United States v. Lendell Beacham

Case: 12-10883 Document: 00512867589 Page: 1 Date Filed: 12/12/2014
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 12-10883
United States Court of Appeals
Fifth Circuit
FILED
UNITED STATES OF AMERICA, December 12, 2014
Lyle W. Cayce
Plaintiff–Appellee, Clerk
v.
LENDELL BEACHAM; WILLIAM RANDOLPH TISDALE, JR.,
Defendants–Appellants.
Cons. w/ No. 12-11209
UNITED STATES OF AMERICA,
Plaintiff–Appellee,
v.
HUBERT JONES, III,
Defendant–Appellant.
Appeals from the United States District Court
for the Northern District of Texas
Before STEWART, Chief Judge, and BENAVIDES and OWEN, Circuit Judges.
PRISCILLA R. OWEN, Circuit Judge:
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William Tisdale, Hubert Jones, and Lendell Beacham were convicted by
a jury on various counts of conspiracy, wire fraud, and bank fraud. They appeal
the sufficiency of the evidence supporting their respective convictions, various
aspects of their respective prison sentences, and the district court’s method of
calculating restitution. We affirm their convictions but vacate their sentences
and remand for resentencing.
I
In 2002, William Tisdale and former Dallas Cowboy Eugene Lockhart
formed America’s Team Mortgage (ATM) and KLT Realty (KLT). The evidence
at trial indicated that Tisdale and Lockhart devised a “pass-through” real
estate scheme. ATM/KLT would contract to purchase a property and, before
obtaining title to the property, would almost immediately sell it to “straw”
purchasers at a higher price. The straw buyers were individuals with good
credit, who relied in part on the cachet of Lockhart’s celebrity. ATM/KLT told
these individuals that they would be buying properties as a once-in-a-lifetime
investment opportunity. ATM/KLT provided the mortgage down payments
and paid the straw buyers a bonus of up to $20,000 for each investment
property he or she purchased. ATM/KLT also represented to the buyers that
they were connected with individuals who desired to own property but needed
to improve their credit scores. These individuals, ATM/KLT said, would rent
the properties from the buyers, and the rental income would cover the monthly
mortgage payments. Ostensibly, the renters would thereby improve their
credit scores, and in time, be able to obtain a mortgage loan to purchase the
properties from the straw buyers. However, ATM/KLT did not obtain renters,
so there was no revenue generated for the straw buyers, and those buyers
defaulted on the mortgages. The lenders foreclosed on the properties.
ATM/KLT, however, profited.
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In order to convince lenders to issue mortgages to the straw buyers,
Tisdale, Lockhart, and others falsified loan documents, procured inflated
property appraisals, and convinced the straw buyers to make
misrepresentations in their mortgage applications. When the lender funded a
loan to the straw buyer, the purchase price was paid to ATM/KLT, the original
property owner was then paid the lower purchase price by ATM/KLT, and
ATM/KLT kept the difference.
In late 2003, Tisdale and Lockhart dissolved their business association,
and each formed new companies. Tisdale and Hubert “Trey” Jones, III,
organized Atilla Capital and Pinnacle Realty, while Lockhart and Jermaine
Frazier created Cowboys Mortgage. Atilla, Pinnacle, and Cowboys Mortgage
continued the real estate pass-through scheme utilized by ATM/KLT.
In order to effectuate the scheme, Tisdale’s and Lockhart’s companies
enlisted the participation of, and sometimes paid, members of the real estate
industry to assist in the procurement of the loans. Lendell Beacham was
among them. Occasionally, before approving a loan, a lender required the
submission of a verification-of-rent form (VOR) to determine whether the
borrower qualified. The VOR reflected the borrower’s history of making
monthly rental payments and therefore was an indication of the ability to make
the monthly mortgage payments. Beacham, a licensed realtor and a landlord,
provided VORs with falsified information at the request of Tisdale, Frazier,
and Lockhart.
In 2009, Tisdale, Jones, and Beacham, along with eight co-defendants,
were indicted on charges of conspiracy, bank fraud, and wire fraud. Lockhart
and five other co-defendants pleaded guilty. Tisdale, Jones, Beacham and two
others proceeded to trial. The jury found Tisdale, Jones, and Beacham guilty
of conspiracy to commit wire fraud in violation of 18 U.S.C. § 1349.
