People of Michigan v. Jeffrey Alan Stoltz

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
PEOPLE OF THE STATE OF MICHIGAN, UNPUBLISHED
March 12, 2020
Plaintiff-Appellee,
v No. 346713
Kent Circuit Court
JEFFREY ALAN STOLTZ, LC No. 18-003731-FH
Defendant-Appellant.
Before: MURRAY, C.J., and METER and K. F. KELLY, JJ.
PER CURIAM.
Defendant appeals as of right his jury trial convictions for two counts of larceny by
conversion of more than $20,000, MCL 750.362; MCL 750.356(2)(a); and four counts of writing
or delivering an insufficient funds check of $500 or more, MCL 750.131(3)(c) (writing bad
checks). He was sentenced to concurrent terms of 6 to 10 years’ imprisonment for his larceny by
conversion convictions and 1 to 2 years’ imprisonment for the writing bad checks convictions.
Further, defendant was ordered to pay restitution in the amount of $287,998.62. Finding no errors
warranting reversal, we affirm defendant’s convictions, but vacate defendant’s sentences and the
restitution award and remand for further proceedings.
I. BASIC FACTS
Defendant was a licensed builder, and the sole owner of a construction company called
Emry Custom Homes and Remodeling, LLC. His convictions arise from his failure to complete
work, or refund money, in connection with renovations on two houses in East Grand Rapids. For
the first project, on Hall Street, defendant received $122,000; and for the second project, on
Plymouth Avenue, defendant received $64,445. Although defendant did some work on the homes,
he left the projects unfinished and used the money for his own purposes, including payment of old
business debts, refunds to past customers, and payment of personal expenses, including a family
vacation, dining, clothing, and other merchandise. In connection with the projects, defendant also
failed to pay some of the suppliers and subcontractors for work they completed or materials they
supplied. He also wrote at least four checks for insufficient funds of $500 or more, resulting in
his convictions for writing bad checks. Other-acts evidence indicated that, on at least three other
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occasions, defendant accepted payment for projects but failed to complete the work. After the
victims in this case reported the matter to police and a news broadcast aired, defendant left
Michigan and moved his family to Illinois.
Defendant testified in his own defense. He delineated his 22 years of experience as a
builder. After a prior career working in sales, defendant started his own construction company,
but did not have any capital, business loans, or line of credit to fund the company. He acquired
customers through friends and his children’s school. Defendant claimed that he always intended
to complete the construction contracts and did not intend to deprive his customers of their money.
However, he believed that once he was paid by his customers he was entitled to use those funds as
corporate money. Therefore, he paid himself as well as purchased items necessary to maintain his
business, such as gas for his work vehicle, work clothes, and materials and tools. However,
defendant also admitted that non-work related charges were made by the business. Additionally,
he acknowledged that he lied to his customers about the status of the project, the ordered materials,
and payments to subcontractors.
The defense also presented the expert testimony of Gary Byker, a licensed builder and self-
employed contractor. Byker testified that defendant “massively underbid” the projects. The jury
convicted defendant as charged.
II. SUFFICIENCY
Defendant first argues that the prosecutor failed to present sufficient evidence to support
his two convictions for larceny by conversion and the trial court erred in denying his motion for
directed verdict. Defendant maintains that the homeowners gave him the funds in question without
any specific restrictions, and absent limitations on the use of the funds, defendant asserts that the
homeowners passed both title and possession to defendant at the time of payment. We disagree.
When reviewing a sufficiency challenge, “we review de novo the trial evidence in a light
most favorable to the prosecution and determine whether a rational trier of fact could have found
that all the elements of the offense were proved beyond a reasonable doubt.” People v
Schumacher, 276 Mich. App. 165, 167; 740 NW2d 534 (2007). “All conflicts in the evidence must
be resolved in favor of the prosecution and we will not interfere with the jury’s determinations
regarding the weight of the evidence and the credibility of the witnesses.” People v Unger, 278
Mich. App. 210, 222; 749 NW2d 272 (2008). The same standard for reviewing the sufficiency of
the evidence applies to a motion for a direct verdict; however, when reviewing a trial court’s
decision on a motion for a directed verdict, only the evidence presented up to the time the motion
is made is considered. People v Schultz, 246 Mich. App. 695, 702; 635 NW2d 491 (2001). In this
case, defendant did not move for a directed verdict until after the close of the defense proofs, and
there was no rebuttal evidence from the prosecutor.
Defendant was convicted under MCL 750.362, which states:
Any person to whom any money, goods or other property, which may be
the subject of larceny, shall have been delivered, who shall embezzle or
fraudulently convert to his own use, or shall secrete with the intent to embezzle, or
fraudulently use such goods, money or other property, or any part thereof, shall be
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deemed by so doing to have committed the crime of larceny and shall be punished
as provided in the first section of this chapter.
The elements of larceny by conversion are:
(1) the property at issue must have some value, (2) the property belonged to
someone other than the defendant, (3) someone delivered the property to the
defendant, irrespective of whether that delivery was by legal or illegal means, (4)
the defendant embezzled, converted to his own use, or hid the property with the
intent to embezzle or fraudulently use it, and (5) at the time the property was
embezzled, converted, or hidden, the defendant intended to defraud or cheat the
owner permanently of that property. [People v Mason, 247 Mich. App. 64, 72; 634
NW2d 382 (2001) (quotation marks and citations omitted).]
In this case, defendant only challenges the second element; that is, defendant maintains
that he cannot be guilty of conversion because he became the owner of the money when it was
given to him by the homeowners. Relevant to defendant’s arguments, “[l]arceny by conversion
constitutes a crime against possession and not against title; one cannot convert his own funds.”
People v Spencer, 320 Mich. App. 692, 701; 909 NW2d 17 (2017) (quotation marks and citation
omitted). For this reason, “when an owner intends to part with his or her title to property as well
as possession, a charge of larceny by conversion is not viable.” Id. Whether an owner intends to
part with title requires an examination of “the facts surrounding each complainant’s transfer of
money to [the defendant] to determine whether they each intended to retain title to the money.”
Id. at 702 (quotation marks and citation omitted).
