State v. Ross

• Decision Date: 21 January 1998
• Docket Number: No. 96-1780,96-1780
• Parties: STATE of Iowa, Appellee, v. Adam ROSS, Appellant.
• Court: Iowa Supreme Court

Page 906

573 N.W.2d 906

STATE of Iowa, Appellee, v. Adam ROSS, Appellant.

No. 96-1780.

Supreme Court of Iowa.

Jan. 21, 1998.

Brent D. Rosenberg of the Rosenberg Law Firm, Des Moines, for appellant.

Thomas J. Miller, Attorney General, Martha E. Boesen and Ray Johnson, Assistant Attorneys General, and William R. Byers, County Attorney, for appellee.

Considered by McGIVERIN, C.J., and CARTER, LAVORATO, ANDREASEN, and TERNUS, JJ.

LAVORATO, Justice.

Adam Ross appeals from convictions and sentences for (1) conspiracy to commit theft by deception, (2) extortion, and (3) aiding, making, establishing, or advertising a lottery. See Iowa Code §§ 706.1, 714.1(3) (conspiracy to commit theft by deception), 711.4 (extortion), 725.12 (lottery) (1993). He seeks to have his sentences and convictions reversed because, as he contends, the district court erred by (1) refusing to instruct the jury that "materiality" is an element of theft by deception, (2) failing to give his theory of defense instruction on the elements of theft by check, and (3) admitting hearsay statements. In addition, Ross contends the admission of the hearsay statements violated his right of confrontation under the Sixth Amendment to the federal Constitution. Finding no merit in any of these contentions, we affirm.

I. Background Facts and Proceedings.

On September 22, 1993, Rita Hierstein tried to cash some certificates of deposit she had with the Brenton Bank in Waukee. At the time, Rita was in her eighties. Linda Pound, a bank employee, told Rita that she would be penalized for an early withdrawal. In response, Rita expressed concern about her ability to cover checks she had written and was not sure she could stop payment on the checks.

Pound helped Rita stop payment on two checks Rita had written to Family Savings Network (FSN), a telemarketing firm out of Dunwoody, Georgia. One check was for $299 and the other was for $2700.

The checks supposedly covered purchases for products Rita had made from FSN as part of the company's "Say No to Drugs" campaign. The purchases included 100 frisbees and "magnadexes," each embossed with the words, "Just Say No to Drugs." These products were to be donated to Rita's church, St. Boniface Catholic Church in Waukee. As part of the "incentive" for buying these products for $2999, Rita was promised her "fair share" of a "treasure chest" of prizes valued at $300,000. This "fair share" and Ross's efforts to collect on Rita's "purchases" form the subject of the State's subsequent prosecution of Ross.

At the time Rita stopped payment on the checks, she also told Pound that she--Rita--had been receiving "lots of calls" from telemarketers. Pound helped Rita secure a new, unlisted phone number. Pound also put Rita in touch with the Iowa Attorney General's (AG) office.

The very next day--September 23--the AG rerouted Rita's phone calls to its Des Moines office. From that point on, all calls from FSN came into the AG's office and were tape recorded.

Marilyn Rand, a legal secretary in the AG's office, posed as "Rita" when answering the calls. Over the course of several months, Rand spoke with three FSN employees. Two of the three gave fictitious names. Ross posed as two different people, never using his real name.

On September 23 Patrick Pavek, posing as "Patrick Adams," was the first FSN employee to call and talk to Rand as "Rita" following the rerouting of Rita's number to the AG's office. Pavek was an FSN salesperson. He asked "Rita" to write a testimonial for FSN because she would come out "way ahead in the promotion" and told her that the award was only four weeks away. Pavek then asked "Rita" if she had taken care of everything and told her that FSN would send the products to St. Boniface.

The next day Pavek, again posing as "Adams," called "Rita" to wish her a "happy Friday" and to "double check" the spelling and address for St. Boniface. He told "Rita" that the verification department would soon be calling her. Pavek reminded "Rita" about the different categories of awards in the "treasure chest" and that he would "satisfy her and take care of her."

Later, the same day, Ron Riviezzo, FSN's verification manager, called "Rita" to make sure that "Rita" fully understood the terms and conditions of the sale and "award." Riviezzo confirmed the following with "Rita": 100 frisbees and "magnadexes" embossed with "Say No to Drugs" would be sent to St. Boniface Catholic Church; in thirty days she would receive notice of her "treasure chest of awards," which could be anything from "home electronics, fabulous vacations, exotic jewelry, gold coins, and even cash." He told "Rita" the total "pot" was close to $300,000 and that FSN would notify her by phone about her award. Finally, he confirmed with "Rita" that she had made the purchases based upon the merchandise.

