State v. Neger

BARBERA, J. Maryland Code (2002 & 2010 Supp.), § 8-601 of the Criminal Law Article (CR) provides, in pertinent part: “(a) Prohibited. — A person, with intent to defraud another, may not counterfeit, cause to be counterfeited, or willingly aid or assist in counterfeiting any[ ] ... (3) deed.” At a bench trial in the Circuit Court for Baltimore City, the Honorable Gale Rasin convicted Respondent, Isaac Neger, of violating § 8-601, finding “beyond a reasonable doubt that the deed ... [Respondent] caused to be presented for recordation contained material alterations as to material elements, including the grantor and grantee, and basically this is a fraud on the system of recording deeds.” Respondent appealed to the Court of Special Appeals, which reversed the conviction. We granted the State’s petition for writ of certiorari, State v. Neger, 424 Md. 291 , 35 A.3d 488 (2012), to review the following question: Did the Court of Special Appeals incorrectly reverse [Respondent’s] conviction for counterfeiting, based on its conclusion that the evidence was insufficient to show an intent to defraud another, notwithstanding its agreement that [Respondent] recorded a deed he had altered, as to the owners of the property in question, to conform to his belief as to ownership? For the reasons that follow, we shall reverse the judgment of the Court of Special Appeals and reinstate Respondent’s conviction.

I. The evidence at trial established the following undisputed background account. 1 In 1990, Respondent entered into an ⁵⁸⁵ agreement with a man named Ephraim Ohana “to take title” to the property at issue, located at 300 S. Robinson Street, Baltimore, Maryland, 21224 (hereafter the Property). The two men intended to form a corporation known as “E & I Associates[ 2 ] owned equally by both parties,” but no such entity ever was registered with the State Department of Assessments and Taxation. The parties’ written agreement explained that Respondent would be responsible for settlement expenses, including the purchase price, for a total amount of $38,722.66. Mr. Ohana would be responsible for paying 10% annually on that amount, interest only, as well as for the normal maintenance and running expenses.

A deed was recorded in Baltimore City on December 5, 1990, listing the grantor as Lorraine G. Izner and the grantees as Ephraim Ohana and E.I. Associates, Inc. Respondent was not listed as a grantee. In 1995, Mr. Ohana and his then-wife Cynthia Ohana filed for bankruptcy. In connection with those proceedings, the Ohanas filed a Statement of Intention indicating that they would surrender the Property to Respondent. In 2000, Mr. Ohana executed a power of attorney authorizing Respondent to sell the Property.

In July 2000, Respondent signed and had a notary sign a document drafted by Mr. Ohana — according to Mrs. Ohana’s testimony that she recognized the handwriting as that of Mr. Ohana — acknowledging that, since 1992, Respondent had “taken over all rights and interest from Ephraim Ohana in the Property.” From 1990 until the deed at issue in this matter was recorded in 2008, no deed was recorded affecting the ownership of the Property. ⁵⁸⁶ On May 26, 2005, the Ohanas’ divorce action was heard in the Circuit Court for Baltimore City. In the Judgment of Absolute Divorce, the Circuit Court designated one-half interest in the Property as the Ohanas’ marital property, evidently based on Mr. Ohana’s being listed as one of the two grantees in the 1990 deed and there being no subsequent recording affecting that interest. The court valued that interest in the Property at $110,000. The court also awarded Mrs. Ohana a monetary award in the amount of $70,000.

The court ordered that the award be reduced to judgment immediately, thereby evidently creating a lien on the Property. 3 In 2007, Respondent, representing himself as the owner, entered into a contract to sell the Property. He sought to secure a release of Mrs. Ohana’s lien on the Property. Mrs. Ohana, however, following the advice of her counsel, Mr. Larry Feldman, declined to grant the release. Mr. Feldman communicated directly with Respondent, by telephone and in writing, with respect to the Property.

In a letter dated April 30, 2007, Mr. Feldman wrote to Respondent ⁵⁸⁷ that, since the 1990 transfer from Ms. Izner to Mr. Ohana and E.I. Associates, “[t]here have been no subsequent transfers of this property, as your [sic] indicated to me there were, up until the present.” Mr. Feldman further wrote, “[i]n lieu of backing out of your valid contract to sell this property ... why don’t you just proceed with assuring your [sic] will get the El share of the property and allow Ephraim’s share to be paid to my client.” Respondent thereafter cancelled the sale. He sent by facsimile to Mr. Feldman a handwritten response to Mr. Feldman’s letter simply indicating that he had cancelled the sale. Respondent subsequently sent Mr. Feldman another handwritten facsimile, in response to further correspondence, stating, “Once again this sale has been cancelled. We will be taking this issue to [the Rabbinical court] for their decision on property ownership.” On May 21, 2007, Respondent also communicated his cancellation of the intended sale by sending a message via facsimile to his realtor.

