Opinion ID: 2717990
Heading Depth: 2
Heading Rank: 1

Heading: The Cashier’s Checks

Text: In September 2008, nine months before bankruptcy, a withdrawal of funds from the “Harold L. Rosbottom Business Account” was used to purchase a cashier’s check for $230,195. Later that month, an additional $1.3 million was withdrawn from the same account and used to purchase a cashier’s check. Rosbottom was remitter and payee on both checks. On March 24, 2009, Tessa Roland, an employee of Rosbottom’s, was instructed to remove $290,000 from a safe, take it to Chase Bank, and use it to purchase a cashier’s check payable to Rosbottom. Roland gave the check to Kisla in the bank’s parking lot. The concealment alleged in Count 3, and the “proceeds of specified unlawful activity” alleged in Count 8, stem from a series of financial transactions that Rosbottom undertook on June 4, 2009—five days before filing for bankruptcy. Rosbottom converted the $230,195 cashier’s check into two cashier’s checks of $115,097.50 each and converted the $1.3 million cashier’s checks into 13 checks of $100,000 each, with himself as payee. He converted the $290,000 cashier’s check into two $145,000 cashier’s checks with Rosbottom as remitter and Nitro Gaming, one of Rosbottom’s companies, as payee; he then converted those two checks into two other $145,000 checks but payable to Rosbottom with Nitro Gaming as remitter. At the end of these transactions and five days before declaring bankruptcy, Rosbottom thus held 3 Case: 13-30071 Document: 00512733084 Page: 4 Date Filed: 08/13/2014 No. 13-30071 17 cashier’s checks, payable to him personally, totaling $1,820,195. None was disclosed on Rosbottom’s personal financial statements in the bankruptcy filings. The false oath counts (Counts 5 and 7) and the money laundering conspiracy count (Count 8) stemmed from Rosbottom’s purchase of a boat and plane with the cashier’s checks.
Twelve of the checks, totaling $1,275,195, were used to purchase a boat, The Bandalwagon. Rosbottom entered into an agreement to purchase the boat on May 18, 2009. CCH Charters (“CCH”), a British Virgin Islands corporation, was then formed to purchase the boat, with Kisla as the sole shareholder. Rosbottom assigned the purchase agreement to CCH on July 6, 2009, and the following day assigned to CCH a $140,000 deposit he had previously made for the purchase of a different boat. The twelve cashier’s checks were deposited into a trust account with CCH’s attorney, and the balance of the sales price ($1,137,506) was paid by wire transfer from that trust account. Rosbottom and his adult son, but not Kisla, attended the closing on July 8, 2009. Allied Marine, who handled the closing, emailed Kisla on September 2009 to explain that CCH had to open a bank account as part of the purchase of the vessel. Kisla replied by email: “I think I understand some of the problem. We are a foreign company, and Harold did not want it traced; so would that mean I need to set up an account in the [British Virgin Islands]?” Rosbottom’s false oath count (Count 5) was based on his testimony under oath at a creditor hearing that Kisla had purchased the boat, in part, with a $550,000 bridge loan from Nitro Gaming and that she used the boat to start a charter company. Rosbottom also answered that he did not know where Kisla got the balance of the purchase price. Kisla’s false oath count (Count 6) was based on testimony she gave under oath about the boat on January 27, 2010. When asked where CCH Charters intended to get the money to purchase the 4 Case: 13-30071 Document: 00512733084 Page: 5 Date Filed: 08/13/2014 No. 13-30071 boat, Kisla testified that “Nitro was going to give a $550,000 bridge loan . . . And the rest came from all of the savings that I had, and my interest in things.” Around this time, Kisla met with Angela Maher, Rosbottom’s comptroller, and instructed Maher to make various entries in Rosbottom company books. An email from Rosbottom on February 4, 2010, confirmed the figures Kisla gave, and Maher made the entries. The entries included at $200,000 commission from Ohio River; salary for Kisla; a $195,000 distribution from Nitro Gaming; and a $130,000 distribution from Gaming Solutions (all LLCs of Rosbottom’s). Maher testified she saw no supporting documentation for these entries.
The other five cashier’s checks were used to purchase a one-half interest in an airplane. Craig Levering, a friend of Rosbottom’s, testified that he approached Rosbottom in April 2009 about jointly purchasing a plane. On June 17, 2009, Rosbottom asked his in-house attorney to form a Texas LLC with the name N73CL, LLC (the name a reference to the tail number of the plane) and two members: Levering Aviation, LLC (owned by Levering), and the newly formed Westwind II, LLC, solely owned by Kisla. The next day, two of Rosbottom’s cashier’s checks totaling $245,000 were deposited into an account of Ohio River, one of Rosbottom’s LLCs. A second deposit of $300,000, consisting of three of Rosbottom’s $100,000 cashier’s checks, was made into another of Ohio River’s accounts that same day. Both deposits, totaling $545,000, were wired the following day into an account owned by Houma Inn, another of Rosbottom’s LLCs. Later that day, Kisla instructed a Rosbottom employee to send two wires totaling $540,000—representing Westwind II’s 50% share of the purchase price—to the North Dallas Bank. The closing for the plane had to occur by June 19, 2009, and occurred that day with Kisla present while Levering was overseas and Rosbottom was hospitalized. Levering and Rosbottom agreed to split the plane’s operating expenses 5 Case: 13-30071 Document: 00512733084 Page: 6 Date Filed: 08/13/2014 No. 13-30071 equally in an account opened for that purpose. Kisla instructed Maher, the Rosbottom comptroller, to wire Rosbottom’s $10,000 share to the account, with the note: “You pick what account… just not harold.” Maher understood this to mean the money was not to come from Rosbottom’s personal accounts, including his “HLR Business Account,” due to the bankruptcy. Levering testified that he offered to buy out Westwind II’s share because Rosbottom rarely used the plane. On October 28, 2009, Levering purchased Westwind II’s share with a Levering Aviation check for $535,851.70, payable to Nitro Gaming. Westwind II was dissolved on November 2. In December, Levering exchanged the check for a cashier’s check payable to Nitro Gaming, which was deposited into Nitro Gaming’s account. Rosbottom’s false oath count (Count 7) was based on Rosbottom’s testimony under oath at a creditor’s hearing in December 2009 that he did not know anything about Westwind II. Rosbottom testified that the creditor’s question may be referring to Nitro Gaming having paid for part of a plane because Mr. Levering was out of the country and that Levering had since reimbursed Nitro Gaming.