United States v. LaTonja Spencer ( 2015 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 13-2649, 13-3523
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
GWENDOLYN JACKSON and
LATONJA SPENCER,
Defendants-Appellants.
____________________
Appeals from the United States District Court for the
Northern District of Illinois, Eastern Division
Nos. 1:08-cr-00453-4, 1:08-cr-00453-12 — James B. Zagel, Judge.
____________________
ARGUED FEBRUARY 20, 2015 — DECIDED JUNE 3, 2015
____________________
Before RIPPLE, KANNE, and TINDER, Circuit Judges.
RIPPLE, Circuit Judge. Gwendolyn Jackson and Latonja
Spencer were convicted in the United States District Court
for the Northern District of Illinois on charges arising out of
a scheme to defraud mortgage lenders. The district court
sentenced Ms. Jackson to 112 months’ imprisonment and
Ms. Spencer to 36 months’ imprisonment. Both defendants
now appeal their respective convictions and sentences. For
2 Nos. 13-2649, 13-3523
the reasons set forth in this opinion, we vacate Ms. Jackson’s
sentence and remand for resentencing. In all other respects,
we affirm the judgments of the district court.
I
BACKGROUND
A.
Ms. Jackson and Ms. Spencer participated in a scheme to
defraud various Chicago-area mortgage lenders from ap-
proximately August 2004 to May 2008. Bobbie Brown Jr. was
the scheme’s leader. Brown arranged with home builders
and other sellers of newly constructed residences to receive
finder’s fees or commissions for locating buyers to purchase
their properties at inflated prices. Using various businesses
that he operated, including Chicago Global Investments, Inc.
(“Chicago Global”), Brown then located nominee buyers
willing to purchase the properties. To obtain financing for
the purchases, the nominees were referred to loan officers,
including Ms. Spencer, who fraudulently qualified the buy-
ers for loans through false statements in loan applications
and other documents submitted to lenders. Once a purchase
was finalized, Brown and his coconspirators kept the surplus
proceeds of the sale—that is, the inflated amount above
what the seller was seeking.
As president and co-owner of Chicago Global, Ms. Jack-
son recruited nominee buyers to participate in the scheme.
She and others also provided, and caused to be provided,
funds for the real estate deals and falsely represented the
nominees as the source of those funds. Ms. Jackson’s partici-
Nos. 13-2649, 13-3523 3
pation in the scheme resulted in losses to mortgage lenders
of approximately $8,515,570.
For her part, Ms. Spencer participated in the scheme
through her job as a loan officer at Oxford Financial. As part
of the scheme, she assisted Brown’s nominee buyers in ob-
taining funding for twelve different fraudulent real estate
transactions. Specifically, Ms. Spencer knowingly provided
false information, including falsely inflated income amounts
and job histories, to lenders so that the nominees would
qualify for mortgages. Ms. Spencer’s participation in the
scheme resulted in losses to mortgage lenders of approxi-
mately $3,091,050.
B.
On June 3, 2008, a grand jury returned a twenty-six count
indictment against Ms. Jackson, Ms. Spencer, and nineteen
other individuals, alleging that the defendants knowingly
devised and participated in a scheme to defraud financial
institutions and mortgage lenders. Ms. Jackson was charged
with two counts of wire fraud, in violation of 18 U.S.C.
§ 1343, and one count of mail fraud, in violation of 18 U.S.C.
§ 1341. Ms. Spencer was charged with two counts of bank
fraud, in violation of 18 U.S.C. § 1344, and two counts of
mail fraud, in violation of 18 U.S.C. § 1341.