The message stated, “This is to advise that due to legal issues we cannot deliver title to this property, I am sorry for any inconvenience.” Recordation of the deed at issue On June 5, 2008, a deed dated May 25, 2005, transferring the Property from “Ephraim Ohana, sole owner of E.I. Associates, Inc.” to “Isaac Neger,” was recorded in the land records in Baltimore City. Upon learning of that recorded deed, Mr. Feldman contacted the State’s Attorney’s Office, which evidently opened an investigation. Ultimately, a Baltimore City grand jury returned an indictment filed on October 13, 2009, charging Respondent with a violation of CR § 8 — 601(a)(3). As mentioned, Respondent elected a court trial.

The State sought to prove that a deed was prepared by Commerce Title Company, executed by Mr. Ohana and Respondent, and signed by a notary on May 25, 2005 (perhaps merely coincidentally, the day before the Ohanas’ divorce action was heard in Circuit Court), though never signed by the attorney whose name appeared on the deed as having prepared it. That deed listed the grantees from the 1990 deed— ⁵⁸⁸ Ephraim Ohana and E.I. Associates, Inc. — as the grantors, and listed E.I. Associates, Inc. as the sole grantee. The State further sought to prove that the 2005 deed was never recorded; rather, Respondent maintained possession of the unrecorded deed, altered the grantor to “Ephraim Ohana, sole owner of E.I. Associates, Inc.” and the grantee to “Isaac Neger,” forged the attorney’s signature, and sought the assistance of a different title company, All Star Title Company, to have the deed recorded. The State presented several witnesses and introduced several documents into evidence in support of its case.

Mr. Ellie Newman, the vice president of Commerce Title Company, testified that in January 2001 his company opened a file related to the Property and described the seller as Ephraim Ohana and the buyer as E & I Associates, Inc. A deed was then prepared that would have transferred the Property from Ephraim Ohana and E.I. Associates, Inc. to E.I. Associates, Inc., but that deed was never executed. An invoice was issued to Respondent for document preparation and attorney’s fees, as Mr. Newman testified, with respect to the file opened in January 2001. Then, in April 2004 another file was opened at Commerce Title Company regarding the Property, listing the seller as Ephraim Ohana and directing that a judgment search be conducted on the property. Mr. Newman also testified that the recorded deed, though it bore the name of the Commerce Title Company attorney, did not appear to have been signed by that attorney.

Mr. Newman further testified, though, that the attorney authorized others, in his absence, to sign his name by a “facsimile stamp signature.” On cross-examination Mr. Newman testified that a “confirmatory assignment” dated May 5, 2004, introduced by the defense, bore a Commerce Title file number. The assignment intended to correct a purported error on the 1990 deed that had transferred the property from Ms. Izner. According to the document itself, a confirmatory deed was being executed and recorded for the purposes of correcting the name of the Grantee. Whereas the Party of the Second Part (Grantee) was erroneously referred to as Ephraim ⁵⁸⁹ Ohana and E.I. Associates, Inc. and it was the intention of the parties hereto that the property be conveyed to the correct Party of the Second Part (grantee) Ephraim Ohana and Isaac Neger this assignment is being recorded for the purpose of correcting said error and confirming the grant unto of the property described herein unto the correct grantee Ephraim Ohana and Isaac Neger.[ 4 ] The State also called Mr. James Holderness, the owner of the former All Star Title Company.

Through Mr. Holderness, the State introduced the file pertaining to the Property from All Star Title Company. Mr. Holderness testified that the deed in the All Star file had not been prepared by All Star. That deed, dated May 25, 2005, signed by Mr. Ohana and Respondent, as “sole acting director of E & I Associates, Inc.,” and notarized, purported to transfer the property from “Ephraim Ohana and Isaac Neger, sole acting director of E & I Associates” to “Isaac Neger.” The All Star file, which had been admitted into evidence, contained a disbursement statement indicating that disbursements had been made to the Director of Finance and the Clerk of the Circuit Court on May 14, 2008 and June 5, 2008. The All Star file also contained a recording receipt from the Clerk of the Court.