In this case, viewing the evidence in a light most favorable to the prosecutor, both sets of
homeowners entered into fixed-price contracts with defendant that required advance payments to
defendant for agreed-upon designated purposes, namely the remodeling of their homes. With the
exception of the $5,500 general contractor fee for defendant under the Plymouth Ave contract,
nothing indicated that defendant could use the money as he pleased irrespective of whether he
performed any work. To the contrary, the contracts specified the work to be performed on each
home. Given the homeowners’ respective contracts for specific home-remodeling services, a
reasonable fact-finder could conclude that, in prepaying defendant for materials and services, the
homeowners intended to retain title to the money until such time as the work was actually
completed. Indeed, “[i]t would make little sense for each of these [homeowners] to intend to give
their hard-earned money to [defendant] to keep irrespective of whether they ever received the
home for which they bargained, especially with no contractual provision to that effect.” Mason,
247 Mich. App. at 74-76.
In addition to the contracts and the initial advance payments to defendant, the facts
surrounding the victims’ subsequent payments to defendant provide further support for the
assertion that the homeowners did not pass title to their money to defendant at the time of payment
irrespective of whether defendant performed the work in question. For example, to obtain
additional draws from the loan funds for the Hall Street project, which were held by a title
company, defendant had to submit sworn statements, detailing how he intended to use the funds
in question. According to the testimony at trial, defendant listed the services to be provided and,
in some cases, the specific subcontractors to be utilized. Clearly, this money from the loan
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proceeds did not pass to defendant without conditions; rather, the money was given to defendant
because he specifically agreed to use the funds for designated purposes. As with the initial
prepayment to defendant, reasonable fact-finders could conclude that owners of the Hall Street
property intended to retain title to the subsequent draws until that money was utilized for its
specific earmarked purposes.
Likewise, regarding the owners of the Plymouth Ave property, their contract called for a
second advance payment when the project reached the “drywall stage.” However, before this stage
occurred, defendant asked for an early payment of $15,000. According to testimony at trial, in
this request, defendant detailed the manner in which he had supposedly used the initial payment
and he then detailed how he intended to use the next $15,000. Again, given this evidence, a
reasonable fact-finder could conclude that, in transferring possession of their money to defendant
for future work, the owners of the Plymouth Ave property did not pass title to the money; rather,
they intended to retain title to the money until the money was actually used to pay for the work in
question.
In sum, viewing the evidence in a light most favorable to the prosecution, a reasonable
fact-finder could conclude that title to the homeowners’ advance payments did not pass to
defendant but that the homeowners instead intended to retain title to the money until it was utilized
to pay for the remodeling of their homes. The trial court did not err by denying defendant’s motion
for a directed verdict, and sufficient evidence was presented to support defendant’s convictions.
III. MOTION TO REASSIGN
Next, defendant contends that Chief Judge Mark A. Trusock erred by denying defendant’s
motion to reassign the case to Judge J. Joseph Rossi. Specifically, defendant asserts that the
prosecution dismissed the case before Judge Rossi and refiled with the hope that the case would
be assigned to a judge inclined to impose harsher sentences as evidenced by its failure to comply
with local administrative rules. In light of the record, we disagree.
Whether a prosecutor engaged in misconduct depriving defendant of due process by filing
repeated prosecutions presents a question of constitutional law, which this Court reviews de novo.
People v Dunbar, 463 Mich. 606, 615; 625 NW2d 1 (2001), overruled in part on other grounds by
People v Jackson, 483 Mich. 271; 769 NW2d 630 (2009). “This Court has recognized that repeated
prosecutions of a defendant for the same offense may violate the defendant’s right to due process.”
People v Vargo, 139 Mich. App. 573, 578; 362 NW2d 840 (1984). “Among the factors to be
considered in determining whether a due process violation has occurred are the reinstitution of
charges without additional, noncumulative evidence not introduced at the first preliminary
examination, the reinstitution of charges to harass, and judge-shopping to obtain a favorable
ruling.” Id. The chief judge has the discretion to reassign a case for good cause. Nat’l Waterworks,
Inc v Int’l Fidelity & Surety, Ltd, 275 Mich. App. 256, 258; 739 NW2d 121 (2007); see also MCR
8.111(C). The decision to reassign a case is reviewed for an abuse of discretion. Nat’l
Waterworks, Inc, 275 Mich. App. at 258. An abuse of discretion occurs when the trial court selects
an outcome that is outside the range of reasonable and principled outcomes. People v Fomby, 300
Mich. App. 46, 48; 831 NW2d 887 (2013).
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At the hearing on the motion to reassign, defense counsel argued that the prosecutor failed
to notify the trial court that defendant’s case was dismissed and subsequently re-filed,1 and
therefore, the case should be assigned to the original trial judge. It was also asserted that at a prior
hearing, a prosecutor stated “well, if we refile maybe we’ll get Judge Trusock,” and the defense
claimed he was a judge known to impose harsher penalties. The prosecutor acknowledged the
local administrative order and explained the failure to apprise the court of the prior criminal case
was the court’s existing knowledge of it in light of his prior decision on a motion to recuse. Further,
the prosecutor stated that preference for a judge in light of known policies or inclinations did not
constitute judge shopping.
Chief Judge Trusock stated that he reviewed the underlying criminal case. He noted that
the underlying criminal case commenced on May 19, 2017, and there were eight adjournments and
three different trial dates before Judge Rossi. He further noted that after Judge Rossi declined the
prosecutor’s request to amend the dates in the information, the prosecutor filed a motion to recuse,
and that he, as the chief judge, had denied the motion. The prosecutor had a right to nolle prosequi
the case, and it was assigned by random draw to Chief Judge Trusock and bound over on April 27,
2018. The trial date was scheduled for September 17, 2018. However, present defense counsel
substituted into the case a mere three weeks before trial and Chief Judge Trusock found that
defense counsel, not the prosecutor was engaged in judge shopping, because he waited until
August 24, 2018, to seek reassignment. Finally, with regard to the circuit court’s local
administrative rules, Chief Judge Trusock stated that they were not followed when good cause and
due process required the contrary. Chief Judge Trusock noted that he had the power of caseload
management, and he could preside over the trial in three weeks as scheduled because it would be
four to eight months before a trial date was set with Judge Rossi. Accordingly, the defense motion
to reassign was denied.
In light of this record, we cannot conclude that Chief Judge Trusock abused his discretion
by denying the defense motion to reassign. This claim of error is without merit.