Ms. Jackson and Ms. Spencer, along with four of their
codefendants, were tried together in a two-week jury trial. In
the end, both defendants were convicted on all counts
charged in the indictment. The district court sentenced
Ms. Jackson to 112 months’ imprisonment on each of her
three counts, to be served concurrently, and ordered her to
4 Nos. 13-2649, 13-3523
pay $8,515,570 in restitution. As for Ms. Spencer, the court
sentenced her to 36 months’ imprisonment on each of her
four counts, also to be served concurrently, and ordered her
to pay $3,091,050 in restitution. 1 Both defendants timely ap-
pealed. 2
II
DISCUSSION
Ms. Jackson and Ms. Spencer each challenge one aspect
of the guilt phase of their trial. First, Ms. Jackson contends
that the district court erred by excluding evidence of
Brown’s physical violence toward her. Ms. Spencer contends
that the district court abused its discretion by failing to sever
her trial from that of her codefendants. Both defendants also
submit that the district court erred in applying a two-level
obstruction-of-justice enhancement when calculating their
respective sentences. We first will review the contentions
from the guilt phase of the trial. Then we will review the
sentencing phase.
A.
We begin with Ms. Jackson’s contention that the district
court erroneously excluded evidence that Brown, with
whom she had a personal relationship, abused her. We re-
view the district court’s evidentiary rulings for abuse of dis-
1 The district court had jurisdiction under 18 U.S.C. § 3231.
2 Our jurisdiction is premised on 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a).
Nos. 13-2649, 13-3523 5
cretion. United States v. Khan, 771 F.3d 367, 377 (7th Cir.
2014).
1.
At trial, Ms. Jackson sought to introduce a police report
from November 12, 2007, detailing a domestic battery allega-
tion that she had filed against Brown. The point of this evi-
dence, according to Ms. Jackson, was to rebut testimony in-
troduced by the Government that she and Brown were in a
business relationship. As defense counsel explained, the po-
lice report was probative in this regard because “business
partnerships and battery are opposites.” 3
The district court refused to admit the report. In doing
so, the court rejected Ms. Jackson’s contention that battery
and business relationships are uncommon, stating that de-
fense counsel “would have to have some expert witness
come in and testify” to that fact. 4 Further, because the inci-
dent described in the report occurred approximately four
months after the last real estate transaction in the case, the
court determined it was irrelevant to Ms. Jackson’s defense.
In response, defense counsel inquired whether Ms. Jack-
son could introduce evidence of Brown’s abuse for a differ-
ent purpose, namely, to corroborate her defense that she was
unaware of Brown’s fraudulent activities because she was
afraid to confront him. The district court responded to this
request in the affirmative:
3 R.801 at 159.
4 Id.
6 Nos. 13-2649, 13-3523
If she wants to say that she didn’t confront him
because she was afraid of him, she’s perfectly
entitled to do that. I mean, absolutely. What
she’s not entitled to do is use a post-event inci-
dent as proof that she was right to fear him at
the time, because it’s a post-event incident.[ 5]
The next day, prior to Ms. Jackson’s testimony, the fol-
lowing colloquy took place between the district court and
defense counsel regarding the court’s ruling excluding the
November 2007 police report:
MR. CAMARENA: … I just wanted to
clarify so I don’t violate Your Honor’s order,
just to be clear, Gwen Jackson can’t testify
about any physical abuse, is that right?
THE COURT: That’s right.
MR. CAMARENA: Okay. And you
mentioned earlier, or yesterday, you men-
tioned an expert and we couldn’t produce that
without a continuance.
THE COURT: Right.
MR. CAMARENA: Thank you, Your
Honor.[ 6]
During her testimony, Ms. Jackson testified that Brown
controlled her and her company and that she did not know
the details of his fraudulent scheme because she was afraid
5 Id. at 162.
6 R.802 at 112.
Nos. 13-2649, 13-3523 7
to confront him. In particular, Ms. Jackson testified that
Brown did not allow her to know the details of Chicago
Global’s business transactions and that he “would holler and
scream” if she ever inquired about such information. 7 Nota-
bly, when asked whether she ever insisted on knowing more
about the company’s business transactions, Ms. Jackson re-
sponded, “For a while, and then—well, Bobbie—Bobbie is
very intimidating, very intimidating. Bobbie Brown is 5-foot
9, 260 pounds, and ex-gang member.” 8 Finally, on cross-
examination, when asked why she continued to do business
with Brown, Ms. Jackson responded that she “had been deal-
ing with an abusive situation with him.” 9
Following the jury’s verdict, Ms. Jackson filed two sepa-
rate motions for a new trial. In both motions, she asserted
that the district court had erred by excluding evidence of
Brown’s physical abuse toward her. The district court denied
the motions. In doing so, the court concluded that Ms. Jack-
son’s proffered evidence of abuse was inadmissible because
it “failed for lack of a proper foundation as to time.” 10 Fur-
ther, the court noted that Ms. Jackson’s defense—i.e., that
she failed to confront Brown because she was afraid of
him—“was admitted more than once as was her accusation
that Brown was abusive.” 11
7 Id. at 144.
8 Id. at 145.
9 Id. at 168.
10 R.896 at 2.
11 Id.
8 Nos. 13-2649, 13-3523
2.
