MEMORANDUM DECISION FILED Pursuant to Ind. Appellate Rule 65(D), Apr 21 2016, 7:42 am
this Memorandum Decision shall not be CLERK Indiana Supreme Court regarded as precedent or cited before any Court of Appeals and Tax Court court except for the purpose of establishing the defense of res judicata, collateral estoppel, or the law of the case.
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE T. Andrew Perkins Gregory F. Zoeller Peterson Waggoner & Perkins, LLP Attorney General of Indiana Rochester, Indiana Larry D. Allen Deputy Attorney General Indianapolis, Indiana
IN THE COURT OF APPEALS OF INDIANA
Max Nicholson, April 21, 2016 Appellant-Defendant, Court of Appeals Case No. 25A03-1506-CR-764 v. Appeal from the Fulton Superior Court State of Indiana, The Honorable Appellee-Plaintiff. Wayne E. Steele, Judge Trial Court Cause No. 25D01-0912-FC-535
Kirsch, Judge.
Court of Appeals of Indiana | Memorandum Decision 25A03-1506-CR-764 | April 21, 2016 Page 1 of 25 [1] Following a jury trial, Max Nicholson (“Nicholson”) was convicted of one
count of Class C felony theft,1 and six counts of Class D felony fraud.2
Nicholson now appeals and raises the following two restated issues:
I. Whether the trial court abused its discretion when it admitted into evidence credit card statements issued in the name of one of the victims, Robert Ragan (“Ragan”); and
II. Whether the trial court abused its discretion when it admitted into evidence a copy of the front of a cashier’s check issued from the bank account of another victim, Patricia Eber (“Eber”).
[2] We affirm.
Facts and Procedural History [3] In the summer of 2002, Nicholson met Eber while attending a real estate
conference in Florida. Eber lived in Rochester, Indiana, and at that time
Nicholson was living in West Virginia.3 A couple of months prior to their
meeting, Eber had inherited a parcel of real estate in Indiana and another in
Mississippi; each included a residence on the real property. She also inherited
real estate in Tennessee, which was subdivided into lots but not yet developed.
In addition, Eber was the beneficiary of $250,000.00 in life insurance proceeds.
1 See Ind. Code § 35-43-4-2(a). We note that the statutes under which Nicholson was charged were amended effective July 1, 2014; however, we will apply the statutes in effect at the time that Nicholson committed his offenses. 2 See Ind. Code § 35-43-5-4(1). 3 Sometime in 2003, Nicholson moved to Rochester, Indiana. Tr. at 280.
Court of Appeals of Indiana | Memorandum Decision 25A03-1506-CR-764 | April 21, 2016 Page 2 of 25 Eber sold the two houses, and she deposited the proceeds along with the life
insurance money into an account at Teachers Credit Union (“TCU”). Eber
retained the Tennessee subdivision, which included an unfinished spec home
upon which a contractor had placed a $35,000.00 mechanic’s lien, which
prevented Eber from selling the home. Eber attended the Florida real estate
conference to acquire knowledge about real estate, since she now owned the
Tennessee subdivided property. At the real estate conference, Eber talked with
Nicholson, who was seated behind her, and Nicholson told Eber that he was
experienced in real estate and development projects.
[4] Some weeks after the real estate conference, in August or September 2002, Eber
contacted Nicholson to seek his advice about the mechanic’s lien that remained
on the spec home, as Eber wanted to sell it. Nicholson suggested a solution
that involved issuing a bond on the property, which would allow her to sell it.
Eber accepted his offer to assist her with accomplishing that task. To complete
the sale of the spec home, Nicholson had Eber execute, in September 2002, a
general power of attorney, naming him as her attorney-in-fact and giving him
power over, among other things, real estate transactions, banking transactions,
business operating transactions, access to checking and savings bank accounts,
and “all other matters.” Tr. at 259-61; State’s Ex. 1. The spec home property
eventually was sold. As for the rest of the Tennessee real estate, Nicholson
directed Eber to place the land in a trust, with him as the trustee, and Eber did
so.
Court of Appeals of Indiana | Memorandum Decision 25A03-1506-CR-764 | April 21, 2016 Page 3 of 25 [5] In 2003, Nicholson approached Eber with the idea of investing in land
development. Eber was interested and ultimately agreed with Nicholson’s
proposal, and they formed a company called The Group Incorporated (“The
Group”). Nicholson was The Group’s president and trustee, and Eber was the
vice president. For purposes of funding The Group, Eber directed TCU to issue
a cashier’s check from her account in the amount of $323,726.47 payable to The
Group. Eber personally handed the check to Nicholson. Eber also cashed out
a Fidelity annuity, valued at approximately $100,000.00, and gave it to
Nicholson to place in The Group for investment. Eber understood that these
funds were to be used to buy property, develop it, and sell it. To Eber’s
knowledge, Nicholson never invested his own money in The Group.
