United States v. Norris , 513 F. App'x 57 ( 2013 )

12-1093-cr
United States v. Norris
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON
OR AFTER JANUARY 1, 2007 IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE
32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED
WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH
THE NOTATION "SUMMARY ORDER"). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY
PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals
for the Second Circuit, held at the Thurgood Marshall United
States Courthouse, 40 Foley Square, in the City of New York, on
the 4th day of March, two thousand thirteen.
PRESENT: RALPH K. WINTER,
DENNY CHIN,
CHRISTOPHER F. DRONEY,
Circuit Judges.
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UNITED STATES OF AMERICA,
Appellee,
-v- 12-1093-cr
DAVID NORRIS,
Defendant-Appellant.
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FOR APPELLEE: RAJIT S. DOSANJH, Assistant United
States Attorney (Brenda K. Sannes,
Assistant United States Attorney),
for Richard S. Hartunian, United
States Attorney for the Northern
District of New York, Syracuse, New
York.
FOR DEFENDANT-APPELLANT: CHRISTOPHER GADOURY (Joel M.
Androphy, on the brief), Berg &
Androphy, Houston, Texas.
Appeal from the United States District Court for the
Northern District of New York (McAvoy, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the judgment of the district court is AFFIRMED.
Defendant-appellant David Norris appeals from a
judgment of conviction entered March 20, 2012, after a jury found
him guilty of bank fraud, in violation of 18 U.S.C. § 1344(2).
Norris was sentenced principally to three years' probation and a
$25,000 fine. We assume the parties' familiarity with the facts,
procedural history, and specification of issues for review.
Norris challenges the sufficiency of the evidence
underlying his conviction. A criminal defendant raising such a
challenge "bears a heavy burden." United States v. Coplan, 703
F.3d 46, 62 (2d Cir. 2012) (internal quotation marks and citation
omitted). While we review such challenges de novo, we "view the
evidence in the light most favorable to the government" and will
affirm the conviction "if any rational trier of fact could have
found the essential elements of the crime beyond a reasonable
doubt." Id. (internal quotation marks and citations omitted).
Norris primarily argues that there was no evidence that
he personally made material misrepresentations to the bank. "The
well established elements of the crime of bank fraud are that the
defendant (1) engaged in a course of conduct designed to deceive
a federally chartered or insured financial institution into
releasing property; and (2) possessed an intent to victimize the
institution by exposing it to actual or potential loss." United
States v. Barrett, 178 F.3d 643, 647-48 (2d Cir. 1999); see 18
U.S.C. § 1344. A conviction under § 1344(2) requires proof of a
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misrepresentation. See United States v. Ragosta, 970 F.2d 1085,
1089 (2d Cir. 1992).
Norris's arguments that he did not personally make any
misrepresentations ignore the fact that he was charged with
aiding and abetting under 18 U.S.C. § 2. "[A] defendant may be
convicted of aiding and abetting a given crime where the
government proves that the underlying crime was committed by a
person other than the defendant, that the defendant knew of the
crime, and that the defendant acted with the intent to contribute
to the success of the underlying crime." United States v.
Hamilton, 334 F.3d 170, 180 (2d Cir. 2003). At the very least, a
rational jury could have concluded beyond a reasonable doubt that
Norris aided and abetted Brian Barber in misrepresenting that he
had personally invested $834,000 in equity capital in the target
business when he had not actually invested anything.
First, it is clear that Barber's underlying
misrepresentation about the equity contribution constituted bank
fraud. "[E]vidence beyond a reasonable doubt that defendants
fraudulently evaded a known down payment requirement . . . is
sufficient to support a bank fraud conviction." United States v.
