U.S. Eighth Circuit - The FindLaw 8th Circuit Court of Appeals Opinion Summaries Blog

TierOne CEO Conviction Upheld Despite Kitchen Sink Appeal

Gil Lundstrom, the CEO of the now defunct TierOne bank, couldn't convince the Eighth Circuit Court of Appeals to do anything with his conviction, despite seemingly making any and every conceivable argument.

And while it's not uncommon for convicted bigwigs to pull out all the stops in arguing their appeals, Lundstrom's appeal just seemed doomed from the get-go, given that former insiders turned on him. In addition to appealing the denial of his motion for a judgment of acquittal, he challenged the jury instructions, a few pieces of evidence, some other procedural nonsense, as well as the prison term he was ultimately awarded, and the restitution he was ordered to pay.

Details of the Case

Although Lundstrom testified that he never knowingly provided false information to bank regulators, the facts that came out certainly belied his contention. The prosecutors were able to prove that he and his cohorts hid losses to the detriment of shareholders. He attempted to prevent financial information from being released to the board, and even after it was, he attempted to prevent some info from being memorialized by the board, raising serious red flags for shareholders.

Delusions on Restitution

Surprisingly (or maybe not), the banker argued that the court miscalculated the amount of restitution due to the court's failure to account for "market forces." However, the appellate court didn't spend much time while dismissing this convenient contention. It succinctly explained:

Where a defendant's fraudulent conduct enticed victims to enter the market in the first place, the defendant assumes responsibility for their losses, including those resulting from market forces.

Appealing Again?

Given the kitchen sink approach, it would not be too shocking to see Lundstrom attempt to get a panel rehearing, then an en banc rehearing, before finally seeking cert at SCOTUS. But given the number of steps involved, it might just be quicker for Lundstrom to serve the rest of his 11 year sentence, or just skip ahead to having his cert petition denied.

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