IV. OTHER-ACTS EVIDENCE
Defendant also argues that the trial court abused its discretion by admitting other-acts
evidence from three homeowners who hired defendant to perform work on their homes. He asserts
that the evidence was irrelevant because there was no allegation that defendant defrauded these
individuals. We disagree.
We review a trial court’s decision to admit evidence for an abuse of discretion. People v
Benton, 294 Mich. App. 191, 195; 817 NW2d 599 (2011). “An abuse of discretion occurs when the
trial court reaches a result that is outside the range of principled outcomes.” Id. “Preliminary
1
Kent Circuit Court Local Administrative Order 2018-01(C)(7) provides: “If a defendant’s case
is dismissed and subsequently re-filed, the case will be assigned to the judge that had been assigned
originally. The Prosecutor’s Office will be responsible for bringing this to the attention of the
court.”
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questions of law, including whether a rule of evidence precludes the admission of evidence, are
reviewed de novo.” People v Burns, 494 Mich. 104, 110; 832 NW2d 738 (2013).
The trial court admitted the evidence in question under MRE 404(b)(1), which provides:
Evidence of other crimes, wrongs, or acts is not admissible to prove the
character of a person in order to show action in conformity therewith. It may,
however, be admissible for other purposes, such as proof of motive, opportunity,
intent, preparation, scheme, plan, or system in doing an act, knowledge, identity, or
absence of mistake or accident when the same is material, whether such other
crimes, wrongs, or acts are contemporaneous with, or prior or subsequent to the
conduct at issue in the case.
The framework for admitting evidence under MRE 404(b) is as follows:
First, the prosecutor must offer the other acts evidence under something other than
a character to conduct or propensity theory. MRE 404(b). Second, the evidence
must be relevant under MRE 402, as enforced through MRE 104(b), to an issue of
fact of consequence at trial. Third, under MRE 403, a determination must be made
whether the danger of undue prejudice [substantially] outweighs the probative
value of the evidence in view of the availability of other means of proof and other
facts appropriate for making decision of this kind under Rule 403. Finally, the trial
court, upon request, may provide a limiting instruction under MRE 105. [People v
Sabin (After Remand), 463 Mich. 43, 55-56; 614 NW2d 888 (2000) (quotation
marks and some citation omitted) (alteration in original).]
Here, the prosecutor introduced other-acts evidence from three homeowners who hired
defendant to work on their homes; the prosecutor offered the evidence for “the purpose of showing
absence of mistake, proof of intent; and proof of scheme, plan, or system in doing an act.”2
Considering the prosecutor’s proffered reasons, the trial court did not err by concluding that the
other-acts evidence was relevant and offered for a proper purpose. Under MRE 401, relevance
consists of two components: materiality and probative value. People v Crawford, 458 Mich. 376,
388; 582 NW2d 785 (1998). “The relationship of the elements of the charge, the theories of
admissibility, and the defenses asserted governs what is relevant and material.” People v
VanderVliet, 444 Mich. 52, 75; 508 NW2d 114 (1993), amended by 445 Mich. 1205 (1994).
2
Defendant also notes that, although one of the homeowners was listed on the prosecutor’s witness
list, the prosecutor failed to include him in the notice of intent required by MRE 404(b)(2). Yet,
he does not advance an argument that the testimony should have been excluded because the
prosecutor failed to comply with MRE 404(b)(2). In any event, the trial court addressed this issue
before trial, concluding that the notice was sufficient because the individual was listed on the
prosecutor’s witness list and the defense was provided a police report relating to his testimony. In
other words, defendant is not entitled to relief on appeal because he received reasonable notice
before trial; he was not unfairly surprised and he was able to marshal arguments regarding
relevancy and unfair prejudice. See People v Jackson, 498 Mich. 246, 261; 869 NW2d 253 (2015).
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Whether defendant intended to permanently deprive the victims of their property was at
issue. The defense asserted that defendant was not trying to defraud anyone. Instead, defendant
testified that he mistakenly underbid the projects, and he had every intention of finishing the work.
In this context, the other-acts evidence related to defendant’s conduct involving three other
homeowners for whom he performed work and is relevant to establish a common scheme, plan, or
system of conducting business. As such, this pattern of business dealings was relevant to an
assessment of defendant’s intent as well as his assertion that he mistakenly underbid the projects
at issue in this case. More specifically, the evidence offered by the other-acts homeowners showed
that defendant’s conduct involved a pattern or scheme of underbidding projects. For example,
defendant asked one of the other-acts homeowners for additional money beyond the contract price
even though they never agreed to any change orders. In addition, two of the other-acts
homeowners, received refunds from the money for the Hall Street project. On appeal, defendant
emphasizes these refunds, and he asserts that none of the other-acts homeowners were defrauded.
However, this argument ignores the nature of defendant’s scheme, which included paying off past
debts with new customers’ money as well as failing to meet deadlines, and ultimately abandoning
projects without completing the work. Given defendant’s assertions that he did not intend to
defraud the homeowners in this case, that he mistakenly underbid the projects, and that he intended
to finish the work, his pattern of underbidding projects and failing to complete work was relevant
and offered for a proper nonpropensity purpose.
Moreover, under MRE 403, the probative value of this evidence was not substantially
outweighed by the danger of unfair prejudice. The other-acts evidence in this case did not involve
injecting extraneous considerations into the case nor did this evidence create a risk that evidence
with little probative value would be given too much weight. See People v McGhee, 268 Mich. App.
600, 613-614; 709 NW2d 595 (2005). Instead, the other-acts evidence had significant probative
value on the issue of defendant’s intent and the absence of mistake. This evidence was not unfairly
prejudicial, particularly considering the inherent difficulty in proving defendant’s state of mind.
Moreover, the trial court instructed the jury on the proper use of other-acts evidence, thereby
mitigating the risk of prejudice. See People v Orr, 275 Mich. App. 587, 593; 739 NW2d 385 (2007).
The trial court did not abuse its discretion by admitting the other-acts evidence under MRE 404(b).
V. PROSECUTORIAL MISCONDUCT3
Next, defendant argues that the prosecutor denied defendant a fair trial by using the phrase
“Ponzi scheme” at trial. Citing to definitions of the term “Ponzi scheme,” defendant maintains
that the term is factually inapplicable to the circumstances in this case. He also asserts that the
phrase is highly inflammatory. We disagree.
