NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUL 29 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 18-30153
Plaintiff-Appellee, D.C. No. 3:15-cr-05198-RBL-1 v.
TROY X. KELLEY, MEMORANDUM*
Defendant-Appellant.
Appeal from the United States District Court for the Western District of Washington Ronald B. Leighton, District Judge, Presiding
Submitted July 9, 2020** Seattle, Washington
Before: FERNANDEZ and NGUYEN, Circuit Judges, and BOLTON,*** District Judge. Concurrence by Judge FERNANDEZ
After his first trial resulted in a jury deadlocked on all but one count, a
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). *** The Honorable Susan R. Bolton, United States District Judge for the District of Arizona, sitting by designation. second jury convicted Defendant-Appellant Troy X. Kelley (Mr. Kelley) of several
counts related to a mortgage fraud scheme perpetuated from 2005 to 2008, during
which Mr. Kelley retained approximately $2.9 million in fees earmarked for
borrowers. Mr. Kelley seeks reversal of his convictions for one count of
possession of stolen property under 18 U.S.C. § 2315 (Count 1); two counts of
false declarations under 18 U.S.C. § 1623(a) (Counts 2 and 5); and five counts of
filing false tax returns under 26 U.S.C. § 7206(1) (Counts 12–15 and 17). We have
jurisdiction under 28 U.S.C. § 1291, and affirm.
1. Mr. Kelley first argues that insufficient evidence supports his stolen
property conviction. We review a legal sufficiency challenge de novo. United
States v. Phillips, 929 F.3d 1120, 1123 (9th Cir. 2019). Evidence is legally
sufficient to support a guilty verdict “if ‘after viewing the evidence in the light
most favorable to the prosecution, any rational trier of fact could have found the
essential elements of the crime beyond a reasonable doubt.’” United States v.
Carranza, 289 F.3d 634, 641–42 (9th Cir. 2002) (quoting Jackson v. Virginia, 443
U.S. 307, 319 (1979)).
Even assuming, as Mr. Kelley argues, that the United States was required to
prove that somebody besides Mr. Kelley owned the unused reconveyance fees, the
United States provided sufficient evidence that the borrowers owned the fees. The
contracts between the title companies and Mr. Kelley’s company required the title
2 18-30153 companies to remit the total reconveyance fee to Mr. Kelley, to be divided three
ways: (1) $15.00 or $20.00 to Mr. Kelley as payment for his services; (2) $85.00 to
$125.00 as an “advance” to cover expenses such as trustee fees and recording fees
required to complete the reconveyance; and (3) the remainder to be “forward[ed]”
by Mr. Kelley to the customer. The United States introduced expert testimony that
Mr. Kelley was contractually entitled to a flat fee of $15.00 or $20.00 per
transaction, and that these contractual provisions were never modified. Finally, the
United States introduced evidence that Mr. Kelley knew the unused fees belonged
to the borrowers, including (1) emails between Mr. Kelley and the title companies;
(2) a sample letter drafted by Mr. Kelley and addressed to borrowers, promising to
“refund[] . . . the excess processing fee”; (3) and a doctored spreadsheet prepared
at the request of Mr. Kelley concealing the unpaid refunds. This evidence is
sufficient to convict under 18 U.S.C. § 2315.
2. Mr. Kelley next argues that the trial court coerced the jury into reaching a
verdict after it reported a deadlock. Whether the district court impermissibly
coerced the jury to return a verdict is reviewed de novo. United States v. Williams,
547 F.3d 1187, 1202 n.14 (9th Cir. 2008). “In determining whether to declare a
mistrial because of jury deadlock, relevant factors for the district court to consider
include the jury’s collective opinion that it cannot agree, the length of the trial and
complexity of the issues, the length of time the jury has deliberated, whether the
3 18-30153 defendant has objected to a mistrial, and the effects of exhaustion or coercion on
the jury.” United States v. Hernandez-Guardado, 228 F.3d 1017, 1029 (9th Cir.
2000) (citing United States v. Cawley, 630 F.2d 1345, 1348–49 (9th Cir. 1980)).
