United States v. Donald Cross, Jr.

• Court: Court of Appeals for the Sixth Circuit
• Decided: December 16, 2025
• Docket: 25-5276
• Status: Unpublished

Opinion

NOT RECOMMENDED FOR PUBLICATION File Name: 25a0581n.06

Case No. 25-5276

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT FILED Dec 16, 2025 ) UNITED STATES OF AMERICA, KELLY L. STEPHENS, Clerk ) Plaintiff-Appellee, ) ) ON APPEAL FROM THE v. ) UNITED STATES DISTRICT ) COURT FOR THE EASTERN DONALD L. CROSS, JR., ) DISTRICT OF TENNESSEE Defendant-Appellant. ) ) OPINION

Before: NALBANDIAN, DAVIS, and HERMANDORFER, Circuit Judges.

NALBANDIAN, Circuit Judge. Donald Cross falsified invoices to draw on his

company’s line of credit. He pled guilty to bank fraud. The district court sentenced Cross to prison

and imposed restitution. Cross served his time, and he’s now a free man. But he’s still obligated

to repay the victim bank. Cross contends that he repaid the bank in full, so he moved to offset his

restitution obligation. He also subpoenaed the bank for information on his payments.

The government disagrees with Cross’s assessment. It contends that Cross still owes the

bank. And it moved to compel Cross to provide his financial information. The district court denied

Cross’s motion to offset restitution, quashed his subpoena, and granted the government’s motion

to compel discovery. Cross appealed. But we find his challenges meritless and affirm.

I.

Two decades ago, Cross transformed his business into a vehicle for bank fraud. In 2003,

he founded Cross Connection Communications, Inc. (CCCI), a contractor in the cable construction No. 25-5276, United States v. Cross

industry. The following year, he obtained a line of credit on behalf of CCCI from Cornerstone

Community Bank, which he secured with CCCI’s accounts receivable. Cross then devised a

scheme to keep the money flowing. In 2006 and 2007, he submitted fraudulent invoices to

Cornerstone to draw funds on the company’s line of credit.

The law—and Cornerstone—caught up to Cross. He pled guilty to a single count of bank

fraud under 18 U.S.C. § 1344. That count concerned only CCCI’s line of credit for which Cross

had submitted fraudulent invoices, not other loans Cornerstone had given Cross. And Cornerstone

then foreclosed on Cross’s home and commercial property under a preexisting security agreement.

After the foreclosures, the district court sentenced Cross to 51 months in prison, followed by five

years of supervised release.

The court also ordered Cross to pay $2.8 million in restitution. The parties had stipulated

to that number as the loss amount under both 18 U.S.C. § 3663A and U.S.S.G. § 2B1.1(b)(1). The

district court accepted that stipulation.

After Cornerstone had foreclosed on Cross’s properties and after the sentencing

proceedings, Cornerstone sold the foreclosed properties for considerable amounts. Specifically,

Cornerstone sold CCCI’s offices for $317,500 and Cross’s home for $1,100,000. Cross then

petitioned the district court to offset the restitution amount. He sought credit for the proceeds from

the sale of these foreclosed properties and for certain payments he had made. On Cross’s view,

Cornerstone had recovered $2,811,303 already (with the difference between the sales proceeds and

the restitution stipulation accounted for by additional payments that Cross says he made to the

bank). If accepted as an offset, that amount would’ve discharged Cross’s restitution obligation

and left him with eleven grand to spare.

2 No. 25-5276, United States v. Cross

The district court didn’t rule on Cross’s motion to offset for several years. In the interim,

Cornerstone merged with SmartBank. Eventually, the district court found that Cornerstone had

received $307,701 from Cross’s payments and from liquidating some of Cross’s assets. That

amount, in addition to being less than the payments Cross had claimed he made, didn’t include the

sales proceeds from the properties that Cornerstone had foreclosed on.1 The court issued an

amended judgment to reflect an updated restitution amount of $2,492,299. That’s what Cross

owed to SmartBank, as Cornerstone’s successor-in-interest.

Cross wasn’t satisfied with the offset. So he subpoenaed SmartBank. He sought to depose

a bank representative and obtain documents concerning CCCI’s dealings with the bank. He told

the district court that he expected to prove that he had satisfied his restitution obligation.

SmartBank and the government didn’t sit idly by. SmartBank moved to quash Cross’s

subpoena, characterizing it as “overly broad and unduly burdensome.” R.63, SmartBank’s Mot.

to Quash, PageID 596. And the government moved to compel Cross to respond to its

interrogatories about his assets and financial situation and requests for production of documents.

Cross then filed another motion to offset the restitution amount. He argued—again—that

he had discharged his obligation by paying down the loans and by forking over his assets, including

the collateralized properties. But this time he claimed that he had actually overpaid, so SmartBank

owed him $894,124.

The district court ruled against Cross on all three motions. It denied Cross’s second motion

to offset. It quashed Cross’s subpoena to SmartBank as unduly burdensome. And it granted the

1 Suffice it to say that the record is thin on the alleged payments that Cross made to the victim that accounted for the bulk of the money that Cross says Cornerstone recovered. Regardless, if Cross is right about the proceeds offset, he’d still be entitled to a significant offset albeit not the amount he claims.

