United States v. Jimenez ( 2019 )

United States Court of Appeals
For the First Circuit
No. 18-1890
UNITED STATES OF AMERICA,
Appellee,
v.
GREISY JIMÉNEZ,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Mark L. Wolf, U.S. District Judge]
Before
Torruella, Lipez, and Kayatta,
Circuit Judges.
Rosemary Curran Scapicchio for appellant.
Sarah Miron Bloom, Assistant United States Attorney, with
whom Andrew E. Lelling, United States Attorney, was on brief, for
appellee.
December 20, 2019
KAYATTA, Circuit Judge. For several years, Greisy
Jiménez worked as a real estate broker at Coldwell Banker and
simultaneously ran a so-called short-sale negotiation firm known
as Foreclosure 911. In the wake of the financial crisis that began
around 2007, the homes of a number of her family members, friends,
and clients were no longer worth as much as the debts secured by
mortgages on their respective homes. Jiménez assisted these
homeowners and procured fees for herself by fraudulently inducing
several banks to agree to short sales of the homes even though,
unbeknownst to the banks, the conditions typically required for
short sales were not met. The various homeowners (including
Jiménez herself) thus managed to continue living in their homes
while reducing their mortgages and avoiding any attempt by the
banks to collect deficiencies on the loans.
On this appeal following her guilty plea and conviction
on charges of bank fraud and conspiracy to commit bank fraud,
Jiménez challenges only the length of her sentence, largely to the
extent that her Guidelines sentencing range (GSR) was inflated by
what she claims was a flawed estimate of the losses caused by her
offense. For the following reasons, we affirm her sentence.
I.
Typically, a prospective homeowner borrows a substantial
portion of the cost of her new home from a bank. In return, the
bank receives a promissory note obligating the borrower to repay
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the loan, plus interest. To secure the note, the bank also
receives a mortgage on the home. Problems for all arise when the
home value drops below the amount of the outstanding debt on the
note, a circumstance often referred to as the property being
"underwater."
Sometimes, borrowers and lenders find it in their mutual
interest to sell an underwater home for less than the borrower
owes on the note. In such a transaction, known as a "short sale,"
the bank releases its mortgage, receives only the proceeds of the
sale, and often forgoes pursuing the borrower for the deficiency
on the note. Before agreeing to cut their losses in this way,
banks often insist on certain conditions. Those conditions
include, among other things, that the sale be at arm's length (that
is, between strangers), with the selling homeowner surrendering
residency. If the conditions are not met, a bank can refuse to
approve the short sale and might well opt to see if the borrower's
desire to avoid foreclosure and stay in the home causes the
borrower to continue making payments.
In this case, Jiménez convinced at least nine banks to
approve short sales of twelve homes owned by Jiménez or her
clients, with many of these homes being encumbered by more than
one mortgage. But the sales were far from bona fide. Rather,
Jiménez recruited straw buyers; used false aliases; and materially
falsified on loan and sale documentation the purported buyers'
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incomes, the relationships of the purported buyers to the sellers,
and the sources of the down payments -- all to dress up loan
reductions as short sales. Eventually, the fraud was revealed,
and Jiménez was indicted.
Jiménez pled guilty to one count of conspiracy to commit
bank fraud and two counts of bank fraud. The presentence
investigation report (PSI Report) calculated a base offense level
of seven, plus a 16-level enhancement for the amount of loss the
scheme caused, see U.S.S.G. § 2B1.1(b)(1)(I), a 2-level
enhancement because the scheme involved "sophisticated means," see
U.S.S.G. § 2B1.1(b)(10)(C), and a 2-level reduction for acceptance
of responsibility, see U.S.S.G. § 3E1.1(a), amounting to a total
offense level of 23. Combining the offense level with a criminal
history category of I, the PSI Report found a GSR of 46–57 months.
The government objected to the PSI Report's failure to include a
4-level enhancement for Jiménez's leadership role in the offense.
