Court Opinion

ID: 4462865
Source: CourtListenerOpinion
Date Created: 2019-12-10 18:00:29.365461+00
Date Added: 2024-06-11T15:02:40.556473
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                             File Name: 19a0607n.06

                                           No. 19-5065

                          UNITED STATES COURT OF APPEALS
                               FOR THE SIXTH CIRCUIT
                                                                                    FILED
 UNITED STATES OF AMERICA,                               )                    Dec 10, 2019
                                                         )                DEBORAH S. HUNT, Clerk
         Plaintiff-Appellee,                             )
                                                         )
                                                                ON APPEAL FROM THE
 v.                                                      )
                                                                UNITED STATES DISTRICT
                                                         )
                                                                COURT FOR THE EASTERN
 RONNIE C. RODGERS,                                      )
                                                                DISTRICT OF KENTUCKY
                                                         )
         Defendant-Appellant.                            )

        Before: GIBBONS, KETHLEDGE, and BUSH, Circuit Judges.

        KETHLEDGE, Circuit Judge. A jury convicted Ronnie Rodgers of participating in a

conspiracy to defraud investors out of millions of dollars. He now challenges the sufficiency of

the evidence supporting his conviction. We affirm.

                                                I.

        In 2007, Ronnie Rodgers started working for Rick-Rod Inc., an oil and gas exploration

company in Kentucky. His brother Rickey was the president and handled field operations; Rodgers

was the primary sales agent. In that role Rodgers cold-called potential investors to sell them

ownership shares in oil wells. He told the investors about Rickey’s supposedly stellar track record

of striking oil and promised that the wells would produce 20, 40, or 60 barrels per day. Some

investors came to Kentucky to tour the wells; Rodgers took them out to dinner to close the sale.

The investors paid between $5,000 and $100,000 in return for a share of the wells and a percentage

of the profits.
No. 19-5065, United States v. Rodgers

       The wells in fact produced little or no oil. When investors asked Rodgers why, he gave

them excuses: bad weather had interfered with oil production; he had been travelling abroad

(though in fact he lacked a passport); or he needed the investor to pay Rick-Rod a “completion

fee” before the wells could begin to produce. But none of that was true. Indeed, a successful oil

well in southcentral Kentucky, where Rick-Rod operated, yielded fewer than 10 barrels per day—

a fraction of what Rodgers had promised.

       More than 175 investors bought shares from Rick-Rod; none of them ever made a profit.

A few got a small percentage of their investment back. For example, one person recouped $2,000

of his $100,000 investment; another got back just $20 of his original $7,500. Many got back no

money at all.

       By 2010, more than 30 people had complained to the Kentucky Department of Financial

Institutions about Rick-Rod. In 2011, the Department sued Rick-Rod for fraud. As part of a

settlement, the Department enjoined Rick-Rod, Rickey, and Rodgers from selling shares of oil

wells in Kentucky for five years. Rickey agreed to pay a $10,000 fine and to disgorge $100,000

in profits; Rodgers agreed to a $6,000 fine and to disgorge $54,000.

       Shortly after the settlement, however, Rodgers created a new company—R & R Plus—to

sell full ownership of wells rather than shares. To that end, Rodgers made the same promises—

and later, the same excuses—as he had before. These investors gave Rodgers larger sums, ranging

from $60,000 to $1,100,000. Just as before, however, none of the investors got their money back.

Meanwhile, throughout both phases of the schemes, Rodgers used the investors’ money as his

own. All together, the investors lost millions.

       In 2017, the government indicted Rodgers for participating in a conspiracy to commit wire,

mail, and securities fraud, in violation of 18 U.S.C. § 371. Twenty-five investors testified at the

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No. 19-5065, United States v. Rodgers

trial. That group alone lost more than $3,000,000. A jury found Rodgers guilty, and the district

court sentenced him to 48 months’ imprisonment. This appeal followed.

                                                 II.

       Rodgers argues that the government lacked evidence to prove that he conspired to commit

fraud. We review de novo the sufficiency of the evidence supporting his conviction. See United

States v. Carson, 560 F.3d 566, 579 (6th Cir. 2009). In doing so, “the relevant question is whether,

after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact

could have found the essential elements of the crime beyond a reasonable doubt.” Jackson v.

