United States v. Alpha Rashidi Mshihiri

United States Court of Appeals
For the Eighth Circuit
___________________________
No. 14-3802
___________________________
United States of America
lllllllllllllllllllll Plaintiff - Appellee
v.
Alpha Rashidi Mshihiri
lllllllllllllllllllll Defendant - Appellant
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Appeal from United States District Court
for the District of Minnesota - St. Paul
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Submitted: October 19, 2015
Filed: March 14, 2016
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Before WOLLMAN, BEAM, and GRUENDER, Circuit Judges.
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WOLLMAN, Circuit Judge.
Alpha Rashidi Mshihiri was convicted of one count of conspiracy to commit
bank fraud, in violation of 18 U.S.C. §§ 1344 and 1349; three counts of bank fraud,
in violation of 18 U.S.C. §§ 1344 and 2; one count of mail fraud, in violation of 18
U.S.C. §§ 1341 and 2; and one count of wire fraud, in violation of 18 U.S.C. §§ 1343
and 2. The district court1 sentenced Mshihiri to 150 months’ imprisonment and
ordered him to pay restitution in the amount of $1,971,091.91. We affirm.
I. General Background
Mshihiri has a bachelor’s degree and had worked as a business analyst for a
large national bank, servicing a no-money-down mortgage product. In 2003 or 2004,
Mshihiri founded a mortgage company named GWP Mortgage (GWP), at which he
served as president and chief executive officer. He became a licensed mortgage
broker in Minnesota in 2005.
At GWP, Mshihiri supervised the processing of loan applications; he was also
responsible for compliance with state and federal law; he formed GWP’s policies,
directed its initiatives, and managed its day-to-day operations. In October 2007,
GWP went out of business and filed for bankruptcy. Its operations, however, carried
on through two successor companies, Pristine Home Loans (Pristine) and Pristine
Finance. Pristine was located in the building where GWP had operated, and it
employed many of the individuals who had worked for GWP. Mshihiri identified
himself as a consultant to Pristine and as CEO of Pristine Finance. Mshihiri also
formed Kilimanjaro Investment Group (KIG), which bought and resold foreclosed
properties, and a company called VANY, which was also used in real estate
transactions. As explained more fully below, Mshihiri used these companies in an
elaborate mortgage fraud scheme.
In July 2013, a grand jury returned an indictment charging Mshihiri with the
counts set forth above. The indictment alleged that Mshihiri had engaged in a scheme
to defraud mortgage lenders from June 2006 through April 2009. Specifically, the
1
The Honorable David S. Doty, United States District Judge for the District of
Minnesota.
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scheme involved obtaining funds from financial institutions by recruiting straw
buyers to participate in the purchase of residential properties and submitting false
information and documentation in support of their mortgage applications. The
indictment identified four properties involved in the scheme: a penthouse
condominium in Bloomington, Minnesota (the Penthouse); a duplex in Minneapolis,
Minnesota (the Inglewood Duplex); a single-family home in Minneapolis (the 33rd
Street Property); and Mshihiri’s own single-family home in Independence, Minnesota
(the Broadmoor Residence). With inflated purchase prices and, in most cases, sales
by a co-conspirator to a straw buyer, Mshihiri and others derived profits from the
sales of the properties. Recruiters, brokers, loan officers, and others were paid
kickbacks for their roles in the scheme.
Mshihiri has raised several arguments on appeal. He contends that the district
court should have suppressed evidence seized pursuant to a warrant, as well as
evidence of statements that he made to federal agents. He also argues that the
government failed to prove a single conspiracy and that the evidence instead
established multiple transactions or conspiracies. He contends that the district court
should have suppressed his pretrial and in-court identification by a witness. Finally,
he claims that the district court made factual errors in determining his sentence. We
address each argument in turn, recounting additional facts as necessary.
II. Motion to Suppress Evidence
After Mshihiri became a suspect in a mortgage fraud investigation, federal
agents applied for warrants to search the Broadmoor Residence, Mshihiri’s laptop
computer, and his electronic storage devices. Internal Revenue Service Special Agent
Jim Shoup submitted an affidavit in support of the warrants, stating that he had
interviewed a confidential reliable informant (CRI) on several occasions and that the
CRI had implicated himself and Mshihiri in fraudulent conduct. The affidavit set
forth specific acts completed by the CRI in furtherance of the mortgage fraud
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conspiracy, explaining that the CRI knew of Mshihiri’s fraudulent conduct “because
CRI #1 committed fraud with . . . Mshihiri.” Shoup also stated that he had reviewed
loan records, real estate purchase records, bank records, and state charging documents
that indicated that Mshihiri was involved in fraudulent conduct. Shoup attested that
the CRI had identified another individual, Oluwaleye Oluwatula, who had assisted
Mshihiri in fraudulent acts. When interviewed by Shoup, Oluwatula admitted that he
had worked with Mshihiri to obtain fraudulent mortgage loans. The applications for
the search warrants were granted, and agents searched the Broadmoor Residence on
June 30, 2010, while Mshihiri was traveling abroad.
