Ponnapula v. Spitzer
| Citation | 297 F.3d 172 |
| Decision Date | 26 July 2002 |
| Docket Number | Docket No. 00-2237. |
| Parties | Murali Krishna PONNAPULA, Petitioner-Appellant, v. Eliot SPITZER, Attorney General of the State of New York; Bernard B. Kerik, Commissioner, New York City Department of Corrections, Respondents-Appellees. |
| Court | United States Courts of Appeals. United States Court of Appeals (2nd Circuit) |
Alexander E. Eisemann, New York, NY, for Petitioner-Appellant.
David J. Mudd, Assistant District Attorney (Robert M. Morgenthau, District Attorney for New York County, and Mark Dwyer, Assistant District Attorney, on the brief), New York, NY, for Respondents-Appellees.
Before: WALKER, Chief Judge, MESKILL, Circuit Judge, and KOELTL, District Judge.1
Petitioner Murali Krishna Ponnapula appeals from the decision of the United States District Court for the Southern District of New York (Jed S. Rakoff, District Judge) denying his petition for a writ of habeas corpus pursuant to 28 U.S.C. § 2254. After a jury trial in the New York State Supreme Court, New York County, petitioner was convicted of grand larceny in the first degree, in violation of New York Penal Law § 155.42, and falsifying business records in the first degree, in violation of New York Penal Law § 175.10, based on his participation in a scheme to obtain a $1.9 million loan by submitting false documents with the loan application.
On appeal, Ponnapula claims that the district court erred in denying his habeas petition because: (1) the evidence was insufficient as to his knowledge and intent to commit larceny; (2) the state court's interpretation of the larceny statute was so unexpected as to violate the fair notice aspect of the Due Process Clause of the Fourteenth Amendment; and (3) the State violated his rights under Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), by failing to disclose impeachment and exculpatory evidence.
The judgment of the district court is affirmed.
Our recitation of the following facts established at petitioner's state trial presents the evidence in the light most favorable to the prosecution. See Fama v. Comm'r of Corr. Servs., 235 F.3d 804, 811 (2d Cir. 2000). Ponnapula played an important role in fraudulently obtaining a $1.9 million loan from the Bank of India ("the Bank"). The scheme was orchestrated by petitioner's brother, Dr. Ponnapula Sanjeeva Prasad. Prasad owned the Prasad Organization, an umbrella organization with several operating entities that purchased hotels for quick resale at a profit. Ponnapula operated three of these hotels and renovated others using his two construction companies. Other employees of the Prasad Organization included Vijay Dandapani, Prasad's first assistant; Mahesh Shetty, the Chief Financial Officer; Pasha Ponnapula ("Pasha"), petitioner's other brother; and Pat White, Dandapani's assistant.
To raise cash to purchase hotel properties, Prasad, Dandapani, Shetty, and White prepared a series of fraudulent applications to obtain loans from six different banks, at times channeling the proceeds of one loan to cover the outstanding balance of the other loans. As detailed below, the $1.9 million loan that served as the basis of petitioner's conviction was part of this overall scheme.
In 1989, the Prasad Organization's main operating entity, the Zurich Corporation ("Zurich"), used proceeds from a loan that was fraudulently obtained from the Bank of Credit and Commerce International to purchase a hotel and an adjacent parking lot near LaGuardia Airport in Flushing, New York. Later that same year, Zurich applied for a $4 million loan, again using falsified documents, from the Bank of India to purchase a hotel in Tennessee ("$4 million loan").
The Bank agreed to lend Zurich the $4 million, but conditioned the disbursement of the proceeds on Zurich first repaying its existing $3 million debt to the Bank. In order to satisfy this requirement, Prasad decided to take out a $1.9 million loan from the Bank using the parking lot near LaGuardia Airport as collateral.
Because the $1.9 million loan would push Zurich's credit above the company's limit with the Bank, Prasad took several steps to mask his and Zurich's involvement in the loan application. The loan would be taken out in the name of Hospitality Realty Corporation ("HRC"), a shell corporation of the Prasad Organization that was legally distinct from Zurich. Prasad split the titles of the hotel and the parking lot and, in January 1990, transferred the parking lot from Zurich to HRC. To avoid listing Prasad as a stockholder or officer of HRC, Dandapani and Prasad designated Ponnapula as both one hundred percent stockholder and president of HRC. They chose Ponnapula because he had "a real company" and "had a better ability [than Pasha] to field any questions." Finally, because Prasad's first name is Ponnapula, petitioner's name appeared on the loan application documents as "Murali Krishna," rather than "Murali Krishna Ponnapula."
