USA v. Applebury et al

District of Alaska, akd-3:2017-cr-00121-58433

Order on Motion for Reconsideration

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UNITED STATES DISTRICT COURT DISTRICT OF ALASKA UNITED STATES OF AMERICA, No. 3:17-cr-00121-TMB-DMS Plaintiff, Order Denying Jill Applebury's Motion for Reconsideration of vs. Detention JILL DIANE APPLEBURY, [Doc. 318] Defendant. I. INTRODUCTION Defendant Jill Applebury has brought a motion for this court to reconsider (Doc. 318) its Order of Detention. (Doc. 313). That order found by clear and convincing evidence that Applebury "presents a danger of economic harm to others based upon evidence presented at the bail hearing 1/16/19." (Doc. 313). Having pled guilty to six felonies, Ms. Applebury faced a presumption of detention which she failed to rebut. See 18 U.S.C. § 3143. Applebury is scheduled for sentencing April 2, 2019. Ms. Applebury now asks the court to reconsider its finding, on the basis of new material facts not previously available. 1 The government filed a response in opposition, arguing that Ms. Applebury 1 The motion was brought "pursuant to Local Criminal Rule 7.3(h)(1)(B)"; however, there is no such Local Criminal Rule. Presumably, defendant meant Local Civil Rule 7.3(h)(1)(B), which governs motions for reconsideration. The statute which authorized this Court's detention order provides that "[t]he hearing may be reopened. . . before or at any time before trial if the judicial officer finds that information exists that was not known to the movant at the time of the hearing and that has a material bearing on the issue of whether there are conditions of release that will reasonably assure. . . the safety of. . . the community." See 18 U.S.C. §3142. United States v. Applebury 3:17-cr-00121-TMB-DMS Order DENYING Motion to Reconsider 1 4 remains a danger. (Doc. 322). The government also presented new evidence of new alleged false statements made by the defendant to a bank and to the Montana Gambling Control Division. The Court has reviewed the motion and opposition. For the reasons discussed below, defendant's motion for reconsideration is hereby DENIED. II. DISCUSSION A. This Court's Detention Order As noted, the Court's detention order concluded that Ms. Applebury was an economic danger to the community based upon evidence presented at the bail hearing of January 16, 2019. (Doc. 313). At the close of that hearing, the Court identified four pieces of evidence that led to the conclusion. (Doc. 326). 1. The Two "Reimbursement" Checks Applebury Wrote to Herself in Late June of 2018 The government presented two checks Ms. Applebury had written to herself from a Rocky Knob account in late June 2018, after the Rocky Knob Lodge had closed. (Doc. 306-1 at 1, 4-5). The lodge was owned by Ms. Applebury's mother and family. The first of these, dated June 26, 2018 in the amount of $4,985.20, stated it was for "Costco Reimb[ursement]." (Doc. 306-1 at 4). Notably, at that time Ms. Applebury was limited by a state-court judge in a related civil case from transferring any amount over $5,000. (Doc. 326 at 23-24). A Statement of Account shows that after the check cleared, $1,906.04 remained in the Rocky Knob account. (Doc. 306-1 at 2). United States v. Applebury 3:17-cr-00121-TMB-DMS Order DENYING Motion to Reconsider 2 4 The second check, dated June 28, 2018 in the amount of $1,906.00, stated it was for "Reimb. Expenses." (Doc. 306-1 at 5). The check was written one day after Rocky Knob Lodge, Inc. had sent Ms. Applebury a letter by certified mail and email informing her she had been terminated for cause. (Doc. 306-1 at 1, 306-2 at 4). The letter stated, "You have no authority to take any further action on behalf of Rocky Knob Lodge, including accessing or utilizing the financial or credit accounts of Rocky Knob Lodge." (Doc. 306-2 at 2-4). Only four cents were left in the Rocky Knob account after Applebury cashed these two checks. (Doc. 306-1 at 1). A bail hearing in September 2018 had left unclear whether Applebury's mother or family had authorized the defendant to write these checks. (Doc. 326 at 66). The Court noted that the evidence presented by the government at the January 2019 hearing made clear that no one in the family had authorized the withdrawal of funds by check. (Doc. 326 at 66-67). 