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State v. Doyle

Superior Court of Rhode Island

April 11, 2017

STATE OF RHODE ISLAND
v.
DANIEL E. DOYLE, JR.

         Washington County Superior Court.

          For Plaintiff: Mark J. Trovato, Esq.; Ryan D. Stys, Esq.; J. Patrick Youngs, III, Esq.

          For Defendant: Chip Muller, Esq.; Kevin J. Bristow, Esq.;David A. Levy, Esq.; Gary G. Pelletier, Esq.

          DECISION

          THUNBERG, J.

         I

         Facts and Travel

         The Leadership Building & the Board of Directors of the Institute for International Sport

         Many years ago, philanthropist Alan Shawn Feinstein created the Feinstein Foundation with the objective of empowering "youngsters to do good deeds for others and hopefully make a positive difference in the world."[1] A very important initiative of the Feinstein Foundation was the "Feinstein Hunger Challenge, " a coordinated fundraising effort among nonprofit agencies "in an attempt to alleviate hunger throughout the country." The Institute for International Sport (IIS or the Institute) was brought to Mr. Feinstein's attention by Alan Hassenfeld, and Mr. Feinstein assessed that "it had a great deal of promise, and they were going to bring youngsters from many foreign countries and enable them to . . . have sports activities and . . . react positively on the world themselves."

         In May of 1996, Mr. Feinstein and the Defendant Daniel E. Doyle, Jr. (Defendant) entered into a "Memorandum of Agreement" (Ex. 1) in which Mr. Feinstein pledged one million dollars for the construction of the "International Scholar-Athlete Hall of Fame" building, to be referenced to and identified as "The Feinstein Building." (Ex. 2.)

         Mr. Feinstein pledged additional monies in October 2005 for a second building, the still incomplete Leadership Building, according to the following payment schedule: $42, 000 upon the signing of the contract; $43, 000 on December 3, 2005; and $83, 000 on June 30 of each of the following five years (building and signage to be completed prior to the first payment) "upon presentation of the reports every year from all Games' attendees those years, showing what they and their schools did in the Feinstein Hunger [Challenge] that past March and April, what was raised and what agencies were the recipients of it with instructions to apply it toward the Feinstein [Hunger] Challenge." (Ex. 3.) Mr. Feinstein did make two payments on his pledge, in October and December of 2005, for a total expenditure of $85, 000. Mr. Feinstein halted his pledge payments after receiving the "Feinstein Hunger Program" letter falsely attributed to Mr. Hassenfeld and bearing the latter's forged signature. (Ex. 6.) According to Mr. Feinstein's pledge terms set forth in the Memorandum of Agreement (Ex. 1), all participants in the World Scholar-Athlete Games were required to complete and document all anti-hunger community service projects in their respective countries. Mr. Feinstein testified that the letter (Ex. 6) "was quite a blow to us because we had given funds with the understanding that all these students would do something that warranted their attendance at the game, not to come to the games with the understanding they could do it once they got here." Mr. Feinstein, rightfully so, explained that "this was completely contrary to our agreement and the trigger to us saying we would not make any further donations."

         On December 15, 2005, sixteen days before Mr. Feinstein made his last donation, the Defendant, on behalf of the IIS, entered into a contract with Alfred Amore's building corporation to construct the Leadership Building for $466, 500. (Ex. 8.) Mr. Amore acknowledged the receipt of three payments as follows: $26, 000 in January of 2006 (Ex. 9); $70, 000 on June 5, 2007 (Ex. 10); and $30, 000 on June 28, 2007 (Ex. 12). Mr. Amore's company never completed the building due to "lack of payment." He was told by the Defendant that he, the Defendant, "was waiting for funding."

         Marissa White, formerly a member of the Joint Committee on Legislative Services (JCLS), personally observed-initially in late 2007-that the building was unfinished and "reported her concerns to the Speaker's Office." She emphasized that the $575, 000 legislative grant was to be utilized exclusively for the construction of the Leadership Building. See also Ex. 18, Letter from Speaker Murphy to Defendant. Ms. White's reportage of the condition of the building ultimately triggered an investigation by the Auditor General, Dennis Hoyle.