Dandapani, Shetty, and White prepared the loan application package on behalf of HRC, including a false representation about HRC's experience in acquiring and renovating hotels and an inaccurate personal financial statement for Ponnapula that reflected his personal worth to be over $2 million. Dandapani forged petitioner's signature on both the application and the personal financial statement.
Dandapani later informed Ponnapula that he was listed as the borrower on the loan but that "it was a Dr. Prasad loan." Dandapani advised Ponnapula that his last name had been omitted from the documents to prevent the Bank from discovering his relationship with Prasad. Furthermore, Dandapani told Ponnapula that a personal financial statement had been submitted on his behalf, but did not tell him that the value of his personal wealth had been exaggerated. Dandapani also warned him that the Bank had been told that the purpose of the loan was to purchase the parking lot, a lot that Ponnapula knew HRC already owned. Finally, Dandapani told Ponnapula to expect calls from the Bank regarding the loan.
After the loan application had been submitted, the Bank requested more information with respect to Ponnapula's personal finances. Accordingly, Dandapani and Ponnapula met with Ponnapula's personal banker, David Moore of Northwest Georgia Bank, and requested that he act as a reference. Subsequent to this meeting, Moore sent a reference letter to the Bank on behalf of HRC and Ponnapula.
The Bank approved the loan for the purpose of providing working capital for the operation of the parking lot. According to the bank officer who evaluated the loan application, his decision to approve the loan was based on a "package of factors," including petitioner's personal guaranty, his reported personal worth of $2 million, and HRC's alleged activity in renovating and acquiring hotels.
After the loan was approved, Ponnapula and Dandapani traveled to New York for the closing. At the closing, Dennis Krasner, an attorney for the Bank, handed Ponnapula documents from the closing binder one at a time and identified each document for him. Ponnapula looked at the documents, but did not read them, and then signed them as "Murali Krishna." In his capacity as president of HRC, Ponnapula signed various papers, including: (1) a loan agreement, stating that the loan proceeds would be used by HRC to operate the parking lot; (2) a promissory note; and (3) a letter directing the proceeds to be disbursed to HRC. In his personal capacity, Ponnapula signed a guaranty for $1.9 million and an affidavit stating that he was familiar with the property and that he was president of HRC.
After the closing, the loan proceeds were disbursed to HRC. As planned, the funds were immediately transferred to Zurich and used to pay down the $3 million owed to the Bank. Zurich thereafter received the $4 million loan from the Bank.
In September 1990, HRC fell behind on the interest payments to the Bank. At about the same time, Dandapani told Ponnapula to direct any inquiries from the Bank regarding the default to him or Prasad. In early 1991, Prasad told the Bank that he would assume responsibility for the loan, but Prasad subsequently left the United States and has not returned. The Bank contacted Ponnapula directly by letter and phone on several occasions requesting payment and, after months of failing to respond to the Bank's requests, Ponnapula promised to work on a repayment plan. In the spring of 1992, Dandapani and Pasha proposed separate plans for repayment of the loan, both of which were ultimately rejected by the Bank. After supporting Pasha's plan in a letter dated May 4, 1992, Ponnapula never contacted the Bank again.
By May 1992, after the loan had gone into litigation, approximately $40,000 was paid on the account. After Ponnapula was convicted, the Bank sold its interest in the parking lot and recovered $1.385 million of the $1.9 million loan.
In addition to the evidence directly linking Ponnapula to the $1.9 million loan, the State rebutted Ponnapula's defense of lack of knowledge and intent by presenting evidence at trial that Ponnapula helped Prasad fraudulently obtain three other loans worth millions.
For example, in its application for the $4 million loan that was the catalyst for the $1.9 million loan, Zurich listed one of Ponnapula's construction companies, Majestic Construction ("Majestic"), as a major supplier for Zurich. Although Majestic was not a supplier at all, much less a major supplier, Ponnapula was prepared to "respond as a supplier" if the Bank asked him any questions.
In another loan application submitted in 1990, Dandapani forged Ponnapula's signature on a personal guaranty for a $1.4 million loan from a different bank, the State Bank of India ("$1.4 million loan"). He instructed Pasha to tell Ponnapula that he was listed as...
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