State v. Castile ( 2015 )

[Cite as State v. Castile, 2015-Ohio-5121.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
State of Ohio, :
Plaintiff-Appellee, :
No. 15AP-103
v. : (C.P.C. No. 11CR-3857)
Isaac J. Castile, III, : (REGULAR CALENDAR)
Defendant-Appellant. :
D E C I S I O N
Rendered on December 10, 2015
Ron O'Brien, Prosecuting Attorney, and Michael P. Walton,
for appellee.
Carpenter Lipps & Leland LLP, Kort Gatterdam, and
Erik P. Henry, for appellant.
APPEAL from the Franklin County Court of Common Pleas
HORTON, J.
{¶ 1} Defendant-appellant, Isaac J. Castile, III, appeals from a judgment entry of
the Franklin County Court of Common Pleas, resentencing defendant to a total prison
term of thirteen and one-half years. Because the trial court erred by sentencing defendant
on certain felonies of the third degree, we reverse and remand the matter to the trial court
for resentencing.
I. FACTS AND PROCEDURAL HISTORY
{¶ 2} The facts of this case were sufficiently stated in our prior decision in State v.
Castile, 10th Dist. No. 13AP-10, 2014-Ohio-1918 (Castile I), as follows:
On July 21, 2011, a Franklin County Grand Jury indicted
appellant with three counts of securities fraud, in violation of
R.C. 1707.44(G), three counts of false representations in the
No. 15AP-103 2
sale of securities, in violation of R.C. 1707.44(B)(4), three
counts of the sale of unregistered securities, in violation of
R.C. 1707.44(C)(1), and three counts of theft, in violation of
R.C. 2913.02. The charges arose out of different transactions
in which appellant accepted money from three Ohio citizens:
John Prater, Jennette Stevens, and Raymond Smith pursuant
to offerings from the Metropolitan Enhancement Treasure-
Backed Investements, Ltd. ("METBI"). Appellant was one of
the managers of METBI. Appellant entered a not guilty plea to
the charges and proceeded to a jury trial.
At trial, Harvey McCleskey, Enforcement Attorney for the
Ohio Division of Securities ("the division"), testified about his
investigation of appellant. The division's investigation of
appellant began in late 2006 or early 2007 after it received
complaints from out-of-state investors. McCleskey learned of
Prater, Stevens, and Smith during the investigation.
Specifically, Stevens invested $6,000 with appellant in 2006
and received a 10 percent Convertible Subordinated
Debenture from METBI, which is a security that entitled her
to receive her principal plus interest at the end of the stated
term. Prater initially invested $250,000 with appellant for a
similar debenture in 2005 and rolled that investment over for
another year in 2006. Smith invested $5,000 in another
similar investment in 2008.
A Private Placement Memorandum ("PPM") that went along
with the debentures contained details about the investment.
The PPM provided that 100 percent of the proceeds available
after expenses of the offering would be used to purchase
treasury bills which would then be used to acquire bank
guarantees. Those guarantees would be swapped in a
repurchase agreement for fixed rate commercial notes. The
PPM also warned investors that the securities were
speculative and involved a high degree of risk. McCleskey
obtained bank records from appellant and METBI and looked
for purchases of treasury bills in accordance with the PPM.
McCleskey could not find any evidence that appellant
purchased treasury bills with money he received from Prater,
Stevens, and Smith. Upon his review of the financial records,
McCleskey concluded that appellant was collecting money
from investors and using that money to pay off other investors
as well as his own personal expenses in what McCleskey
termed a Ponzi scheme. (Tr. 113-14.)
Each of the three victims testified about making what they
thought were investments with appellant. Although Stevens
No. 15AP-103 3
did receive a small portion of her investment back, neither
Prater nor Smith received any of their investments back.
The jury found appellant guilty of all counts except one of the
theft counts. The trial court sentenced appellant accordingly.
Castile I at ¶ 2-6.
{¶ 3} The trial court's original sentence imposed both consecutive and concurrent
prison terms, for a total term of imprisonment of thirteen and one-half years. In Castile I,
this court concluded that the trial court failed to make the necessary R.C. 2929.14(C)(4)
findings before imposing consecutive sentences. Id. at ¶ 27. As such, we remanded the
case for resentencing.