Additionally, the jury convicted Tisdale and Jones of aiding and abetting bank
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fraud under 18 U.S.C. § 1344 and convicted both Beacham and Jones on
separate counts of aiding and abetting wire fraud under 18 U.S.C. § 1343.
Tisdale, Jones, and Beacham were each sentenced to serve a term of
imprisonment.
The district court also ordered Tisdale, Jones, and Beacham to each pay
restitution to the victims of the fraud. To calculate the amount of restitution,
the district court reduced the original loan amount by any proceeds obtained
through foreclosure. However, Tisdale, Jones, and Beacham objected to the
use of the original loan amount for victims that purchased the loans on the
secondary market. Without evidence of the mortgages’ purchase prices on the
secondary market, the district court used the original loan amounts as a
“reasonable estimate” of the amount owed in restitution. These appeals
followed.
II
Tisdale, Jones, and Beacham each challenge the sufficiency of the
evidence supporting their respective convictions, except Jones does not
challenge his separate conviction for bank fraud. Because they made timely
motions for judgments of acquittal, we review the sufficiency of the evidence
de novo. 1 However, “[o]ur review of the sufficiency of the evidence is highly
deferential to the verdict.” 2 The jury’s verdict will be affirmed unless no
“rational jury, viewing the evidence in the light most favorable to the
prosecution, could have found the essential elements of the offense to be
satisfied beyond a reasonable doubt. In reviewing the evidence presented at
trial, we draw all reasonable inferences in favor of the jury’s verdict.” 3
1 United States v. Block, 635 F.3d 721, 723 (5th Cir. 2011) (per curiam).
2 United States v. Isgar, 739 F.3d 829, 835 (5th Cir. 2014) (internal quotation marks
and citations omitted).
3 United States v. Miles, 360 F.3d 472, 476-77 (5th Cir. 2004) (citations omitted).
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A
Tisdale, Jones, and Beacham were each convicted of conspiracy to
commit wire fraud under 18 U.S.C. § 1349. To be convicted of conspiracy under
§ 1349, the jury must find: (1) two or more persons agreed to commit fraud;
(2) the defendant knew the unlawful purpose of the agreement; and (3) the
defendant joined the agreement with the intent to further the unlawful
purpose. 4 “An agreement may be inferred from concert of action, voluntary
participation may be inferred from a collection of circumstances, and
knowledge may be inferred from surrounding circumstances.” 5
Tisdale and Jones challenge their convictions by asserting that the
government failed to establish that they “agreed” to engage in real estate
fraud. However, the government provided ample evidence to the jury to
support the convictions.
For example, Lockhart testified that Tisdale was the “great teacher” at
ATM/KLT and instructed his co-conspirators on how the pass-through scheme
operated. Lockhart described Tisdale as the point-person for the conspiracy:
Tisdale directed how funds were to be disbursed after each fraudulent
transaction and how much of a bonus the straw buyers should receive. The
testimony of Stacey Chambers-Ball, an office manager at ATM/KLT,
corroborated Tisdale’s role in the conspiracy. She testified that Tisdale was
“the most savvy,” he held the pass-through scheme out as his formula, and
other employees would seek his assistance. Jacqueline Hawthorne and Wilma
Holliday, both straw buyers, testified that they met with Tisdale and became
investors relying on his misrepresentations.
4 United States v. Grant, 683 F.3d 639, 643 (5th Cir. 2012).
5 United States v. Simpson, 741 F.3d 539, 547 (5th Cir. 2014) (quoting Grant, 683 F.3d
at 643).
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Jones joined ATM shortly before that company dissolved, and he and
Tisdale formed Atilla/Pinnacle. Chambers-Ball testified that Jones was
certainly aware of the pass-through scheme in his short time at ATM. Several
victims of the conspiracy also testified as to Jones’s involvement. Samuel
Washington, a straw buyer, testified that Jones was the first to present him
with the idea of being an investor. Holliday testified that Jones assisted
Tisdale in the initial meeting at ATM about an investment opportunity. After
ATM dissolved, Jones remained involved in the Hollidays’ transaction at
Pinnacle.