         In early August of 2011, Thomas Falcone, the Executive Director of JCLS, requested that Mr. Hoyle review the grants provided to the IIS in 2007. Mr. Falcone specified that the "grants . . .were provided with the intention construction [sic] of a new building . . . [which was] still not complete as of August 2011." (Ex. 26.) Mr. Hoyle recalled telephoning the Defendant on September 2, 2011, and the Defendant representing to him that construction had to stop due to a "land lease issue" and that $425, 000 of the $575, 000 had been expended. (Ex. 29.) The Defendant also indicated that there would be a "reconfiguring [of the] board" and the establishment of an audit committee. Id.

         On October 3, 2011, Mr. Hoyle formally requested that the Defendant provide him with a list of expenditures for construction, contracts, purchase orders, invoices, cancelled checks, estimates for completion of the building, audited financial statements of the Institute and recent 990's.

         The Defendant hand-delivered to Mr. Hoyle a Construction Report on October 5, 2011. Payments on construction were identified as follows: JJO, Inc. (Builder): $19, 400; Armore Bldg. Corp. $126, 000; Richard Cardarelli, AIA $21, 477; Construction Advisor, Clerk of the Works and Attorneys' Fees $34, 460, for a total of $201, 337. (Ex. 36.)

         The Construction Report contained an assurance that a forthcoming updated audit was "being overseen by the Board's Finance Committee, along with three distinguished individuals who are volunteering their time, all of whom have extensive background [sic] in finance and audit." Id. The projected cost of completion of the building project was stated as $435, 000. Id.

         In an e-mail to Mr. Hoyle, dated October 24, 2011, purportedly from Laurie DeRuosi, the head of the above-referenced financial team was Jack Hines. (Ex. 41.) A subsequent e-mail dated November 3, 2011, purportedly from Jack Hines to Mr. Hoyle, states that the "[team] ha[d] held two meetings [that] week" and assured Mr. Hoyle that the team was working "as expeditiously as possible to bring the books up-to-date and get the audit finished." (Ex. 46.)

         Mr. Hines testified that he was never a member of any "team" or Board and that "none of this [was] true as it relates to [him]." He never dictated any documents or sent any messages nor authorized anyone to do so on his behalf.

         Mr. Hines is further referenced in a so-called Board of Directors Report provided to Mr. Hoyle via e-mail on November 7, 2011. (Ex. 47.) The e-mail purports to memorialize a November 4, 2011 Board of Directors "meeting" at which Mr. Hines, "Chair of the Finance Team that Dan Doyle has put together, [was instructed by the Board] to proceed with the audit requested by the State of Rhode Island, and to finish the audit by no later than December 15, 2011." Id. In fact, on the day of the "meeting" Mr. Hines was cruising in the Caribbean with his wife. Once again, he testified that "none of this as it relates to me is true."

         Two additional sham e-mails directed to the IIS Board of Directors, with counterfeit attribution to Mr. Hines, discussed, in part, the Defendant's "contractual" rights and tuition remission. (Exs. 68, 69.) Mr. Hines, who saw these documents (dated late Fall 2011) for the first time during the trial, testified that he did not author these documents nor direct anyone to prepare them on his behalf.

         In February of 2012, Mr. Hoyle completed his grant review report, and it is this report (Ex. 62) which triggered the Rhode Island State Police investigation which culminated in the Grand Jury indictment of eighteen charges against the Defendant.

         The Office of the Auditor General concluded, in material part, that, "[a]s of January 2012, [IIS] owed the University of Rhode Island [URI] [approximately $380, 000] for unreimbursed payroll costs and other services provided to the Institute. Most of this [debt] was incurred during fiscal years 2007 to 2009 and represents (1) salary and benefits paid to the Executive Director through the State's payroll system and (2) dining, lodging and other services provided by the University to the Institute during the World Scholar-Athlete games.'" Id. at 8.