On appeal, Ms. Jackson contends that the district court
abused its discretion by precluding her from “presenting
any evidence that [she] was the victim of physical and men-
tal abuse at the hands of Bobbie Brown.” 12 Such evidence,
she maintains, was necessary to corroborate her defense that
she was unaware of Brown’s fraudulent activities because
she feared challenging him. In response, the Government
submits that the district court made no such ruling, but ra-
ther merely precluded Ms. Jackson from introducing a post-
event police report in order to show that she and Brown
were not in a business relationship.
We agree with the Government’s assessment of the dis-
trict court’s order. The only evidence of Brown’s physical
abuse ever proffered by Ms. Jackson was the instance de-
scribed in the November 2007 police report. The district
court excluded that report as irrelevant to Ms. Jackson’s
mental state at the time of the offense. Aside from the report,
the district court did not exclude any other evidence of
Brown’s physical abuse. Although the court later stated that
Ms. Jackson could not testify about “any” physical abuse, we
believe that those remarks, when read in context, refer only
to the instances of abuse described in the November 2007
police report. Prior to those remarks, the record contains no
mention of any other instance of physical abuse. The court’s
only stated reason for excluding the report was because it
described a “post-event incident” of abuse. 13 Finally, and
12 Appellants’ Br. 24.
13 R.801 at 162.
Nos. 13-2649, 13-3523 9
most importantly, Ms. Jackson testified at trial, without ob-
jection, that Brown was abusive, intimidating, and control-
ling. Under these circumstances, we decline to interpret the
district court’s order as excluding evidence beyond the No-
vember 2007 police report. Because the instance of abuse de-
scribed in that report post-dated the last fraudulent transac-
tion in the case, we cannot say that the court’s decision to
exclude it was an abuse of discretion. Cf. United States v. Sav-
age, 505 F.3d 754, 761 (7th Cir. 2007) (concluding that district
court did not abuse its discretion by excluding evidence of
post-offense threats offered to support defendant’s coercion
defense).
B.
Ms. Spencer contends that the district court erred by fail-
ing to sever her trial from that of her codefendants. We re-
view a district court’s denial of a defendant’s request for
severance for an abuse of discretion. United States v. Del Val-
le, 674 F.3d 696, 704 (7th Cir. 2012). Where, however, a de-
fendant fails to renew a motion for severance at the close of
evidence, we consider the issue waived. See United States v.
Plato, 629 F.3d 646, 650 (7th Cir. 2010).
Severance under Federal Rule of Criminal Procedure 14
is required “only if there is a serious risk that a joint trial
would compromise a specific trial right of one of the defend-
ants, or prevent the jury from making a reliable judgment
about guilt or innocence.” Zafiro v. United States, 506 U.S.
534, 539 (1993). “[B]lame-shifting among codefendants,
without more, does not mandate severance.” Plato, 629 F.3d
10 Nos. 13-2649, 13-3523
at 650. 14 Rather, “[w]hen codefendants blame each other, less
drastic measures, such as limiting instructions, often will
suffice to cure any risk of prejudice.” Id. at 651 (internal quo-
tation marks omitted).
Ms. Spencer submits that the district court abused its dis-
cretion by failing to sever her trial from that of her code-
fendant, Edgardo Hernal. More precisely, Ms. Spencer con-
tends that severance was warranted because her trial strate-
gies and defenses were in direct conflict with Hernal’s. The
Government responds that Ms. Spencer waived this objec-
tion by failing to request severance in the district court and
that, in any event, the district court’s denial of severance was
not an abuse of discretion.