2. The Stopped and Reissued Insurance Check in Fall of 2018 As noted, supra, on June 27, 2018, Ms. Applebury was informed she had been terminated for cause and no longer had "authority to take any further action on behalf of Rocky Knob Lodge, including accessing or utilizing the financial or credit accounts of Rocky Knob Lodge." (Doc. 306-2 at 4). Nevertheless, sometime between October 26 and November 13, 2018, Ms. Applebury stopped payment on an insurance check issued to Rocky Knob Lodge in the amount of $1,615.56. (Doc. 306-3 at 1). Ms. Applebury then directed the insurance company to reissue the check to her, endorsed it, and cashed the check United States v. Applebury 3:17-cr-00121-TMB-DMS Order DENYING Motion to Reconsider 3 4 with no notice to the lodge or family members. (Doc. 306-3 at 2, 326 at 67-68). Only when Ms. Applebury's mother attempted to deposit the original check in order to pay bills of the lodge, did the bank notify her that a stop payment request had been made on the original check. (Doc. 326 at 13-14). 3. Missing Point of Sale Machine in Winter of 2018 A week before Christmas 2018, a real estate agent involved with the pending sale of the Rocky Knob Lodge was told by Applebury family members that Applebury was in Montana. (Doc. 326 at 27-28). The agent then returned to the lodge and discovered that a point of sale ("POS") system—consisting of one or two iPads and a desktop computer—was missing, along with some other personal items, including a jacket and quilt. (Doc. 326 at 28-29). When questioned, none of the remaining employees knew what happened to this system. (Doc. 326 at 29). However, on December 27, 2018, Ms. Applebury texted her mother asking if the company which had sold the POS to Rocky Knob had sent a box for the POS to be returned. (Doc. 306-4 at 1). Ms. Applebury told her mother that she had made monthly payments on it from her personal credit card but had stopped paying in July. (Doc. 306-4 at 1). Applebury's mother responded the same day that the POS was needed for the sale of the lodge and asked Ms. Applebury to return it. (Doc. 306-4 at 2). Ms. Applebury did not reply, which the Court found "certainly suggests that Ms. Applebury has some knowledge of or possession of the point of sale [system]." (Doc. 326 at 68). 4. Common Modus Operandi United States v. Applebury 3:17-cr-00121-TMB-DMS Order DENYING Motion to Reconsider 4 4 The Court closed the hearing by noting that Ms. Applebury was essentially arguing that, although she cashed these checks and obtained possession of the POS system without permission, she was entitled to do so because the lodge owed her money. (Doc. 326 at 69). The Court further noted that "this is strikingly similar to the modus operandi on offenses that she's charged with." (Doc. 326 at 69). That is, Ms. Applebury has repeatedly claimed to have done great work for her victim's business, which entitled her to the money she paid to herself without permission, authority, or notice to the victim. (Doc. 326 at 69). The Court expressed concern that the defense arguments during the January hearing suggested the possibility the pattern was repeating with a firm called Surgical Specialties. (Doc. 326 at 48-49). At the September 2018 hearing, it was stated that Ms. Applebury had been volunteering for this company. (Doc. 326 at 49). At the January hearing the defense stated she was employed by the firm yet was unable to offer proof that Applebury was being paid for her work. (Doc. 326 at 49- 52). Instead, defense counsel could only proffer, "My understanding is she's been working there and [if she] hasn't been paid yet, certainly is owed money." (Doc. 326 at 51). The Court noted that Ms. Applebury's alleged arrangement with Surgical Specialties was "very much what I'm hearing about the lodge, and it also appears similar to the offenses she pled to." (Doc. 326 at 69). For all of these reasons, the Court determined that Ms. Applebury was an economic danger to the community and issued the detention order. United States v. Applebury 3:17-cr-00121-TMB-DMS Order DENYING Motion to Reconsider 5 4 B. New Evidence Presented by Defendant's Motion. The defense's motion for reconsideration claims to present new evidence in three areas. The headings below are those utilized by the defense in its motion for reconsideration. 