         The formal organization of the Institute, a nonprofit corporation, took place at its first Board of Directors meeting on May 26, 1987 at Trump Tower in Manhattan. (Ex. 107.) In addition to the Defendant, the following individuals were in attendance: Dr. Edward D. Eddy, Dr. Americo W. Petrocelli, Mr. Russell E. Hogg, Courtney F. Jones, Nicholas R. Tomassetti, Dr. J. Richard Polidero, Dr. Thomas R. Pezzullo, Ambassador Thomas Estes, and the incorporating attorney, John J. Partridge. Attorney Partridge, after a unanimous vote, was appointed "Secretary pro tem" for the purpose of the taking of minutes at that meeting. The following officers of the Institute were unanimously elected "to serve until their death, resignation or removal, or until their successors are duly elected and qualified, whichever shall first occur: Chairman: Russell E. Hogg; Vice Chairman: Dr. Edward D. Eddy; Secretary: Courtney F. Jones; Treasurer: Dr. Americo W. Petrocelli." Id. An additional unanimous vote resulted in the appointment of the Defendant as the "Executive Director of the Institute to serve until his death, resignation or removal or until his successor is duly appointed . . ." Id. In tandem with this appointment was a provision designating Dr. Eddy to be "authorized, empowered and directed, in the name of and on behalf of the Institute, to negotiate, execute and deliver an employment contract with Mr. Doyle on such terms and conditions as he, in his sole discretion, deems necessary, advisable and convenient, and further that this resolution shall not be deemed to grant any additional employment rights than those to be the subject of the employment contract." Id.

         The Board of Directors, pursuant to Article IV of the adopted by-laws, had the power and responsibility to "establish the duties of and have general control over the Executive Director." (Ex. 106, Art. IV § 1(ii).)

         Article IV further provided that the directors of the corporation could consist of up to "fifteen (15) persons, [2] two (2) of whom shall be the President of the University of Rhode Island and the Vice President For Business and Finance of said University of Rhode Island. (The President and Vice President for Business and Finance of the University of Rhode Island from time to time shall be referred to as 'ex-officio directors' who shall have the same voting rights as the other directors.)" Id. at § 2. The directors' terms limited their service to three years, except for the ex-officio members who were authorized to serve two consecutive terms.

         The by-laws mandated that "[d]irectors . . . be elected from among the Trustees at the annual meeting of the Trustees." Id. at § 3; see also Art. III § 2. Attorney Partridge testified that an Executive Director who "runs day-to-day operations" has no power to appoint individuals to the Board of Directors.

         A final pertinent provision of the by-laws adopted in 1987 provided that "[n]o loans shall be contracted on behalf of the Corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors." (Ex. 106, Art. VI § 2.)

         Courtney F. Jones, the original Secretary of the Board of Directors, testified that he first met the Defendant through his daughter's volleyball coach at URI. At this time, around 1985, Mr. Jones was working full-time as a Vice President at Merrill Lynch. Mr. Jones was very experienced in corporate governance and recognized that he, or his designee, would have had the responsibility of taking notes and preparing the minutes of any Board of Directors meeting. He testified that he "never prepared any agendas, took any minutes or sent out any notices." Mr. Jones was completely unaware that he had been identified as the Treasurer of the Institute for the years 1990 through 1999 in the Secretary of State annual filings. (Ex. 273.) He had no recollection of voting for any bonus for the Defendant and stated that he "absolutely did not remember any tuition [reimbursement] discussion, it would be highly improper."

         Mr. Nicholas Tomassetti, who had been in attendance at the Trump Tower incorporation meeting explained that no "official board meetings" were conducted; there was "no roll call . . . no quorum . . . no minutes were kept . . . The record was your memory." Mr. Tomassetti had no knowledge that he "became" Vice-President of the Institute's Board of Directors from 1990 to 2009 until the prosecutor displayed the annual filings to him. He also testified that he never participated in any discussion where the Board of Directors unanimously approved the purchase of Bald Head Island.