3
Although defendant characterizes the prosecutor’s statements as misconduct, this Court recently
explained that a fairer label of most claims of prosecutorial misconduct would be “prosecutorial
error,” because only the most extreme and rare cases rise to the level of “prosecutorial
misconduct.” People v Cooper, 309 Mich. App. 74, 87-88; 867 NW2d 452 (2015). However, we
will use the phrase “prosecutorial misconduct” because it has become a term of art in criminal
appeals. Id.
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“Issues of prosecutorial misconduct are reviewed de novo to determine whether the
defendant was denied a fair and impartial trial.” People v Bennett, 290 Mich. App. 465, 475; 802
NW2d 627 (2010). “Prosecutors are typically afforded great latitude regarding their arguments
and conduct at trial.” Unger, 278 Mich. App. at 236. “A prosecutor may not make a factual
statement to the jury that is not supported by the evidence, but he or she is free to argue the
evidence and all reasonable inferences arising from it as they relate to his or her theory of the
case.” People v Dobek, 274 Mich. App. 58, 66; 732 NW2d 546 (2007) (citations omitted).
Moreover, a prosecutor need not confine his or her arguments “to the blandest possible terms.” Id.
A prosecutor’s remarks must be considered in context, in light of defense counsel’s comments,
and “[a]n otherwise improper remark may not rise to an error requiring reversal when the
prosecutor is responding to the defense counsel’s argument.” People v Watson, 245 Mich. App.
572, 593; 629 NW2d 411 (2001) (quotation marks and citation omitted).
The prosecutor used the phrase Ponzi scheme during rebuttal as follows:
Now, what the defendant did is nothing new, it’s been happening [since] the
1920s. Charles Ponzi. What the defendant did was a Ponzi scheme. It’s a form of
fraud in which a purported businessman lures investors and pays profits to earlier
investors using the funds from the new people.
So what did the defendant do? He took the [homeowners’] money, and he
paid off old projects, people who he did the same thing to. And below these people,
below these people are question marks because we don’t know the victims before
them. But we can’t forget about all the collateral damage, all of the other people,
they got screwed over because of the defendant’s Ponzi scheme.
You see the defendant isn’t signing up homeowners to build their dream
houses, he is signing them up to be his personal line of credit. And defense counsel
says well, how can the prosecutor answer to these photos? How can she explain
away what he has done? Ladies and Gentlemen, you want to know what those
photos exhibit? It exhibits his scam and con artist skills, because what those photos
depict are him stringing along the victims. Yup, I’m doing the work on your project
little by little, I’m tearing up your house. Stuff was getting done. That is all those
projects show.
But the defendant was running a scam. He was robbing Peter to pay Paul.
But when Peter gets angry, this defendant finds new unsuspecting homeowners and
victims to quiet Peter and the others. It’s a Ponzi scheme. It’s a contractor Ponzi
scheme.
Contrary to defendants’ argument, the prosecutor’s use of the phrase Ponzi scheme did not
deprive defendant of a fair trial. First, although defendant’s conduct was not a traditional Ponzi
scheme involving investments and payment of investment returns, there are similarities between
defendant’s scheme and a traditional Ponzi scheme. Therefore, the prosecutor’s characterization
of defendant’s scheme as “a contractor Ponzi scheme” was a reasonable inference and a
permissible argument based on the facts. In particular, as explained by this Court:
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A ‘Ponzi’ or ‘Ponzi scheme’ is defined as a swindle in which a quick return on an
initial investment paid out of funds from new investors lures the victim into bigger
risks. It is named after Charles Ponzi, who was the organizer of such a scheme
during 1919 and 1920. [Sturrus v Dep’t of Treasury, 292 Mich. App. 639, 642 n 1;
809 NW2d 208 (2011) (quotation marks and citation omitted).]
Additionally, one of the usual characteristics of a Ponzi scheme is that it is conducted “without
any operation or revenue-producing activity other than the continual raising of new funds.”
Black’s Law Dictionary (11th ed). In this case, the prosecutor’s theory was that defendant’s only
revenue-producing activity involved taking money from new customers without performing work
to earn that money and then using this money for purposes unrelated to the projects, such as paying
off old customers and subcontractors for other projects. In other words, like a Ponzi swindler using
funds from one investor to pay another, defendant also stole from “Peter to pay Paul.” Considering
the prosecutor’s argument as a whole and in context, the prosecutor’s argument was a fair
characterization of the evidence.
Moreover, the propriety of the prosecutor’s rebuttal should be considered in light of
defense counsel’s arguments. During closing, defense counsel repeatedly asserted that defendant
did not have an “evil master plan,” that defendant was not engaged in “some Bernie Madoff
financial scam,” that defendant was simply a “terrible businessman,” that defendant was not
“lining his pockets and getting rich,” and that defendant was not engaged in a “long con.” Indeed,
in arguing that the prosecutor failed to establish that defendant intended to defraud the victims,
defense counsel repeatedly asked “why” defendant would do this—“to get what?” or to “[m]ake
off with what?” In responding to these assertions, the prosecutor reasonably argued that defendant
did have a scheme and that scheme involved a “contractor Ponzi scheme” in which defendant kept
his business going by luring in new customers and stealing from “Peter to pay Paul.” On the
whole, although the prosecutor did not use the blandest possible terms, the prosecutor’s argument
was reasonably based on the evidence and it was a fair response to defense counsel’s assertion that
defendant was not engaged in any type of financial scam. Moreover, even if the phrase “Ponzi
scheme” was inflammatory or improper, “[c]urative instructions are sufficient to cure the
prejudicial effect of most inappropriate prosecutorial statements,” Unger, 278 Mich. App. at 235.
Here, the trial court instructed the jury that the lawyers’ arguments were not evidence and to not
let sympathy or prejudice influence their decision, thereby curing any potential prejudice.
Defendant was not denied a fair trial.
VI. OFFENSE VARIABLES
Defendant next asserts that the trial court clearly erred by scoring offense variables (OVs)
9 and 19.