On October 1 Ross posing as "Adam Thompson" called "Rita" because FSN had received notice of the stop-payment order. Ross directed "Rita" to get a cashier's check at the bank and to send it by Federal Express to FSN. Ross gave her a toll-free phone number for Federal Express and FSN's account number with the delivery company. Ross told "Rita" he would call back in a short while to confirm that she had arranged for Federal Express to pick up the cashier's check.

Ross did call back. To encourage "Rita," he repeatedly told her she would "get back at least what she put in." His call had an ominous tone as well. He claimed her stop-payment order caused FSN six hours worth of paperwork and may have cost "Patrick Adams" his job. Ross accused "Rita" of writing a "bad check" for which she could be "locked up" because she "broke the law." He also told her to call her lawyer because he would call the police. "Rita" would not relent; she would not send any money until she knew what specifically she had "won."

Three days later, Ross called again, this time posing as "Michael Price" from the accounting department. He told "Rita" he was calling about the merchandise FSN had sent to St. Boniface Catholic Church and the two "bad checks." He said he wanted to clear up the matter. Playing on "Rita's" sense of guilt, he told her of the predicament in which she had placed "Adam Thompson" and that "Adam" might lose his job. In an attempt to secure at least some money, Ross was willing to "come down" from $3000 to $1500, but she would still receive her "fair share" of the "treasure chest." Ross repeatedly resisted telling "Rita" what she had already won. However, he did tell her she was a finalist and implied that if she were one of three winners, she would win $100,000 of the $300,000 "pot." When "Rita" resisted promising to send any money until she knew what she had won, Ross threatened her with lawsuits, criminal prosecution, and public humiliation, saying "you'll be the embarrassment of Waukee, Iowa."

With this, the AG decided to scale up its efforts. Investigator Barbara White learned of Ross's identity and location. On May 13, 1994, she spoke with Johnny Gutierrez, FSN's owner, who was posing as "Tim Andrews" in the customer service department.

Gutierrez defended FSN's legitimacy and asserted that the company prohibited its employees from using aliases. He also explained the sales promotion and said that Rita would have been told that she had won her "fair share" of the "treasure chest." According to Gutierrez this meant Rita would receive one of five prizes but not $100,000 in cash. He asserted the collection efforts in Rita's case were initiated because the products she had purchased had already been sent (they were not). Gutierrez distanced himself from Ross by claiming Ross had quit a year earlier. (In fact, Ross had left less than six months earlier because of a dispute over his compensation.) Gutierrez tried to evade responsibility for FSN by claiming stockholders owned the company.

Six months later, White spoke with Ross. An oblivious Ross explained in detail how he operated while working for FSN and what he did in Rita's case. He told White that despite pitching a "fair share" of a $300,000 "pot," "recipients" would never receive more than what they had sent FSN. Otherwise, he believed FSN would not turn a profit. According to Ross, FSN used whatever funds they received from people like Rita this way: twenty percent of the "winner's" money went to the purchases (in this case the "Just Say No to Drugs" campaign), twenty percent to the prize award, ten percent to the salesperson, and fifty percent to Gutierrez.

Later, the AG charged Ross with conspiracy to commit theft by deception, extortion, and aiding, making, establishing, or advertising an illegal lottery. The jury found Ross guilty of all three charges. The district court sentenced Ross to two five-year indeterminate sentences on the conspiracy and extortion convictions and to a one-year term for the illegal lottery conviction. The court ordered the sentences to be served concurrently. In addition, the court fined Ross a total of $11,000.

Ross appealed from the convictions and sentences.

On appeal, Ross assigns three errors. First, he contends the district court should have instructed the jury that materiality is an element of theft by deception. Second, he contends the district court should have given the jury his requested instruction on theft by check to support his theory of defense to the extortion charge. Last, he contends the district court should not have admitted Gutierrez's statements to White because such statements were inadmissible hearsay and violated Ross's Sixth Amendment right of confrontation under the federal Constitution.

II. Scope of Review.

We review the district court's determination regarding jury instructions for errors at law. See Iowa R.App. P. 4; State v. Breitbach, 488 N.W.2d 444, 449 (Iowa 1992). In the case of hearsay rulings, our review is for correction of errors at law because admission of hearsay evidence is prejudicial to the nonoffering party unless the contrary is...