         When Mr. Tomassetti was shown, at the trial, the "Minutes of Meeting, Institute for International Sport Board of Directors, June 26, 2006, " purportedly submitted by him as "Acting Secretary for the Board, " he said he had never seen them before. (Ex. 127.)

         He also was not aware, until the trial, that he was listed as a member of an oversight committee which was to "monitor all construction costs" of the building on URI's campus. (Ex. 15.) The Defendant submitted this "Budget Report" in October 2006 at the JCLS's request for supplemental information regarding the $575, 000 grant application. Id.

         Lastly, Mr. Tomassetti denied being aware of an ostensible Board of Directors meeting on November 4, 2011, the report of which references the completion of the state audit by December 15, 2011. (Ex. 47.)

         Mr. David Esty, in his "85th year, " as he would say, travelled here from Seattle to speak about his involvement with the Institute. Mr. Esty is truly an extraordinary gentleman; he, a combat veteran and cancer survivor, offers counseling to brave people of similar experiences. Mr. Esty met the Defendant in 1999 through an Amherst College classmate and accepted the Defendant's invitation to be on "the Board, " finding the Defendant to be "a mesmerizing presence." When asked about "sitting down with his fellow members for a Board meeting, " he responded, ". . . we never had a Board meeting. We had some working lunches." He did meet and was in the company of Mr. Hogg about ten times during the years of his service from 1999 to 2005. These contacts with Mr. Hogg included "some of the events, the scholar athlete events and Hall of Fame induction ceremonies." When asked if at any time while in Mr. Hogg's company there was a formal Board of Directors meeting, Mr. Esty replied, "[w]e never had one of those." Mr. Esty never discussed finances with either Mr. Hogg or the Defendant and never discussed or negotiated an employment contract for the Defendant with Mr. Hogg or any other members of the Board of Directors.

         When asked if to his knowledge he ever held an executive position on the Board of Directors, the forthright witness answered: "No, not that I was ever told other than it was to me, it came to me like a latrine rumor." He was then shown the 2002 corporate filing (Ex. F) identifying him as the Secretary and Treasurer of the Institute. His reaction, in part, was: "I am astonished . . . [w]ow . . . [t]hat's me? . . . I never knew . . . I never performed any secretarial or bean counting . . . in the operation . . . I'll be damned."

         Despite the fact that Mr. Esty told the Defendant that "maybe we ought to have a meeting, " he was "never invited to anything resembl[ing] a Board meeting" over the six-year period.

         Mr. Esty described as "absurd" the document (Ex. 121) professing the "Board's" unanimous approval of the purchase of the Bald Head Island property to create an endowment.

         By July of 2005, Mr. Esty's concerns regarding the operation of the Institute and its lack of a functioning Board of Directors had escalated to the point that he felt compelled to tender a resignation letter. (Ex. 124.) In his July 4, 2005 letter to the Defendant, he expresses these concerns, in part, as follows: "Secondly, [3]because of some issues which have not been resolved, it is time for me to resign from the IIS board. At top of the list, and the only one to which I will refer, is the fact that IIS does not have a functioning board. I have been a director for a long time and, to my knowledge, we have never had a board meeting during that period. Under the 501c3 law [sic], as provided by the IRS, this has been a serious mistake. I only am accustomed to operating organizationally and otherwise in the sunshine. Some other things have concerned me but it is the board matter which is the most compelling reason for me to resign from it, effective immediately." Id. In closing, Mr. Esty writes: "I wish you nothing but the greatest imaginable success, Dan. Please stay in touch." Id.

         Unlike Mr. Esty, other putative Board of Directors' "members, " such as Rose Styron and Robert Fiondella, did not even know they were on this imaginary "Board of Directors."