Nicholson told Eber to expect a ten percent return on her investment. At some
point, Nicholson also advised Eber to transfer ownership of her Rochester
residence into a trust, of which he was trustee, and Eber did so. Tr. at 272. He
told her the purpose was to “protect the property.” Id.
[6] Eber, in addition to her own money and property, also invested $100,000.00 on
behalf of her mother into The Group. Eber was power of attorney for her
mother, and in that capacity, Eber executed a general power of attorney in
September 2003 that gave Nicholson authority over Eber’s mother’s affairs.
Eber’s mother owned real estate, which was placed in a trust of which
Nicholson was trustee. State’s Ex. 6. Nicholson agreed to disburse income
from The Group to cover the mother’s living expenses, and he stated he would
Court of Appeals of Indiana | Memorandum Decision 25A03-1506-CR-764 | April 21, 2016 Page 4 of 25 issue a check to Eber every month for her use in paying her mother’s expenses.
This occurred for about three months and then stopped.
[7] In 2004, Nicholson “changed gears” away from developing real estate, as Eber
had agreed to do, and Nicholson told Eber that he used money from The Group
to purchase an Oregon-based golf equipment company called Harris
International (“Harris”). Tr. at 262, 265. Nicholson did not consult with Eber
before purchasing Harris. Following the purchase of Harris, Eber’s relationship
with Nicholson declined. Eber made attempts to reach Nicholson after her
mother died in 2005, because Eber wanted to sell her mother’s property that
was in trust, but he avoided communicating with her.
[8] When Eber eventually confronted Nicholson about the financial arrangements
and her ownership of Harris, Nicholson told Eber that her money was “gone.”
Tr. at 296. Eber also discovered that her Home Depot credit card had
$11,205.34 in unauthorized charges on it. State’s Ex. 5. Nicholson had changed
the billing address on her Home Depot card, so that monthly statements were
mailed to The Group, and Eber did not receive or see the statements. Eber
checked on the Tennessee subdivision and found that many lots had been sold,
but she had never seen any of the money.
[9] By January 2006, Eber wanted to end the business relationship with Nicholson.
She hired a lawyer, and in February 2006, she executed a revocation of her
power of attorney that had been executed in favor of Nicholson. State’s Ex. 4.
Court of Appeals of Indiana | Memorandum Decision 25A03-1506-CR-764 | April 21, 2016 Page 5 of 25 Eber filed a civil suit against Nicholson, and she obtained a judgment against
him. At some point in 2008, the matter was also referred to law enforcement.
[10] Meanwhile, in 2003, Nicholson responded to an online advertisement placed by
Ragan, who had recently moved from New York to the Mishawaka/South
Bend area. Tr. at 333-35. Ragan placed the ad looking for friends, as he was
new to the area. The two met, and Nicholson told Ragan he was a financial
advisor, had experience flipping properties, and could help Ragan with real
estate investing. In December 2003, after the two had been friends for some
months, and Nicholson had observed that Ragan struggled with the
organization of his personal finances and payment of bills, Nicholson offered to
assist Ragan with managing his financial affairs. Ragan agreed, and Nicholson
began paying Ragan’s bills for him, by making payment from Ragan’s checking
account. Nicholson had previously told Ragan that The Group was a company
he utilized to buy and sell homes, and at some point, Nicholson suggested that
Ragan change his billing address for his bills to The Group’s address, to make it
more convenient for bill payment, and Ragan agreed. Eventually, all of
Ragan’s bills and credit card statements were sent to The Group.
[11] In May 2004, Ragan executed a power of attorney, naming Nicholson as
attorney-in-fact and trustee. State’s Ex. 7. Thereafter, in the spring of 2004,
Nicholson assisted Ragan with looking for a home to purchase in South Bend.
Ragan borrowed $10,000.00 from his mother for a down payment, and Ragan
wrote a check from his checking account to The Group. Ragan did not end up
moving into a home in South Bend, and due to work changes, in 2005 Ragan
Court of Appeals of Indiana | Memorandum Decision 25A03-1506-CR-764 | April 21, 2016 Page 6 of 25 began investigating a move to Chicago. Ragan allowed Nicholson to keep the
$10,000.00 because Nicholson told him that the money was invested and would
have increased in value when he needed it to buy a home in Chicago. Ragan
borrowed more money from his father to purchase a condominium in Chicago.
Nicholson handled the paperwork and, shortly after the purchase, Nicholson
directed Ragan to transfer ownership of the property into a trust with Nicholson
as trustee, in order to “protect the property.” Tr. at 342, 353. Nicholson also
assisted in the paperwork when Ragan purchased a Nissan pickup truck.
