State v. Kellogg , 2013 Ohio 4702 ( 2013 )

[Cite as State v. Kellogg, 2013-Ohio-4702.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 99455
STATE OF OHIO
PLAINTIFF-APPELLEE
vs.
MARK KELLOGG
DEFENDANT-APPELLANT
JUDGMENT:
AFFIRMED IN PART, REVERSED IN PART,
AND REMANDED
Criminal Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CR-527677
BEFORE: S. Gallagher, J., Celebrezze, P.J., and Rocco, J.
RELEASED AND JOURNALIZED: October 24, 2013
ATTORNEY FOR APPELLANT
Susan J. Moran
55 Public Square
Suite 1616
Cleveland, OH 44113
ATTORNEYS FOR APPELLEE
Timothy J. McGinty
Cuyahoga County Prosecutor
By: Kristen L. Sobieski
Assistant Prosecuting Attorney
Justice Center - 8th Floor
1200 Ontario Street
Cleveland, OH 44113
SEAN C. GALLAGHER, J.:
{¶1} Appellant Mark Kellogg appeals his conviction and sentence on 103 counts
relating to crimes committed in connection with the “Enterprise, a subprime mortgage and
loaning scheme, which led to the foreclosure of twenty-seven homes in the Slavic Village
area.” For the reasons stated herein, we affirm the judgment, except with regard to
restitution. We reverse the amount of restitution ordered and remand the matter to the
trial court for a proper determination in accordance with R.C. 2929.18(A)(1).
{¶2} On September 2, 2009, appellant, along with several codefendants, was
charged under a multi-count indictment with engaging in a pattern of corrupt activity and
related crimes committed in connection with the Enterprise. The indictment alleges that
Kellogg, a mortgage loan officer, acted to secure loans for the purchasers of properties
and perpetrated false and fraudulent loan applications for lender approval. The
indictment also alleges that Kellogg was involved in down-payment schemes, that he
participated in kickbacks and money laundering, and that he aided and abetted in the
illegal acts of the participants of the Enterprise.
{¶3} The indictment refers to 78 loans made by the Enterprise during a three-year
period, the majority of which were the subject of abandonment or foreclosure. However,
only 27 of these properties were designated as “incidents of corrupt activity.” The
indictment listed the total of the loans for the 27 properties designated “incidents of
corrupt activity” as $2,096,000. It also listed the total of the loans for all 78 properties as
$5,831,500. The indictment further states that economic harm was inflicted upon
neighboring properties in Slavic Village, and that Cuyahoga County suffered lost tax
revenues, which resulted from the abandoned or foreclosed properties. On certain
counts, the victims were identified to include all of the lenders for the 78 properties
associated with the Enterprise; the 78 listed properties of the Enterprise, including the 27
incidents of corrupt activity; adjacent and/or neighboring properties; and Cuyahoga
County.
{¶4} Appellant eventually entered a guilty plea to 103 counts of the indictment.
At the time of his plea, the prosecutor indicated the corrupt activity pertained to 27
properties with an aggregate loan loss of $2 million. The court recognized the maximum
fine could be $6 million. In May 2010, the trial court sentenced appellant to a total
prison sentence of 14 years, postrelease control of 5 years, and restitution in the amount
of $5,831,500.
{¶5} Several postconviction motions were filed in the trial court. This court
denied a motion for delayed appeal. Ultimately, on December 27, 2012, the trial court
granted appellant’s petition for postconviction relief, finding that he had not been
apprised of his appellate rights at the time of sentencing, and the court issued an entry
notifying appellant of his right to appeal the sentence.1 Appellant proceeded to file the
instant appeal.
1
Though the issue has not been raised on appeal for review, we note that the appropriate
procedure requires the trial court to reenter the judgment of conviction against the defendant, and
thereby, reinstate the time for filing a timely notice of appeal. See State v. Gover, 71 Ohio St.3d
577, 581, 645 N.E.2d 1246 (1995).
{¶6} Under his first assignment of error, appellant asserts that “the trial court erred
by imposing a sentence which was unduly harsh and not supported by the record.”
Appellant claims that the record is devoid of any justification for imposing a 14-year
sentence, that his sentence was predicated upon improper considerations, and that his
sentence was inconsistent with sentences imposed upon his codefendants.
{¶7} Initially, we recognize that appellant did not object to the alleged errors at the
time of sentencing. Therefore, he has waived all but plain error on appeal. See State v.