The strength of the evidence against Tisdale and Jones shows that a
rational jury could have found them guilty of conspiracy. But, Tisdale and
Jones alternatively assert that even if there was evidence that they engaged
in a conspiracy, it was not the conspiracy alleged in the indictment.
Specifically, they argue that the conspiracy proved at trial was specific to
Cowboys Realty, Lockhart’s company after Tisdale and Lockhart ended their
business relationship.
The question of whether the evidence establishes the existence of a single
conspiracy or multiple conspiracies is a question of fact for the jury, and “[w]e
will affirm the jury’s finding that the government proved a single conspiracy
‘unless the evidence and all reasonable inferences, examined in the light most
favorable to the government, would preclude reasonable jurors from finding a
single conspiracy beyond a reasonable doubt.’” 6 “The principal considerations
in counting the number of conspiracies are (1) the existence of a common goal;
(2) the nature of the scheme; and (3) the overlapping of the participants in the
6 Id. at 548 (quoting United States v. Mitchell, 484 F.3d 762, 769 (5th Cir. 2007)).
6
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various dealings.” 7 The evidence presented at trial supports the jury’s verdict
under all three factors.
First, we have applied the criteria for a common goal broadly, such that
the “test may have become a matter of semantics.” 8 For example, in United
States v. Richerson, we concluded that a common goal was shown when alleged
co-conspirators all sought “personal gains” through some participation in a
broad conspiracy scheme. 9 Similarly, in United States v. Mitchell, we held the
jury could have found a common goal of deriving “personal gain from the sale
of crack cocaine.” 10 Likewise, there was ample evidence for the jury to
reasonably conclude Tisdale, Jones, and other co-conspirators shared the
common goal of deriving personal gain through real estate fraud.
Second, in considering the nature of the scheme, a single conspiracy “will
be inferred where the activities of one aspect of the scheme are necessary or
advantageous to the success of another aspect or to the overall success of the
venture.” 11 The evidence establishes that the jury could reasonably conclude
that the nature of the scheme also indicated a single conspiracy. Two straw
buyers testified that they began their transactions with ATM/KLT, and after
Tisdale and Lockhart were no longer associated, one of the buyers closed with
Cowboys Realty, which was Lockhart and Frazier’s company, and the other
buyer closed with Atilla/Pinnacle, which were Tisdale and Jones’s companies.
Another straw buyer testified that Jones gave her a Lockhart-autographed
football upon closing, even though her transaction occurred after Jones and
7 Mitchell, 484 F.3d at 770 (quoting United States v. Morrow, 177 F.3d 272, 291 (5th
Cir. 1999)).
8 United States v. Richerson, 833 F.2d 1147, 1153 (5th Cir. 1987).
9 Id.
10 Mitchell, 484 F.3d at 770.
11 Id. (quoting United States v. Morris, 46 F.3d 410, 415 (5th Cir. 1995)).
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Tisdale had formed Atilla/Pinnacle. Holliday, who was presented the
investment opportunity at ATM/KLT and later at Atilla/Pinnacle, testified that
the schemes presented to her were identical.
Third, in considering the overlapping of participants, “there is no
requirement that every member must participate in every transaction to find
a single conspiracy.” 12 “The more interconnected the various relationships are,
the more likely there is a single conspiracy.” 13 The evidence established
sufficient overlap between the conspiring parties to allow the jury to
reasonably conclude there was a single conspiracy. Testimony from several
government witnesses established that the pass-through scheme initiated at
ATM/KLT with Tisdale and Lockhart. After Tisdale and Lockhart ended their
association, they both formed new companies with employees from ATM/KLT
and continued to perpetuate the fraud.
The district court instructed the jury that if it found that a defendant
was in a conspiracy but not in the conspiracy alleged in the indictment, then it
must acquit. But the jury found a single conspiracy. Construing the evidence
in the light most favorable to the verdict, we conclude that a reasonable jury
could have found a single conspiracy beyond a reasonable doubt. We therefore
affirm Tisdale’s and Jones’s conspiracy convictions.