1. "Payments Made by Jill Applebury for Which She Has Not Been Recompensed." a. Electric Bills Defense Exhibit A consists of many electric bills for Rocky Knob Lodge, 656 Fork Road, and 614 Fork Road. (Doc. 318-1, 318-2). These bills date from September 2015 up through August 2018. (Doc. 318-2). The latter two addresses were private residences owned by Applebury's mother and occupied at various times by Ms. Applebury or her daughter. (Doc. 318-1). Defense Exhibits B and C consist of credit card statements for Ms. Applebury showing corresponding payments of these bills at various times. (Doc. 318-3, 318-4). The motion states that Ms. Applebury "had taken upon herself" the responsibility of these payments. (Doc. 318 at 1). Furthermore, Exhibit A1, a spreadsheet of total electricity bills, shows a total of $24,335.26 charged to Rocky Knob. (Doc. 318-1). The defense motion notes that "if Mrs. Applebury is released she will be able to obtain the documentation establishing that she did indeed pay this full amount." (Doc. 318 at 2 n.1). b. Father's Line of Credit The motion also states that Ms. Applebury "took upon herself" payments on a United States v. Applebury 3:17-cr-00121-TMB-DMS Order DENYING Motion to Reconsider 6 4 credit line taken out by her father. (Doc. 318 at 2). Exhibit D consists of an unnamed statement from a Wells Fargo account, showing payments to "Ravalli County Bank" and "IPFS CORPORATION." (Doc. 318-5). The motion claims that Exhibit E, a statement for an unnamed "Commercial Unsecured" account with TrailWest Bank, shows the receipt of these Exhibit D payments. (Doc. 318-6). However, not all of these payments appear to match. (Doc. 318-5, 318-6). Defense counsel apparently spoke with Ms. Applebury's mother, who confirmed that since the death of her father Ms. Applebury had been making $300 monthly payments on the lodge's line of credit. (Doc. 318-12 at 1). Defense Counsel also confirmed with TrailWest Bank that it was arranged after her father's death that Ms. Applebury would assume payments on the line of credit. (Doc. 318-12 at 1- 2). 2. "Jill Applebury Cashing of the Insurance Check Was Not Done With Malicious Intent." The defense's motion also argues that certain evidence at the January 2016 hearing was not given due weight, specifically, that the insurance check was issued for "employee hours and mileage." (Doc. 306-3 at 1, 318 at 2). Exhibit F to the motion for reconsideration consists of an undated spreadsheet detailing hours incurred by Rocky Knob employees as a result of the fire. (Doc. 318-7). A significant portion of these hours are credited to Ms. Applebury. The motion notes that defense counsel sought the insurance file related to the stopped check and that the insurance agent was "originally quite amenable." (Doc. 318 at 3, 318-11). However, the agent later informed counsel "in a one sentence United States v. Applebury 3:17-cr-00121-TMB-DMS Order DENYING Motion to Reconsider 7 4 reply" that the lodge's attorney had informed the insurer of Ms. Applebury's termination and no file would be provided. (Doc. 318-12 at 2). 3. "Jill Applebury Has Continued to Be Asked to Work for the Lodge and has Done So Without Compensation." Finally, the defense's motion presents copies of electronic correspondence between Ms. Applebury and various representatives of the lodge, which the motion claims to show Ms. Applebury has been asked to continue working for the lodge. (Doc. 318-8). • July 12, 2018 5:16 pm (Doc. 318-8 at 1)—This is the first email in the exhibit. Ms. Applebury asks Dirk Williams, the attorney who represents the lodge for Crowley Fleck, PLLP, whether severance will be provided to employees. • July 12, 2018 6:05 pm (Doc. 318-8 at 2)—A follow-up email from Ms. Applebury to Mr. Williams includes further details. It provides Williams with "the amounts you have requested," apparently for various obligations of the lodge, including payroll, electric, and payments to creditors. The email also provides a Wells Fargo account number. Finally, Ms. Applebury volunteers "I will complete the 2nd quarter payroll taxes for you," due at the end of July. • July 13, 2018 7:36 am (Doc. 318-8 at 6)—Mr. Williams responds to Applebury's emails at Doc. 318-8 at 1 by thanking her for doing the payroll and requesting all payroll records for Rocky Knob. Mr. Williams states there was no promise for severance, but severance may be paid if funds allow it. United States v. Applebury 3:17-cr-00121-TMB-DMS Order DENYING Motion to Reconsider 8 4 "Most importantly," Mr. Williams demands information and access to Rocky Knob's Wells Fargo and Bitterroot Community Credit Union accounts. "That information belongs to Rocky Knob Lodge, Inc., not you, and you owe a profound legal duty to give the officers of Rocky Knob Lodge, Inc. both access to the information and access to the money in those accounts, immediately. . . . If there is any ambiguity about my demand that you provide all the financial information