Ned Roscoe Sentenced

Left: Ned Roscoe





Sigh. Ned Roscoe, one of the most-effective of the 135 candidates who ran in the 2003 California Gubernatorial Recall Election, has been sentenced to federal prison:

The former owner of Cigarettes Cheaper!, a man with long-standing Napa ties, was sentenced Wednesday in a San Jose federal courtroom to five years in federal prison for multiple counts of bank fraud, according to the U.S. District Attorney’s Office.

...Roscoe, who lives in the Twin Sisters area on the border between Napa and Solano counties, was found guilty on Feb. 22, 2011 after a month-long trial of conspiracy to:
• commit bank fraud and make a false statement to the bank
• 13 counts of bank fraud
• 14 counts of making a false statement to the bank, court documents show.

The fraud occurred while Roscoe, 51, was an owner of Cigarettes Cheaper!, a Benicia-based cigarette chain that at one time had 800 stores and brought as much as $1 billion in annual revenues. Authorities indicted Ned Roscoe and his father, John Roscoe, in 2007.

The elder Roscoe pleaded in January 2011 to one count of conspiracy to make false statements to a bank. On Wednesday, John Roscoe was sentenced to 12 months of home confinement with electronic monitoring followed by five years of supervised released, the U.S. district attorney’s office said.

In court documents, federal prosecutors had recommended a 14-year prison term for Ned Roscoe, saying he led a complicated scheme to defraud — and did defraud — Comerica Bank. In the end, the bank’s losses because of the fraud, interests included, totaled $27 million, the prosecutors said.

But Roscoe’s attorney, Vicki Young, of Palo Alto, argued that the actual loss was $370,000 and that Cigarettes Cheaper! was making regular payments on the interest due.

“There is no evidence that the Roscoes, and Ned Roscoe in particular, intended that the bank suffer any loss,” Young said.

“Ned Roscoe was not in any sense the ‘kingpin’ of a criminal conspiracy,” Young also wrote in briefs. “The case involves businessmen trying to keep the failing business going. The bank officer and Cigarettes Cheaper! employees testified that there was constant tension between the company and the bank about the strict and increasingly stringent definitions of eligible inventory required by the bank,” Young said.

After her client was convicted in 2011, Young said she believed the matter should have been a civil matter between Comerica Bank and Cigarettes Cheaper! “While mistakes may have been made, we disagree that it warranted criminal prosecution,” she said in an email in February 2011.

I was one of the folks who wrote a letter in support of Ned Roscoe: a letter that might be able to describe either his “history and characteristics,” or his “nature and circumstances” during the period from August through November, 2003, the period of time when he had been accused of committing crimes (and when he was also running for Governor). Here are excerpts from what I wrote Judge Whyte:

Ned Roscoe and I were among 135 candidates who chose to run in the 2003 California Gubernatorial Recall Election campaign. I did not meet Ned Roscoe until August 30, 2003, so I can’t shed light on his history prior to that time, but because I blog zealously I have records that can help illuminate his characteristics, nature, and circumstances from August through November, 2003. I encountered Ned Roscoe on several occasions during this period, and had frequent contact with him via E-Mail.

Of the large number of candidates running, roughly a third could be described as sensation-seekers of one sort or another; another third were single-issue candidates. The last third were engaged, capable, well-rounded citizens. Ned Roscoe was one of the leaders of this last group of candidates.

The large majority of candidates were not well known, and not endorsed by any party. As a result, local and national media wrote off the large majority, and focused on just a few well-known candidates. Scorned by the media, the alternative candidates banded together to create what became known as the Candidates’ Forum. By banding together we could attract media attention that we could not attract individually. But it also meant we had to downplay our ideological differences in order to work towards our common goal of media exposure. Ned Roscoe facilitated this cooperation.

I always found Ned to be affable and thoughtful. In many ways, he was among the most-capable of the alternative candidates running. In candidate circles, Ned Roscoe took a leadership role, and helped direct their energies. By my assessment, of the alternative candidates running (perhaps 126 of the 135 candidates), Ned Roscoe was probably the third most-influential (behind only Cheryl Bly-Chester and Jon Zellhoefer). Ned achieved his leading role among this particularly headstrong group of people through persuasion and sound arguments (money wasn’t an issue, since most of us had pledged to abide by a minimal $5,000.00 campaign spending limit). While we are not ideologically-compatible (Ned is a Libertarian; I am a liberal Democrat), we are certainly compatible by temperament.

...The first place a large number of gubernatorial candidates met was at Alameda, CA, at the USS Hornet aircraft-carrier maritime museum, on August 30, 2003. That was the first place I met Ned Roscoe. The candidates, while often partisan, freely-discussed even the most radical of political opinions at this meeting, held in a sort of battle-room within the aircraft carrier. The mood of the meeting felt more like a nascent constitutional convention than anything else. Ned Roscoe was very excited, and offered to be the secretary of the Candidates’ Forum.

Libertarian Candidate Roscoe had several hobbyhorses during his campaign; principally moving the U.S. to a sensible drug policy, and implementing a state grand jury process.

...Monday September 22nd, 2003 was an eventful day for all of us, as 90 or so California gubernatorial candidates gathered at NBC’s Burbank television studios for Jay Leno’s Recall Candidate Night.