B
Beacham also challenges the sufficiency of the evidence of his conspiracy
conviction, but on separate grounds. Beacham asserts that his conviction
cannot stand because it is based primarily on the testimony of Lockhart and
Frazier, who Beacham asserts are not credible witnesses. But this court’s “role
12 Id. (quoting Morris, 46 F.3d at 416).
13 Id. (quoting Morris, 46 F.3d at 416).
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does not extend to . . . assessing the credibility of witnesses.” 14 We cannot
nullify the jury’s verdict based on the assertion that the testimony offered at
trial was not credible.
C
Tisdale and Jones challenge the sufficiency of the evidence supporting
their convictions for aiding and abetting bank fraud in violation of 18 U.S.C.
§ 1344 15 in relation to the sale of 716 Mustang Ridge Drive to the Hollidays.
Because Tisdale and Jones were charged with aiding and abetting, it was not
necessary for the government to prove that Tisdale and Jones themselves
completed all the elements of the underlying crime. 16 It was sufficient to show
that they “associated with the criminal venture such that [they] had the same
criminal intent as the principal.” 17 Tisdale and Jones accordingly challenge
their convictions by arguing there was insufficient evidence to establish they
acted with the requisite intent. However, the testimony of Tricia Suarez and
Wilma Holliday provided sufficient evidence of intent.
14United States v. Reagan, 725 F.3d 471, 481 (5th Cir. 2013) (quoting United States v.
Lopez, 74 F.3d 575, 577 (5th Cir. 1996)).
15 18 U.S.C. § 1344 provides:
Whoever knowingly executes, or attempts to execute, a scheme
or artifice—
(1) to defraud a financial institution; or
(2) to obtain any of the moneys, funds, credits, assets,
securities, or other property owned by, or under the
custody or control of, a financial institution, by means
of false or fraudulent pretenses, representations or
promises;
shall be fined not more than $1,000,000 or imprisoned not more
than 30 years, or both.
16 United States v. Ismoila, 100 F.3d 380, 387 (5th Cir. 1996).
17 Id.
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Suarez was the escrow agent for the sale of 716 Mustang Ridge, and she
pled guilty prior to trial. Suarez testified that the sale contracts submitted to
her by Pinnacle, which was Tisdale and Jones’s company, contained fraudulent
information. The documents also contained forgeries of the Hollidays’
signatures. Countrywide, the lender, issued a loan to the Hollidays based on
these fraudulent documents.
Holliday testified that Tisdale and Jones presented the idea of investing
in 716 Mustang Ridge. Tisdale and Jones characterized the transaction as a
once-in-a-lifetime investment opportunity. Additionally, the jury could have
inferred Tisdale’s and Jones’s intents to further the fraudulent scheme because
the details of the Hollidays’ purchase of 716 Mustang Drive followed the
pattern of the pass-through scheme.
Reviewing the evidence in the light most favorable to the verdict, a
rational jury could have found Tisdale and Jones guilty of aiding and abetting
bank fraud beyond a reasonable doubt.
D
Beacham challenges the sufficiency of the evidence supporting his
conviction under 18 U.S.C. § 1343 18 for aiding and abetting wire fraud relating
to the purchase and sale of 1206 Quinlan Drive to Nicholas Mazzu, a straw
18 18 U.S.C. § 1343 provides:
Whoever, having devised or intending to devise any
scheme or artifice to defraud, or for obtaining money or
property by means of false or fraudulent pretenses . . .
transmits or causes to be transmitted by means of wire,
radio, or television communication in interstate or
foreign commerce, any writings, signs, signals, pictures,
or sounds for the purpose of executing such scheme or
artifice, shall be fined under this title or imprisoned not
more than 20 years, or both.
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buyer. As discussed above, “[t]o aid and abet simply means to assist the
perpetrator of a crime while sharing the requisite criminal intent.” 19
Beacham argues that the evidence presented at trial did not establish
his specific intent to aid and abet wire fraud because he believed the
transaction to be legal and he thus acted in good faith. However, the
government presented the jury with evidence sufficient to support Beacham’s
conviction.
Although Beacham’s usual role in the conspiracy was to provide false
VORs that would be submitted to lenders, Beacham facilitated the pass-
through for the 1206 Quinlan transaction. Although Beacham claims in his
brief that he believed the transaction to be legal, testimony at trial revealed
that Beacham told Lockhart he was uncomfortable with acting as the
middleman for pass-through transactions. Despite his discomfort, he persisted
and was paid $10,000 to $15,000 per transaction.