         Rose Styron, a writer, poet and human rights activist, widow of novelist William Styron, testified that she met the Defendant "years ago." He telephoned her to ask if she would like to participate in an Irish American writers' conference, "which would mean a week in Ireland with writers who were friends of [hers], Frank McCourt, William Kennedy, Joyce Carol Oates." Sometime between 2002 and 2005, she met the Defendant at a sports event at URI and never saw him again. Ms. Styron "absolutely" did not know she was named as a member of the IIS Board of Directors. She never received minutes of any meetings nor "any sort of documentation from the Institute." When the Rhode Island State Police called her to inquire about her status she was "totally baffled" and "had no idea what they were talking about." Nonetheless, she was identified as being a Board of Directors member in the Institute's 990 filings in the years 2003, 2004, 2005, 2006, and 2008. (Exs. 141, 142, 143, 144, 146.)

         Mr. Robert W. Fiondella, retired Chairman of the Board and CEO of Phoenix Home Life, had also served as a Board of Directors member for nonprofit organizations such as Special Olympics International and University of Hartford's St. Frances Hospital. Also, Mr. Fiondella knew the Defendant and was familiar with the World Scholar-Athlete Games and had sponsored a student participant. He was never asked to serve on the Board of Directors. He never received any agendas or minutes and never attended any meetings with his named fellow Board of Directors members; he did not even know them. He first learned that he was listed as a Board of Directors member from a reporter "years ago." Yet, he was identified as such on the 990 filings of the Institute for the years 2003-2008. (Exs. 141-146.)

         Mr. Rodney Steier, who has known the Defendant since 1994, did agree to serve on the Board of Directors sometime in 2004 and testified that "theoretically [he] is still on the Board." Over the course of twelve years, he recalled participating in five meetings, three held in person and two conducted by teleconference. During his tenure, he never served as Secretary or Treasurer. For the first time, at trial, he was shown a number of documents identifying him as Secretary of the Institute and purporting to bear his signature. He signed none of them. The signatures were counterfeit on the following: (1) a corporate authorization resolution for Port City Capital Bank in North Carolina, certifying Mr. Steier as secretary of the Institute, dated September 29, 2004 (Ex. 203); (2) a promissory note in the amount of $382, 500, obligating the Institute to Central Carolina Bank, dated October 29, 2004 (Ex. 204); (3) a guaranty of payment of the foregoing, same date (Ex. 205); (4) an accompanying Deed of Trust (Ex. 206); (5) a corporate resolution authorizing "Dan Doyle to sign on behalf of the Institute for International Sport for a financing loan for the purchase of a van and Saab automobile, " dated June 18, 2005 (Ex. 208); (6) "Loan from Doermann Family Trust to Institute for International Sport" stating that in October 2005 the Trust loaned the Institute $25, 000 and confirming that the loan was repaid with 6% interest, dated June 30, 2005-note that this date predates the referenced loan, id.; (7) a document stating that the "Institute for International Sport does not owe Mr. Halas any further payroll, " dated June 30, 2005, id.; (8) "Investment Policy of the Institute" declaring that said policy "is to stay strictly with land in Bald Head Island, North Carolina for the foreseeable future. The Institute's policy does not encompass any other investments, including stocks, bonds or other real estate. This is due to the extremely high rate of return the Institute has already received on its investment portfolio in Bald Head, North Carolina, " dated June 30, 200(uncertain of last digit), id.; (9) "Vehicles Owned/Leased by the Institute for International Sport as of December 31, 2004" stating the IIS owns a 1996 Maxima without a loan and had leased a 2002 Saab with lease ended in May 2005, dated

          June 30, 2005, id.; (10) "Regarding Documentation for State Grant, " noting that the IIS received $550, 000 in state grants in 2004 and that "[b]ecause these grants are taken from the State's Grant Appropriation account, the Institute simply submits an invoice, and receives payment, " dated June 30, 2005, id.; (11) "Loan from Walter Halas to Institute for International Sport" indicating that a loan from Mr. Halas in October 2005 for $25, 000 had been repaid with 6% interest, dated June 30, 200(last digit could be 4 or 7), id.; and (12) "Corporate Authorization Resolution" stating that the resolutions in said document were "adopted at a meeting of the Board of Directors of the Corporation duly and properly called and held on January 28, 2010." (Ex. 209.)