The first two jury notes did not indicate a deadlock. After submitting the
third note, the jury foreperson informed the court, “I think we are permanently
deadlocked.” At that point, the court did exactly what it was supposed to do: it
“question[ed] the jury to determine independently whether further deliberations
might overcome the deadlock.” See Hernandez-Guardado, 228 F.3d at 1029. In
response to the court’s questioning, several jurors who disagreed with the
foreperson’s statement indicated they believed there were “opportunities that [we]
think we need to discuss more.” The court sent the jurors back to the jury room
with instructions to discuss “whether there is the possibility that votes can be
changed,” and if not, to return the verdict form “as it stands,” and to “not come to a
decision simply because other jurors think it is right.” The court’s instructions did
not, as Mr. Kelley suggests, “blast a verdict out of the deadlocked jury.” A mistrial
is unwarranted on this basis.
3. Mr. Kelley next argues that the district court erred by denying his motion
for acquittal and urges us to vacate his convictions because he was placed in
jeopardy for a second time when he was retried on Counts 11–15 and 17 after the
first jury in acquitted on Count 16. Count 16 charged Mr. Kelley with falsely
4 18-30153 stating that one of his companies earned $245,000 in income for reconveyance
work performed in 2011 and 2012. The district court correctly denied Mr. Kelley’s
motion on the basis that at trial, Mr. Kelley argued both that the statement was not
true and that the statement was never made. Since the jury’s verdict could have
been based on either theory, the court had no way of knowing whether the jury
believed the statement false. Because the first jury did not necessarily find Mr.
Kelley’s statement truthful, and because ample evidence could support a finding
that Mr. Kelley never made that statement at all, retrying Mr. Kelley on the
remaining charges—whether they were predicated on the truthfulness of that
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NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUL 29 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 18-30153
Plaintiff-Appellee, D.C. No. 3:15-cr-05198-RBL-1 v.
TROY X. KELLEY, MEMORANDUM*
Defendant-Appellant.
Appeal from the United States District Court for the Western District of Washington Ronald B. Leighton, District Judge, Presiding
Submitted July 9, 2020** Seattle, Washington
Before: FERNANDEZ and NGUYEN, Circuit Judges, and BOLTON,*** District Judge. Concurrence by Judge FERNANDEZ
After his first trial resulted in a jury deadlocked on all but one count, a
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). *** The Honorable Susan R. Bolton, United States District Judge for the District of Arizona, sitting by designation. second jury convicted Defendant-Appellant Troy X. Kelley (Mr. Kelley) of several
counts related to a mortgage fraud scheme perpetuated from 2005 to 2008, during
which Mr. Kelley retained approximately $2.9 million in fees earmarked for
borrowers. Mr. Kelley seeks reversal of his convictions for one count of
possession of stolen property under 18 U.S.C. § 2315 (Count 1); two counts of
false declarations under 18 U.S.C. § 1623(a) (Counts 2 and 5); and five counts of
filing false tax returns under 26 U.S.C. § 7206(1) (Counts 12–15 and 17). We have
jurisdiction under 28 U.S.C. § 1291, and affirm.
1. Mr. Kelley first argues that insufficient evidence supports his stolen
property conviction. We review a legal sufficiency challenge de novo. United
States v. Phillips, 929 F.3d 1120, 1123 (9th Cir. 2019). Evidence is legally
sufficient to support a guilty verdict “if ‘after viewing the evidence in the light
most favorable to the prosecution, any rational trier of fact could have found the
essential elements of the crime beyond a reasonable doubt.’” United States v.
Carranza, 289 F.3d 634, 641–42 (9th Cir. 2002) (quoting Jackson v. Virginia, 443
U.S. 307, 319 (1979)).
Even assuming, as Mr. Kelley argues, that the United States was required to
prove that somebody besides Mr. Kelley owned the unused reconveyance fees, the
United States provided sufficient evidence that the borrowers owned the fees. The
contracts between the title companies and Mr. Kelley’s company required the title
2 18-30153 companies to remit the total reconveyance fee to Mr. Kelley, to be divided three
ways: (1) $15.00 or $20.00 to Mr. Kelley as payment for his services; (2) $85.00 to
$125.00 as an “advance” to cover expenses such as trustee fees and recording fees
required to complete the reconveyance; and (3) the remainder to be “forward[ed]”
by Mr. Kelley to the customer. The United States introduced expert testimony that
Mr. Kelley was contractually entitled to a flat fee of $15.00 or $20.00 per
transaction, and that these contractual provisions were never modified. Finally, the
United States introduced evidence that Mr. Kelley knew the unused fees belonged
to the borrowers, including (1) emails between Mr. Kelley and the title companies;
(2) a sample letter drafted by Mr. Kelley and addressed to borrowers, promising to
“refund[] . . . the excess processing fee”; (3) and a doctored spreadsheet prepared
at the request of Mr. Kelley concealing the unpaid refunds. This evidence is
sufficient to convict under 18 U.S.C. § 2315.