Originally the vehicle was titled in Ragan’s name, but “almost immediately” it
was transferred into a trust, of which Nicholson was trustee. Id. at 351.
[12] In April 2007, Ragan attempted to make an online purchase with his American
Express Personal Gold card. The card was rejected, and when Ragan called
American Express, he discovered that his account was frozen due to an
outstanding balance of over $10,000.00. Thereafter, Ragan obtained a credit
report and discovered outstanding balances on other credit cards, as well. He
learned that four other credit cards had been issued in his name, although he
did not apply for them: Bank of America, American Express Business Gold,
Chase Bank, and USAA Savings Bank. Tr. at 358-84; State’s Exs. 9-13. The
outstanding balances totaled more than $115,000.00. Ragan learned that the
monthly statements on the cards had been mailed to The Group. Ragan hired
an attorney and, with the attorney’s assistance, revoked the power of attorney
that Ragan had executed in favor of Nicholson. In April 2007, Ragan made a
police report about the credit card fraud. In November 2007, Ragan relocated
Court of Appeals of Indiana | Memorandum Decision 25A03-1506-CR-764 | April 21, 2016 Page 7 of 25 from Chicago to Indianapolis, and in June 2008, Eber made contact with
Ragan to share her experiences with Nicholson and discuss being a victim of
fraud.
[13] In December 2009, the State charged Nicholson with: Count I, Class C felony
theft, alleging that he knowingly exerted unauthorized control over Eber’s
property, namely cash in excess of $100,000.00, with the intent to deprive her of
its value or use; Count II, Class D felony fraud, alleging that Nicholson, with
intent to defraud, obtained property by using Eber’s Home Depot credit card
without Eber’s consent; and Counts III-VII, five counts of Class D felony fraud,
alleging that Nicholson, with intent to defraud, obtained property by using five
different credit cards belonging to Ragan without his consent, specifically:
Bank of America, American Express Personal Gold Card, American Express
Business Gold Card, Chase Bank, and USAA Savings Bank credit cards.4
Nicholson fled Indiana, and a warrant was issued for his arrest. The State
enlisted the assistance of, among others, the Federal Bureau of Investigation
and the Indiana State Police Intelligence Division in locating Nicholson; Eber
hired at least one private investigator. Nicholson was eventually located and
apprehended in the state of Washington in February 2013.
[14] At trial, Eber testified that during the course of their business relationship,
Nicholson had informed her that she owned 500 shares of Harris, but she never
4 We note that the State initially filed Count VIII, another count of fraud, but later dismissed it.
Court of Appeals of Indiana | Memorandum Decision 25A03-1506-CR-764 | April 21, 2016 Page 8 of 25 received proof of ownership of either Harris or The Group. Eber testified that
in 2005, their relationship starting “going downhill.” Tr. at 288. She would try
to reach him and ask for documentation, but he was not available and would
not return her attempts to reach him. Although Nicholson told her that she was
vice president of The Group, she did not engage in any transactions for the
company; she did not write checks, or prepare documents, or have any direct
involvement with it. She never received a receipt or some form of formal
acknowledgement of the monies that she and her mother contributed to The
Group. Although the Tennessee spec home sold, she never saw any of the
proceeds. Eber testified that, for approximately a year and a half, she drove a
Saturn Vue vehicle that was purchased by The Group in 2003; the Vue was one
of three vehicles purchased by The Group, with the other two having been
purchased in late 2002. Eber later learned that the two other vehicles were
financed under her name using her credit.
[15] The State introduced Exhibit 3, which was the TCU cashier’s check that Eber
directed TCU to issue from her account in the amount of $323,726.43. It was
payable to The Group. Nicholson objected on the grounds that the check was a
duplicate and that there was no copy of the back of the check, which would
have reflected who endorsed it. Nicholson argued the back of the check was
necessary to see whether Nicholson or someone else had endorsed it, and thus
had exerted control over the money. The trial court overruled Nicholson’s
objections, and it admitted the check into evidence.
Court of Appeals of Indiana | Memorandum Decision 25A03-1506-CR-764 | April 21, 2016 Page 9 of 25 [16] Eber testified that she personally gave the check to Nicholson. The check was
payable to The Group, but Eber testified that Nicholson was the president and
sole trustee of The Group. Eber testified that the money was withdrawn from
her TCU account. Later, when Eber confronted Nicholson about all the money
she had invested in the Group, he told her that the money was “gone,” and
there was nothing left. Tr. at 296. Eber never saw any of the trust documents
that held her properties.