See U.S.S.G. § 3B1.1(a). For her part, Jiménez objected to, among
other things, each enhancement and any contention that she led or
organized the scheme.
At sentencing in August 2018, the district court adopted
the guidelines calculations in the PSI Report, as well as the
leadership enhancement proposed by the government. The district
court estimated the loss attributable to Jiménez's scheme
according to the probation office's formula: by calculating the
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difference between the outstanding loan balances on those
properties and their short-sale prices. In this manner, the court
found that the scheme caused between $1,500,000 and $3,500,000 in
loss, generating a 16-level enhancement. In the alternative, the
district court estimated that the participants in the frauds
collectively gained approximately the same amount. Based on those
findings, Jiménez's total offense level came to 27. This offense
level, in combination with a criminal history category of I,
produced a GSR of 70–87 months.
Varying downward, the district court sentenced Jiménez
to thirty-six months of imprisonment and four years of supervised
release, reasoning that letters from Jiménez's friends, family,
clients, and colleagues "really d[id] consistently describe a
person who ha[d] done very good things for other people,"
notwithstanding the seriousness of the offense. Jiménez now
appeals that below-range sentence, arguing that it was
procedurally unreasonable, primarily due to the district court's
loss-calculation methodology. Jiménez also challenges the
district court's findings that the scheme involved sophisticated
means and that she was a leader or organizer of the conspiracy.
Finally, Jiménez challenges the substantive reasonableness of her
sentence, and she argues that the district court punished her for
failing to cooperate with the government, thereby impinging on her
Fifth Amendment right against self-incrimination.
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II.
We consider first Jiménez's claims that the district
court committed procedural errors in calculating her GSR and then
turn to her substantive-reasonableness claim. See United States
v. Matos-de-Jesús, 856 F.3d 174, 177 (1st Cir. 2017). We address
Jiménez's Fifth Amendment challenge last.
A.
Jiménez challenges each of the three enhancements the
district court applied in determining her offense level under the
Sentencing Guidelines. We address each in turn. In doing so, we
"afford de novo review to the sentencing court's interpretation of
and application of the sentencing guidelines, assay the court's
factfinding for clear error, and evaluate its judgment calls for
abuse of discretion." United States v. Ruiz-Huertas, 792 F.3d
223, 226 (1st Cir. 2015).
1.
The most significant issue in this case is whether the
district court appropriately held Jiménez responsible for a loss
to the lenders of over $1,500,000, a calculation that increased
her offense level by 16 under U.S.S.G. § 2B1.1(b)(1), stepping up
her total offense level from 11 to 27 and the corresponding GSR
from 8–14 months to 70–87 months.
A fraud defendant's total offense level is based in part
on the amount of pecuniary loss caused by her conduct. See
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U.S.S.G. § 2B1.1(b)(1); see also United States v. Mayendía-Blanco,
905 F.3d 26, 35 (1st Cir. 2018) (explaining the principles of loss
calculation under U.S.S.G. § 2B1.1(b)(1)). The appropriate loss
amount is the greater of actual loss or intended loss. U.S.S.G.
§ 2B1.1 cmt. n.3(A). Actual loss is "the reasonably foreseeable
pecuniary harm that resulted from the offense." Id. § 2B1.1
cmt. n.3(A)(i).
To calculate the loss amount in this case, the district
court took the remaining loan amount secured by each mortgage and
subtracted the lesser amounts received in the short sales.1 This
formula well fits most cases in which fraud induced the making of
the original loan. See, e.g., United States v. Appolon, 695 F.3d
44, 51 (1st Cir. 2012). In such a case, but for the fraud, no
loan would have been made. Id. at 66–67. Here, though, the
original loans were presumably bona fide, and they were under-
secured before the conspiracy was hatched through no fault of
Jiménez. So we need to subtly but materially restate the formula
by first estimating what the banks would have foreseeably realized
1 The district court adopted these calculations from the PSI
Report. Although the Report stated that its loss calculations
"represent[ed] the original mortgage amount minus the amount
recovered by the bank in short sales," the probation officer
confirmed at the sentencing hearing that that was an error and
that the figures really represented the outstanding loan amount
minus the amount recovered in the short sale.