{¶ 4} The trial court held a resentencing hearing on December 15, 2014. The court
gave defendant a chance to speak, and defendant stated his belief that he was "innocent of
the charges." (Dec. 15, 2014 Tr., 5.) The court reviewed R.C. 2929.14(C)(4), and stated the
statutory reasons in support of consecutive sentences. The court noted that one of the
victims was "a disabled vet," and further noted that, despite defendant's contentions, "the
jury did find him guilty of the circumstances after hearing the witnesses." (Dec. 15, 2014
Tr., 19.) The court found consecutive sentences appropriate, to "really reflect the true
damage [defendant] caused the public in his economic ventures." (Dec. 15, 2014 Tr., 19.)
The court resentenced defendant to a total prison term of thirteen and one-half years.
II. ASSIGNMENTS OF ERROR
{¶ 5} Defendant appeals, assigning the following errors for our review:
[I.] THE TRIAL COURT ERRED CONTRARY TO
APPELLANT'S DUE PROCESS RIGHTS IN SENTENCING
APPELLANT TO FELONIES OF THE THIRD DEGREE AS
TO COUNTS NINE THROUGH TWELVE BECAUSE THE
GENERAL ASSEMBLY INTENDED COUNTS NINE
THROUGH ELEVEN TO BE CATAGORIZED AS FELONIES
OF THE FOURTH DEGREE AND COUNT TWELVE TO BE
CATEGORIZED AS A FELONY OF THE FIFTH DEGREE.
[II.] THE TRIAL COURT ERRED IN IMPOSING
CONSECUTIVE SENTENCES WITHOUT MAKING THE
REQUIRED FINDINGS PURSUANT TO R.C. 2929.14(C)(4)
DEPRIVING APPELLANT OF DUE PROCESS CONTRARY
TO THE FOURTEENTH AMENDMENT TO THE UNITED
No. 15AP-103 4
STATES CONSTITUTION AND CORRESPONDING RIGHTS
UNDER THE OHIO CONSTITUTION.
[III.] THE TRIAL COURT'S SENTENCE WAS CLEARLY AND
CONVINCINGLY CONTRARY TO LAW AND NOT
SUPPORTED BY THE RECORD, AND CONSTITUTED AN
ABUSE OF DISCRETION DEPRIVING APPELLANT OF DUE
PROCESS CONTRARY TO THE FOURTEENTH
AMENDMENT TO THE UNITED STATES CONSTITUTION
AND CORRESPONDING RIGHTS UNDER THE OHIO
CONSTITUTION.
[IV.] APPELLANT WAS DEPRIVED OF THE EFFECTIVE
ASSISTANCE OF TRIAL COUNSEL IN VIOLATION OF
APPELLANT'S RIGHTS UNDER THE FIFTH, SIXTH, AND
FOURTEENTH AMENDMENTS TO THE UNITED STATES
CONSTITUTION, AND SECTION 10 AND 16, ARTICLE I OF
THE OHIO CONSTITUTION.
III. FIRST ASSIGNMENT OF ERROR – FELONY CLASSIFICATION
{¶ 6} In his first assignment of error, defendant asserts that the trial court erred
by imposing a sentence on certain felonies of the third degree. The December 18, 2014
resentencing judgment entry reflects that that jury found defendant guilty of eleven of the
twelve charges listed in the indictment. Pertinent to the instant issue, the jury found
defendant guilty of securities fraud in Count 9, a violation of R.C. 1707.44(G); of false
representation in the sale of securities in Count 10, a violation of R.C. 1707.44(B)(4); of
the sale of unregistered securities in Count 11, a violation of R.C. 1707.44(C)(1); and of
theft in Count 12, a violation of R.C. 2913.02. The court noted in the resentencing entry
that Counts 10 and 12 merged with Count 9 for purposes of sentencing. The court
accordingly sentenced defendant on Counts 9 and 11, imposing a sentence of 18 months
on each count. Both the original sentencing entry and the resentencing entry reflect that
Counts 9 through 12 were all felonies of the third degree.
{¶ 7} Because a defendant "is not 'convicted' for purposes of R.C. 2941.25(A) until
the sentence is imposed," we confine our analysis under this assignment of error to the
convictions in Counts 9 and 11, for violations of R.C. 1707.44(G) and R.C. 1707.44(C)(1).