3 No. 25-5276, United States v. Cross

government’s motion to compel post-judgment discovery. On the motion to offset, the court

concluded that the parties had considered the value of Cross’s collateralized real estate when they

stipulated to the original loss amount of $2,800,000. It also noted that while Cross provided bank

statements purportedly showing his payments on various loans, he didn’t explain what the

statements displayed, or the amount of offset he sought based on the purported payments.

This appeal followed.

II.

Cross raises three issues on appeal. He argues that the district court erred in denying his

second restitution offset motion, in quashing his SmartBank subpoena, and in granting the

government’s motion to compel post-judgment discovery. We address each issue in turn.

A.

Cross contends that the district court erred in denying his second restitution offset motion

because Cornerstone sold his collateralized real estate for a profit. He concedes that the loss

amount accounted for the value of those properties at sentencing—when Cornerstone had title to

the properties but hadn’t sold them yet. But he argues that the district court failed to account for

the subsequent sales, so Cornerstone (now SmartBank) over-recovered by earning a profit without

a corresponding offset to the loss amount. We disagree. Cross hasn’t shown that his real estate

secured the loan at issue here. So he isn’t entitled to an additional offset on a double-recovery

theory.

Once a sentencing court determines the amount of restitution, the defendant bears the

burden of proving an offset. United States v. Sizemore, 850 F.3d 821, 828 (6th Cir. 2017). That’s

because the “restitution statute allocates the various burdens of proof among the parties who are

best able to satisfy those burdens.” United States v. Elson, 577 F.3d 713, 734 (6th Cir. 2009)

4 No. 25-5276, United States v. Cross

(citation modified), abrogated on other grounds by Lagos v. United States, 584 U.S. 577 (2018).

And “the defendant should know the value of any compensation he has already provided to the

victim.” Id. (citation modified). We review the amount of a restitution award for an abuse of

discretion. Id. at 733.

The Sentencing Guidelines and the Mandatory Victims Restitution Act (MVRA) provide

different methods for calculating losses and offsets. Under the Guidelines, sentencing courts

reduce loss amounts by “the amount the victim has recovered at the time of sentencing from

disposition of the collateral, or if the collateral has not been disposed of by that time, the fair market

value of the collateral at the time of sentencing.” U.S.S.G. § 2B1.1 cmt. n.3(D)(ii). Under the

MVRA, courts reduce restitution by “the value . . . of any part of the property that is returned.” 18

U.S.C. § 3663(b)(1)(B). And when that “property” is money secured by real estate, it’s “returned”

when the victim sells the property—not when the victim takes title. Robers v. United States, 572

U.S. 639, 640–41 (2014).

Why the distinction? Because the Guidelines and the MVRA have different aims. Courts

use the Guidelines’ loss provisions to calculate sentences. The Guidelines’ loss amounts map onto

prison terms. See generally U.S.S.G. § 2B1.1. But courts use the MVRA to compute the actual

amount a defendant must pay in restitution. See United States v. James, 564 F.3d 1237, 1246–47

(10th Cir. 2009) (distinguishing “loss for the purpose of calculating the defendant’s sentence under

the Guidelines” from the MVRA calculation of “actual loss”). So it’s the MVRA—not the

Guidelines—that governs here.

But to offset restitution based on a victim’s sale of foreclosed property, a defendant must

first link his collateral to the restitution order. He must show that his collateral was “intended to

cover the same losses that the restitution order covers.” Sizemore, 850 F.3d at 829. Otherwise, a

5 No. 25-5276, United States v. Cross

court can’t “conclude that the restitution order has the undesirable result of effectuating a double

recovery.” Id. (citation modified).

Cross fails at this threshold step. He hasn’t established that his properties secured the line

of credit for which he submitted false invoices. That line of credit is just one of Cross’s debts, but

it’s the only one at issue here. Indeed, SmartBank implied the opposite: that Cross’s properties

secured a different loan. It noted that while it “did liquidate [Cross’s] collateralized assets and

apply those to the loans it had with Cross,” it still “has not recovered its restitution ordered for

Cross[’s] bank fraud related to false accounts receivable.” R.92, SmartBank’s Resp. to Cross’s

Reply to its Resp. to Cross’s Second Mot. to Offset, PageID 1002. Cross failed to refute this,

much less establish that his properties secured the line of credit for which he submitted false

invoices. So he failed to carry his burden to establish an offset. See Sizemore, 850 F.3d at 829

(no offset when insurer issued “general settlements,” but restitution order related to specific funeral

and medical expenses and lost wages).

