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Man in money laundering scheme wins early release

JESSICA SHAMBAUGH
Special to the Legal News

Published: August 3, 2015

The 10th District Court of Appeals recently affirmed a lower court’s decision that granted judicial release to a man convicted for his involvement in a fraudulent mortgage lending scheme.

The state appealed a Franklin County Court of Common Pleas decision granting Nathan Orms judicial release after he served just six month behind bars.

The state argued on appeal that the trial court improperly found that Orms’ victims had not suffered serious economic harm and he was not involved in organized crime.

Orms was indicted along with his co-defendants in April 2011 on several charges, including engaging in a pattern of corrupt activity, theft, money laundering, receiving stolen property and forgery.

The indictment alleged that the group committed the 84 counts in order to steal millions of dollars through a fraudulent mortgage scheme.

Not all of the counts were directly related to Orms and he eventually pleaded guilty to one count of engaging in a pattern of corrupt activity and nine counts of money laundering.

Although the trial court inquired about restitution, the state did not request it.

The common pleas court then sentenced Orms to 4 1/2 years in prison for his offenses.

After serving six months of that term, Orms moved for judicial release and the trial court held a hearing on the matter. The state opposed the motion, but the trial court granted the release.

The state then appealed and the matter was reversed and remanded with instructions for the trial court to make the required findings.

On remand, the trial court made all nine required findings and found no reason to hold Orms. It therefore granted his motion and the state appealed the decision again.

In its first assignment of error, the state alleged that the trial court erred by failing to find that Orms’ victims suffered serious economic harm.

However, the majority of the appellate panel held that the trial court properly explained its decision and its supported by the record.

Specifically, the trial court took issue with the state’s lack of evidence regarding economic harm.

It emphasized that the prosecutor had not requested restitution and had not provided any evidence of a specific amount of financial harm Orms’ offenses caused to his victims, namely the banks involved.

The trial judge stated that on one page of the state’s memorandum, it mentioned Orms causing millions of dollars in harm.

However, on that page, the state specifically mentioned $12 million, $2.5 million, $14 million and $3.4 million.

“Well, you come into court and it says, ‘no restitution,’ and then you go make up numbers. So what is it? I don’t think we know what it is. I have no restitution. So I specifically find based on the record before us and the plea and the presentation by the prosecutor, that there is no restitution, that we have no economic harm to the victims. He had his opportunity to present that and he did not,” the trial court stated.

The state argued that the trial court erroneously found a failure to supply an exact figure for restitution amounted to “no economic harm.”

The appellate panel, however, disagreed.

“The trial court record indicates that the trial court was dissatisfied with the fact that the state presented little to nothing in the way of evidence relating to ‘serious economic harm,’” Judge Jennifer Brunner wrote in her opinion for the majority.

The appellate judges agreed, finding that the state did not offer any evidence of money that was misappropriated by Orms or any harm that came to his victims as a result.

“Based on the lack of evidence before the trial court, we find no clear or convincing evidence in the record to reject the trial court’s finding that there was no evidence that victims had suffered harm,” Brunner stated.

The state next argued that the trial court erred by failing to find that Orms committed his offense as part of an organized criminal activity.

Although Orms pleaded guilty to engaging in a pattern of corrupt activity, the appellate panel found no evidence that he and his co-defendants were part of an organization.

They found no evidence that the group had a structure or acted as part of a common interest other than greed.

“At best, Orms was a ‘bottom feeder’ in what some non-fiction authors post-September 2008 have described as ‘organized crime’ in trying to make sense of the financial practices that evolved after Congress’ 1999 repeal of the Glass-Steagall Act (U.S. Banking Act of 1933),” Brunner wrote.

The judges found that Orms did act as part of a group that acted together in short-term, profit-driven way and was largely encouraged to do so by federal policies.

However, they found that the group did not necessarily constitute a criminal organization.

“Orms does admit to being a player in a scheme that permitted banking and rating institutions to establish various types of financially-based transactions that made it possible for people from top-to-bottom of the system and with dishonest intentions such as Orms to carry out their own scheme for self-enrichment at the expense of nameless millions of other Americans in myriad and still emerging ways,” Brunner continued.

However, the judges found no evidence to support that organized criminal activity was attributable to Orms.

Finding not clear and convincing evidence to reverse the lower court’s judgment, the appellate judges overruled the state’s argument.

Judge Tim Horton joined Brunner to form the majority on the case while Judge Julia Dorrian dissented in a brief separate opinion.

Dorrian stated only that she did not believe the record clearly and convincingly supported the trial court’s findings that Orms did not cause his victims serious financial harm or was not involved in organized criminal activity.

The case is cited State v. Orms, 2015-Ohio-2870.

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