[17] Eber testified that, during her relationship with Nicholson, she did not know
anyone named Robert Ragan; however, during the time that she began to
pursue legal action against Nicholson, and she was at the courthouse doing
research on Nicholson, she discovered a general power of attorney in which
Ragan gave Nicholson power over his affairs. Eber’s name appeared as a
notary on the document, although she never had seen it before and did not
notarize it. Tr. at 293; State’s Ex. 7. Eber testified that she made contact with
Ragan in June 2008.
[18] Ragan also testified. He explained that, after Nicholson noticed that Ragan
was not too organized with his personal finances and payment of bills,
Nicholson offered to assist with that task, but would not accept payment,
stating he was doing it as a friend. At first, Nicholson picked up the bills from
Ragan, and later, Ragan agreed to send the bills directly to Nicholson’s business
address at The Group. In May 2004, Ragan executed the general power of
attorney naming Nicholson as his attorney-in-fact. Initially, Ragan’s
understanding of the reason for the power of attorney would be to assist with
Court of Appeals of Indiana | Memorandum Decision 25A03-1506-CR-764 | April 21, 2016 Page 10 of 25 the payment of Ragan’s bills, and later he believed the power of attorney would
be useful while Nicholson was helping Ragan purchase a residence in Chicago.
During 2006 and 2007, after living in Chicago for a period of time, Ragan
desired to take back control of his personal finances and affairs, as he was
seeing and communicating less with Nicholson, who still lived in Indiana.
Ragan asked Nicholson repeatedly to send him his bills and statements so that
Ragan could pay them himself. Nicholson sporadically sent Ragan various
bills, mostly utilities, but never sent him credit card statements.
[19] With regard to the American Express Personal Gold Card, Ragan explained
that he had had that account since at least the late 1980s. He attempted to use
it sometime in 2005, but it was denied, and when he called American Express,
he was told of the balance and that the account was frozen due to nonpayment.
Ragan believed that the charges were likely moving expenses that he incurred
when moving to Chicago, so Ragan paid the balance in full, which was in
excess of $13,000.00. Later in April 2007, he again was not able to make a
purchase on the card, and when he inquired, he learned of a balance in excess
of $10,000.00. Although Ragan had made some purchases, he knew that it
would not have totaled that amount, so he began investigating and obtained a
credit report, at which time he learned of at least four other credit cards in his
name that he did not apply for or know existed: Bank of America, Chase,
American Express Business Gold Card, and USAA Savings Bank. Ragan
testified that Nicholson was the only individual who possessed a power of
attorney for him and who could have had the power to open and change the
Court of Appeals of Indiana | Memorandum Decision 25A03-1506-CR-764 | April 21, 2016 Page 11 of 25 credit accounts. Tr. at 396, 410. After learning from the credit report of the
unauthorized cards, Ragan contacted the various credit card companies and
entered into payment agreements for the outstanding balances.
[20] The State introduced Exhibits 9 through 13, the five credit card statements in
Ragan’s name, which he did not apply for or open and which had charges on
them totaling over $115,000.00. Nicholson objected to the admission of each of
the exhibits, arguing that they were not properly authenticated. Tr. at 358-70.
Nicholson also objected on the basis that the statements contained hearsay and
that the State did not present the necessary evidence to have them admitted
under the business records exception to the hearsay rule. The trial court
admitted the five credit card statements over Nicholson’s objections.
[21] Ragan testified that he never saw copies of the trust documents into which he
had placed personal and real property. There came a point in time when Ragan
wanted the pickup truck and his Chicago condominium out of the trust, but
Nicholson had “disappeared,” and Ragan could not reach him. Id. at 352.
[22] The jury found Nicholson guilty as charged. At the sentencing hearing,
Nicholson testified, and he also made a statement to the trial court, which,
along with asking for forgiveness, purported to “forgive the victims.” Id. at 531.
The trial court viewed Nicholson’s statement as “narcissistic” and “rambling.”
Id. at 559. The trial court reviewed Nicholson’s extensive lists of employers and
charitable work, noting “[T]he Court’s not buying it.” Id. at 558. The trial
court remarked, “You’re trying to make this Court and this system your next
Court of Appeals of Indiana | Memorandum Decision 25A03-1506-CR-764 | April 21, 2016 Page 12 of 25 victim. And it’s not going to happen.” Id. at 557. The trial court found that
“the anguish and the harm” to the victims was “immeasurable[,]” and it
characterized Nicholson as “a predator.” Id. at 560. The trial court thereafter
sentenced Nicholson to eight years on the Class C felony theft conviction and
three years each on the six Class D felony fraud convictions. The trial court
ordered the sentences to run consecutively, for a total executed sentence of
twenty-six years. Nicholson now appeals.