Brandon, 17 F.3d 409, 426-27 (1st Cir. 1994). Both the bank and
the Small Business Administration required that Barber personally
invest $834,000 in the business as a condition for the loan. See
United States v. Rigas, 490 F.3d 208, 235 (2d Cir. 2007) ("For
those misstatements to be material, . . . they had to be capable
of influencing a decision that the bank was able to make."). To
satisfy this condition at the closing, Barber presented, inter
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alia, a cashier's check for $427,000 and a letter indicating he
had deposited another $400,000 in an escrow account. A third-
party affiliated with Norris, however, had actually deposited the
$400,000 into the escrow account and, through a series of wire
transfers, the same $400,000 was used to generate the cashier's
check. This sum was returned to its source shortly after the
closing.
Second, there was substantial evidence that Norris
helped create this illusion that Brian Barber had made the equity
contribution. Robert Barber, who was using his son Brian as a
nominee to obtain the loan, testified that Norris took charge of
obtaining the financing for the capital contribution. A
handwritten fax from Norris indicated that he had taken care of
the "down payment" condition for the loan. Joel Thomas testified
that Norris played a role in procuring the fraudulent letter
about the amount in escrow. The escrow agent testified that
Norris was involved with all of the wire transfers in and out of
the escrow account. Norris even told the SEC that he helped
obtain a "bridge loan" for Brian Barber, which was allegedly
repaid shortly after closing.
Finally, a jury could reasonably find that Norris had
the specific intent to victimize the bank. Under our precedent,
"[t]he government had to prove beyond a reasonable doubt that
appellant intended to expose the bank[] to losses." United
States v. Nkansah, 699 F.3d 743, 749 (2d Cir. 2012). Failing to
make a down payment necessarily exposes a bank to a greater risk
of loss, see, e.g., Brandon, 17 F.3d at 427 n.15 (explaining that
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"[d]own payments on a loan decrease the risk of default or
nonrepayment"), and Norris's assistance in avoiding that payment
demonstrates his intent to deprive the bank of this security.
Norris was motivated to sell the company to Robert Barber, even
without obtaining the $834,000 difference in the sale price,
because it was part of his plan to "pump" up the seller's stock
price and then "dump" the stock. To cover up for the missing
difference in the sale price, Norris not only orchestrated wire
transfers to create the false appearance that Brian Barber had
the $834,000 before the closing, but he also arranged for Brian
to sign a phony promissory note after the closing to cover up the
sham. Later, when the FBI began investigating the loan, Norris
fabricated documents showing that the "bridge loan" was actually
provided to Barber in lieu of amounts the seller allegedly owed
his mother. From this evidence, the jury could conclude beyond a
reasonable doubt that Norris knew and intended to expose the bank
to a greater risk of loss by avoiding the equity contribution
requirement.
Norris also argues that the district court erroneously
admitted evidence of the "pump and dump" scheme, his cover-up of
the fraud, and the distribution of the loan proceeds. We review
evidentiary challenges for abuse of discretion. United States v.
Quinones, 511 F.3d 289, 307 (2d Cir. 2007). We conclude this
evidence was relevant and admissible for permissible purposes,
such as to show motive, intent, consciousness of guilt, and
falsity of the misrepresentations. See Fed. R. Evid. 404(b);
United States v. Mickens, 926 F.2d 1323, 1329 (2d Cir. 1991); see
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also United States v. Adkinson, 158 F.3d 1147, 1160 & n.23 (11th
Cir. 1998) (noting that some "evidence that the loans proceeds
were subsequently diverted might be relevant to show that the
now-completed scheme was fraudulent," but that a "mountain of
evidence . . . as to how the defendants spent their 'ill-gotten'
gains" was not (emphasis added)). Furthermore, the district
court's conclusion that the risk of unfair prejudice did not
substantially outweigh the evidence's probative value was not
arbitrary and irrational. See Fed. R. Evid. 403; Quinones, 511
F.3d at 307-08.
We have considered Norris's remaining arguments and
find them to be without merit. Accordingly, we AFFIRM the
judgment of the district court.
FOR THE COURT:
Catherine O'Hagan Wolfe, Clerk
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