Hunter, 131 Ohio St.3d 67, 2011-Ohio-6524, 960 N.E.2d 955, ¶ 152; State v. Maddox,
8th Dist. Cuyahoga No. 99120, 2013-Ohio-3140, ¶ 53. Notice of plain error is to be
taken with the utmost caution, under exceptional circumstances and only to prevent a
manifest miscarriage of justice. State v. Long, 53 Ohio St.2d 91, 372 N.E.2d 804 (1978),
paragraph three of the syllabus.
{¶8} At the time of appellant’s sentencing in 2010, the trial court had full
discretion to impose a prison sentence within the statutory range and was not required to
make findings or give reasons for imposing maximum, consecutive, or more than the
minimum sentences. State v. Foster, 109 Ohio St.3d 1, 2006-Ohio-856, 845 N.E.2d 470,
paragraph seven of the syllabus. 2 The record does not clearly and convincingly
demonstrate that the sentence is contrary to law. R.C. 2953.08(G)(2). Each sentence was
within the statutory range, and the trial court’s sentencing entry reflects that the court
2
On September 30, 2011, Ohio’s General Assembly enacted Am.Sub.H.B. 86, which, in
effect, revived the requirement that trial courts make findings before imposing consecutive
sentences under R.C. 2929.14(C). Appellant’s sentence was imposed pre-H.B. 86.
considered all required factors of law and that the court found prison is consistent with
the purpose of R.C. 2929.11. We are also unable to conclude that the trial court failed to
consider the sentencing factors of R.C. 2929.12, relating to the seriousness of the
offender’s conduct and the likelihood of recidivism.
{¶9} A review of the record shows that the trial court reviewed the presentence
investigation report and the court was apprised of appellant’s low risk for recidivism and
lack of a prior felony conviction. The court indicated its belief that appellant was
unlikely to reoffend. However, the court determined the seriousness of the offenses and
the great economic harm that was caused by appellant’s conduct warranted a prison
sentence.
{¶10} The court heard statements from the prosecution, defense counsel, appellant,
and several victims. Appellant argues that the economic harm caused to Slavic Village
was too remotely associated with him and claims that the state inappropriately implicated
him in the foreclosure crisis and the decline in property values. However, the trial court
specifically indicated that it was “not singling [appellant] out for every problem that
exists here.” Further, the record reflects that appellant’s conduct led to the foreclosure of
at least 27 homes and contributed to the economic harm caused to other homes in Slavic
Village.
{¶11} Appellant also claims the state went beyond the 27 homes that were
designated incidents of corrupt activity and argued that there were 78 properties with a
total loss to lenders of $5,831,500. The prosecutor referenced all 78 properties
associated with the Enterprise as being fraudulent, when only 27 homes were designated
as “incidents of corrupt activity.” Nonetheless, the trial court was aware that the
indictment only listed 27 homes as being incidents of corrupt activity. Also, there was
evidence reflecting that the economic harm caused by appellant’s criminal conduct went
beyond these 27 homes. The trial court sentenced appellant on the counts to which he
pled, and there is nothing to indicate that the prosecutor’s statements altered the length of
the sentences imposed. Thus, we are unable to find that the statements by the prosecutor
impacted appellant’s substantial rights.
{¶12} The trial court sentenced appellant with regard to the 103 counts to which he
pled guilty. While appellant argues that his sentence was inconsistent with the sentences
imposed upon his codefendants, appellant pled to a far greater number of counts than his
codefendants. Appellant pled guilty to over 100 felonies, and his sentence was well
below the statutory maximum. Upon our review, we find no sentencing disparity.
{¶13} We do, however, find the trial court committed plain error with regard to the
restitution amount because the amount ordered was not based on proper considerations or
fully substantiated by the record. R.C. 2929.18(A)(1) authorizes a court to award
restitution as follows:
Restitution by the offender to the victim of the offender’s crime or any
survivor of the victim, in an amount based on the victim’s economic loss.