On September 16, 2010, Shoup and United States Secret Service Special Agent
Michael Olson coordinated with Customs and Border Protection (Customs) officers
to interview Mshihiri and to execute a search of his laptop upon Mshihiri’s return
from Dar es Salaam, Tanzania. Accordingly, when Mshihiri arrived at the
Minneapolis-St. Paul International Airport, a Customs officer intercepted him at the
immigration entry point, led him to baggage claim, and then escorted him to a
reception area.
According to Olson, he and Shoup met Mshihiri in the reception area, where
they identified themselves as federal agents and presented their credentials. They
asked whether Mshihiri would be willing to speak with them, explaining that Mshihiri
was not under arrest or obligated to answer questions. Olson testified that Mshihiri
agreed to be interviewed and voluntarily accompanied them to an interview room.
The agents entered the room first and sat at a table across from Mshihiri, who sat
“right next to the door.” The agents were wearing casual clothes, and Olson testified
that if he was wearing his service weapon, it would have been concealed. According
to Olson, no Customs officer was present during the interview.
Olson described Mshihiri’s demeanor as calm, inquisitive, and alert. Using a
normal tone and volume, Shoup asked Mshihiri several questions about the suspected
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mortgage fraud, including whether Mshihiri’s wife was involved. Mshihiri also asked
questions, trying to understand the purpose of the investigation. Olson testified that
during the forty-minute interview, Mshihiri did not request a break or try to access
his cell phone. He also did not ask to consult a lawyer or ask to call his wife so that
she could call a lawyer on his behalf. Olson testified that “[i]f [Mshihiri] would have
asked for a lawyer, we wouldn’t have questioned him.”
Shoup ended the interview abruptly, after changing the tone of his voice and
accusing Mshihiri of lying. Shoup gave Mshihiri a copy of the search warrant and
advised him that the U.S. Attorney’s office had issued a target letter for him. Olson
could not remember whether Mshihiri’s laptop was searched at the beginning or the
end of the interview, but he testified that he and Shoup searched Mshihiri’s person
after the interview ended. Olson testified that he and Shoup then left the airport and
that Mshihiri probably “went out the normal way, back out through the passport
control area in the main terminal.”
According to Mshihiri, a Customs officer escorted him to an interview room,
where he met Olson and Shoup. Mshihiri testified that he was exhausted from his
travels and the time difference. When Mshihiri asked to call his wife, the Customs
officer seized his cell phone, and thereafter told him, “You need to cooperate;
otherwise, your Immigration status is going to be compromised.” Mshihiri claimed
that the agents disregarded his request for an attorney and his request to call his wife
so that she could contact an attorney. As the interview continued, Shoup threatened
Mshihiri and his wife, saying that they were “going down” and that they should make
arrangements for their children. The Customs officer looked inside the interview
room numerous times during the interview. Mshihiri testified that he was never told
he was free to leave and that he answered the agents’ questions because he “didn’t
have a choice” and “it felt like [he] couldn’t get out of that room.”
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Mshihiri moved to suppress the evidence seized as a result of the search
warrants and the statements he made during the September 16, 2010, interview. He
argued that the affidavit in support of the search warrants was insufficient to establish
probable cause, that the interview constituted a custodial interrogation during which
he was not advised of his rights under Miranda v. Arizona, 384 U.S. 436 (1966), and
that the statements he made during the interview were not voluntary. Adopting the
report and recommendation of the magistrate judge,2 the district court denied the
motion.
Mshihiri first argues that the affidavit in support of the search warrant was
insufficient to establish probable cause because the affidavit wrongly identified the
CRI as a confidential reliable informant. According to Mshihiri, the CRI should have
been identified as a cooperating witness, and the CRI’s misidentification prevented
the issuing judge from making a fair probable cause determination. “As a reviewing
court, we pay ‘great deference’ to the probable cause determinations of the issuing
judge or magistrate, and our inquiry is limited to discerning whether the issuing judge
had a substantial basis for concluding that probable cause existed.” United States v.
