APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS (D.C. No. 2:09-CR-20107-JWL-1)
The opinion of the court was delivered by: Kelly, Circuit Judge.
United States Court of Appeals Tenth Circuit
Elisabeth A. Shumaker Clerk of Court
Before KELLY, BALDOCK, and HARTZ, Circuit Judges.
Defendant-Appellant Wildor Washington, Sr. was convicted of conspiracy to commit wire and mail fraud, 18 U.S.C. §§ 371, wire fraud, 18 U.S.C. §§ 2, 1343, and commercial carrier fraud, 18 U.S.C. §§ 2, 1341. He was acquitted of making a false statement to a federal investigator and money laundering. Mr. Washington was sentenced to 36 months' imprisonment and three years' supervised release. On appeal, he argues (1) the evidence was insufficient on the commercial carrier fraud count because use of the carrier was not essential to the scheme, occurring after the purpose of the scheme had been completed; and (2) his sentence was improperly increased based upon a loss calculation that included losses incurred by assignees of original loans. Aplt. Br. 1-2. Our jurisdiction arises under 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a) and we affirm.
Mr. Washington, serving as a mortgage broker, assisted Emma Jean Holmes in the purchase of three houses in Overland Park, Kansas. Doc. 125 at 2. The loan applications overstated Ms. Holmes's income and included other misstatements. 1 R. 84. Upon nonpayment of the loans, foreclosure proceedings ensued. As part of those proceedings, each property was auctioned at a sheriff's sale and acquired by the lender or an assignee and then resold on the open market.
The basis for the commercial carrier fraud charge was a September 2004 transaction where closing documents were sent to the lender via Federal Express. See Aplt. Br. 9. At trial, Denise Robinett, a closing agent for the Kansas Secured Title company who handled the September 2004 transaction, testified that it was standard industry practice to send closing documents overnight via Federal Express. See id. at 11-12. She also testified that there was nothing unique about this particular transaction that required overnight delivery via commercial carrier. Id. at 12. Mr. Washington had not requested that Robinett use Federal Express for this transaction, id. at 13, and he argued that the scheme had already reached fruition once Ms. Holmes received the loan money and title to the property; the subsequent mailing of the closing documents was not in execution of the scheme to defraud.
Following his conviction, Mr. Washington filed a motion for judgment of acquittal, which included the argument that the evidence was insufficient on the commercial carrier fraud count. Id. at 15. In a June 2, 2010, order the district court denied the motion as to the commercial carrier charge, reasoning that "[i]f the fraudulent scheme was to procure the loans, then the scheme reached fruition only once all the requirements for obtaining the loan were satisfied." United States v. Washington, 724 F. Supp. 2d 1122, 1136 (D. Kan. 2010). Because mailing the form was a required step in the process of obtaining the loan, the court reasoned, it "would have been contemplated by Mr. Washington and Ms. Holmes at the time that they sought to obtain the loan." Id. at 1138. In addition, even assuming the scheme was complete upon Ms. Holmes's receipt of the loan money and title, the sending of the closing documents here "lulled the lender into a false sense of security." Id. at 1137 (citing United States v. Maze, 414 U.S. 395, 403 (1974); United States v. Lane, 474 U.S. 438, 451-52 (1986)).
In challenging his sentence Mr. Washington asserts that assignment of any loans prior to the final sale of foreclosed properties should have been taken into account in the loss calculation. Mr. Washington participated in four mortgage transactions involving three properties. The foreclosure records reflect that some of the loans involved in these transactions may have been assigned prior to foreclosure. See 1 R. 305-06. At least one was sold with recourse such that National Cities, the original lender, purchased back the loan pursuant to agreement with the purchaser. See 2 R. 751. There was also some evidence that one or more of the other loans may have continued in the hands of or reverted back to the original lenders. Id. at 793.
At the sheriff's sale the lenders (original or assigned) "bid in" the property for the amount owed on the outstanding loan so that they could complete the foreclosure process and sell the properties. See id. at 748-49. The final sale price following foreclosure was used to determine the value of the collateral, i.e., Loss = (amount owed to original lender) - (amount received from downstream purchaser on open market following foreclosure). Aplt. Br. 17. Mr. Washington challenges this calculation on the grounds that it includes losses not attributable to him as well as losses of assignees to the original loans, which, he argues, is contrary to our holding in United States v. James, 592 F.3d 1109 (10th Cir. 2010).
A. Sufficiency of the ...