In addition to conducting the transaction as a pass-through, Beacham’s
intent was further established by the several misrepresentations made in the
straw buyer’s loan application. For example, the evidence indicated Beacham
inflated Mazzu’s income, falsely stated the Quinlan Drive property would be
Mazzu’s primary residence, and forged Mazzu’s signature.
Considering the evidence in the light most favorable to the verdict, the
government presented evidence at trial from which a rational jury could find
Beacham guilty of aiding and abetting wire fraud.
III
The district court sentenced Tisdale, Jones, and Beacham to each serve
a term of imprisonment. Tisdale and Beacham, but not Jones, challenge their
19Ismoila, 100 F.3d at 387 (quoting United States v. Jaramillo, 42 F.3d 920, 923 (5th
Cir. 1995)).
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sentences. “We review sentences for reasonableness under an abuse of
discretion standard. First, we determine whether the district court committed
any procedural error, such as improperly calculating the Guidelines range. If
there is no procedural error or the error is harmless, we may review the
substantive reasonableness of the sentence.” 20 When an appellant objects to
sentence enhancements before the district court, “we review the district court’s
interpretation and application of the Guidelines de novo, and review findings
of fact for clear error.” 21 “Under the clearly erroneous standard, we will uphold
a finding so long as it is plausible in light of the record as a whole.” 22
A
The district court sentenced Tisdale to a term of 120 months after
calculating Tisdale’s advisory sentencing range to be 151 to 188 months under
the Guidelines. This calculation included enhancements for (1) the number of
victims, (2) the sophistication of the offense, (3) Tisdale’s role as the
leader/organizer of a crime that involved five or more participants, and (4)
committing the offense while on probation. Tisdale objected to each sentence
enhancement to the district court. Because the bases for Tisdale’s sentence
enhancements amounted to factual findings, we review the district court’s
determinations for clear error.
First, Tisdale asserts that the district court could not enhance his
sentence for having ten or more victims pursuant to USSG § 2B1.1(b)(2)(A)(i)
because it is unclear who the ten victims were. However, during Tisdale’s
sentencing hearing, the district court heard evidence establishing that there
United States v. Valdez, 726 F.3d 684, 692 (5th Cir. 2013) (citations omitted) (citing
20
United States v. Cisneros-Gutierrez, 517 F.3d 751, 764 (5th Cir. 2008)).
21 Id (citing Cisneros-Gutierrez, 517 F.3d at 764).
22 United States v. Ramos-Delgado, 763 F.3d 398, 400 (5th Cir. 2014) (quoting United
States v. Ekanem, 555 F.3d 172, 175 (5th Cir. 2009)).
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were at least ten victims of his fraud. While Tisdale asserts that many of the
victim banks were “double counted,” it is apparent that banks counted twice
were counted once as a victim, and again as a trustee for another entity. When
the bank is acting as a trustee, the real victim is not the bank, but the
beneficiary of the trust. Therefore, the district court did not clearly err in
finding ten or more victims and imposing this sentence enhancement.
Second, the district court imposed an enhancement under USSG
§ 2B1.1(b)(10)(C) because Tisdale’s fraud used sophisticated means. In United
States v. Chon, we affirmed a sophisticated-means enhancement in connection
with a money-laundering conviction because the defendant maintained two
sets of financial records, skimmed income daily, and mislabeled funds to
disguise their source. 23 The mortgage-fraud scheme at issue here is arguably
more complex than the operations in Chon. The district court noted the various
elements supporting its finding of sophistication: for example, the different
levels of people engaged in the fraud, the recruiting of the straw buyers, the
use of false VORs, the involvement of escrow officers, and the length of time
the scheme continued. The district court’s determination that Tisdale used
sophisticated means is plausible in light of the record as a whole, and therefore,
the district court did not clearly err in applying the enhancement.