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but for the fraud and then subtracting what they in fact received
as a result of the short sales.
Whether this restated formula would have produced a
different result from the one the district court used depends on
what one thinks would have happened but for the frauds. Note that
in Jiménez's scheme, while the mortgage lenders were misled on
many aspects of the transactions, there are no allegations that
the short sales were based on deflated home values. To the
contrary, Jiménez argues that the sales prices were based on
official appraisals approved by the original lenders. The
government for its part does not argue that any of the short sales
realized less than fair market value. We can therefore assume
that the original lending banks received roughly the full existing
value of their collateral in the short sales. So if, but for the
fraudulent short sales, there would have been either a series of
legitimate short sales or forced foreclosures for roughly the same
or lower prices, the scheme might well have caused no loss.
There was another foreseeable outcome, however: that,
but for the fraud, the borrowers, wanting to stay in their homes,
would have continued making loan payments such that the banks would
have eventually recouped either full repayment or higher sales
prices after the property values had rebounded.2 Jiménez's
2 In the district court, the government presented evidence
that the house values eventually rebounded some.
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argument seems to be that this could not have happened because the
borrowers were not able to continue making payments in the first
place. But there is no substantial evidence either that any of
the homeowners had stopped making payments other than as a ploy in
the course of the fraud or that they could not continue making
payments going forward.3 Furthermore, the owners apparently wanted
to remain in their homes so much that they risked going to prison.
Absent any evidence to the contrary, the district court was thus
entitled to presume that the status quo ante (making payments)
would have foreseeably continued but for the fraud, certainly
enough so that the amount that would have been realized by the
banks but for the fraud was at least $1,500,000 more than what
they did realize. See United States v. Stone, 866 F.3d 219, 226
(4th Cir. 2017) ("[W]ithout any evidence to the contrary, the
district court could only speculate as to when (or if) any of these
homeowners would cease making mortgage payments."). And in that
event the difference between the pre-existing unpaid loan amounts
and the short-sale prices would have represented both a gain to
the homeowners and a loss to the banks.
Of course, the above only holds assuming that the
deficiencies on the original notes were forgiven and the banks did
3 The government points to interviews with two of Jiménez's
co-conspirators, who both reported that she told clients to stop
making their mortgage payments so that they would be eligible for
short sales. Jiménez does not contest this point.
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not recover any amounts beyond the short-sale prices. Jiménez
argues that the banks did not formally give up their rights to go
after the homeowners for deficiencies on the notes, but the
evidence on that point leaves us largely in the dark. Jiménez's
objection to the PSI Report, as well as a Rule 28(j) letter she
sent after oral argument, tell us that, in the documentation for
at least one short sale, the bank reserved a claim for a
deficiency. The government contends that the short-sale agreement
Jiménez identifies was for the short sale of her own home. The
government's 28(j) letter in turn points to a different short-sale
agreement, which it says uses opposite language. As most of the
short-sale agreements are not in the record before us, we do not
know what the general pattern was.
The parties agreed, however, at oral argument that in
reality the banks pressed no such claims against any of the
conspirators. The time for doing so has now passed under
Massachusetts law.4 That means that none of the conspirators face
personal liability for the deficiencies. In fact, the entire
scheme seems to have been premised on the foreseeability that
events would unfold this way. It is hard to imagine that the
conspirators would have gone through with the scheme if they had
4The Massachusetts statute of limitations for deficiency
judgments is two years, Mass. Gen. Laws ch. 244, § 17A, and the
frauds took place between 2008 and 2010.