If the court imposes restitution, the court shall order that the restitution be
made to the victim in open court, to the adult probation department that
serves the county on behalf of the victim, to the clerk of courts, or to
another agency designated by the court. If the court imposes restitution, at
sentencing, the court shall determine the amount of restitution to be made
by the offender. If the court imposes restitution, the court may base the
amount of restitution it orders on an amount recommended by the victim,
the offender, a presentence investigation report, estimates or receipts
indicating the cost of repairing or replacing property, and other information,
provided that the amount the court orders as restitution shall not exceed the
amount of the economic loss suffered by the victim as a direct and
proximate result of the commission of the offense. If the court decides to
impose restitution, the court shall hold a hearing on restitution if the
offender, victim, or survivor disputes the amount. All restitution payments
shall be credited against any recovery of economic loss in a civil action
brought by the victim or any survivor of the victim against the offender.
{¶14} With regard to this provision, the Ohio Supreme Court recently stated as
follows:
R.C. 2929.18(A)(1) gives a sentencing court discretion to order
restitution but not in an amount greater than the amount of economic loss
suffered by the victim as a direct and proximate result of the commission of
the offense. The court may base the amount of restitution on an amount
recommended by the victim, the offender, a presentence investigation
report, estimates or receipts indicating the cost of repairing or replacing
property, and other information. Further, the statute mandates that the court
must conduct a hearing if the offender, victim, or survivor disputes the
amount.
State v. Lalain, 136 Ohio St.3d 248, 2013-Ohio-3093, 994 N.E.2d 423, ¶ 3.
{¶15} In this case, it is apparent that the restitution figure of $5,831,500
coincides with the total loan amount for all 78 houses sold by the Enterprise. However,
this figure did not establish actual loss to lenders. At the time of appellant’s plea, the
prosecutor represented that “the indictment talks about 27 properties, and the aggregate
value of those properties per loan lost is $2 million.” The indictment indicates a figure
of $2,096,000 for these 27 properties. While the state did submit other evidence of
economic loss, the restitution amount awarded by the trial court was not based on “the
amount of economic loss suffered by the victim as a direct and proximate result of the
commission of the offense.” Thus, we must remand the matter to the trial court for a
proper determination of restitution in accordance with R.C. 2929.18(A)(1).
{¶16} Appellant’s first assignment of error is sustained only as to the amount of
restitution ordered, and is otherwise overruled.
{¶17} Under his second assignment of error, appellant asserts that he was denied
effective assistance of counsel. In order to substantiate a claim of ineffective assistance
of counsel, the appellant must show that (1) counsel’s performance was deficient and (2)
the deficient performance prejudiced the defendant so as to deprive him of a fair trial.
State v. Trimble, 122 Ohio St.3d 297, 2009-Ohio-2961, 911 N.E.2d 242, ¶ 98, citing
Strickland v. Washington, 466 U.S. 668, 687, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984).
{¶18} Appellant argues his trial counsel was ineffective in failing to object to the
prosecutor’s statements at sentencing concerning there being 78 properties involved, as
opposed to the 27 incidents of corrupt activity on which appellant was indicted, and
failing to object to the restitution amount. Because we have already found that the trial
court erred with regard to the restitution amount, we need not address counsel’s failure to
object. Further, having determined in the first assigned error that appellant’s sentence
was properly imposed otherwise, we cannot conclude that defense counsel’s performance
was deficient.
{¶19} Additionally, appellant argues that he was ineffectively counseled into
pleading to over 103 counts of the indictment when his codefendants pled to far fewer
counts. Appellant received a 14-year sentence after pleading guilty to 103 counts. The
majority of appellant’s sentence was run concurrently, with the consecutive sentences
being imposed as to only four counts, which were felony 1 and felony 2 offenses.
{¶20} The record reflects that appellant’s plea was made knowingly, intelligently,
and voluntarily. Appellant has not identified any evidence in the record to suggest that
counsel pressured him into entering the plea or that his plea was coerced. At the time of
his plea, appellant represented that no promises or threats had been made to induce his
plea and that he was satisfied with counsel’s representation. Moreover, appellant was
informed of the charges and the potential penalties at the plea hearing. Appellant has
failed to establish that he was prejudiced by his trial counsel’s performance.
{¶21} Appellant’s second assignment of error is overruled.
{¶22} Judgment affirmed in part, reversed in part; cause remanded.
It is ordered that appellant and appellee share the costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the common
pleas court to carry this judgment into execution. The defendant’s conviction having
been affirmed, any bail pending appeal is terminated. Case remanded to the trial court
for execution of sentence.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
the Rules of Appellate Procedure.
SEAN C. GALLAGHER, JUDGE
FRANK D. CELEBREZZE, JR., P.J., and
KENNETH A. ROCCO, J., CONCUR