...After the exciting evening on national TV (featuring the percussionists “Blue Man Group,” and actor Robert Downey, Jr.) there was time for some final photos and good wishes outside NBC’s studios. Ned Roscoe drove by, leaned out his window, and shouted 'Marc Valdez for Governor!’ It was hard not to smile at Roscoe’s genial support for one of his rivals!

...On September 27th, another meeting of the Candidates’ Forum was held at the Hyatt Regency Hotel in downtown Sacramento. Ned Roscoe promoted a run from the Tower Bridge over the Sacramento River to the State Capitol at 9:30 a.m.

...At this meeting, Ned Roscoe promoted a new idea: dogging Arnold Schwarzenegger’s bus tour from San Diego to Sacramento with a school bus tour of our own. It was a brilliant idea, with lots of potential for press coverage, and was quickly adopted by the rest of the group. Ned Roscoe quickly became majordomo of the effort.

Roscoe was very careful in claiming credit for his idea of pursuing Arnold’s bus caravan as it made its way to Sacramento. Indeed, he never claimed the idea as his own at all: he ascribed the idea to “the people in the crazy idea department.” But as far as I could tell, there was really only one person in the Candidates’ Forum “crazy idea department,” and that person was Ned.

...On Election Day, Tuesday, October 7th, 2003, a euphoric Roscoe issued a press release:

Victory! Roscoe an Early Winner!

…Roscoe says “I already feel like a winner. I went out to represent citizens at the bleeding edge of California’s tax abuse, the smokers, carrying the sensible ideas of California’s Libertarian Party. I had a ton of fun doing it.“ Roscoe organized the Candidate Coalition Bus to tour California last week. He danced with the Blue Man Group on the Tonight show. He spoke with 100 of the recall candidates and had close to 3,000 people tell him what they wanted from a governor: “Less.“

Ned Roscoe placed 34th in the balloting, with 2,248 votes (I placed 41st, with 1,837 votes).

...My last regular contact with Ned Roscoe was on June 16th, 2004, when he E-Mailed a few thoughts:

I enjoy the pageantry of democracy. Relatively rational people get seized with delusions of grandeur. When the system works well, money and power gravitate towards two poles which may not be very far from each other. The two camps bid for marginal positions without alienating their core supporters. It’s a great game, but I don’t have to play it.

America is stable and prosperous enough that we can take it for granted that election results will be accepted peacefully by almost everyone. We can argue about how decisions are made in Napa, California and the United States, but we know that elections play a smaller part than ballyhooed by editorial writers. As long as government has such tremendous power, the money will find a path to the power.

Duty to God, family, friends, employers, neighbors, regulators, and tax collectors keep me pretty darn busy. People ask me to register to vote and then to vote their way. I wish they’d get their priorities straight. I might vote Libertarian, because I like those people. They need every vote they can get to maintain their position as the 3rd largest political party. And, touch screen voting is fun like a cheap version of Vegas. But first, I ought to donate blood.

Concluding Thoughts

Ned Roscoe’s E-Mail to me soliciting a letter to the federal judge asked that I address two questions:

1) What would be good for society, in your view, if and when I am sentenced; and,
2) What would happen if the judge took your advice?

Referring to the ills of society, I’ve always thought of people like Ned Roscoe as more a part of the solution and not the problem. As I’ve illustrated above, during the period of August through October 2003, Ned Roscoe was fully-engaged in creative efforts to advance the candidacies of all the alternative candidates for California Governor, and not just his own candidacy. He approached the job with winning self-deprecation and humor, and was very careful in not claiming too much credit for ideas (like the bus pursuit) that he could proudly take full credit for. His comparative wealth alone could have elevated his standing amongst the other candidates, but Ned Roscoe never put that wealth on display. Instead, he was interested in political debate, and the power of ideas, and was available for discussions with just about anyone. And Ned Roscoe could keep his perspective too, urging the importance of donating blood to the community as opposed to seeking power for its own merits. Under different circumstances, perhaps Ned Roscoe should have been California’s Governor.

Indeed, I am a bit puzzled that Ned Roscoe may have had any free time left over for committing crimes, or any other activities, during this period. I do know that the rest of us were seriously overcommitted and overbooked from the beginning of August through the middle of October, 2003. I’m sure the same had to have been true for Ned Roscoe. Whatever crimes may have been committed, they were crimes that could not have demanded much time.

My understanding of the charges against Ned Roscoe is extremely-limited, but it sounds like the action of exaggerating the size and value of business inventory for the purpose of securing loans is just a larger version of the real estate bubble occurring about the same time, whereby homes and properties were overvalued for the same reasons. The many, many malefactors in the real estate bubble were not imprisoned. Is it appropriate to deprive Ned Roscoe of liberty for doing much the same? Depriving him of ill-gained wealth (plus a penalty) seems a more-appropriate response to me. Society would be poorly-served by consigning creative folks like Ned Roscoe to prison, and the deterrent value of a penalty would suffice to protect the interests of society.

As I’ve indicated, politically I am oriented differently than Ned Roscoe, and might be expected to urge a hard line towards his punishment. Nevertheless, I see no merit in doing so. A more-merciful approach is better for everyone.