2. Mr. Kelley next argues that the trial court coerced the jury into reaching a
verdict after it reported a deadlock. Whether the district court impermissibly
coerced the jury to return a verdict is reviewed de novo. United States v. Williams,
547 F.3d 1187, 1202 n.14 (9th Cir. 2008). “In determining whether to declare a
mistrial because of jury deadlock, relevant factors for the district court to consider
include the jury’s collective opinion that it cannot agree, the length of the trial and
complexity of the issues, the length of time the jury has deliberated, whether the
3 18-30153 defendant has objected to a mistrial, and the effects of exhaustion or coercion on
the jury.” United States v. Hernandez-Guardado, 228 F.3d 1017, 1029 (9th Cir.
2000) (citing United States v. Cawley, 630 F.2d 1345, 1348–49 (9th Cir. 1980)).
The first two jury notes did not indicate a deadlock. After submitting the
third note, the jury foreperson informed the court, “I think we are permanently
deadlocked.” At that point, the court did exactly what it was supposed to do: it
“question[ed] the jury to determine independently whether further deliberations
might overcome the deadlock.” See Hernandez-Guardado, 228 F.3d at 1029. In
response to the court’s questioning, several jurors who disagreed with the
foreperson’s statement indicated they believed there were “opportunities that [we]
think we need to discuss more.” The court sent the jurors back to the jury room
with instructions to discuss “whether there is the possibility that votes can be
changed,” and if not, to return the verdict form “as it stands,” and to “not come to a
decision simply because other jurors think it is right.” The court’s instructions did
not, as Mr. Kelley suggests, “blast a verdict out of the deadlocked jury.” A mistrial
is unwarranted on this basis.
3. Mr. Kelley next argues that the district court erred by denying his motion
for acquittal and urges us to vacate his convictions because he was placed in
jeopardy for a second time when he was retried on Counts 11–15 and 17 after the
first jury in acquitted on Count 16. Count 16 charged Mr. Kelley with falsely
4 18-30153 stating that one of his companies earned $245,000 in income for reconveyance
work performed in 2011 and 2012. The district court correctly denied Mr. Kelley’s
motion on the basis that at trial, Mr. Kelley argued both that the statement was not
true and that the statement was never made. Since the jury’s verdict could have
been based on either theory, the court had no way of knowing whether the jury
believed the statement false. Because the first jury did not necessarily find Mr.
Kelley’s statement truthful, and because ample evidence could support a finding
that Mr. Kelley never made that statement at all, retrying Mr. Kelley on the
remaining charges—whether they were predicated on the truthfulness of that
statement or not—did not violate double jeopardy principles.
4. Mr. Kelley lastly argues that the district court erred by denying his motion
to sever the false statement and tax counts from the stolen property count. The
district court’s denial of a motion to sever is reviewed for abuse of discretion.
United States v. Sutton, 794 F.2d 1415, 1427 (9th Cir. 1986). “Misjoinder of
charges is a question of law reviewed de novo.” United States v. Whitworth, 856
F.2d 1268, 1277 (9th Cir. 1988).
Mr. Kelley argues that the government’s “allegation of stolen property” was
“baseless” and that “[w]ithout a valid allegation of stolen property, the remaining
false declaration and tax counts against Mr. Kelley had no unifying theory to
support their joinder.” But the allegation of stolen property was not baseless: as
5 18-30153 detailed above, it was supported by sufficient evidence. Because the allegation of
stolen property was valid, and the remaining counts were related to the stolen
property count, the district court did not err by refusing to sever the charges.
AFFIRMED.
6 18-30153 FILED U.S. v. Kelley, No. 18-30153 JUL 29 2020 FERNANDEZ, Circuit Judge concurring: MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS
I concur in the result.