United States v. Lutz , 237 F. App'x 849 ( 2007 )

ON REHEARING
UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 05-4519
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
FREDERICK SIMON LUTZ,
Defendant - Appellant.
Appeal from the United States District Court for the Middle
District of North Carolina, at Durham. Frank W. Bullock, Jr.,
District Judge. (CR-04-9)
Submitted: April 27, 2007 Decided: August 7, 2007
Before TRAXLER, KING, and GREGORY, Circuit Judges.
Affirmed in part, vacated in part, and remanded by unpublished per
curiam opinion.
Frederick Simon Lutz, Appellant Pro Se. Anna Mills Wagoner, United
States Attorney, Sandra Jane Hairston, Assistant United States
Attorney, Lawrence Patrick Auld, OFFICE OF THE UNITED STATES
ATTORNEY, Greensboro, North Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Frederick Simon Lutz appeals his conviction by jury and
sentence on all charges in a nine-count superseding indictment that
included various counts of mail and wire fraud, in violation of 18
U.S.C. §§ 1341, 1343 (2000); money laundering in violation of 18
U.S.C. § 1956(a)(1)(A)(i) (2000); and making a false material
statement to a federal agent, in violation of 18 U.S.C.
§ 1001(a)(2) (2000). The district court sentenced Lutz to a term
of imprisonment of twelve months and one day, a term of supervised
release of three years, and ordered payment of restitution in the
amount of $124,106.72 as well as payment of a $900 special
assessment. On appeal, Lutz contends that the evidence was
insufficient to establish the existence of a scheme to defraud,
that Lutz acted with intent to defraud, and that Lutz made a
material false statement to a federal agent. In addition, he
asserts error in the district court’s submission of a willful
blindness instruction to the jury. Finally, Lutz challenges the
district court’s inclusion of losses arising from an uncharged
offense in its restitution order.
We have reviewed Lutz’s sufficiency of the evidence
claims based on the record before us,1 and conclude that the claims
are without merit. In evaluating the sufficiency of the evidence
1
The entire trial transcript has not been made part of the
record on appeal.
- 2 -
supporting a criminal conviction on direct review, “[t]he verdict
of a jury must be sustained if there is substantial evidence,
taking the view most favorable to the Government, to support it.”
Glasser v. United States, 315 U.S. 60, 80 (1942). Substantial
evidence is evidence “that a reasonable finder of fact could accept
as adequate and sufficient to support a conclusion of a defendant’s
guilt beyond a reasonable doubt.” United States v. Burgos, 94 F.3d
849, 862 (4th Cir. 1996) (en banc). We consider circumstantial and
direct evidence, and allow the Government the benefit of all
reasonable inferences from the facts proven to those sought to be
established. United States v. Tresvant, 677 F.2d 1018, 1021 (4th
Cir. 1982). In resolving issues of substantial evidence, we do not
weigh evidence or review witness credibility. United States v.
Lomax, 293 F.3d 701, 705 (4th Cir. 2002); see also Burgos, 94 F.3d
at 863. Rather, it is the role of the jury to judge the
credibility of witnesses, resolve conflicts in testimony, and weigh
the evidence. United States v. Manbeck, 744 F.2d 360, 392 (4th
Cir. 1984).
Evidence was presented at trial in this case to support
the jury’s findings that Lutz was involved with, and had the
requisite criminal intent to act with others to perpetrate, a real
estate scheme involving property-flipping through the use of straw-
buyers in whose names loans were obtained through providing false
information to lenders. Mortgage brokers presented or caused the
- 3 -
presentation of loan applications and verification materials
containing such false information to lenders. Mortgage payments
were not made and the properties went into foreclosure. Settlement
statements prepared in connection with and provided to the lenders
in order to finalize the transactions also contained material false
statements about the receipt and disbursement of funds, such as
cash brought to closing by straw-buyers and the recipients of
closing proceeds. The evidence demonstrated that Lutz assisted in
perpetrating the scheme, inter alia, by concealing the “flip”
nature of the transactions from the lenders (including by
falsifying documentation regarding the disbursement of loan
proceeds) and the fact that the same straw-buyer was purchasing
multiple properties in rapid succession all as primary residences.
