Court Opinion

ID: 854191
Source: CourtListenerOpinion
Date Created: 2013-03-04 15:56:39.108443+00
Date Added: 2024-06-11T13:22:22.856961
License: Public Domain

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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