U.S. v. Ross

• Citation: 502 F.3d 521
• Decision Date: 21 September 2007
• Docket Number: No. 05-4469.,05-4469.
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Anthony H. ROSS, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

502 F.3d 521

UNITED STATES of America, Plaintiff-Appellee, v. Anthony H. ROSS, Defendant-Appellant.

No. 05-4469.

United States Court of Appeals, Sixth Circuit.

Argued: June 5, 2007.

Decided and Filed: September 21, 2007.

ARGUED: Myron P. Watson, Cleveland, Ohio, for Appellant. Robert W. Kern, Assistant United States Attorney, Cleveland, Ohio, for Appellee. ON BRIEF: Myron P. Watson, Cleveland, Ohio, for Appellant. Robert W. Kern, Assistant United States Attorney, Cleveland, Ohio, for Appellee.

Before: MARTIN, BATCHELDER, and CLAY, Circuit Judges.

MARTIN, J., delivered the opinion of the court, in which CLAY, J., joined. BATCHELDER, J. (p. ___), delivered a separate opinion concurring in part and dissenting in part.

OPINION

BOYCE F. MARTIN, JR., Circuit Judge.

Defendant Anthony H. Ross appeals his conviction on two counts of bank fraud in violation of 18 U.S.C. § 1344. Defendant challenges (1) the deliberate ignorance jury instruction given by the district court, (2) the government's questioning of defendant regarding his personal bankruptcy petition, (3) the sufficiency of the evidence supporting his conviction, and (4) the district court's finding that the intended loss from the bank fraud scheme totaled $634,300, resulting in a sentence enhancement. For the reasons that follow, we find the district court did not abuse its discretion in giving a deliberate ignorance instruction or in overruling Ross's objection to the government's cross-examination regarding his personal bankruptcy petition, and that the evidence was sufficient to support both convictions for bank fraud. We find, however, that the district court's determination of intended loss at sentencing was in error. Accordingly, we AFFIRM defendant's conviction, VACATE his sentence, and REMAND for resentencing.

I.

1. The Nigerian Counterfeit Check Scam

Defendant Anthony Ross is a residential and commercial real estate broker in Lorain County, Ohio. Ross has been in real estate for approximately twenty years. After graduating from high school, Ross joined the Navy, where he became involved in real estate part time. After receiving an honorable discharge in 1993, Ross became a real estate agent in Lorain County. In 1997, after working as an agent for Realty One for several years, Ross obtained his broker's license and opened his own business, Northshore Realty. At the time of trial, Northshore Realty had eight full-time employees and seven affiliated independent agents. In 2001, Ross became a Certified Commercial Industrial Management (CCIM) specialist, a designation of some renown in real estate, which allowed him to conduct commercial real estate transactions. During his time as an agent in Lorain County, Ross was involved with the Lorain County Board of Realtors and in 2001 was elected its president.

When Ross opened Northshore Realty, he planned to develop and sell houses to low-income residents of Lorain County. Ross created E.A.R. Investors, Inc., which was a general contracting business affiliated with Northshore Realty for the express purpose of building low-income houses. Ross obtained financing through FirstMerit Bank and also from family and friends who invested between $15,000 and $20,000 in the project. Between 2001 and 2002, Ross sold 18 of these homes. Unfortunately, he was never able to return a profit on them, and suffered a financial loss. Throughout 2002, FirstMerit repeatedly reminded Ross to make timely payments on his credit line. In 2003, FirstMerit foreclosed on his credit line and Ross was unable to repay the loans he obtained from his family and friends. Also in 2003, Ross filed for personal bankruptcy, though his businesses remained intact.

It was during these financial difficulties that Ross met a potential commercial real estate investor. In 2001, Ross was attending a National Realtors' Association convention in Washington, D.C. where he met an individual by the name of Didi Duke. Duke and Ross agreed to develop commercial real estate in Lorain County. Duke offered to gather approximately $12.5 million in investment capital for the proposed project. Upon his return from the conference, Ross memorialized his agreement with Duke in a contract to represent Duke and a "group of investors in a development or an investment of about $12.5 million." Ross and Duke corresponded several times over the phone before agreeing to enter into this contract, and Ross had his attorney review the contract prior to signing it. Testimony at trial did not, however, provide any insight into the specifics of this alleged commercial real estate transaction other than $12.5 million was to be invested in commercial real estate projects in Lorain County, Ohio.