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anticipated confronting personal lawsuits for the deficiencies on
their notes. So the conspirators as a group seemingly received a
debt reduction (i.e., a gain) of $2,152,420 even though they stayed
in their homes.
That was precisely the formula that the district court
used to calculate the conspiracy's gain as an alternative to
calculating loss. Although calculating gain as a substitute for
loss is only appropriate in limited scenarios, see United States
v. Stoupis, 530 F.3d 82, 86 (1st Cir. 2008), Jiménez presses no
challenge to the use of gain as a measure of loss on this record
under U.S.S.G. § 2B1.1.5 Moreover, here the gain to the homeowners
serves as a good economic proxy for loss: what the owners did not
pay, the banks did not receive. All in all, and recognizing that
the loss estimate need only exceed $1,500,000 to sustain the 16-
level enhancement, we see neither clear nor legal error in the
district court's calculations of gain and loss, or in its resulting
decision to employ the enhancement.
2.
Jiménez next argues that the district court erred in
applying a 4-level enhancement for her role in the offense.
5 Her brief on appeal mentions the issue in passing but makes
no serious argument on it. See United States v. Zannino, 895
F.2d 1, 17 (1st Cir. 1990) ("[I]ssues adverted to in a perfunctory
manner, unaccompanied by some effort at developed argumentation,
are deemed waived."). In any case, she clearly agreed to the use
of gain as an alternative measurement at the sentencing hearing.
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Specifically, the district court found that she "was an organizer
or leader of a criminal activity that involved five or more
participants." U.S.S.G. § 3B1.1(a). The Guidelines provide seven
factors for evaluating whether a defendant is a leader or
organizer, including the defendant's decision-making authority,
the nature of the defendant's participation, whether she recruited
accomplices, her share of the "fruits of the crime," her
involvement in organizing the offense, "the nature and scope of
the illegal activity," and the degree of control she exercised
over her co-conspirators. Id. § 3B1.1 cmt. n.4. More than one
person can be a leader or organizer of a conspiracy. Id.
There was ample evidence on those factors here. Jiménez
conceived of the conspiracy, recruited key players who acted at
her direction, was the common actor involved in every one of the
fraudulent short sales, and received the largest share of the fees
generated by the scheme. The evidence on which the district court
relied included reports of interviews with Jiménez's co-
conspirators, as well as documentary evidence of the transactions.
The district court's decision to apply the enhancement was
eminently reasonable.
3.
Jiménez next argues that the district court erred in
applying a 2-level sophisticated-means adjustment under U.S.S.G.
§ 2B1.1(b)(10). The Guidelines require an upward adjustment of
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two offense levels if the offense involved "sophisticated means."
Id. § 2B1.1(b)(10)(C). Sophisticated means are "especially
complex or especially intricate offense conduct pertaining to the
execution or concealment of an offense." Id. § 2B1.1 cmt. n.9(B).
The conduct must involve some greater level of concealment than a
typical fraud of its kind. United States v. Pachecho-Martinez,
791 F.3d 171, 179 (1st Cir. 2015) (requiring "a greater level of
planning or concealment than a typical fraud" (quoting United
States v. Knox, 624 F.3d 865, 870–72 (7th Cir. 2010))).
The district court determined that Jiménez's conduct
went beyond the typical fraud of making misrepresentations on a
loan application form (which it characterized as "a conventional
way to defraud a bank"), and instead encompassed recruiting
individuals to act as straw buyers (which required them to pretend
that they were going to live in the short-sold homes), using
aliases, and advising mortgagors on whether to continue making
their mortgage payments. The evidence on which the district court
relied was solid, and the court thus reasonably found that the
planning and concealment in this scheme surpassed that required
for simple mortgage fraud.
B.
Jiménez also contests the substantive reasonableness of
her sentence, arguing that it produces unwarranted disparities on
two fronts. First, she argues, as she did in the district court,
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that the sentence creates unfair disparities between herself and
her co-conspirators. Second, she argues for the first time that
the sentence results in unfair disparities between herself and
other defendants nationally because the national average sentence
for fraud defendants is lower than thirty-six months.