Discussion and Decision [23] Nicholson claims that the trial court abused its discretion when it admitted into
evidence “documents purporting to be credit card statements from various
financial institutions” and a copy of Eber’s check in the amount of $323,726.43
from TCU payable to The Group. Appellant’s Br. at 6. A trial court has broad
discretion in ruling on the admissibility of evidence, and, on review, we will
disturb its ruling only on a showing of abuse of discretion. Wise v. State, 26
N.E.3d 137, 143 (Ind. Ct. App. 2014), trans. denied; Sandleben v. State, 22 N.E.3d
782, 795 (Ind. Ct. App. 2014), trans. denied. An abuse of discretion occurs when
the trial court’s decision is clearly against the logic and effect of the facts and
circumstances before it. Wise, 26 N.E.2d at 143. When reviewing a decision
under an abuse of discretion standard, we will affirm if there is any evidence
supporting the decision. Sandleben, 22 N.E.2d at 795. A claim of error in the
admission or exclusion of evidence will not prevail on appeal unless a
substantial right of the party is affected. Ind. Evid. Rule 103(a); Guiterrez v.
State, 961 N.E.2d 1030, 1034 (Ind. Ct. App. 2012). “In other words, even if the
Court of Appeals of Indiana | Memorandum Decision 25A03-1506-CR-764 | April 21, 2016 Page 13 of 25 trial court erred in admitting evidence, we will not reverse if that error was
harmless.” Sandleben, 22 N.E.3d at 795 (citing Williams v. State, 714 N.E.2d
644, 652 (Ind. 1999), cert. denied 528 U.S. 1170 (2000)).
I. The Credit Card Statements [24] Nicholson challenges the admission into evidence of the following credit card
statements that were issued in Ragan’s name but mailed to The Group: Exhibit
9 (Bank of America); Exhibits 10 and 10A (American Express, Personal Gold
Card); Exhibit 11 (American Express, Business Gold Card); Exhibit 12 (Chase
Bank); and Exhibit 13 (USAA Savings Bank). Nicholson challenges the
admission of the exhibits on two grounds: the State failed to properly
authenticate the credit card statements, and it failed to satisfy the requirements
of the business records exception to the hearsay rule.
[25] Nicholson argues that the credit card statements were admitted into evidence
despite “a lack of proper authentication.” Appellant’s Br. at 7. Nicholson asserts
that under Indiana Evidence Rule 901(a), the party seeking to admit evidence
must “produce evidence sufficient to support a finding that the item is what the
proponent claims it is.” In this case, the State presented the credit card
statements through Ragan’s testimony. Nicholson argues that, “[t]he only
familiarity that Ragan had with most of the statements was that his name
appeared on them[,]” and that Ragan’s testimony was inadequate to provide
proper authentication of the documents. Id. at 10. We disagree with
Nicholson.
Court of Appeals of Indiana | Memorandum Decision 25A03-1506-CR-764 | April 21, 2016 Page 14 of 25 [26] Ragan testified that he had possessed a personal American Express Gold Card
for over two decades. Although the first time that the card was declined, when
he tried to use it in 2005, he paid the outstanding balance of over $13,000.00
because he believed it must have been his moving expenses. However, when
the card was again declined in 2007, and the balance exceeded $10,000.00, he
knew that he had not made that amount of charges, so he obtained the
statement from American Express. He also obtained a credit report and
discovered that four other credit cards had been issued in his name, without his
knowledge or consent, each with large balances: Bank of America; Chase
Bank, American Express Business Gold Card account; and USAA Savings
Bank. He personally obtained statements from those companies, saw that he
had not made any of the charges reflected and, thereafter, engaged in separate
negotiations with each of the issuing banks.5 As Nicholson acknowledges,
authentication can be established by direct or circumstantial evidence, and
absolute proof of authenticity is not required; a reasonable probability that the
document is what it purports to be is sufficient. Appellant’s Br. at 7 (citing
Pavlovich v. State, 6 N.E.3d 969, 976 (Ind. Ct. App. 2014), trans. denied). We
find that Ragan’s testimony was sufficient evidence to support a finding that the
items were what Ragan claimed them to be, namely credit card statements for
5 Ragan testified that he was required to pay one or more of the balances in full, because of the existing power of attorney, but that other banks wrote off the debt, or reached a compromise with him for partial payment in satisfaction of the debt.
Court of Appeals of Indiana | Memorandum Decision 25A03-1506-CR-764 | April 21, 2016 Page 15 of 25 cards issued in his name, without his knowledge, the balances of which, for
several cards, he was held financially responsible, in full or in part.