According to Ross's testimony, after the contract was signed, Duke mailed a $90,000 due diligence check to him. Ross received this check via overnight mail on October 25, 2002. The check was drawn on an Associates Credit Card Services Account with the Bank of New York. The check itself appears to be printed on a British Petroleum check. Upon receipt of this $90,000 check, Ross quickly went to a FirstMerit branch in Oakwood (nearest his office) to deposit it and to get $5,000 cash back. The branch informed him a hold would be placed on a check of that size and he would be unable to receive funds from the check until after the check cleared. Ross then decided to take the check to the FirstMerit branch in Sheffield (nearest his home) because "they [knew him] over there." At the Sheffield branch, Ross was able to gain approval from the manager to deposit the check in his E.A.R. Investors account and to receive $5,000 back. Ross needed the $5,000 in order to make payroll at one of his low-income housing construction sites. A few days later, on October 28, 2002, Ross withdrew another $8,000 from the E.A.R. Investors account in order to have cash for a trip he was taking with his girlfriend (now wife) to New Orleans.

While in New Orleans, Ross's bank card and credit card from FirstMerit were frozen and he was unable to withdraw funds. Ross spoke with an official from the bank who informed him that the $90,000 check he had deposited was counterfeit. Upon his return from New Orleans, Ross contacted Duke to inquire about the counterfeit check. Duke informed Ross that his investors were no longer interested in investing in the United States after the events of 9/11 and had backed out of the transaction. Ross's accounts at FirstMerit remained frozen through the time of trial. Ross's financial difficulties subsequently proved too much to bear, and he filed for personal bankruptcy under Chapter 7 of the Bankruptcy Code on April 18, 2003. Ross was discharged from his bankruptcy on July 29, 2003.

During the summer of 2003, several months after the failed transaction with Duke, Ross was contacted by an individual named Didi Hassan. From May 2003 until sometime in the fall of that year, there were several email and telephonic communications between Ross and Hassan discussing the resurrection of the transaction originally arranged with Duke. Hassan led Ross to believe an individual by the name of Bello from Canada was arranging financing for the deal. Ross spoke with Bello on the phone and provided his personal information for purposes of securing financing.

In June 2003, Ross received via overnight mail a check for $346,990.60 drawn on the account of Gregory Dodge Hyundai Car Dealership in Highland Park, Illinois. Ross believed this check was from Mr. Bello and that Gregory Dodge Hyundai was an investor in the proposed real estate deal. Ross called Gregory Dodge Hyundai to confirm they were actually investors in the deal and discovered the check was counterfeit. Ross mailed the counterfeit check to Gregory Dodge Hyundai at their request.

A few days later, Ross received a Bank of America cashier's check for $5,000. Ross deposited this check in his FirstMerit account, believing it to be money sent from Hassan for the purposes of opening up an offshore account to facilitate the proposed deal. After depositing the check, Ross was contacted by the bank and informed the check was counterfeit. Because Ross had not withdrawn any funds from the check, the bank suffered no loss. Ross informed the bank he was dealing with Nigerians who were interested in investing in Lorain County. Ross shared several emails between himself and Hassan with the bank investigator. The bank investigator informed Ross that this was likely a scam and to stop dealing with Hassan or any other Nigerians. Ross promised to cut off his dealings with Hassan.

From August 2003 until May 2004 there was a break in the email communication between Ross and Hassan. No evidence was presented as to why this break occurred other than Ross's own testimony that he was ignoring Hassan because he was angry about the counterfeit checks.

In the summer of 2004, Hassan contacted Ross again in an attempt to revive the deal with new financing. Hoping to prevent any future counterfeit checks, Ross informed Hassan that he would only accept payment by wire transfer from a United States bank. Hassan agreed to a wire transfer and initiated negotiations with Ace Financial, allegedly based in Chicago, to secure financing in the amount of $700,000. In June of 2004, Ross emailed Hassan stating that he had been contacted by the Chicago financiers about the loan and that the disbursement would occur within seven to ten business days.

On July 15, 2004, National City Bank received an envelope containing a United States Treasury Check for $700,000 payable to A.H. Ross Corp. The account number for A.H. Ross Corp. was typed on the endorsement line on the back of the check. Upon receipt of the check, National City immediately deposited the check in the A.H. Ross Corporation account. No hold was placed on the check as Treasury checks are considered guaranteed funds. At this time, Ross was out of town. When he returned to town on Monday, July 19, 2004, Ross was greeted...