Lucca, 377 F.3d 927, 933 (8th Cir. 2004) (quoting Illinois v. Gates, 462 U.S. 213, 236
(1983)). An issuing judge considers two factors when considering a confidential
informant’s information: the informant’s reliability and the basis for the informant’s
knowledge. Id. Both factors, however, need not be present before a warrant may
issue. Id. The issuing judge considers the totality of the circumstances so that “a
deficiency in one [factor] may be compensated for . . . by a strong showing as to the
other, or by some other indicia of reliability.” Gates, 462 U.S. at 233.
The information provided by the CRI was sufficiently reliable to support a
finding of probable cause, regardless of manner in which he was identified. The CRI
2
The Honorable Jeffrey J. Keyes, United States Magistrate Judge for the
District of Minnesota.
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participated in the mortgage fraud conspiracy with Mshihiri, giving the CRI first-hand
knowledge of Mshihiri’s role in the scheme. The information the CRI provided also
was corroborated by other evidence, including loan records, real estate purchase
records, bank records, and state charging documents. Any deficiency in the showing
of the CRI’s reliability was sufficiently compensated for by the strong showing of the
basis of the CRI’s knowledge and by the corroborating evidence. Moreover, despite
Mshihiri’s argument to the contrary, the information contained in the affidavit linked
Mshihiri to specific fraudulent mortgage loan transactions and provided a substantial
basis for the issuing judge to conclude that probable cause existed.
Mshihiri next argues that the district court should have suppressed the
statements he made to Olson and Shoup because he was in custody when he made the
statements and he had not been advised of his Miranda rights. “Miranda requires that
law enforcement agents provide certain prescribed warnings before conducting an
interrogation of a suspect who is in custody.” United States v. New, 491 F.3d 369,
373 (8th Cir. 2007). To determine whether a person is in custody we consider:
“[F]irst, what were the circumstances surrounding the interrogation; and second,
given those circumstances, would a reasonable person have felt he or she was at
liberty to terminate the interrogation and leave.” J.D.B. v. North Carolina, 131 S. Ct.
2394, 2402 (2011) (quoting Thompson v. Keohane, 516 U.S. 99, 112 (1995)); see
also United States v. Griffin, 922 F.2d 1343, 1349 (8th Cir. 1990) (listing six non-
exclusive factors for evaluating whether an individual is in custody for purposes of
Miranda). We review the district court’s custody determination de novo and its
factual findings for clear error. United States v. LeBrun, 363 F.3d 715, 719 (8th Cir.
2004) (en banc).
The district court made the following findings with respect to the
circumstances surrounding the interrogation: the agents informed Mshihiri that he
was not under arrest, Mshihiri entered the interview room voluntarily and was seated
closest to the door throughout the questioning, the agents were dressed in casual
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clothing and did not display their weapons, most of the forty-minute interview was
calm and conversational, and Mshihiri was never handcuffed or placed under arrest.
Because these findings are not clearly erroneous and are well-supported by Olson’s
testimony, we conclude that Mshihiri was not in custody at any point during the
September 16, 2010, interview.
Mshihiri essentially argues that the district court erred in its credibility findings
when it rejected his testimony that the agents never told him he was free to leave, that
they ignored his request for an attorney, and that they threatened his wife and
children. “The district court, however, has a distinct advantage in evaluating the
credibility of witnesses, and its credibility determinations are virtually unreviewable
on appeal.” United States v. Vinton, 631 F.3d 476, 481 (8th Cir. 2011) (internal
quotation marks and citation omitted). The district court reasonably found that
Olson’s testimony was credible and that Mshihiri’s testimony was inconsistent and
lacked credibility.
Mshihiri also argues that his statements were not voluntary because the agents
threatened his wife and children. “A statement is involuntary when it was extracted
by threats, violence, or express or implied promises sufficient to overbear the
defendant’s will and critically impair his capacity for self-determination.” LeBrun,
363 F.3d at 724 (internal quotation marks and citation omitted). Having already
concluded that the district court reasonably discredited Mshihiri’s testimony that he
was threatened by the agents, Mshihiri’s argument fails. See id. (“We review the
district court’s findings of fact for clear error and its legal conclusion as to whether
a [statement] was voluntary de novo.”).
III. Conspiracy Conviction
Mshihiri argues that the government failed to prove a single conspiracy
involving the four properties identified in the indictment. “Whether the government’s
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proof established a single conspiracy or multiple conspiracies is a question of fact for
the jury.” United States v. Morales, 113 F.3d 116, 118 (8th Cir. 1997). Accordingly,
we view the evidence in the light most favorable to the verdict and draw all
reasonable inferences in favor of the verdict. Id. at 118-19. We recount in some
detail the facts related to each property below, keeping in mind our deferential
standard of review.