[27] Next, Nicholson argues that the credit card statements constituted hearsay, did
not qualify for admission under the business records exception, and should have
been excluded from evidence. Hearsay is an out-of-court statement offered into
evidence to prove the truth of the matter asserted. Evid. R. 801(c). Hearsay is
inadmissible unless it falls under a recognized exception. Evid. R. 802. One
such exception exists for records that satisfy the requirements of Evidence Rule
803(6), which provides,
The following are not excluded by the rule against hearsay, regardless of whether the declarant is available as a witness:
.... (6) Records of a Regularly Conducted Activity. A record of an act, event, condition, opinion, or diagnosis if:
(A) the record was made at or near the time by—or from information transmitted by—someone with knowledge;
(B) the record was kept in the course of a regularly conducted activity of a business, organization, occupation, or calling, whether or not for profit;
(C) making the record was a regular practice of that activity;
(D) all these conditions are shown by the testimony of the custodian or another qualified witness, or by a certification that complies with Rule 902(11) or (12) or with a statute permitting certification; and
Court of Appeals of Indiana | Memorandum Decision 25A03-1506-CR-764 | April 21, 2016 Page 16 of 25 (E) neither the source of information nor the method or circumstances of preparation indicate a lack of trustworthiness.
[28] “In essence, the basis for the business records exception is that reliability is
assured because the maker of the record relies on the record in the ordinary
course of business activities.” In re Termination of Parent-Child Relationship of
E.T., 808 N.E.2d 639, 643 (Ind. 2004). Business records are “imbued with
independent indicia of trustworthiness.’” Embrey v. State, 989 N.E.2d 1260,
1264-65 (Ind. Ct. App. 2013) (quoting Williams v. Hittle, 629 N.E.2d 944, 947
(Ind. Ct. App. 1994), trans. denied). “These indicia are that the business
establishes a routine of record-making, that the record is made by one with a
duty to report accurately, and that the business relies upon that record in
carrying out its activities.” Id.
[29] Nicholson argues that because the State did not present the testimony of a
custodian of the records or provide a certification for the documents, it thereby
failed to provide sufficient foundation to admit the credit card statements under
Evidence Rule 803(6). The State responds that circumstantial evidence
established that they were trustworthy business records and, thus, properly
admitted. It maintains, “Ragan’s testimony was sufficient to show the records
were regularly kept business records,” explaining that Ragan’s testimony, about
receiving the statements and directly negotiating payment plans with the
issuers, reflected that he relied upon the statements as accurate business records.
Appellee’s Br. at 15. The State further argues, “Almost everyone is familiar with
the monthly statements they receive from financial institutions, including credit
Court of Appeals of Indiana | Memorandum Decision 25A03-1506-CR-764 | April 21, 2016 Page 17 of 25 card issuers[,] and, thus, “[T]he nature of the records themselves” reflects “their
reliability as regularly kept business records.” Id. at 16-17. However, the fact
that Ragan relied on the records as being accurate or that “almost everyone”
knows about and receives monthly credit card statements did not relieve the
State from satisfying the requirements of Evidence Rule 803(6). Id. at 16.
[30] Evidence Rule 803(6)(D) requires that “all the conditions” under subsection
(A), (B), and (C) – that the record was made at or near the time by someone
with knowledge, was kept in the course of regularly conducted activity of the
business, and making the record was a regular practice – be shown “by the
testimony of the custodian” or “by certification[.]” See also In re Paternity of
H.R.M., 864 N.E.2d 442, 448 (Ind. Ct. App. 2007) (records of regularly
conducted business activity “must be supported by testimony or an affidavit
indicating that such records were kept in the normal course of business, and
that it was the regular practice of the business to make such records”).
To our knowledge, this state has not adopted the approach taken by the federal courts which would permit the admission of business records based upon circumstantial evidence derived from the document itself, without the testimony of the custodian or another qualified witness. . . . Neither are we aware of any catch-all exception in Indiana similar to the Federal Rules of Evidence, Rule 803(24) which would allow a trial judge in the exercise of discretion to consider the inherent trustworthiness of the entry and the nature of the business which produced it.
[31] Ground v. State, 702 N.E.2d 728, 731 (Ind. Ct. App. 1998) (quoting Cardin v.
State, 540 N.E.2d 51, 55 (Ind. Ct. App. 1989)).
Court of Appeals of Indiana | Memorandum Decision 25A03-1506-CR-764 | April 21, 2016 Page 18 of 25 [32] We have recognized that, as an exception to the hearsay rule, the business
record exception must be strictly construed. Speybroeck v. State, 875 N.E.2d 813,
819 (Ind. Ct. App. 2007). In this case, the State presented neither the testimony
of a custodian or a written certification. Ragan’s testimony could not provide
an adequate foundation to sponsor the credit card statements because he was
not the custodian and did not have knowledge of the record sufficient to
sponsor it; he did not explain how the record was created or that the company
relied on it in the course of its business.6 Thus, the trial court abused its
discretion when it admitted the credit card statements over Nicholson’s hearsay
objections.7 See Sandleben, 22 N.E.3d at 796 (witness could not provide
adequate foundation to sponsor business record that showed internet subscriber
information where witness was not custodian and did not have knowledge of
how record was made or who created it); Stahl v. State, 686 N.E.2d 89, 92 (Ind.