The All Star file, however, did not contain a copy of the deed that All Star recorded. Respondent defended the counterfeiting charge on the ground that there was no evidence to support that the changes to the signed deed of May 25, 2005 were made without authorization of all parties or, alternatively, while in the hands of All Star Title. He argued that the evidence affirmatively demonstrated the absence of fraudulent intent in connection with any action he undertook. In support of that argument, Respondent called Mrs. Ohana ⁵⁹⁰ to testify. 5 Mrs. Ohana explained, inter alia, that she and her husband had intended to surrender the Property to Respondent pursuant to the bankruptcy proceedings.

Mrs. Ohana also testified that, at some point after the initial 1990 transfer, problems arose with the Property, and “the solution for this property was ... they entered into an agreement-a written agreement where Mr. Ohana was just walking away from the property and giving it back to [Respondent].” Mrs. Ohana continued that, during the divorce proceedings in 2005, she “was surprised to learn that in fact Mr. Ohana was still titled the owner of the property,” and her “intent was not to satisfy the judgment ... by foreclosing on [the Property].” After hearing argument of counsel, the court reconciled the evidence, made factual findings, and found Respondent guilty of counterfeiting. In light of Respondent’s arguments based on the court’s specific findings, it is necessary to include those findings verbatim and in their entirety. The court explained: The people involved in this case, that is Mr. Ohana and the Defendant, were experienced businessmen involved in many real estate transactions, and the Defendant, based upon the testimony of the person from All Star ... Title, the extent of his businesses is very wide.

I believe the witness testified he represented the Defendant in his creditor rights business or something. So he’s got a travel agency, he apparently owns and sells-buys and sells real estate and rents it, and hold mortgages. So-and according to Mrs. Ohana was represented by at least '07/'08 by an attorney whom he deemed to be an expert. So he’s not some ignorant, innocent roaming around trying to figure out how to get ownership title to this property.

I need not find this, but I suspect there was no mistake back in 1990 when this property was titled, that for whatever reason the Defendant did not want it titled in his name. Whether it was for protection of assets, I don’t know, it ⁵⁹¹ doesn’t matter, but because it’s not-I need not make a finding. But what I believe is that at some point because Mr. Ohana was not presumably paying him what he was supposed to pay him for his interest in the property or for whatever deal, he wasn’t holding up his end of whatever deal they actually had, the Defendant decided that he better make a change. He was the client of Commerce Title.

He directed the president of Commerce Title initially to change the ownership to El Associates. Now maybe that was because he believed the document that I did permit into evidence, the surrender or whatever it was,[ 6 ] that he then became the exclusive owner of El Associates and therefore if the transfer was made as he first requested that would give him ownership, again not in his name, he would be protected by some pseudo corporate name. But no deed was recorded. And again, I don’t know why.

But one thing I am convinced of beyond a reasonable doubt is that the deed that was recorded in 2008 is not the deed that was prepared by Commerce Title at any point, and assuming Mr. Ohana actually executed a deed, and I assume he did in the presence of the notary, the deed Mr. Ohana signed is not the one that was recorded in 2008. I find sufficient circumstantial evidence to be convinced beyond a reasonable doubt that the Defendant was the moving party in all of this. That I believe Mrs. Ohana, that Mr. Ohana basically washed his hands of this. And Mr.— the Defendant truly believed this was his property as a matter of equitable title or whatever, he may not have called it that, and so when he protested to Mr. Feldman this is my ⁵⁹² property he believed it.

But having equitable title and having put the money up for a piece of property is not the same thing as being the record owner, and that’s why he discovered — he discovered in 2007 that the formalities required something better than what he had. And so I believe that’s why he went — even though the file doesn’t bear his name as the — as the client — and the funds apparently didn’t come from him ... The money for the disbursement came from Prime Time, but the State’s investigator made an evidentiary connection between the Defendant and Prime Time. That’s a link in the chain.

All Star didn’t prepare this deed. I don’t care — I can’t imagine, although it is theoretically possible, that a client[ 7 ] of All Star took a deed prepared by another lawyer and whited out and Isaac Neger, sole owner of E & I Associates, and white all that out and wrote on top of it, ‘Sole owner of El Associates.” I do not find that to be credible. I believe the only reasonable inference once again was the Defendant was maintaining control over the original deed that was prepared and signed, perhaps back in May of 2005, who knows, and that he made the changes to it and made the ultimate change and gave it to All Star to record. While — and that it was — and Io find beyond a reasonable doubt it was not signed by the attorney whose name is typed there.