A. Factual Background
In 2007, Mshihiri lived with his wife, Yvrose Mshihiri (Yvrose), and their
children at the Broadmoor Residence, an expansive home situated on a large lot in
Independence, Minnesota. According to Mshihiri, they planned to move to Tanzania
to pursue business opportunities there, and so he and Yvrose decided to sell the
Broadmoor Residence and purchase the Penthouse, as a place where they could stay
when they visited the United States.
The April 2007 purchase agreement for the Penthouse stated a purchase price
of $1,090,000 and listed only Yvrose as the buyer. Mshihiri and his broker had
negotiated a deal with the sellers that inflated the purchase price of the Penthouse to
facilitate post-closing kickbacks. The seller testified that he had “agreed to distribute
checks after the closing from the funds of the sale to entities of Alpha [Mshihiri’s]
choosing.” The broker and an associate of Mshihiri provided funds for the down
payment. Mshihiri testified that he and Yvrose did not plan on living in the
Penthouse immediately after they purchased it.
Mshihiri provided the information and documentation used to complete the
loan application. The application falsely stated that Yvrose earned $27,000 per
month as an owner of VANY. It indicated that no part of the down payment was
borrowed, that Yvrose planned to occupy the Penthouse after closing, and that
Yvrose’s primary residence was a home she rented in Brooklyn Center, Minnesota.
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The application did not disclose Yvrose’s obligation on the mortgage on the
Broadmoor Residence. The application included a bank statement that had been
altered to remove Mshihiri’s name from the account and to show Yvrose’s address
as being in Brooklyn Center. It also included a false investment account statement.
Mshihiri ultimately secured two loans, together totaling more than $987,000.
The sale of the Penthouse closed on June 26, 2007. After the seller’s mortgage
on the Penthouse was paid, the broker received $87,200 and the seller received
$284,327.43. From her proceeds, the broker paid $40,750 to VANY. The seller
testified that Mshihiri instructed him to make four payments from his proceeds, which
he did. The seller paid $20,000 to the broker; $77,000 to the associate who helped
fund the down payment; $40,000 to another associate of Mshihiri; and $69,000 to
KIG. Mshihiri stopped making payments on the mortgage shortly after closing. The
Penthouse went into foreclosure and was sold at a sheriff’s sale in July 2008.
KIG’s bank account had a negative balance when the proceeds from the
Penthouse transaction were deposited. The day after the $69,000 was deposited, KIG
used part of those funds to make a mortgage payment on the Inglewood Duplex, a
residential property in Minneapolis that John Mlay had purchased using funds from
Mshihiri and other members of KIG. The co-founder of KIG described Mlay as an
associate whose name and credit KIG used to buy properties. KIG, however, made
the mortgage payments on the Inglewood Duplex.
Okwuchwukwu Jidofor (KeKe)3 recruited Yartah Kimba to purchase the
Inglewood Duplex from Mlay. Kimba was a hair stylist who had her own salon,
which was located in a space that she leased. She met KeKe at a nightclub, and KeKe
3
KeKe joined the conspiracy after going to GWP’s office looking for work.
Mshihiri told him that he could make thousands of dollars by recruiting straw buyers
to purchase houses and could, in turn, pay the buyers whatever he wished from his
share of the proceeds.
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convinced her to buy property through him, even though she had limited income and
no significant assets. KeKe obtained Kimba’s personal and financial information and
brought it to Mshihiri. Mshihiri assured KeKe that the deal would proceed, despite
the fact that Kimba did not have sufficient assets to qualify for a loan. On November
13, 2007, Kimba entered into an agreement to purchase the Inglewood Duplex.
Mshihiri handled the documentation for Kimba’s loan. He gave the documents
to KeKe, who took them to Kimba to sign and then returned them to Mshihiri’s
office. Kimba’s loan application falsely stated that she earned $5,229 per month as
a general manager of a tax preparation service provider, that she had more than
$15,000 in cash, and that no part of the down payment had been borrowed. Mshihiri
instructed KeKe to take the completed application to Yissa Jinadu, a loan officer for
Wells Fargo. A loan of more than $265,000 was secured.
The sale of the Inglewood Duplex to Kimba closed on December 26, 2007.
After Mlay’s existing mortgage was paid, KIG received $93,250.17 and paid $55,000
to the company that had supplied the funds for Kimba’s down payment. At
Mshihiri’s direction, that company, in turn, paid kickbacks in the amounts of $2,000
to Mlay; $21,971.03 to KeKe; and $3,000 to Jinadu.
Some mortgage payments were made on the Inglewood Duplex by the co-
founder of KIG. Kimba, however, was surprised by the size of the mortgage and by
the uninhabitable state of the Inglewood Duplex. She could not afford to make the
necessary repairs or the mortgage payments, and the Inglewood Duplex went into
foreclosure.