“Under the sentencing guidelines, the circuit court’s factual determinations are reviewed
for clear error and must be supported by a preponderance of the evidence.” People v Hardy, 494
Mich. 430, 438; 835 NW2d 340 (2013). “Clear error exists when the reviewing court is left with
a definite and firm conviction that a mistake was made.” People v Brooks, 304 Mich. App. 318,
319-320; 848 NW2d 161 (2014) (quotation marks and citation omitted). “Whether the facts, as
found, are adequate to satisfy the scoring conditions prescribed by statute, i.e., the application of
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the facts to the law, is a question of statutory interpretation, which an appellate court reviews de
novo.” Hardy, 494 Mich. at 438.
A. OV 9
OV 9 relates to the number of victims. MCL 777.39(1). OV 9 is “offense-specific,”
meaning “only conduct relating to the offense may be taken into consideration when scoring” OV
9. People v McGraw, 484 Mich. 120, 124, 126; 771 NW2d 655 (2009) (quotation marks and
citation omitted). Relevant to this case, OV 9 must be assigned 10 points if there were “4 to 19
victims who were placed in danger of property loss.” MCL 777.39(1)(a). Under MCL
777.39(2)(a), “each person who was placed in danger of physical injury or loss of life or property”
counts “as a victim.”
There were two homeowners for each project; that is, two homeowners who could be
counted as victims for each count of larceny by conversion. To reach at least four victims for the
sentencing offense, by analogizing to a “home invasion case where children are in the home,” the
prosecutor argued, and the trial court agreed, that the homeowners’ children should also be counted
as victims. Including the children, there were 4 to 10 victims, and therefore the trial court scored
OV 9 at 10 points.
The trial court clearly erred by scoring OV 9 on the basis of the homeowners’ children.
To warrant 10 points under OV 9, there must be “4 to 19 victims who were placed in danger of
property loss.”4 MCL 777.39(1)(c) (emphasis added). And, as noted, victims are those who are
“placed in danger of physical injury or loss of life or property.” MCL 777.39(2)(a) (emphasis
added). The operative word in these statutory provisions is “property,” commonly understood to
mean: “something owned or possessed.” Merriam-Webster’s Dictionary (11th ed). Further, when
identifying individuals facing danger of property loss, the question is whether the individual faced
the danger of a “direct” loss rather than an “indirect” harm as a result of harm to another’s property.
See, e.g., People v Carrigan, 297 Mich. App. 513, 516; 824 NW2d 283 (2012) (finding fewer than
four victims in vandalisms to two schools “each owned by the same school district” and rejecting
assertion that persons in the “community,” who were indirectly harmed, could be counted as
victims).
Applying these principles in this case, certainly there is evidence that the children may be
affected by their parents’ financial losses. However, the fact remains that the financial and
property loss by defendant belonged to the parents, not the children. In other words, the children
are not “direct” victims of the crime, rather they are “indirect” victims who will be impacted by
their parents’ property losses. Because the children were not in danger of “property loss,” the trial
4
On appeal, the prosecutor notes that one of the children had some breathing difficulties resulting
from living in the home during construction. However, even assuming that defendant’s crime of
larceny by conversion placed this child in “danger of physical injury or death,” there would need
to be at least two victims in danger of physical injury or death to merit 10 points under OV 9 on
the basis of physical injury or death. MCL 777.39(1)(c). Only one such victim must be scored at
zero points. MCL 777.39(1)(d).
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court erred by counting the children as victims under OV 9, and OV 9 should have been scored at
zero points. See MCL 777.39(1)(d).
B. OV 19
The trial court did not err by scoring OV 19 at 10 points. This variable involves a “threat
to the security of a penal institution or court or interference with the administration of justice or
the rendering of emergency services.” MCL 777.49. A score of 10 points for OV 19 is warranted
when “[t]he offender otherwise interfered with or attempted to interfere with the administration of
justice.” MCL 777.49(c). “Interfering or attempting to interfere with the administration of justice
includes acts that constitute obstruction of justice, but is not limited to such acts.” People v
Ericksen, 288 Mich. App. 192, 204; 793 NW2d 120 (2010). Moreover, “conduct that ‘interfered
with or attempted to interfere with the administration of justice’ does not have to necessarily rise
to the level of a chargeable offense.” People v Barbee, 470 Mich. 283, 287; 681 NW2d 348 (2004).
“The investigation of crime is critical to the administration of justice,” and consequently, OV 19
may be scored for conduct that interferes with the investigation of a crime. Id. at 288. Indeed,
“OV 19 is generally scored for conduct that constitutes an attempt to avoid being caught and held
accountable for the sentencing offense.” People v Sours, 315 Mich. App. 346, 349; 890 NW2d 401
(2016).
In assessing 10 points for OV 19, the trial court stated: “Well, I’m going to keep the OV-
19 scored as 10 points. When he leaves the area as soon as he knows that there may be charges
brought against him, moves to another state, I think that’s sufficient to score OV-19.”
The evidence at trial supported the conclusion that within days of the homeowners’ police
reports and a news report about his conduct, defendant withdrew his children from school and
went to Illinois. Defendant maintains that going to Illinois did not interfere with the police
investigation, and he emphasizes that he eventually returned to Michigan to stand trial. However,
these assertions did not preclude the trial court from concluding from the timing of defendant’s
flight that he initially left the state in an effort to impede the police investigation and avoid the
impending charges. People v Smelley, 485 Mich. 1023 (2010) (“The fact that he voluntarily
returned to Michigan does not necessarily mean that defendant did not initially flee to Georgia out
of fear of apprehension.”). Further, although defendant was unsuccessful in avoiding the charges,
OV 19 is properly scored for an “attempt[] to interfere with the administration of justice.” MCL
777.49(c); Sours, 315 Mich. App. at 349 (“OV 19 is generally scored for conduct that constitutes
an attempt to avoid being caught and held accountable for the sentencing offense.”). Accordingly,
the trial court did not err by assigning 10 points for OV 19.
Although we conclude that the trial court erred by scoring OV 9, defendant is not entitled
to resentencing on this basis alone because a 10-point change—reducing defendant’s total OV
score from 45 to 35—will not alter the applicable guidelines range. People v Francisco, 474 Mich.
82, 89, n 8; 711 NW2d 44 (2006); MCL 777.65.