1997) (error to admit bank’s “affidavit of forgery” document, which had been
completed by bank customer at bank’s request to verify that defendant did not
have authorization to use customer’s ATM card, because requirements of Rule
803(6) were not met).
6 Although a sponsor “need not have personally made [the record], filed it, or have firsthand knowledge of the transaction represented by it,” a sponsor must still testify about how the record was made, who filed it, and that the person who filed it was both authorized to do so and had personal knowledge of the transaction. Sandleben v. State, 22 N.E.3d 782, 795 (Ind. Ct. App. 2014), trans. denied.
Court of Appeals of Indiana | Memorandum Decision 25A03-1506-CR-764 | April 21, 2016 Page 19 of 25 [33] However, not all trial court error is reversible. We will affirm a defendant’s
convictions if error in admission of evidence was harmless. Speybroeck, 875
N.E.2d at 822. A claim of error in the admission or exclusion of evidence will
not prevail on appeal unless a substantial right of the party is affected.
Sandleben, 22 N.E.3d at 795. In determining whether error in the introduction
of evidence affected a defendant’s substantial rights, we assess the probable
impact of the evidence on the jury. Corbett v. State, 764 N.E.2d 622, 628 (Ind.
2002).
[34] Viewing the record in this case, we conclude that any error in the admission of
the documents does not rise to the level of reversible error. The record as a
whole reveals that Nicholson engaged in a similar pattern of conduct with Eber
and Ragan. He befriended each of them, assessed their needs and
vulnerabilities, and after gaining their trust, offered his assistance. He offered
expertise and assistance with financial matters, and to best help each of them,
he advised that he would need a general power of attorney, which Eber and
Ragan each executed. This gave Nicholson broad control over their financial
affairs. He advised that, to protect their assets, it would be best to put various
assets into a trust, of which he was trustee. Eber and Ragan believed Nicholson
and did as he suggested. In Ragan’s case, Nicholson offered to assist Ragan
with making payment of his monthly bills. Ragan testified that Nicholson
recommended that, for ease, the bills be paid through his company, The Group.
Ragan agreed to have the bills sent directly to The Group’s business address.
Court of Appeals of Indiana | Memorandum Decision 25A03-1506-CR-764 | April 21, 2016 Page 20 of 25 [35] Because Nicholson committed the fatal misstep of failing to make one or more
payments on Ragan’s personal American Express Gold Card, the card was
declined when Ragan tried to use it in 2007. This led to Ragan obtaining his
statement from American Express, as well as a credit report, which revealed to
Ragan that four other credit cards had been issued in his name without his
knowledge and were being mailed to The Group. He testified that he obtained
those credit card statements, and other than some of the charges on his personal
American Express Gold Card bill, none of the charges on the other cards were
attributable to him. Ragan testified that he communicated directly with those
credit card issuers to attempt to have the balances removed, reduced, or
otherwise arrange a payment plan. He entered into settlement agreements with
American Express, Chase, Bank of America, and USAA Savings Bank. While
the erroneously-admitted credit card statements illustrated specific purchases on
specific dates on specific cards, that information was not the only evidence that
connected Nicholson to having committed fraud by obtaining and using credit
cards issued in Ragan’s name.
[36] The State’s evidence as a whole was sufficient from which the trier of fact could
reasonably infer that Nicholson – who at the relevant time was the only person
who possessed a power of attorney over Ragan’s affairs and who was already
paying Ragan’s bills – obtained credit cards in Ragan’s name, made
unauthorized charges on the cards, and had the statements mailed directly to
The Group. Thus, while the trial court erred in admitting the records over
objection, the other properly admitted trial evidence supports Nicholson’s
Court of Appeals of Indiana | Memorandum Decision 25A03-1506-CR-764 | April 21, 2016 Page 21 of 25 convictions beyond a reasonable doubt, and any error did not affect
Nicholson’s substantial rights. Accordingly, we hold that any error in the
admission of the credit card statements, Exhibits 9-13, was harmless error. See
Sandleben, 22 N.E.3d at 796 (although business record listing subscriber
information was improperly admitted, it was harmless because other evidence
supported convictions beyond reasonable doubt).
B. Eber’s Check [37] Nicholson next argues that the trial court erred when it admitted Exhibit 3, a
copy of Eber’s check in the amount of $323,726.43 from TCU payable to The
Group. Here, Eber identified the copy of the TCU cashier’s check and
explained that she directed the bank to issue the check, payable to The Group.