Mshihiri used $30,000 of KIG’s funds from the Inglewood Duplex sale to
purchase the 33rd Street Property, which he later transferred to his company VANY,
recording a $60,000 mortgage to KIG. Sometime thereafter, KeKe told Mshihiri
about a stolen identity that KeKe had acquired from a friend, and Mshihiri decided
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to use it to purchase the 33rd Street Property from VANY. On July 2, 2008, Mshihiri
and KeKe went to an Associated Bank together, where KeKe opened an account in
the identity-theft victim’s name, R.C. After Mshihiri told KeKe that they would need
someone to pose as R.C., KeKe recruited Tristan Trice to the scheme. A loan in
R.C.’s name was brokered through Pristine. Given that R.C.’s identity had been
stolen, the loan application was entirely fabricated and supported by fraudulent
documentation.
On July 21, 2008, Trice signed the closing documents for the 33rd Street
Property as R.C., but it was too late in the day for Trice to purchase the cashier’s
checks required for closing. Accordingly, the next day, KeKe and Trice went to an
Associated Bank, where Trice was able to purchase a $6,000 cashier’s check as R.C.,
using cash given to him by KeKe. KeKe and Trice then went to an office building
in Brooklyn Park, Minnesota, where they met Mshihiri, who had cash for a second
cashier’s check. Driving a black Mercedes bearing personalized license plates,
Mshihiri took KeKe and Trice to an Associated Bank in St. Louis Park, Minnesota,
where Mshihiri gave Trice an envelope containing cash and instructed him to
purchase a $5,000 cashier’s check. Mshihiri and KeKe waited in the parking lot
while Trice entered the bank to complete the transaction. Trice presented the cash
and a withdrawal slip to the teller in an attempt to purchase the cashier’s check. Their
suspicions aroused, bank personnel called the police, who arrested Trice. As he was
being escorted out of the bank, Trice saw Mshihiri drive away. Another associate
was able to procure a second cashier’s check in R.C.’s name later that day. The
checks were delivered to the title company, which released funds to VANY on July
23, 2008.
From the $187,493.86 proceeds from the sale of the 33rd Street Property,
$60,000 was paid to Pristine and $126,139.51 was paid to VANY. Pristine then
transferred its funds to KIG, which in turn used part of the funds to facilitate Hassan
Rashid’s straw purchase of the Broadmoor Residence. Mshihiri issued kickbacks to
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the recruiter, broker, and loan officers from the VANY account, and VANY then
transferred $62,500 of its funds to Rashid’s bank account.
Mshihiri convinced Rashid, his cousin, to act as the straw buyer of Mshihiri’s
primary home, the Broadmoor Residence. Mshihiri explained that he was
contemplating moving to Tanzania and had not been able to sell his house. He
suggested that Rashid purchase the house, with Mshihiri making the down payment
and finding renters to cover the monthly mortgage payments. Rashid agreed to do so,
but he had no role in setting the purchase price of $640,000, which he believed was
arranged by Mshihiri and the loan officer.
Mshihiri completed the loan application, which, as with the applications related
to the other properties, was replete with misrepresentations and omissions. The
application misrepresented Rashid’s income and employer, stating that he earned
$14,824 per month working for Pristine Finance. The application also indicated that
no part of the down payment was borrowed, that Rashid planned to occupy the
Broadmoor Residence after closing, and that Rashid received $2,500 per month in
rental income, none of which was true. Phony pay stubs and a false investment
account statement were submitted in support of the application. Rashid’s loan
application was referred to Jinadu, the Wells Fargo loan officer who had facilitated
the Inglewood Duplex deal. As recounted above, Mshihiri provided most of Rashid’s
down payment through KIG and VANY. The sale closed on July 31, 2008, following
which Mshihiri and his family continued to live at the Broadmoor Residence, which
eventually went into foreclosure.
B. Discussion
Mshihiri argues that the government failed to prove a single conspiracy. He
describes the roles different individuals played in completing the fraudulent
transactions related to each of the four properties, arguing that there were four
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separate schemes, one for each property. Denying that he was the hub of a single,
hub-and-spoke conspiracy, Mshihiri claims that KeKe was the hub of the conspiracies
involving the Inglewood Duplex and the 33rd Street Property and that the Penthouse
and the Broadmoor Residence were merely “separate personal transactions of Mr. and
Mrs. Mshihiri.” Appellant’s Br. 38. He reiterates the fact that not all of the
individuals involved in the four transactions worked together and that he was often
traveling outside the country when the transactions related to the Inglewood Duplex
and 33rd Street Property were being completed.