VII. RESTITUTION
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Next, defendant argues, and the prosecutor concedes, that the trial court abused its
discretion by ordering $287,998.62 in restitution without holding an evidentiary hearing. We
agree.
This Court reviews a trial court’s award of restitution for an abuse of discretion, and the
trial court’s findings of fact are reviewed for clear error. People v Fawaz, 299 Mich. App. 55, 64;
829 NW2d 259 (2012). Generally, “a trial court’s decision whether to hold an evidentiary hearing
is reviewed for an abuse of discretion.” Unger, 278 Mich. App. at 216-217. “An abuse of discretion
occurs when the court chooses an outcome that falls outside the range of reasonable and principled
outcomes.” Id. at 217. A trial court may also abuse its discretion by operating within the wrong
legal framework. People v Kelly, 317 Mich. App. 637, 643; 895 NW2d 230 (2016). For example,
“[a] trial court may abuse its discretion by blurring the distinction between a civil remedy for
damages and the criminal penalty of restitution.” People v Corbin, 312 Mich. App. 352, 361; 880
NW2d 2 (2015). To the extent analysis of the trial court’s restitution decision involves
interpretation of the Crime Victim’s Rights Act (CVRA), MCL 780.751 et seq., or other statutory
provisions, this Court’s review is de novo. Fawaz, 299 Mich. App. at 64.
“Under the CVRA, restitution is mandatory, not discretionary.” Id. at 65.
(2) Except as provided in subsection (8), when sentencing a defendant
convicted of a crime, the court shall order, in addition to or in lieu of any other
penalty authorized by law or in addition to any other penalty required by law, that
the defendant make full restitution to any victim of the defendant’s course of
conduct that gives rise to the conviction or to the victim’s estate. . . .
* * *
(8) The court shall order restitution to the crime victim services commission
or to any individuals, partnerships, corporations, associations, governmental
entities, or other legal entities that have compensated the victim or the victim’s
estate for a loss incurred by the victim to the extent of the compensation paid for
that loss. The court shall also order restitution for the costs of services provided to
persons or entities that have provided services to the victim as a result of the crime.
Services that are subject to restitution under this subsection include, but are not
limited to, shelter, food, clothing, and transportation. However, an order of
restitution shall require that all restitution to a victim or victim’s estate under the
order be made before any restitution to any other person or entity under that order
is made. The court shall not order restitution to be paid to a victim or victim’s
estate if the victim or victim’s estate has received or is to receive compensation for
that loss, and the court shall state on the record with specificity the reasons for its
action. [MCL 780.766.]
MCL 780.766(3) more specifically provides for restitution for “damage to or loss or destruction
of property” and the methods for calculating restitution related to property.
“[T]he prosecution bears the burden of establishing the proper amount of restitution by a
preponderance of the evidence.” Fawaz, 299 Mich. App. at 65 (quotation marks and citation
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omitted; alteration in original). “The amount of restitution to be paid by a defendant must be based
on the actual loss suffered by the victim.” Id. (quotation marks and citation omitted). “MCL
780.766(2) does not authorize the assessment of restitution based on uncharged conduct.” People
v McKinley, 496 Mich. 410, 421; 852 NW2d 770 (2014). Rather, “MCL 780.766(2) requires a
direct, causal relationship between the conduct underlying the convicted offense and the amount
of restitution to be awarded.” Id. Restitution is intended to be remedial in nature, Wright v
Genesee Co, 504 Mich. 410, 418 n 3; 934 NW2d 805 (2019), and “[r]estitution awarded by a
sentencing court is not a substitute for civil damages,” People v Tyler, 188 Mich. App. 83, 89; 468
NW2d 537 (1991). Further, “[r]estitution is not intended to provide a windfall for crime victims
but rather to ensure that victims, to the greatest extent possible, are made whole for their losses.”
Corbin, 312 Mich. App. at 370, quoting United States v Huff, 609 F3d 1240, 1248 (CA 11, 2010)
(quotation marks omitted; alteration in Corbin). The amount of restitution awarded must be based
on the evidence. People v Guajardo, 213 Mich. App. 198, 200; 539 NW2d 570 (1995).
In this case, the presentence investigation report (PSIR) indicates that the total amount of
restitution was calculated at $287,998.62. This amount included restitution for the homeowners
and various subcontractors. At sentencing, defendant challenged the amount of restitution on
various bases and requested an evidentiary hearing for the prosecutor to prove the amount of
restitution by a preponderance of the evidence. The trial court refused to hold an evidentiary
hearing, and the trial court did not make any factual findings on the basis of the existing record.
Although the PSIR is presumed accurate, this fact alone does not justify the award in this case
without an evidentiary hearing. The information contained in the PSIR was sparse, did not
substantiate any particular amount, and defendant raised effective challenges to the amounts
requested. People v Waclawski, 286 Mich. App. 634, 689-690; 780 NW2d 321 (2009) (outlining
procedures for resolving challenges to the PSIR). By failing to address defendant’s challenges and
by failing to hold an evidentiary hearing, the trial court abused its discretion by awarding a
restitution amount that was arbitrary and unsubstantiated. MCL 780.767(4); People v White, 212
Mich. App. 298, 316-317; 536 NW2d 876 (1995).
More specifically, we note that defendant raised several significant challenges in the trial
court to the restitution amounts requested. For instance, defendant challenged the request for
attorney fees that the Hall Street homeowners incurred in a legal action involving a lien a
subcontractor placed on the home. The evidence at trial suggested that the subcontractor paid the
homeowners’ legal fees, and if the homeowners have actually been compensated for those legal
fees, they cannot again collect from defendant.5 MCL 780.766(8) (“The court shall not order
5
In fact, the restitution request in the PSIR includes over $28,000 for the subcontractor, which,
given the evidence at trial, appears to include a request for legal fees relating to the litigation over
the lien on the property. Whether the legal fees related to an invalid lien are a direct result of the
defendant’s criminal acts is also a question that should be decided. People v Byard, 265 Mich. App.
510, 513; 696 NW2d 783 (2005). And, aside from this particular subcontractor, there are
subcontractors who received restitution, not all of whom received bad checks from defendant.