Third, the district court increased Tisdale’s offense level pursuant to
§ 3B1.1(a) of the sentencing guidelines, because the court determined Tisdale
was the leader or organizer of the mortgage-fraud scheme and the scheme
involved five or more participants. Tisdale’s Presentence Report (PSR)
identified Frazier and Suarez as co-participants, and the district court, during
the sentencing hearing, identified Lockhart and Jones as well. Tisdale himself
23 United States v. Chon, 713 F.3d 812, 822-23 (5th Cir. 2013).
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may be counted as a co-participant, 24 thus bringing the total participants to a
minimum of five. The record also supports the district court’s finding that
Tisdale was a leader of the conspiracy. Lockhart testified that Tisdale was the
“great teacher” at ATM/KLT because Tisdale was the most knowledgeable
about the real estate business and taught his co-conspirators how the
mortgage-fraud scheme would operate. The district court expressed, based on
all the evidence that had been presented at trial and the sentencing hearings,
that Tisdale “was clearly the leader of this organization.” We do not disturb
this finding nor the imposition of the sentence enhancement.
Finally, the district court increased Tisdale’s criminal history by two
points because the fraud began while Tisdale was on probation. Tisdale was
on probation from May 2, 2002 until April 30, 2003. Tisdale and Lockhart
formed ATM and KLT in August 2002. These two companies were found to be
the initial vehicle for the mortgage-fraud conspiracy. Lockhart testified that
Tisdale began teaching him about the pass-through scheme shortly after their
businesses were organized. The district court’s finding is plausible in light of
the record as a whole, and the court did not clearly err by finding Tisdale was
on probation when the offense began.
B
The district court sentenced Beacham to a term of thirty-six months of
imprisonment after calculating his advisory guidelines range to be forty-six to
fifty-seven months. Beacham challenges his sentence because the district
court denied him a minor-role reduction, and he claims the district court
improperly calculated the relevant loss amount. Because both the scope of
Beacham’s role and the loss amount are factual findings, we review for clear
error.
24 See United States v. Wilder, 15 F.3d 1292, 1299 (5th Cir. 1994).
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Beacham asserts that his involvement in the conspiracy was limited to
the 1206 Quinlan transaction and he was thus entitled to the minor-role
reduction. He also asserts that the loss amount the district court assigned to
him was incorrect because it included the losses from properties for which
Beacham did not provide or authorize false VORs. These losses, Beacham
contends, should not be included because the VORs were forged by Frazier and
because the lenders did not rely on the VORs. Beacham’s assertions are not
supported by the record. Both Lockhart and Frazier testified that Beacham
prepared fraudulent VORs and authorized Frazier to sign fraudulent VORs in
Beacham’s absences. One VOR was incomplete, and Beacham contends that
no one could have relied upon it. But this VOR had information that purported
to represent rental history, and there was no evidence that the VOR was
disregarded or ignored by the lender. Testimony at trial established that, as a
general matter, VORs could play a pivotal part in a lender’s decision to issue a
loan. The district court did not clearly err by denying Beacham the minor-role
reduction or including properties other than 1206 Quinlan Drive in the loss
amount attributable to Beacham.
IV
The district court ordered Tisdale, Jones, and Beacham to each pay an
amount in restitution pursuant to the Mandatory Victims Restitution Act
(MVRA). 25 The victims to whom restitution is to be paid are financial
institutions that eventually foreclosed on the fraudulently procured
mortgages. For several transactions at issue, the victim financial institution
was not the original lender. The district court did not have before it evidence
25 18 U.S.C. § 3663A(a)(1) (“Notwithstanding any other provision of law, when
sentencing a defendant convicted of an offense described in subsection (c), the court shall
order, in addition to . . . any other penalty authorized by law, that the defendant make
restitution to the victim of the offense . . . .”).
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of these victims’ purchase prices for the mortgages on the secondary market
and could not calculate the exact losses these victims suffered. Instead of
ordering no restitution, the district court calculated the restitution amount by
subtracting the victims’ foreclosure proceeds from the original loan amounts.