regarding the Rocky Knob, then please submit your questions in writing." • July 13, 2018 7:53 am (Doc. 218-8 at 4)—Mr. Williams responds to Applebury's emails at Doc. 318-8 at 2 by asking for the invoices from the electric company and creditors "immediately," and asking for payment- account information if any of the bills were set up on auto-pay. • July 15, 2018 5:14pm (Doc. 318-8 at 10-11)—Mr. Williams, apparently having not received a reply from Ms. Applebury, states that the lodge is unable to access the Wells Fargo accounts unless Ms. Applebury physically goes to the branch. He urges her to do so the next morning and transfer authority to sign checks "to Paula Wetzsteon, President of Rocky Knob Lodge, Inc." • July 17, 2018 7:16 pm (Doc. 318-8 at 13)—Ms. Applebury provides "all of the Wells Fargo statements" to Jeff Kuchel 2 of Crowely Fleck. • July 18, 2018 8:10 am (Doc. 318-8 at 15)—Ms. Applebury follows up on a conversation she had the day earlier with Mr. Kuchel. She provides further background details regarding their conversation. Her email closes by noting 2 Mr. Kuchel apparently covered for Mr. Williams while Williams was out of the office from July 17- 22. (Doc. 318-8 at 11, 27). United States v. Applebury 3:17-cr-00121-TMB-DMS Order DENYING Motion to Reconsider 9 4 she may be unable to finish the second quarter financial statements by end of July and claiming she "did not promise or guarantee" to do so. • (undated) (Doc. 318-8 at 16)—A portion of an email apparently from Jeff Kuchel summarizing his and Applebury's conversation. The defense does not provide the email in its entirety. However, the provided portion appears to show that Ms. Applebury had answered some of Mr. William's questions regarding the lodge's accounts. • July 19 – 27, 2018 (Doc. 318-8 at 18-27)—Various emails between Ms. Applebury and Jeff Kuchel. These emails appear to show Ms. Applebury providing information regarding payroll and cooperating to provide Rocky Knob Lodge with access to its accounts. • October 23, 2018 11:50 am (Doc. 318-8 at 29)—In its entirety, the email reads: "Please allow Jill Applebury to do the 3rd Quarter reports for the Rocky Knob Lodge." The names of the sender and recipient are redacted. 3 • October 28, 2018 4:40 pm (Doc. 318-8 at 30)—Ms. Applebury emails her mother with three payroll reports for Rocky Knobb. • October 29, 2018 9:34 pm (Doc. 318-8 at 31)—Ms. Applebury's mother thanks Ms. Applebury "for the taxes!" • January 9 – 10, 2019 3:51 am (Doc. 318-8 at 33-35)—An email thread between Ms. Applebury and Gary Behm. This thread shows that Ms. Applebury offered to prepare the Lodge's year-end payroll reports. (Doc. 318- 3Nevertheless, the same email appears in a thread at Doc. 318-8 at 30. The email was sent to Jill Applebury from "pwetzsteon," Applebury's mother. United States v. Applebury 3:17-cr-00121-TMB-DMS Order DENYING Motion to Reconsider 10 4 8 at 35). Mr. Behm accepted and thanked Ms. Applebury for her offer. (Doc. 318-8 at 34). C. New Evidence Presented in the Government's Opposition The government's opposition presents evidence of Ms. Applebury making false statements to a financial institution before and after Rocky Knob Lodge was closed. (Doc. 322-1). This evidence shows that Applebury filed two separate applications to open accounts with the Bitterroot Community Federal Credit Union. (Doc. 322-1). The first of these, dated April 25, 2018, described Ms. Applebury's membership eligibility as "Resides in Ravalli County." (Doc. 322-1 at 7-8). The second, dated September 13, 2018, described her membership eligibility as "Ravalli County Resident." (Doc. 322-1 at 5-6). The opposition states that both claims were false, as Ms. Applebury concurrently collected checks for the Permanent Fund Dividend in Alaska, which depended upon her residence there. (Doc. 322 at 5). The government's opposition also states that Applebury's criminal conduct was among the reasons Rocky Knob Lodge was forced to close. (Doc. 322 at 5-6). Dirk Williams stated that Ms. Applebury was the only Location Manager for the lodge who had been approved by the State of Montana, Gambling Control Division, in 2017. (Doc. 322 at 5). The lodge's gambling license came up for renewal in 2018. (Doc. 322 at 5). However, Question 5 of the application asked: "Since your initial licensure or since your last renewal, have there been any criminal charges (either felony or misdemeanor) filed against the licensee or any United States v. Applebury 3:17-cr-00121-TMB-DMS Order DENYING Motion to