Given that these subcontractors did not receive bad checks and that defendant was not charged
with converting funds from any subcontractor, there is also a question whether the subcontractors
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restitution to be paid to a victim or victim’s estate if the victim or victim’s estate has received or
is to receive compensation for that loss . . . .”). The Hall Street homeowners also requested
$22,400 for volunteer labor; however, it does not appear on this record that the homeowners
suffered any actual losses from free labor.6
More generally, defendant challenged the amount of losses suffered by the homeowners;
and he questioned the basis for their specific figures, noting, for example, conflicts between their
requests and their trial testimony.7 The prosecutor concedes, and we agree, that in the absence of
an evidentiary hearing, the record in this case does not substantiate any particular amount of actual
losses for either set of homeowners.8 Further, in the trial court, defendant maintained that he was
entitled to credit for work he did perform; and despite considerable evidence—including testimony
from the homeowners—that defendant performed at least some work, the trial court failed to
consider this issue. Precisely how much work he completed, and how much the homeowners
actually lost in light of his work were fact questions, and the evidence on these questions was not
uncontroverted. Accordingly, the trial court should have determined whether defendant provided
any value to the homeowners in the form of services and products, and that amount, if any, should
be offset against the amount of restitution. Given the factual uncertainty for the basis of the
homeowners’ requests, remand for an evidentiary hearing is warranted. And, if on remand, the
prosecution cannot substantiate the specific amounts requested by a preponderance of the
evidence, it should be disallowed. Accordingly, we vacate the restitution award and remand for
an evidentiary hearing to determine the actual loss caused by the conduct underlying defendant’s
convictions without affording the victims a windfall.
VIII. PROPORTIONALITY REVIEW
are entitled to restitution in connection with the conduct actually charged in this case. McKinley,
496 Mich. at 421.
6
If there is going to be any restitution for the volunteer services provided to the victims, see MCL
780.766(8), there needs to be a determination of the proper amount and it would need to be
awarded to the proper parties, i.e., the “volunteers.” Byard, 265 Mich. App. at 514.
7
Notably, the Plymouth Ave homeowners—who paid defendant approximately $64,000—
requested the return of $50,000 and an additional $59,289.74 to have him pay to complete the
house. “[R]estitution is not intended to provide a windfall for crime victims but rather to ensure
that victims, to the greatest extent possible, are made whole for their losses.” Corbin, 312 Mich
App at 370 (quotation marks and citation omitted). Absent a more specific explanation for this
restitution request, it is challenging to see how making them whole would involve defendant
refunding their money for work not completed and at the same time paying to complete the project.
8
The trial court’s denial of a motion for an evidentiary hearing on the basis that there had already
been a trial suggested that the amount of loss had somehow been decided. There were many
numbers mentioned at trial, and extensive testimony about the work or lack thereof that defendant
completed, but at no time has there been a determination of the actual amount of losses suffered
by the victims in this case.
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Finally, defendant argues that the trial court abused its discretion by departing from the
recommended minimum guidelines range and imposing sentences that were unreasonable and
disproportionate such that resentencing before a different judge is required. Although we conclude
that a remand is warranted for resentencing or further articulation of the reasons for the departure
sentence, we decline to remand to a different judge.
“A sentence that departs from the applicable guidelines range will be reviewed by an
appellate court for reasonableness.” People v Dixon-Bey, 321 Mich. App. 490, 520; 909 NW2d 458
(2017) (quotation marks and citation omitted). “[T]he standard of review to be applied by appellate
courts reviewing a sentence for reasonableness on appeal is abuse of discretion.” Id. (quotation
marks and citation omitted; alteration in original). “A sentence is unreasonable—and therefore an
abuse of discretion—if the trial court failed to adhere to the principle of proportionality in imposing
its sentence on a defendant.” People v Lampe, 327 Mich. App. 104, 125; 933 NW2d 314 (2019).
“The trial court’s fact-finding at sentencing is reviewed for clear error.” Id. at 125-126.
“[T]he principle of proportionality . . . requires sentences imposed by the trial court to be
proportionate to the seriousness of the circumstances surrounding the offense and the offender.”
People v Walden, 319 Mich. App. 344, 351; 901 NW2d 142 (2017) (quotation marks and citation
omitted). The trial court “must take into account the nature of the offense and the background of
the offender,” and courts may “depart from the guidelines when, in their judgment, the
recommended range under the guidelines is disproportionate, in either direction, to the seriousness
of the crime.” Id. (quotation marks and citation omitted). When applying the principle of
proportionality, factors that may be considered by the trial court include, but are not limited to:
(1) the seriousness of the offense; (2) factors that were inadequately considered by
the guidelines; and (3) factors not considered by the guidelines, such as the
relationship between the victim and the aggressor, the defendant’s misconduct
while in custody, the defendant’s expressions of remorse, and the defendant’s
potential for rehabilitation. [Id. at 352-253 (citation omitted).]
In the context of proportionality review, the legislative guidelines “serve as a ‘useful tool’ or
‘guideposts’ for effectively combating disparity in sentencing.” Dixon-Bey, 321 Mich. App. at 524-
525. For this reason, the trial court must “justify the sentence imposed in order to facilitate
appellate review,” including “an explanation of why the sentence imposed is more proportionate
to the offense and the offender than a different sentence would have been.” Id. at 525 (quotation
marks and citations omitted).
In this case, the applicable minimum range under the legislative guidelines was 10 to 23
months. The trial court departed from this range and sentenced defendant to 6 to 10 years’
imprisonment. In imposing this sentence, the trial court offered the following reasons for deviating
from the recommended minimum under the guidelines:
Okay. I am very familiar with the facts of this case. I sat as judge over the
trial of this matter. You were convicted, sir, by a jury of two counts of Larceny by
Conversion of $20,000. Each of those carry a maximum penalty of 10 years. You
were also convicted of four counts of writing checks without sufficient funds; each
of those carry a maximum penalty of two years.
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You’re 38 years old, as your counsel points out you have no prior record,
no felonies, misdemeanors of juvenile court record. You’ve never been in jail, on
probation or in prison.
This is a situation where you were—you started a business Emry Custom
Homes and Remodeling. There were two main victims here, plus a number of
subcontractors. And, sir, this whole thing that you did was absolutely outrageous.
You lied so many times to these people, to not only the [homeowners], but to your
contractors. You told hundreds of lies from what I saw over the course of this trial.