“A single conspiracy is composed of individuals sharing common purposes or
objectives under one general agreement.” Morales, 113 F.3d at 118-19 (internal
quotation marks and citation omitted). If the evidence has established one overall
agreement to commit an illegal act, the government has proved its case. Id. In
determining whether the evidence has established a single conspiracy, we consider
the totality of the circumstances, viewing the evidence in the light most favorable to
the verdict and drawing all reasonable inferences in favor of the verdict. United
States v. Johnson, 719 F.3d 660, 669 (8th Cir. 2013). “Relevant factors include the
nature of the activities involved, the location where the alleged events of the
conspiracy took place, the identity of the conspirators involved, and the time frame
in which the acts occurred.” Id. (internal quotation marks and citation omitted). A
single conspiracy may exist “even if the participants and their activities change over
time, and even if many participants are unaware of, or uninvolved in, some of the
transactions.” Id.
When so viewed the evidence established a single conspiracy, whose purpose
was to secure lenders’ funds through material misrepresentations, omissions, and
fraudulent documents. The manner and means of securing lenders’ funds were
similar across the transactions related to the four properties. Specifically, Mshihiri
or a co-conspirator would identify a straw buyer and a property in the Twin Cities
metropolitan area. Thereafter, purchase prices were inflated, the straw buyer’s
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income and assets were misrepresented, down payment funds were secured, and post-
closing kickbacks were paid, usually at Mshihiri’s direction. The loan applications
bore similar misrepresentations of income and assets, and the documentation
supporting each application was altered, fabricated, or created from whole cloth.
Mshihiri used GWP, Pristine, KIG, and VANY, and individuals who shared
connections to those entities throughout the June 2006 through April 2009
conspiracy.
The flow of the ill-gotten funds used to perpetuate the scheme also supports the
jury’s finding of a single conspiracy. Proceeds from the Penthouse closing were used
to fund mortgage payments on the Inglewood Duplex before it was sold to straw-
buyer Kimba. Some of the proceeds from the Inglewood Duplex closing were then
used to fund Mshihiri’s purchase of the 33rd Street Property before it was sold to the
fictitious straw-buyer, R.C. Thereafter, proceeds from the 33rd Street Property
closing were used to fund the down payment for Rashid’s straw purchase of the
Broadmoor Residence.
Finally, we reject Mshihiri’s contention that KeKe was the hub of separate
conspiracies involving the Inglewood Duplex and the 33rd Street Property. Although
KeKe had recruited Kimba and procured a stolen identity, he brought those straw
buyers to Mshihiri, who then completed or facilitated the completion of their bogus
loan applications, which in turn secured lenders’ funds through material
misrepresentations and omissions. The overwhelming evidence of his involvement
gives the lie to Mshihiri’s argument that he was not responsible for these transactions
because he was traveling abroad.
IV. Motion To Suppress Trice’s Pretrial and In-Court Identification of Mshihiri
Mshihiri argues that evidence of Trice’s pretrial identification of Mshihiri
should have been suppressed. Before trial, Trice had been shown photographs of
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Mshihiri and had identified him on an investigative flow chart, recognizing him as
one of the “big guys.” It was Mshihiri who introduced the pretrial identification
evidence, however, in an attempt to demonstrate to the jury that Trice knew Mshihiri
only from the photographs he was shown. By introducing this evidence himself,
Mshihiri has waived any argument that the district court should have excluded it. See
United States v. Preciado, 336 F.3d 739, 745 (8th Cir. 2003) (citing United States v.
Mihm, 13 F.3d 1200, 1204 (8th Cir. 1994) (concluding that an unsuccessful tactical
decision waives even plain error review)).
Mshihiri also argues that the district court erred by denying his motion to
suppress Trice’s in-court identification of Mshihiri. He contends that the pretrial
identification procedures were unnecessarily suggestive and tainted Trice’s in-court
identification, thereby violating Mshihiri’s constitutional right to due process.
Reviewing this claim de novo, we apply the two-part test that governs the
admissibility of identification evidence. United States v. Williams, 340 F.3d 563, 567
(8th Cir. 2003). “First, we determine if the identification procedures were
‘impermissibly suggestive.’ If they were, we examine the totality of the
circumstances to determine whether the suggestive procedures created ‘a very
substantial likelihood of irreparable misidentification.’” Id. (quoting Simmons v.
United States, 390 U.S. 377, 384 (1968)). In determining the likelihood of
misidentification, we consider “the opportunity of the witness to view the criminal
at the time of the crime, the witness’ degree of attention, the accuracy of his prior
description of the criminal, the level of certainty demonstrated at the confrontation,
and the time between the crime and the confrontation.” Id. (quoting Manson v.