         There is also an unsigned Board Resolution (Ex. 207) which was not authorized by Mr. Steier which lists him as Secretary/Treasurer. The document states that the Board of Directors authorized the Institute in April of 2005 to "purchase a lot on Bald Head Island, North Carolina, as part of the Institute's endowment portfolio." Id. Other unsigned documents falsely attributed to Mr. Steier include: (1) Minutes of a Board of Trustees Conference Call Meeting, March 18, 2005 "authoriz[ing]" the Defendant to purchase three to four more properties on Bald Head Island, listing Mr. Steier as "Secretary, Board of Trustees." (Ex. 123); and (2) "Minutes of . . . Board Meeting, July 18, 2005" pretending that the "Board" unanimously approved the purchase of "up to six more building lots on Bald Head Island in 2005." (Ex. 126.) Said minutes purported to have been submitted by Mr. Steier, Secretary.

         Curiously, Mr. Steier is not designated as the Secretary of the Institute in the annual filings with the Secretary of State (which commenced in 1988) but for the years 2012 and 2013. In 2004 and 2005, Mr. Esty was listed as Secretary, with Mr. Cleary succeeding him for the years 2006 through 2009. During the years that Mr. Cleary was designated as Secretary, Mr. Steier was listed as the Treasurer, and also in the years 2012, 2013, and 2014. (Exs. 125, 273.) In the 990 filings for the years 2005, 2006, 2007, and 2008, Mr. Steier is identified as a "Board Member" but with his first name as "Ronald" and his surname misspelled as "Stier." (Exs. 143-146.) In the 2007 and 2008 filings (Exs. 145, 146), Vice Admiral William P. Lawrence is designated as a "Board Member" even though he had passed away in December of 2005.

         Philanthropist Alan Hassenfeld, who was "passionate" about what he perceived the Defendant's "vision" to be, testified that he never joined the Board of Directors of the Institute nor attended any meetings. Nonetheless, he appears as President of the Institute and its "Chair" on the 2009 and 2010 annual reports. (Exs. 75, 125.) Mr. Hassenfeld testified that the documents do not bear his signature or printing, and he did not authorize their production. Nor did he author the "Feinstein Hunger Program" letter which refers to him as "Chair, Hasbro, (Toys) Inc." and "Chair, World Scholar-Athlete Games." (Ex. 6.) Mr. Hassenfeld explained that he never uses the term "Chair, " only Chairman. He also refers to his company as "Hasbro, Inc." not Hasbro Toys. Once again, the attribution of authorship and the signature on the letters were spurious.

         The conclusion is inescapable, beyond any doubt, based on the documentary and credible testimonial evidence, that the "Board of Directors" was a chimerical product of the Defendant's incessant and far-flung chicanery.

         Earnest believers in the Institute's mission, supporters of the Defendant, routinely shared organizational suggestions with him to enhance the function, finances and future of the Institute. The Defendant's consideration and implementation of their ideas was a complete masquerade. The Defendant's solitary, unrestricted course of conduct and the manufacture of fictionalized and forged documents were essential to the insulation of his perfidy.

         II

         Standard of Review

         When this Court rules on a motion for a new trial, the Court "'acts as a thirteenth juror and exercises independent judgment on the credibility of witnesses and on the weight of the evidence.'" State v. Guerra, 12 A.3d 759, 765 (R.I. 2011) (quoting State v. DiCarlo, 987 A.2d 867, 870 (R.I. 2010)). The Court considers "'the evidence in light of the jury charge'" and assesses witnesses' credibility and "'the weight of the evidence.'" Id. (quoting State v. Morales, 895 A.2d 114, 121 (R.I. 2006)). Then, if the Court finds that it "would have reached the same result as the jury did or that reasonable minds could differ as to the result, the motion for a new trial must be denied." State v. Imbruglia, 913 A.2d 1022, 1028 (R.I. 2007).

         III

         Analysis

...


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