Reconsider 11 4 owner, investor, shareholder, member, partner, office/director, or location manager?" (Doc. 322-2 at 3) (emphasis added). Because the lodge answered no, it could not list Applebury as Location Manager. (Doc. 322 at 5-6). Instead, the lodge listed Alissa Hamby as its Location Manager. (Doc. 322-2 at 4). When Rocky Knob failed to engage Hamby as new manager prior to its deadline for license renewal, the lodge was closed. (Doc. 322 at 6). D. Ms. Applebury Remains a Danger to the Community To recap, this Court's detention order at Docket 313 found that Ms. Applebury was an economic danger to the community on the basis of: 1) two reimbursement checks she issued to herself without permission in late June of 2018; 2) the insurance check she stopped payment on, reissued to herself, and endorsed in the fall of 2018; 3) the POS she gained access to without permission or notice in the winter of 2018; and 4) the manner in which all of these actions demonstrate a clear modus operandi, whereby Ms. Applebury takes property without permission and post hoc rationalizes that the prior work she has done for the victim's business, and/or the expenses she has allegedly paid, entitle her to the victim's property. The new evidence does nothing to show that Ms. Applebury did in fact have an interest or right to any of the above-referenced property. The new evidence shows that Ms. Applebury paid numerous electric bills from September 2015 through August 2018. Some of these were for Rocky Knob Lodge; others were for private residences lived in at various times by Ms. Applebury or her daughter. The new evidence also shows that Ms. Applebury made regular United States v. Applebury 3:17-cr-00121-TMB-DMS Order DENYING Motion to Reconsider 12 4 monthly payments to a line of credit with TrailWest bank. In both cases, the motion states that Ms. Applebury took these obligations "upon herself." However, the evidence does not show that the lodge asked Ms. Applebury to make these payments. In fact, according to the government's opposition, Dirk Williams has explicitly denied that the TrailWest line of credit is an obligation of the lodge. (Doc. 322 at 2). No evidence shows that her payments created a legal right to any of the lodge property, which serves as the basis for the Court's detention order. The new evidence also highlights the fact that the stopped insurance check was issued for "employee hours and mileage." The motion provides a spreadsheet of hours incurred by lodge employees as a result of the fire. However, the spreadsheet does not say when or by whom it was prepared. Nor does the spreadsheet show that Ms. Applebury had authority to stop payment of the check in October 2018 as compensation for the hours it alleges she worked. Instead, Ms. Applebury's authority over lodge finances and credit accounts was revoked by her termination letter of June 27, 2018. Finally, the new evidence shows that Ms. Applebury offered to perform some work for the lodge after June 27. Specifically, Ms. Applebury may or may not have completed the lodge's second quarter payroll taxes by the end of July 2018; she may or may not have completed the third quarter reports; she completed three payroll reports for her mother in October 2018; and she may or may not have completed Rocky Knob's year-end payroll reports in January 2019. At the same time, the United States v. Applebury 3:17-cr-00121-TMB-DMS Order DENYING Motion to Reconsider 13 4 emails suggest the lodge manager and attorneys were continuing their relationship with Ms. Applebury to ensure they obtained lodge records and regained access to lodge bank accounts. Additionally, rather than helping to keep the lodge open, the government's new evidence shows that Ms. Applebury's conduct may in fact have been a significant cause of Rocky Knob Lodge's closure. The new evidence fails to establish that Ms. Applebury had the authority to: (1) write herself the two "reimbursement" checks in late June 2018; (2) stop payment on, reissue, and endorse the insurance check to herself in the fall of 2018; or (3) gain access to the POS equipment in the winter of 2018. Thus, the grounds for the Court's detention order remain unchanged. III. CONCLUSION For the foregoing reasons, Ms. Applebury's motion is hereby DENIED. The Court's Order of Detention at Docket 313 remains in effect. DATED this 12th day of March, 2019 at Anchorage, Alaska. S/DEBORAH M. SMITH CHIEF U.S. MAGISTRATE JUDGE United States v. Applebury 3:17-cr-00121-TMB-DMS Order DENYING Motion to Reconsider 14 4