To be sure, the district court didn’t exactly follow our approach. It erroneously relied on

the Guidelines standard to deny Cross’s second motion to offset. It concluded that Cross wasn’t

entitled to an offset greater than the value of the collateral at sentencing, noting that “the parties

would have included the value of collateral when stipulating to a loss amount.” R.98, Order,

PageID 1033. As we explained, the Guidelines calculation doesn’t provide the actual restitution

amount. So the court relied on an erroneous legal standard, and that amounts to an abuse of

discretion. See United States v. Yaker, 87 F. App’x 532, 534 (6th Cir. 2004). By relying on the

Guidelines standard, the district court ignored that Cross might have offset his restitution award

by (1) providing evidence that Cornerstone made money on its post-foreclosure sales and (2)

linking his collateral to the line of credit at issue here.

6 No. 25-5276, United States v. Cross

But because Cross didn’t provide any evidence linking his collateral to the line of credit,

he wouldn’t have been entitled to an offset under any standard. So the district court’s error was

harmless. See United States v. Beverly, 369 F.3d 516, 540 (6th Cir. 2004) (“[A]n abuse of

discretion that does not affect substantial rights is harmless error and is to be disregarded” (quoting

United States v. Bonds, 12 F.3d 540, 554 (6th Cir. 1993)); see also Fed. R. Crim. P. 52(a) (“Any

error . . . that does not affect substantial rights must be disregarded.”).

B.

Cross also challenges the district court’s decision to quash his SmartBank subpoena, which

we review for an abuse of discretion. United States v. Theunick, 651 F.3d 578, 591 (6th Cir. 2011).

He contends that SmartBank wasn’t a victim. On his view, SmartBank was just a “third party

custodian of Cornerstone’s records.” Appellant Br. at 17. So, he argues, it wasn’t unduly

burdensome for SmartBank to respond to the subpoena. We disagree. Cross sought irrelevant

information from the victim of his fraud. So the district court properly quashed the subpoena.

District courts issue subpoenas for documents upon a showing of relevance, admissibility,

and specificity. United States v. Nixon, 418 U.S. 683, 699–700 (1974). We’ve noted that

production is appropriate when “documents are evidentiary and relevant,” are not “otherwise

procurable . . . in advance of trial,” the party can’t “properly prepare for trial without . . .

production,” and “the application was made in good faith and is not a fishing expedition.” United

States v. Hughes, 895 F.2d 1135, 1146 (6th Cir. 1990).

But a district court may quash a subpoena if “compliance would be unreasonable or

oppressive.” United States v. Llanez-Garcia, 735 F.3d 483, 494 (6th Cir. 2013) (quoting Fed. R.

Crim. P. 17(c)(2)). That’s because it “must balance the need for discovery against the burden

imposed” on the subpoenaed party (or non-party). In re Mod. Plastics Corp., 890 F.3d 244, 251

7 No. 25-5276, United States v. Cross

(6th Cir. 2018) (citation modified). A district court is more likely to find undue burden when a

fraud defendant serves a broad subpoena on an alleged victim. See, e.g., United States v. Minton,

No. 5:17-CR-6-JMH, 2017 WL 1078635, at *3 (E.D. Ky. Mar. 21, 2017) (noting that “imposing

the burden of a document production that is akin to a civil discovery production seems particularly

unfair” to “alleged victims”); see also United States v. You, No. 2:19-CR-14, 2024 WL 2736200,

at *4 (E.D. Tenn. May 28, 2024) (“[A]ny arguable relevance is convincingly outweighed by the

burden . . . [on] the Victim Companies.”). Nor does a bank’s successor-in-interest status preclude

a district court from quashing a subpoena. See In re Grand Jury Subpoena, 688 F. Supp. 319,

319–20 (W.D. Tenn. 1988).

Here, the district court didn’t abuse its discretion in granting SmartBank’s motion to quash

the subpoena. It reasoned that Cross sought information “relating to the liquidation of [his]

collateral,” which became irrelevant when the court denied his second motion to offset restitution.

R.99, Order, PageID 1038. And it noted that “SmartBank currently stands as the victim in this

case.” Id. These are proper considerations. See Hughes, 895 F.2d at 1146 (information sought

must be “evidentiary and relevant”); Mod. Plastics, 890 F.3d at 251 (non-party status relevant to

burden); Minton, 2017 WL 1078635, at *3 (victim status relevant to burden); You, 2024 WL

2736200 (same). Cross hasn’t shown that the district court’s decision to quash the subpoena “was

clearly arbitrary or without support in the record.” Theunick, 651 F.3d at 591 (citation modified).

So we see no reason to disturb that decision.

C.

Finally, Cross argues that the district court abused its discretion in relying on findings from

its order denying restitution offset to grant the government’s motion to compel discovery. But

Cross cites no legal authority for his proposition that the district court couldn’t rely on its

8 No. 25-5276, United States v. Cross

previously entered order. And common sense and judicial economy suggest that it could. See,

e.g., Bobo v. United Parcel Serv., Inc., 665 F.3d 741, 758 (6th Cir. 2012) (finding it “unnecessary

to engage in a lengthy discussion” of race discrimination claims under Tennessee law because the

court reversed summary judgment on the Title VII and § 1981 claims), abrogated on other grounds

by Univ. of Tex. Sw. Med. Ctr. v. Nassar, 570 U.S. 338 (2013). So the district court didn’t abuse

its discretion in granting the government’s motion.

III.

For these reasons, we affirm.