Brathwaite, 432 U.S. 98, 114 (1977)).
Even if we were to assume that the procedure here was somehow impermissibly
suggestive, the circumstances do not suggest a substantial likelihood that Trice
misidentified Mshihiri. Trice observed Mshihiri twice: when Trice first
impersonated R.C., and again approximately a week after their first encounter, when
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Mshihiri drove Trice from an office building located in Brooklyn Park to a bank
located in St. Louis Park. Trice apparently paid close attention to Mshihiri, because
he was able to recount their meetings in detail and accurately describe the make,
color, and personalized license plate of Mshihiri’s vehicle. According to Mshihiri,
when Trice was shown the investigative flow chart more than three years after he had
last seen Mshihiri, he identified Mshihiri as one of the “big guys,” but later seemed
to confuse Oluwatula and Mshihiri. Given the totality of the circumstances, however,
we find no substantial likelihood of irreparable misidentification, and thus the district
court did not err in allowing Trice to identify Mshihiri at trial.
V. Sentencing
At sentencing, the government introduced a summary chart showing the losses
for thirteen properties that were involved in the overall scheme to defraud—three of
the properties that were the subject of the trial and ten other properties.4 For each
property, the chart listed the address, borrower, closing date, lender, financial loss
victim, loan amount, unpaid principal balance, sales price, sales proceeds, and
realized loss. To calculate the amount of loss, the government took the post-
foreclosure sales price or sales proceeds for each property, whichever was higher, and
subtracted it from the unpaid principal balance on the fraudulently obtained
mortgages, which resulted in a total realized loss of $1,971,091.91. A special agent
with the United States Department of Housing and Urban Development (HUD)
testified regarding the ten properties that were not identified in the indictment,
connecting each property and associated transaction to the conspiracy.
The district court determined that Mshihiri’s relevant conduct involved the
thirteen properties listed on the summary chart and found that the amount of loss was
4
The 33rd Street Property did not have a realized loss when Mshihiri was
sentenced and was not included in the loss calculation.
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$1,971,091.91. The district court applied several enhancements to Mshihiri’s base
offense level: a loss of more than $1 million but not more than $2.5 million; using
sophisticated means; making unauthorized use of a means of identification to obtain
another means of identification; deriving more than $1 million in gross receipts from
one or more financial institutions; acting as an organizer or leader of criminal activity
that involved five or more participants; and obstructing justice. The district court
rejected Mshihiri’s request that the amount of loss be discounted by thirty percent
based on unforeseeable market changes. The district court determined that Mshihiri’s
total offense level was 35, his criminal history category was I, and his advisory
sentencing range was 168 to 210 months’ imprisonment. As set forth earlier,
Mshihiri was sentenced to 150 months’ imprisonment and ordered to pay restitution
in the amount of $1,971,091.91.
Mshihiri argues that the district court erred in determining his relevant conduct,
the actual loss amount, and that Mshihiri had obstructed justice.5 Mshihiri first
argues that the government failed to prove any jointly undertaken criminal activity.
He contends that the transactions related to each of the properties described in the
indictment were separate frauds and not part of an overarching conspiracy. He also
argues that the transactions related to the ten other properties should not be
considered relevant conduct.
5
Mshihiri has made no meaningful argument regarding the district court’s
imposition of offense-level enhancements for use of sophisticated means, use of
identification to obtain another means of identification, and role in the offense.
Accordingly, he has waived any such argument. See Fed. R. App. P. 28(a)(8)(A)
(stating that an appellant’s brief should contain “appellant’s contentions and the
reasons for them, with citations to the authorities and parts of the record on which the
appellant relies”); United States v. Ali, 799 F.3d 1008, 1026 (8th Cir. 2015)
(foregoing consideration of an argument that was mentioned but not meaningfully
argued).
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We review the district court’s relevant conduct findings for clear error. United
States v. Whiting, 522 F.3d 845, 850 (8th Cir. 2008). For sentencing purposes,
relevant conduct includes all acts and omissions of the defendant that were “part of
the same course of conduct or common scheme or plan as the offense of conviction”
and “all reasonably foreseeable acts and omissions of others in furtherance of the
jointly undertaken criminal activity.” U.S.S.G. § 1B1.3(a)(1) and (2). The district
court did not clearly err in finding that Mshihiri’s relevant conduct included the
properties listed on the summary chart. The properties that were the subject of trial
are beyond challenge. As for the remaining ten properties, the HUD special agent’s
testimony connected those properties to the conspiracy and established that the
lenders with respect to those properties were defrauded during the time period alleged
in the indictment by means of a scheme substantially similar to the one alleged in the
indictment. Mshihiri makes no specific allegations of error as to any of the
properties, but argues that he did not fully control the mortgage fraud, that he spent
several months abroad between 2007 and 2009, and that he began exiting the real
estate business during that time period. Whatever the truth of those assertions, they
do not establish that the district court clearly erred in determining Mshihiri’s relevant
conduct.