Contrary to Lutz’s contention, the evidence in fact demonstrated
how the scheme to defraud worked, the identities of its
participants, how those participants were to have acted, and the
goal of the scheme. Such evidence sufficiently establishes the
existence of the charged scheme to defraud. See, e.g., United
States v. Colton, 231 F.3d 890, 901 (4th Cir. 2000). The fact that
the other participants to the scheme did not testify is of no
moment to the jury’s determination that the evidence presented by
the Government sufficiently established the existence of the
scheme, as well as the fact that Lutz acted with the intent to
defraud the lenders. In addition, we find sufficient evidence to
- 4 -
support the jury’s verdict that Lutz made material false statements
to a federal agent.
We review for abuse of discretion the district court’s
decision to submit a willful blindness instruction to the jury.
Nelson v. Green Ford, Inc., 788 F.2d 205, 208 (4th Cir. 1986).
Here, Lutz expressly denied knowledge that the transactions he was
closing were fraudulent. The Government introduced evidence that
many signs of fraudulent activity existed, including suspicious and
unusual circumstances associated with the manner in which the real
estate deals were conducted and closed, which, when coupled with
Lutz’s stated denial of knowledge of the fraud, fully support the
district court’s decision to give a willful blindness jury charge.
Finally, we turn to Lutz’s challenge to the district
court’s inclusion of $32,738.43 in its restitution order which
represents the loss attributable to a real estate deal,
specifically, the “Rivermeade” property, which was not part of the
offense on which Lutz was indicted and convicted. Specifically,
Lutz asserts that the evidence of his criminal conduct as to the
Rivermeade property was insufficient, that if his conduct was
criminal, the lender was not directly harmed by such conduct, and
that his conduct was not part of the scheme on which he was
convicted. Lutz objected below to the inclusion of the Rivermeade
property in his restitution order. There is no dispute that the
Rivermeade property was not included in the properties on which
- 5 -
Lutz was indicted and convicted. The Government asserts that the
restitution order is proper because the Rivermeade property loss
arose “in the course of the scheme” on which Lutz was convicted.
We review criminal restitution orders for abuse of discretion.
United States v. Henoud, 81 F.3d 484, 487 (4th Cir. 1996).
Contrary to the Government’s position, while the
Mandatory Victims Restitution Act of 1996 requires that a court
enter an order of full restitution when the loss is caused by a
property offense, the order must be limited to the losses to the
victim(s) that actually are “caused by the offense.” United States
v. Newsome, 322 F.3d 328, 341 (4th Cir. 2003). Stated differently,
“it is the ‘offense of conviction,’ not the ‘relevant conduct,’
that must be the cause of losses attributable as restitutionary
liability.” Id. (citing Hughey v. United States, 495 U.S. 411, 418
(1990)). Hence, we find that restitution in this case properly is
tied only to the losses caused by the offense of conviction, and
that in ordering restitution that included the $32,738.43 loss on
the Rivermeade property, the district court erred.2
2
Lutz’s base offense level at sentencing was adjusted upwards
four levels under the Sentencing Guidelines based on judicially-
determined facts, in violation of his Sixth Amendment rights as
recognized in the subsequent decision of United States v. Booker,
543 U.S. 200 (2005). However, Lutz has made clear in his petition
for rehearing that we granted in this case, that he does not wish
to pursue the Sixth Amendment error on appeal. We therefore leave
the district court’s sentencing order intact, with the exception of
the restitution portion of the order.
- 6 -
Accordingly, we affirm Lutz’s conviction and his
sentence, except for the restitution portion of the sentencing
order. We vacate the restitution order and remand for resentencing
consistent with this opinion. We dispense with oral argument
because the facts and legal contentions are adequately presented in
the materials before the court and argument would not aid the
decisional process.
AFFIRMED IN PART,
VACATED IN PART,
AND REMANDED
- 7 -