Virginia, 443 U.S. 307, 319 (1979).

       “To sustain a conspiracy conviction, the government must prove an agreement between

two or more persons acting together in committing an offense, and an overt act in furtherance of

the conspiracy.” United States v. Faulkenberry, 614 F.3d 573, 584 (6th Cir. 2010) (internal

quotation marks omitted). “The existence of a conspiracy may be inferred from circumstantial

evidence that can reasonably be interpreted as participation in the common plan.” United States

v. Deitz, 577 F.3d 672, 677 (6th Cir. 2009). Here, the indictment charged Rodgers with conspiracy

to commit wire, mail, and securities fraud; the verdict stands if the evidence was sufficient to prove

that he conspired to commit any of those offenses. See Griffin v. United States, 502 U.S. 46, 56–

57 (1991).

       The evidence here was largely circumstantial, but ample nonetheless. The evidence

included testimony that Rodgers was Rick-Rod’s primary salesman from 2007 until 2011; that

Rodgers told potential investors that their wells would produce vastly more oil than wells in

southcentral Kentucky typically did; and that he continued making those promises after starting R

& R. The jury also heard expert testimony that no “responsible, honest operator” would promise

                                                 -3-
No. 19-5065, United States v. Rodgers

investors quantity of oil production that Rodgers did. There was also evidence that Rickey, for his

part, cashed investors’ checks and typically called the investors with news that their wells had

struck oil; thereafter both brothers would string the investors along with farfetched excuses as to

why the wells were not actually producing oil as promised. Moreover, R & R paid substantial

monies to a cement company controlled by Rickey, in return for little or no work on the wells; and

Rodgers assured R & R’s investors that, if anything happened to Rodgers, Rickey would manage

the wells.

       The testimony of Avner Elizarov was representative of what the jury heard at trial. Elizarov

testified that, in 2013, he emailed R & R in response to an online advertisement. Rodgers invited

Elizarov to Kentucky, showed him a few oil wells, and told Elizarov about Rickey’s supposed

success in the industry. Rodgers also said that, with Elizarov’s investment, Rodgers could more

than double production for five wells. Elizarov sent Rodgers a check for $330,000. When Elizarov

later called Rodgers about the wells, Rodgers told him that a lightning strike had destroyed the

wiring for all the wells, which would delay production by two years. A while later, Rodgers asked

Elizarov for a “pumping fee” to get the wells working. In the end, Elizarov recouped less than

$7,000 of his original investment. Suffice it to say that the jury had sufficient evidence to find that

the brothers agreed to a plan to commit fraud and that they acted in furtherance of that plan.

       Rodgers also argues that any charges based on the Rick-Rod phase of the scheme were

time-barred. The government indicted Rodgers in December 2017; the applicable statute of

limitations was five years, see 18 U.S.C. § 3282, which means that it reached back to December

2012; and Rick-Rod ceased operations in 2011. But the R & R scheme occurred within the

limitations period; and if that scheme and the Rick-Rod one were part of a single, continuing

conspiracy to commit fraud, then the entirety of the indictment was timely. See Grunewald v.

                                                 -4-
No. 19-5065, United States v. Rodgers

United States, 353 U.S. 391, 397 (1957); United States v. Gardiner, 463 F.3d 445, 463 (6th Cir.

2006).

          A rational jury could easily find that both schemes were part of the same conspiracy to

defraud. Although some of the particulars of the two schemes differed—Rick-Rod sold shares,

R & R sold wells; Rickey created Rick-Rod, Rodgers created R & R—the schemes’ fundamentals

were the same: in both Rodgers lied to investors about the wells’ likely production and the reasons

why the wells were not in fact producing. And in both schemes the brothers spent the investors’

money as if it were their own. The jury could therefore find that the schemes demonstrated “a

continuity of purpose and a continued performance,” and were part of the same conspiracy.

Gardiner, 463 F.3d at 463. And that means the indictment was timely. See Grunewald, 353 U.S.

at 397.

          The district court’s judgment is affirmed.

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