She testified that the amount reflected her entire account balance, “down to the
penny.” Tr. at 263. Nicholson objected to the check, asserting that it was a
copy and that “Evidence Rule 1002 requires the original,” and he further
argued that Exhibit 3 was not a complete document because it did not include a
copy of the back of the check, which would show whether Nicholson, or
someone else, endorsed it. Id. Eber testified that Exhibit 3 was the only
evidence of the check that she was able to obtain from TCU. The trial court
overruled Nicholson’s objection, and with regard to the fact that the back of the
check was not included, the trial court stated, “That may very well go to the
weight, but the Court will overrule the objection[.]” Id. at 265.
Court of Appeals of Indiana | Memorandum Decision 25A03-1506-CR-764 | April 21, 2016 Page 22 of 25 [38] Our Rules of Evidence set forth rules concerning the admissibility of original
and copies of various documentary and recorded forms of evidence. Generally,
to prove the content of a writing, “the original writing, recording, or
photograph is required” unless the Rules of Evidence or a statute provide
otherwise. Evid. R. 1002. However, “[a] duplicate is admissible to the same
extent as an original unless a genuine question is raised about the original’s
authenticity or the circumstances make it unfair to admit the duplicate.” Evid.
R. 1003; Wise, 26 N.E.3d at 143. Here, Nicholson objected and argued that it
was unfair to admit the duplicate because the back of the check was not
included, thus “we’re not able to see who endorsed the check,” which is
relevant to the case because “the entire crux” of the State’s charges was that
Nicholson “had some kind of control over the money.” Tr. at 265.
[39] Upon review of the record before us, we find that the check was properly
admitted. Eber identified the TCU check, when it was issued, to whom, in
what amount, from what account, and at her direction. She testified that the
funds were withdrawn from her account. Thus, we find that her testimony
properly authenticated the check. We likewise reject Nicholson’s argument that
it was an abuse of discretion to admit the one-sided check because the reverse
side of it was necessary to establish whether he did or did not exert control over
the money, as was necessary to convict him of Class C felony theft, as charged.
We disagree and find that other, circumstantial evidence was presented to the
jury from which it could have inferred that Nicholson exerted unauthorized
Court of Appeals of Indiana | Memorandum Decision 25A03-1506-CR-764 | April 21, 2016 Page 23 of 25 control over Eber’s property, “namely cash in excess of $100,000.” Appellant’s
App. at 13.
[40] Nicholson presented himself to Eber as an experienced real estate investor. He
was able to resolve the issue of the lien on the Tennessee spec home so that
Eber could sell the property. Eventually, he proposed to Eber that he could
assist her with real estate investing and that she could make ten percent on her
investment. To this end, she withdrew her funds from TCU, ordering TCU to
prepare the check for $323,726.43 payable to The Group. She handed the
check to Nicholson, the president and trustee of The Group. Thereafter, the
funds were removed from her TCU account. Eber also cashed out a Fidelity
annuity, valued at approximately $100,000, and placed that into The Group.
Eber also invested $100,000.00 of her mother’s money into The Group. To
Eber’s knowledge, Nicholson never contributed any of his own money to The
Group. Without her consent, Nicholson purchased Harris, a golf equipment
company, even though he had told her that the money would be invested in real
estate. She never received any income from the claimed investment. Nor did
she receive any money from the Tennessee lots that she discovered had been
sold. Later, when she asked Nicholson about her money that had been given to
The Group for investment, Nicholson told her that the money was “gone.” Tr.
at 296, 300. Even without the endorsement on the back of the TCU check, we
find that there was evidence from which a fact-finder could infer that Nicholson
exerted control over Eber’s property with the intent to deprive her of its use or
value.
Court of Appeals of Indiana | Memorandum Decision 25A03-1506-CR-764 | April 21, 2016 Page 24 of 25 [41] Nicholson contends that he was deprived of “the opportunity to explore issues
surrounding [the check’s] endorsement.” Appellant’s Br. at 18. However, the
record indicates that he did cross-examine Eber on the issue, asking “You don’t
actually know who cashed that check do you?” Tr. at 313. Eber conceded that,
because she was not able to obtain a copy of the check that included the back
side of it, she did not “know” who cashed the check. Id. Thus, Nicholson
explored the issue with Eber, and the jury heard Eber’s response. Nicholson
has not shown that his substantial rights were affected by the admission of the
check, and we find no abuse of trial court discretion.
[42] Affirmed.
[43] Mathias, J., and Brown, J., concur.
Court of Appeals of Indiana | Memorandum Decision 25A03-1506-CR-764 | April 21, 2016 Page 25 of 25