And while one may speculate that Mr. Davis[ 8 ] I believe signed it because the Commerce Title[ 9 ] witness recognizes the A, I’m not buying that, and I don’t believe that. So are these changes material? Is this a counterfeit? I find it’s material and this is a counterfeit, and that our ⁵⁹³ system of land records, which I guess goes back to the founding of the colony presumably, depends upon the register of deeds being able to accept at face value that the deed presented for recordation, regardless of how sloppy and messy it is, as this indeed is, is the deed that the parties signed and accurately — and shows who the grantor or grantors are and who the grantees are.

That is simply I find beyond a reasonable doubt that the deed — State’s Exhibit 7 — that the Defendant caused to be presented for recordation contained material alterations as to material elements, including the grantor and grantee, and basically this is a fraud on the system of recording deeds. This is a fraud on our system of having reliable title records. And his belief, even if it was a good faith belief that this was his property, that it had always been his property, that he’d paid for the property, does not dissipate the intent to do — the intent to have a deed filed which was altered in a material way. For those reasons I find — granted after much pressing the State on the theory, asking the State hypothetical, being the devil’s advocate, I am — posing every possible what if this, what if that, I did all that because in a court trial ... the Court has a very heavy burden, what the jury bears, that level of conviction of proof beyond a reasonable doubt, and I asked all those questions because I wanted to eliminate all reasonable possibilities and explanations.

And while I wasn’t always satisfied with every answer I received, in the end the evidence tells the story, and the Defendant as of '07 acknowledged he didn’t have record title, although he protested he owned the property, and for whatever his personal reasons were, which I cannot fathom, he proceeded in this manner to serve his own interests, whatever they might have been at the time. So being convinced beyond a reasonable doubt that the Defendant had the intent to defraud and caused to be made material alterations in a previously executed deed I find him guilty. ⁵⁹⁴ Respondent timely appealed the conviction to the Court of Special Appeals, which, in an unreported opinion, reversed the judgment of the Circuit Court. The Court of Special Appeals reasoned that, in CR § 8-601, the specific intent requirement of the “intent to defraud another” refers to another “person.” The intermediate appellate court reasoned that the Circuit Court had not found that Respondent intended to defraud another person, but rather “the system”; consequently, there was insufficient evidence to support the specific intent element of the crime, necessitating reversal. This Court’s grant of certiorari followed.

II

The State challenges the Court of Special Appeals’s holding that CR § 8-601’s specific intent element that a defendant have acted with ‘“the intent to defraud another[]’ requires proof of a specific individual person who was defrauded as a result of the counterfeiting.” The State argues that there was sufficient evidence for the Circuit Court to conclude, as it did, that Respondent acted with the intent to defraud the system of recording when he materially altered and recorded the deed, satisfying the specific intent element. Respondent, while agreeing that the “intent to defraud does not require an identified victim who suffered a pecuniary loss,” contends that “the Trial Court here found only a fraud on the ‘system of recording deeds,’ but readily acknowledged that T don’t know if anybody was financially defrauded.’ ” (Footnote omitted.) Respondent’s argument focuses on the rule that a good faith belief is a complete defense to the specific intent element of CR § 8-601 because good faith factually negates the intent to defraud. In that vein, Respondent asserts that “the evidence at trial was more than sufficient to generate [Respondent’s] defense of a good faith belief and to support the Trial Court’s finding that he truly believed he was the equitable[ 10 ] owner of the Property.” ⁵⁹⁵ Whether the defendant was tried by a judge or jury, the evidence must be such as would permit a rational fact finder to find, beyond a reasonable doubt, every element of the charged offense. See Spencer v. State, 422 Md. 422, 433-34 , 30 A.3d 891, 898 (2011).

When the conviction is rendered after a bench trial, we “review the case on both the law and the evidence.” Md. Rule 8-131(c). We “will not set aside the judgment of the trial court on the evidence unless clearly erroneous, and will give due regard to the opportunity of the trial court to judge the credibility of the witnesses.” Id. The clearly erroneous standard, however, “does not, of course, apply to legal conclusions.” Clancy v. King, 405 Md. 541, 554 , 954 A.2d 1092, 1099 (2008) (quoting Nesbit v. Gov’t Emps. Ins.

Co., 382 Md. 65, 72 , 854 A.2d 879, 883 (2004)). For legal conclusions, we conduct a non-deferential review. Id., 954 A.2d at 1099 . See also Toth v. State, 393 Md. 318, 324 , 901 A.2d 820, 823 (2006) (performing de novo review of issues involving Maryland statutory interpretation and application).

The issue before this Court involves, as we shall see, a review of both the law and the evidence. A. “Intent to defraud another” We begin