaning business.     Hewitt testified that
Willis brought the loan application to her to sign and paid her $250 for
her role as nominee borrower.   The loan application submitted to the bank
contained false information, which Hewitt denied providing, including false
entries regarding her income, savings, the value of her house, and the
purpose of the loan.   A handwriting expert identified some of false entries
as being in Willis's handwriting.


     Moreover, additional evidence supports Ettles' testimony that Willis
knew of the fraudulent nature of the irrevocable letters of credit that
were prepared by Ettles without the bank's knowledge and thereafter
provided to several of the nominee borrowers to induce them to borrow money
for Rec Co.   These letters stated that the bank guaranteed payment of the
loans in the event that the




                                    -5-
beneficiary (Rec Co) failed to pay.       Typically, the bank would provide such
letters only when the loan beneficiary had a line of credit at the bank.
Willis clearly knew that Rec Co had no such credit line with First Federal,
as the company's credit deficiency was the sole reason for the nominee
loans.    Willis's claim that he did not understand the nature of letters of
credit sufficiently to know that these were not legitimate is belied both
by Willis's extensive education and by codefendant Hopp's testimony that
Willis had admitted to him concern over a letter of credit that he had
written to support one of the nominee loans.


     Although Willis argues that his case is the mirror image of Reutter
v. Solem, 888 F.2d 578 (8th Cir. 1989), we think that there are significant
differences between the two cases.        Unlike Reutter, in which the state's
case "depended almost entirely on Trygstad's testimony," 888 F.2d at 581,
the government's case against Willis did not rest almost entirely upon
Ettles'    testimony.    True,   Ettles    was   an   important   witness   for   the
government--indeed, probably the principal witness--but, as pointed out
above, there was other evidence tending to establish Willis's guilt.
Moreover, and most significantly, Ettles had pleaded guilty, had been
sentenced, and was serving time in the penitentiary at the time of Willis's
trial.    There were no more charges to be dropped and no further concessions
to be made by the government in return for his testimony.             In contrast,
unbeknownst to Reutter's counsel, witness Trygstad in Reutter was slated
to appear at a commutation hearing soon after Reutter's trial, a hearing
that was of utmost importance to Trygstad and from which he stood to reap
a specific, substantial benefit depending upon the state's recommendation
to the parole board, a recommendation that could only have been influenced
by the nature of Trygstad's testimony at Reutter's trial.           Thus, Willis's
case is not Reutter redux.


     We conclude, therefore, that the alleged deficiencies in trial
counsel's performance do not undermine our confidence in the jury's




                                      -6-
verdict.


                                             III.


       Willis argues that instruction #11 violated his due process rights,
that   counsel's      failure    to     object   to    this   instruction    amounted   to
ineffective assistance, and that counsel was ineffective for failing to
offer an instruction on good faith.


       Because      Willis    failed    to   challenge    the   contested    portion    of
instruction #11 both at trial and on direct appeal, he cannot obtain relief
on his due process claim unless he shows cause and prejudice for his
procedural default.        See Ried v. United States, 976 F.2d 446, 448 (8th Cir.
1992).       As   cause,     Willis    offers    his   counsel's   alleged   ineffective
assistance.


       Jury instruction #11 reads, in relevant part:


       Intent to defraud a bank exists whenever the defendant acts
       knowingly and the result of his or her conduct would be to
       defraud the bank, regardless of motive. Reckless disregard of
       the interests of the bank is equivalent of intent to defraud.

       A majority of circuits that have addressed the question whether
reckless disregard of the interests of the bank is sufficient to prove
intent to defraud have answered in the affirmative.                See United States v.
Crabtree, 979 F.2d 1261, 1269 (7th Cir. 1992) (holding that reckless
disregard of bank's interests is equivalent to intent to defraud under 18
U.S.C.   §   656,    the     parallel    bank    fraud   statute   applicable    to   bank
employees), cert. denied, 114 S. Ct. 216 (1993); United States v. Hoffman,
918 F.2d 44, 46 (6th Cir. 1990) (per curiam) (same); United States v. Cyr,
712 F.2d 729, 732 (1st Cir. 1983) (same); United States v. Krepps, 605 F.2d
101, 104 (3rd Cir. 1979) (same); United States v. Larson, 581 F.2d 664, 667
(7th Cir. 1978) (same).         But see United




                                             -7-
States v. Adamson, 700 F.2d 953, 965 (5th Cir.) (en banc), cert. denied,
464 U.S. 883 (1983).    Moreover, the minority position articulated by the
Fifth Circuit merely holds that the intent to defraud should not be equated
with reckless disregard.   Rather, the jury should be instructed that it may
infer the intent to defraud from a reckless disregard of the bank's
interests.    See Adamson, 700 F.2d at 965.   As the Adamson dissent points
out, such a distinction is mere semantics, and the chance that it will
influence the outcome of the trial is "so tenuous as to be more meaningful
in the classroom than the courtroom."     Id. at 969.


      In United States v. Beran, 546 F.2d 1316 (8th Cir. 1976), cert.
denied, 430 U.S. 916 (1977), a case involving a violation of 18 U.S.C.
§ 656, we said:


      Criminal intent may be inferred from all the facts and
      circumstances of the case.      It "exists if a person acts
      knowingly and if the natural result of his conduct would be to
      injure or defraud the bank even though this may not have been
      his motive."


Id. at 1321 (citations omitted) (quoting United States v. Schmidt, 471 F.2d
385, 386 (3rd Cir. 1972)).


      The Sixth Amendment right to counsel functions to ensure that
defendants receive a fair trial, not a perfect one.     It does not require
counsel to argue for an instruction that is supported by only a minority
of   circuits and which, in effect, appears to make only a semantic
difference.    Counsel was not ineffective for failing to challenge an
instruction that finds support in our holding in Beran, as well as in the
decisions of the majority of the circuits that have ruled upon the
question.


      Willis contends that his trial counsel was ineffective for failing
to proffer an instruction on good faith.       It is true that good faith
constitutes a complete defense to a charge of fraudulent




                                    -8-
intent and that a defendant is entitled to a good faith instruction where
one has been requested and finds support in the evidence.                   See United
States v. Casperson, 773 F.2d 216, 222-23 (8th Cir. 1985).                    We find,
however, that the instructions in the present case, which set out the
elements of bank fraud and stated that a specific intent to defraud was
required, were adequate to convey to the jury that if it found that Willis
acted in good faith it could not find him guilty of bank fraud.              Moreover,
Willis's counsel asserted this good faith defense repeatedly in his closing
argument, arguing that Willis did not knowingly participate in Ettles'
deception of the bank and thus did not have the requisite intent to
defraud.    Accordingly, counsel's failure to proffer a specific instruction
on good faith did not fall outside the wide range of professionally
competent assistance.       See Strickland, 466 U.S. at 689.


                                          IV.


        We hold that the district court did not err in denying the section
2255 motion.     Likewise, we hold that the district court did not abuse its
discretion in denying the motion without an evidentiary hearing.                   See,
e.g.,    Payne   v.    United   States,   78    F.3d   343,   347   (8th   Cir.   1996).
Accordingly, we deny Willis's alternative prayer that the case be remanded
to the district court for an evidentiary hearing.


        The district court's order is affirmed.


        A true copy.


             Attest:


                      CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.




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