You stole money from these people. You would come to them and say you needed
this money, 10 or $15,000 to pay a subcontractor to come in when they were in a
vulnerable situation with their house torn apart, months after it was supposed to be
done, and then you would take that money and go buy a trip to Disney World? Or
pay off some other contractors? You would lie to them about what it was, take that
money and then go do something else with it.
You are a con man. There is no question about that. And you’re here trying
to act as a con man. You testified that way during the course of this trial, trying to
make the jury feel sorry for you, as if you were the victim in this case, not these
people whose homes you ripped apart and stole money from, or these poor
subcontractors that go out and do an honest day’s work and then don’t get their pay.
You’re exactly what gives the building industry a bad name.
And this is not a civil action. This is a criminal case. Your attorneys never
understood that. You acted as a criminal here, lying, deceiving and tricking people
out of this money and it seriously affected their families, their kids, their
relationships, everything that they’ve done over the course of their lives. That is
absolutely outrageous, unacceptable and you have, other than today, when you’re
being faced with sentencing, you’ve shown no remorse for this whatsoever.
Your sentencing guidelines call for a minimum sentence between 10 and 23
months. Those sentencing guidelines, however, do not take into effect the amount
of restitution in this matter. It’s clearly over $200,000. Sentencing guidelines only
take into effect the first $20,000. That’s about 12 times more, a quarter of a million
in this, than what the guidelines take into effect.
The guidelines don’t take into effect that you lied literally hundreds of times
to these people and that you have absolutely no remorse whatsoever.
I am aware of People v Tanner that says I cannot impose anything more
than two-thirds of the maximum sentence. The maximum sentence on your two
counts of conversion is 10 years, that would be 6.6 years.
I am aware of People v Lockridge, that sentencing guidelines are advisory
and I have to impose a reasonable sentence. I’m also aware of People v Melbourne
[sic], that I have to impose a proportionate sentence, and I believe that I am
imposing a reasonable and proportionate sentence, sir, but it is the sentence of this
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Court with regards to the two counts of Larceny by Conversion that you be
committed to the Michigan Department of Corrections, serve a minimum of six
years to a maximum of 10 years on each of those counts. You’ll serve in the
Michigan Department of Corrections 1 to 2 years on the other four counts. All of
these, by law, will be concurrent. You’re entitled to 109 days credit on all of this.
The trial court identified two main reasons for defendant’s sentence: (1) defendant’s
numerous lies and acts of deception and (2) the amount of restitution imposed. As a general
principle, the trial court did not err by considering these factors as bases for an upward departure.
First, the trial court noted defendant’s repeated lies as a reason for the upward departure.
As detailed by the trial court, defendant lied to the homeowners to obtain money and he lied to the
contractors to obtain work from them without payment. Notably, he told many of the lies when
the homeowners were in “a vulnerable situation with their house torn apart, months after it was
supposed to be done.” The sheer number of lies defendant told—and the many, many people to
whom defendant lied—to perpetrate his conversion is not something contemplated by the
guidelines. That is, defendant did not simply obtain money and convert it on one occasion; rather,
over the course of numerous months, without any sign of remorse, he continued to lie and deceive
to obtain more money and to hide his wrongdoing. Further, the trial court’s concern for the
homeowners’ vulnerability to defendant’s lies at a time when their homes had been torn apart was
not something accounted for by the guidelines. The trial court’s remarks about defendant’s lies as
part of defendant’s overall scheme relate to the seriousness of the offense and to matters not
adequately accounted for by the guidelines. Accordingly, these issues were properly considered
by the trial court when sentencing defendant and justifying the extent of the departure.
Second, with regard to the restitution amount, as the trial court noted, the sentencing
offense involved larceny by conversion of $20,000 or more, but to the extent defendant converted
substantially more than $20,000, defendant was not similarly situated to a defendant with a
comparable criminal history who only converted $20,000. Indeed, as noted by the prosecutor, the
trial court assessed 10 points for OV 16 for the loss of property with a value of more than $20,000.
See MCL 777.46(1)(d). To the extent defendant converted more than $20,000, that amount,
bearing on the seriousness of the offense, is not adequately reflected in the guidelines.
Accordingly, the amount lost by the victims as reflected in the restitution award may theoretically
be considered by the trial court in sentencing defendant and justifying the extent of the departure.
Although the trial court did not categorically err by considering the amount of restitution
when sentencing defendant, the trial court clearly erred by citing the amount of restitution as over
$200,000 or a quarter of a million dollars. As detailed earlier, this amount of restitution is not
factually supported by the record in this case. Defendant is entitled to be sentenced on accurate
information, and there is no indication that the trial court would have imposed the same sentence
regardless of the amount of restitution. Indeed, the amount of restitution was one of the trial court’s
primary reasons for the upward departure; and the amount of restitution awarded to the
homeowners was a key justification for the extent of the departure. On this record, if the amount
of restitution—or the specific amount defendant converted—is to be used as a basis for an upward
departure, it needs to be accurately determined. Because the amount of restitution has not been
accurately determined, defendant’s upward departure sentence, premised on the conclusion that he
owed restitution in the amount of $287,998.62, is not reasonable and proportionate.
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Accordingly, we vacate defendant’s sentence and remand for resentencing.
IX. ALTERNATIVE JUDICIAL ASSIGNMENT
Although we conclude that a remand and resentencing is warranted, we see no reason to
grant defendant’s request to remand to a different judge. In requesting a different judge, defendant
makes no argument—and the record does not suggest—that (1) Chief Judge Trusock will “have
substantial difficulty” in putting aside his “previously-expressed views or findings determined to
be erroneous or based on evidence that must be rejected” or that (2) reassignment is warranted to
preserve the appearance of justice. People v Hill, 221 Mich. App. 391, 398; 561 NW2d 862 (1997)
(quotation marks and citation omitted). Moreover, given the lengthy trial in this case and the
factually detailed restitution issue to be decided on remand, reassignment to another judge “would
entail waste and duplication.” Id. Instead, the matter will be remanded to Chief Judge Trusock
for further proceedings.
Affirmed in part, vacated in part, and remanded for further proceedings. We do not retain
jurisdiction.
/s/ Christopher M. Murray
/s/ Patrick M. Meter
/s/ Kirsten Frank Kelly
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