We agree with the Government. First, there is no indica-
tion in the record that Ms. Spencer ever moved for severance
in the district court. Although her codefendants, Jean and
Edgardo Hernal, each individually moved to sever their tri-
als from that of Ms. Spencer, there is no indication that
Ms. Spencer ever joined in those motions. Accordingly, we
consider this issue waived. See id. at 650.
14 See also Zafiro v. United States, 506 U.S. 534, 538 (1993) (holding that
severance is not required simply because codefendants present mutually
antagonistic defenses); United States v. Hughes, 310 F.3d 557, 564 (7th Cir.
2002) (“Mere ‘finger-pointing’ at another defendant, such as occurred
here, is not sufficient to require severance.”); United States v. Mietus, 237
F.3d 866, 873 (7th Cir. 2001) (“Even a showing that two defendants have
‘mutually antagonistic defenses,’ that is, that the jury’s acceptance of one
defense precludes any possibility of acquittal for the other defendant, is
not sufficient grounds to require a severance unless the defendant also
shows prejudice to some specific trial right.”).
Nos. 13-2649, 13-3523 11
In any event, waiver aside, it is clear that the district
court did not abuse its discretion by denying severance. On
appeal, Ms. Spencer only offers one reason for requiring sev-
erance: because her defense strategy was “mutually exclu-
sive” with that of Edgardo Hernal. 15 Severance, however, is
not required simply because two codefendants present “mu-
tually antagonistic defenses.” See Zafiro, 506 U.S. at 538. Ac-
cordingly, the district court did not abuse its discretion by
failing to sever Ms. Spencer’s trial from that of her codefend-
ants.
C.
Both defendants contend that the district court erred in
applying an obstruction-of-justice enhancement when calcu-
lating their respective sentences. When reviewing an ob-
struction-of-justice enhancement, we review the district
court’s factual findings for clear error and its conclusion that
those findings support the enhancement de novo. United
States v. Cheek, 740 F.3d 440, 453 (7th Cir. 2014).
The Sentencing Guidelines permit a two-level enhance-
ment for obstruction of justice
[i]f (1) the defendant willfully obstructed or
impeded, or attempted to obstruct or impede,
the administration of justice with respect to the
investigation, prosecution, or sentencing of the
instant offense of conviction, and (2) the ob-
structive conduct related to (A) the defendant’s
15 Appellants’ Br. 29.
12 Nos. 13-2649, 13-3523
offense of conviction and any relevant conduct;
or (B) a closely related offense[.]
U.S.S.G. § 3C1.1. A finding that the defendant committed
perjury is sufficient to justify the enhancement. See United
States v. Riney, 742 F.3d 785, 790 (7th Cir. 2014). “A defend-
ant commits perjury if, while testifying under oath, she gives
false testimony concerning a material matter with the willful
intent to provide false testimony, rather than as a result of
confusion, mistake, or faulty memory.” United States v. Chy-
chula, 757 F.3d 615, 619 (7th Cir. 2014) (alterations omitted)
(internal quotation marks omitted). “To apply the enhance-
ment based on perjury, the district court should make a find-
ing as to all the factual predicates necessary for a finding of
perjury: false testimony, materiality, and willful intent.”
Riney, 742 F.3d at 790 (internal quotation marks omitted).
1.
With these principles in mind, we turn first to
Ms. Jackson’s contention. The Presentence Investigation Re-
port (“PSR”) for Ms. Jackson recommended a two-level en-
hancement to her sentencing calculation for obstruction of
justice pursuant to U.S.S.G. § 3C1.1. In particular, the PSR
asserted that Ms. Jackson had obstructed justice by knowing-
ly providing false testimony at trial.
When addressing this issue at sentencing, the district
court determined, contrary to the PSR, that Ms. Jackson had
not “deliberately or knowingly lied” while testifying:
I heard you testify, I think what you said to me
and testified to was not the truth. I am unwill-
ing to add additional time to the fact that you
Nos. 13-2649, 13-3523 13
were untruthful, often untruthful, because it is
possible for me to believe that you started with
all of this by lying to yourself and perhaps
coming to believe your lies to yourself. If I
thought that the false testimony you gave me
was something that you knew as you testified
was a lie, the sentence would be more severe.