A
We review “the legality of a restitution order de novo and the amount of
the restitution order for an abuse of discretion.” 26 The district court “abuses
its discretion when its ruling is based on an erroneous view of the law or a
clearly erroneous assessment of the evidence.” 27
The defendants contend that the loss amount for a victim who purchased
a mortgage on the secondary market cannot be based on the amount of the
original loan. We recently addressed this identical issue in an appeal by
Tisdale, Jones, and Beacham’s co-defendant, Jermaine Frazier, who pleaded
guilty prior to trial. 28 In an unpublished opinion, we agreed with the
disposition of the issue by our sister circuits and held that the original loan
amount is irrelevant to determining loss when a victim purchased a mortgage
on the secondary market. 29 In United States v. Yeung, the Ninth Circuit
reasoned:
Because the value of that loan is not necessarily its unpaid
principal balance, but may vary with the value of the collateral,
the credit rating of the borrower, market conditions, or other
United States v. Arledge, 553 F.3d 881, 897 (5th Cir. 2008) (citing United States v.
26
Adams, 363 F.3d 363, 365 (5th Cir. 2004)).
United States v. Crawley, 533 F.3d 349, 358 (5th Cir. 2008) (internal quotation
27
marks and citations omitted).
28 United States v. Frazier, 577 F. App’x 271, 271-72 (5th Cir. 2014).
29 Id. at 273-74.
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factors, the loan purchaser may have purchased the loan for less
than its unpaid principal balance. 30
In United States v. Chaika, the Eight Circuit commented that the loss to a
victim who is not the initial lender “will turn on its purchase price in the
secondary market.” 31 Therefore, the proper amount of restitution owed to a
victim that purchased a fraudulently procured loan on the secondary market
is what the victim paid for the mortgage less any proceeds obtained through
foreclosure.
The government attempts to distinguish Yeung and Chaika by noting
that in those cases, unlike here, the secondary-market purchase prices were
available. The unavailability of the information in this case, the government
argues, forced the district court to choose between awarding no restitution and
awarding the victims restitution based on the original loan amounts. However,
our court has held that “[t]he MVRA limits restitution to the actual loss
directly and proximately caused by the defendant’s offense of
conviction. . . . [E]xcessive restitution awards cannot be excused by harmless
error; every dollar must be supported by record evidence.” 32 In United States
v. Arledge, less than one percent of the total order was not supported by the
record, but we vacated the restitution order. 33 The purchase prices paid by
many of the victims who were not the original lenders are not in the record.
The government has not carried its burden of establishing the restitution
amount as it pertains to the secondary-market purchasers. 34 Accordingly, the
30United States v. Yeung, 672 F.3d 594, 602 (9th Cir. 2012), abrogated on other
grounds by Robers v. United States, 134 S. Ct. 1854 (2014).
31 United States v. Chaika, 695 F.3d 741, 748 (8th Cir. 2012).
32 United States v. Sharma, 703 F.3d 318, 322 (5th Cir. 2012).
33 United States v. Arledge, 553 F.3d 881, 899 (5th Cir. 2008).
34 18 U.S.C. § 3664(e) (“The burden of demonstrating the amount of the loss sustained
by a victim as a result of the offense shall be on the attorney for the Government.”).
17
Case: 12-10883 Document: 00512867589 Page: 18 Date Filed: 12/12/2014
No. 12-10883
district court abused its discretion by using the original loan amounts to
calculate restitution for these victims. The restitution orders must be vacated.
B
The question arises as to whether we may vacate and remand only the
restitution aspects of the sentences. “Our court has in some cases vacated the
entire sentence when an order of restitution was vacated, but in other cases,
our court has vacated only the restitution order and left in place a term of
imprisonment that was also included in the sentence.” 35 We have vacated an
entire sentence after determining there was an error in a restitution award
when restitution was “only one component of the sentencing court’s balance of
sanctions.” 36 In the present case, it is unclear whether the district court
weighed the restitution awards in the balance when deciding Tisdale’s, Jones’s,
and Beacham’s prison terms. The district court did not, on the record, state
whether the imposition of restitution resulted in a modification of the prison
sentences or its decision not to impose penal fines. We therefore vacate the
sentences in their entirety and remand for resentencing.
* * *
For the foregoing reasons, we AFFIRM the convictions, VACATE the
sentences, and REMAND to the district court for resentencing consistent with
this opinion.
35 United States v. Espinoza, 677 F.3d 730, 734 & nn. 21-22 (5th Cir. 2012) (listing
cases).
36 Id. (quoting United States v. Hayes, 32 F.3d 171, 173 (5th Cir. 1994)).
18