Mshihiri contends that the ten properties addressed at sentencing should not
have been included in the loss calculations. He further argues that the district court
should have considered only the loss suffered by the original lender. If the lender
packaged the mortgage and sold it to a different financial institution for a profit, the
argument goes, no loss should be attributed to Mshihiri. Finally, he contends that the
district court erred when it considered hearsay evidence and when it rejected his so-
called black swan argument—that is, that the amount of loss should be reduced by
thirty percent to account for the unforeseeable collapse of the real estate market.
The district court did not clearly err in finding an actual loss of $1,971,091.91.
United States v. Engelmann, 720 F.3d 1005, 1013 (8th Cir. 2013) (standard of
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review). As an initial matter, the district court properly included the losses from the
ten properties addressed at sentencing in its loss calculation. See United States v.
Quevedo, 654 F.3d 819, 823 (8th Cir. 2011) (“A sentencing court must include in its
calculation any losses caused by ‘relevant conduct.’”). We have held that a district
court does not clearly err “in basing its actual loss calculation on the difference
between the unpaid loan balances and the prices obtained for the properties at
sheriff’s sales or short sales.” Engelmann, 720 F.3d at 1013-14 (citing U.S.S.G.
§ 2B1.1 cmt. n.3(E)(ii)). Accordingly, there can be no clear error here, where the
district court engaged in a more conservative calculation by subtracting the higher of
the post-foreclosure sales price or the sales proceeds from the unpaid principal
balance.
Moreover, the loss here meets the U.S. Sentencing Guidelines Manual’s
definition of “actual loss” because the loss was “the reasonably foreseeable pecuniary
harm that resulted from the offense.” See U.S.S.G. § 2B1.1 cmt. n.3(A)(i) (defining
“actual loss”). The Guidelines define “reasonably foreseeable pecuniary harm” as
“pecuniary harm that the defendant knew or, under the circumstances, reasonably
should have known, was a potential result of the offense,” U.S.S.G. § 2B1.1 cmt.
n.3(A)(iv), and we have recognized that “[i]t was reasonably foreseeable ‘that a
scheme premised on false loan applications and inflated real estate prices would
unravel, and that market conditions could exacerbate the losses.’” Engelmann, 720
F.3d at 1014 (quoting United States v. Spencer, 700 F.3d 317, 323 (8th Cir. 2012)).
Moreover, it is immaterial that the loss victims were sometimes other than the original
lender. Regardless of whether the victim was the original lender or a subsequent
holder of the mortgage, the pecuniary harm “resulted from” Mshihiri’s conspiracy
offense. Finally, the district court did not err in considering the hearsay testimony of
the HUD special agent. United States v. Shackelford, 462 F.3d 794, 796 (8th Cir.
2006) (per curiam) (“Hearsay evidence, even double hearsay, can be used at
sentencing proceedings if it bears sufficient indicia of reliability to support its
probable accuracy.” (internal quotation marks and citation omitted)).
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With respect to the enhancement for obstruction of justice, the district court
found that Mshihiri gave false testimony both at the suppression hearing and at trial.
Because “[c]ommitting perjury at trial is a reason to apply a two-level enhancement
for obstruction of justice” and because there was no clear error in the finding that
Mshihiri had committed perjury, the district court properly applied the enhancement.
See United States v. Waters,799 F.3d 964, 974 (8th Cir. 2015) (citing U.S.S.G.
§ 3C1.1 cmt. n.4(B)).
Throughout his sentencing arguments, Mshihiri cites Apprendi v. New Jersey,
530 U.S. 466 (2000), and Alleyne v. United States, 133 S. Ct. 2151 (2013). In
Apprendi, the Supreme Court held that “[o]ther than the fact of a prior conviction, any
fact that increases the penalty for a crime beyond the prescribed statutory maximum
must be submitted to the jury, and proved beyond a reasonable doubt.” 530 U.S. at
490. In Alleyne, the Court held that any fact that increases the statutory mandatory
minimum sentence to which a defendant is exposed is an “element” of the crime and
must be submitted to the jury. 133 S. Ct. at 2155. Neither case applies here, because
the district court’s findings did not increase the statutory maximum sentence or the
statutory mandatory minimum sentence.
VI. Conclusion
The judgment is affirmed.
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