People who lie to themselves, particularly in
this kind of offense you committed, are fairly
common. The ability to forget what you knew,
the ability to blame some of your conduct on
others, the ability to think that the trouble you
caused people you love and people who are
close to you is a good ground for me to forget
the trouble you have caused many people who
got entwined into this very substantial fraud
over a very long period of time, but because I
do not find that you are deliberately and
knowingly—that you’ve deliberately or know-
ingly lied at trial or deliberately lied knowingly
to me now.[ 16]
Following these remarks, defense counsel pointed out
that the offense level the court was using to calculate
Ms. Jackson’s guidelines range still included an enhance-
ment for obstruction of justice. In response, the district court
stated, “If by raising the obstruction issue in light of what I
have said about her lying to herself, I do not think lying to
yourself excuses obstruction of justice.” 17 The district court
16 App. R.48 at 108–09.
17 Id. at 110.
14 Nos. 13-2649, 13-3523
then proceeded to calculate Ms. Jackson’s sentence using the
two-level obstruction enhancement.
Ms. Jackson contends that the district court erroneously
applied the obstruction enhancement in light of its finding
that she did not “deliberately or knowingly lie[] at trial.”18
For its part, the Government concedes that the district court
erred in applying the enhancement and that a remand is
warranted for resentencing.
We agree with the parties’ conclusion on this issue. The
district court’s finding that Ms. Jackson did not knowingly
and deliberately lie during her testimony directly refutes one
of the key elements required for perjury, namely, willful in-
tent. The Government offers no other basis in the record
warranting this enhancement. Accordingly, we conclude
that Ms. Jackson’s sentence should be vacated and her case
remanded for resentencing.
2.
Ms. Spencer’s PSR recommended a two-level obstruction
enhancement based on the ground that she too had know-
ingly provided false testimony. In response, Ms. Spencer
filed an objection to the PSR in which she asserted that just
because the jury did not believe her testimony does not
mean that she committed perjury.
At sentencing, the district court determined that
Ms. Spencer’s conduct warranted the enhancement. In par-
ticular, the court agreed with the Government that
18 Id. at 109.
Nos. 13-2649, 13-3523 15
Ms. Spencer had lied when testifying that she did not know-
ingly provide false information to lenders. Although the
court recognized that her testimony was “not a brilliant” or
“particularly effective obstruction of justice,” the court none-
theless determined “that she had, at the very minimum,
shaded the truth” and “knew she was doing it.” 19 Thus, the
court concluded that the enhancement was warranted.
On appeal, Ms. Spencer’s challenge to the district court’s
obstruction enhancement consists entirely of one sentence:
“In consolidation, Ms. Spencer believes this argument [refer-
ring to Ms. Jackson’s argument] pertains to the imposition of
the obstruction enhancement for the same reasons and there-
fore adopts this argument.” 20 As we have just discussed,
Ms. Jackson’s sentencing argument was premised entirely on
the district court’s finding that she did not deliberately or
knowingly lie at trial. The district court made no such find-
ings with regard to Ms. Spencer. Rather, it found exactly op-
posite: that she had “shaded the truth” and “knew she was
doing it.” 21 Thus, Ms. Jackson’s sentencing argument is
wholly irrelevant to Ms. Spencer’s case. We must conclude
that the district court did not err in applying the enhance-
ment. 22
19 R.1169 at 7.
20 Appellants’ Br. 28.
21 R.1169 at 7.
22 To the extent that Ms. Spencer intended to challenge her sentence on a
broader rationale, we consider any additional arguments on this issue
waived. See Perez v. Illinois, 488 F.3d 773, 776–77 (7th Cir. 2007)
(“[P]erfunctory and undeveloped arguments are deemed waived.”).
16 Nos. 13-2649, 13-3523
Conclusion
For the foregoing reasons, we vacate Ms. Jackson’s sen-
tence and remand for resentencing. In all other respects, we
affirm the judgments of the district court.
AFFIRMED IN PART, VACATED AND REMANDED IN
PART