State v. Whitfield, 124 Ohio St. 3d 319, 2010-Ohio-2, ¶ 24. Effective September 30, 2011,
Am.Sub.H.B. No. 86 amended R.C. 1707.99 and reclassified the applicable degrees of
No. 15AP-103 5
felonies for violations of R.C. 1707.44. The previous version of the law stated that, if the
value of the funds or securities involved in any violation of R.C. 1707.44 was between
$5,000 and $25,000, the offender was guilty of a felony of the third degree. Following
the Am.Sub.H.B. No. 86 amendments, if the value of the funds or securities involved in
a violation of R.C. 1707.44 is between $1,000 and $7,500, the offender is guilty of a
felony of the fourth degree. R.C. 1707.99(B). If the value of the funds or securities
involved in such an offense is between $7,500 and $37,500, the offender is guilty of a
felony of the third degree. R.C. 1707.99(C).
{¶ 8} In their verdict finding defendant guilty on Count 11, the jurors found that
the value of the funds or the securities involved in the offense was between $1,000 and
$7,500. (R. 100.) Similarly, in their verdict on Count 9, the jurors found that the value of
the funds or the securities involved in the offense was between $1,000 and $7,500. (R.
98.) Thus, R.C. 1707.99(B) instructs that Counts 9 and 11 were both felonies of the
fourth degree. Although defendant committed the conduct under each count prior to the
September 30, 2011 effective date of Am.Sub.H.B. No. 86, he was sentenced after that
date. As such, the trial court had to sentence defendant pursuant to the amended
version of the statute. See State v. Taylor, 138 Ohio St. 3d 194, 2014-Ohio-460, ¶ 1-4
(concluding that a defendant must benefit from the decrease in a classification and
penalty of an offense enacted by the General Assembly, if the newly enacted statute
becomes effective before the defendant is sentenced); R.C. 1.58(B); State v. Gillespie,
5th Dist. No. 2012-CA-6, 2012-Ohio-3485 (finding error as the trial court convicted the
defendant of a fifth degree felony, and Am.Sub.H.B. No. 86 had reclassified the offense
to a first degree misdemeanor).
{¶ 9} Thus, on Counts 9 and 11, defendant was convicted of a higher
classification of felony than the law permits. As such, defendant asserts that this matter
should "be remanded to the trial court for resentencing" and, notably, the state
"concedes error" on this issue. (Appellant's Brief, 12; Appellee's Brief, 2.) Accordingly,
we must remand the matter to the trial court for resentencing. See State v. Underwood,
124 Ohio St. 3d 365, 2010-Ohio-1, ¶ 20 (noting that "sentences that do not comport with
mandatory provisions are subject to total resentencing"). Based on the foregoing,
defendant's first assignment of error is sustained.
No. 15AP-103 6
{¶ 10} Defendant's remaining assignments of error all concern some aspect of his
sentence. Defendant argues that the court did not make the necessary R.C.
2929.14(C)(4) findings, that his sentence is clearly and convincingly contrary to law, and
that his attorney rendered constitutionally ineffective assistance by failing to object to
the trial court's sentence on Counts 9 and 11. Thus, as the remaining assignments of
error all relate to the sentence, our resolution of defendant's first assignment of error
renders the remaining assignments of error moot. See State v. Montgomery, 10th Dist.
No. 13AP-512, 2014-Ohio-4354, ¶ 67 (noting that, as the case was being "remand[ed] for
resentencing, appellant's remaining argument challenging his * * * sentence [was]
moot"). We do note however, that the trial court's findings in support of consecutive
sentences must also be stated in the court's judgment entry. See State v. Bonnell, 140
Ohio St. 3d 209, 2014-Ohio-3177, ¶ 37 (noting that "[i]n order to impose consecutive
terms of imprisonment, a trial court is required to make the findings mandated by R.C.
2929.14(C)(4) at the sentencing hearing and incorporate its findings into its sentencing
entry").
IV. DISPOSITION
{¶ 11} Having sustained defendant's first assignment of error, thereby rendering
defendant's second, third, and fourth assignments of error moot, we reverse the judgment
of the Franklin County Court of Common Pleas and remand the case for resentencing.
Judgment reversed; case remanded.
BROWN, P.J. and SADLER, J., concur.
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