Where a substantive-reasonableness challenge is
preserved, we review for an abuse of discretion. Matos-de-Jesús,
856 F.3d at 179. The standard of review for unpreserved challenges
is "somewhat blurred," so here we avoid the issue and give the
benefit of the doubt to the defendant, applying an abuse-of-
discretion standard. United States v. Alejandro-Rosado, 878 F.3d
435, 440 (1st Cir. 2017) (citing United States v. Márquez-García,
862 F.3d 143, 147 (1st Cir. 2017)).
A reasonable sentence is one driven by a "plausible
sentencing rationale" with a "defensible result." United States
v. Martin, 520 F.3d 87, 96 (1st Cir. 2008). The standard affords
significant discretion to the district court, because "in most
cases there is not a single appropriate sentence, but rather a
universe of reasonable sentences." Alejandro-Rosado, 878 F.3d at
440 (quoting United States v. Rivera-González, 776 F.3d 45, 52
(1st Cir. 2015)).
Jiménez's challenge to the substantive reasonableness of
her sentence starts out with little prospect for success. The
thirty-six-month sentence is well below the guidelines range. See
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United States v. King, 741 F.3d 305, 310 (1st Cir. 2014) ("It is
a rare below-the-range sentence that will prove vulnerable to a
defendant's claim of substantive unreasonableness."); see also
United States v. Floyd, 740 F.3d 22, 39–40 (1st Cir. 2014)
("When . . . a district court essays a substantial downward
variance from a properly calculated guideline sentencing range, a
defendant's claim of substantive unreasonableness will generally
fail."). The argument that Jiménez's sentence should not
substantially exceed her co-conspirators' fares little better:
"Congress's concern [with unwarranted disparities] was mainly with
minimization of disparities among defendants nationally rather
than with disparities among codefendants engaged in a common
conspiracy." United States v. Vargas, 560 F.3d 45, 52 (1st. 2009).
In any event, the sentencing court reasonably concluded
that Jiménez was more culpable than her co-conspirators, in part
because she brought them into the scheme in the first place, and
also because they cooperated with the government while she did
not. Jiménez also has not offered evidence that would show that
her circumstances are sufficiently similar to the national median
fraud defendant to create a meaningful point of comparison. As a
result, she can point to no relevant disparity that might render
her sentence substantively unreasonable.
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C.
Finally, Jiménez argues that the district court's
explanation of her co-conspirators' lower sentences shows that it
punished Jiménez for not cooperating with the government and thus
both penalized her for exercising her Fifth Amendment rights and
violated the Sentencing Guidelines. See U.S.S.G. § 5K1.2
(prohibiting use of "refusal to assist authorities" as an
aggravating factor). These arguments were not raised below, and
Jiménez has provided no explanation for why they should not be
considered forfeited. While preserved claims of constitutional
sentencing error are reviewed de novo, United States v. Platte,
577 F.3d 387, 391 (1st Cir. 2009), most unpreserved claims are
reviewed for plain error, see United States v. Zarauskas, 814 F.3d
509, 514–15 (1st Cir. 2016) (reviewing an unpreserved Fifth
Amendment claim for plain error).
Either way, the claim has no merit. The district court
did not punish Jiménez for not cooperating; it simply explained to
her why her sentence was higher than those of her co-conspirators
who did cooperate. Our precedent is clear that sentencing courts
are permitted to hand down shorter sentences to those who cooperate
and show remorse. United States v. Cruzado-Laureano, 527 F.3d
231, 237 (1st Cir. 2008) (remorse); United States v. Miller, 589
F.2d 1117, 1139 (1st Cir. 1978) (cooperation).
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III. Conclusion
For the foregoing reasons, we affirm Jiménez's sentence.
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