U.S. v. Lutz

• Decision Date: 28 August 1998
• Docket Number: No. 97-3197,97-3197
• Citation: 154 F.3d 581
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Truth E. LUTZ, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 581

154 F.3d 581

UNITED STATES of America, Plaintiff-Appellee, v. Truth E. LUTZ, Defendant-Appellant.

No. 97-3197.

United States Court of Appeals Sixth Circuit.

Submitted June 19, 1998.

Decided Aug. 28, 1998.

Dennis P. Levin (briefed), Cleveland, Ohio, for Defendant-Appellant.

Ann C. Rowland, U.S. Attorney (briefed), Office of the U.S. Attorney, Organized Crime Strike Force Unit, Cleveland, Ohio, for Plaintiff-Appellee.

Before: MOORE, CLAY, and GILMAN, Circuit Judges.

OPINION

CLAY, Circuit Judge.

Defendant-Appellant Truth E. Lutz appeals her conviction and sentence for making false statements in a matter within the jurisdiction of a federal agency in violation of 18 U.S.C. § 1001 (1994). For the reasons set forth below, we hereby AFFIRM Lutz's conviction and sentence.

I.

In 1990, Appellant Truth E. Lutz decided to open up her own mortgage brokerage company with a friend, Linda Edens. Lutz and Edens formed TLC Mortgage Specialists, Inc. ("TLC"). Lutz was president of TLC, which was formed for the purpose of originating and processing loans. TLC was a correspondent mortgage broker authorized by the United States Department of Housing and Urban Development ("HUD") to originate loans. HUD at that time offered One to Four-Family Home Mortgage Insurance, which was federal mortgage insurance to finance home ownership. By insuring commercial lenders against loss, HUD encouraged them to invest capital in the home mortgage market. The program was limited to owner-occupants who could meet certain financial requirements. Loan originators, such as Lutz, acted as HUD's agents in processing the HUD-insured loan applications.

HUD policies required that the loan originator meet with the borrower for the purpose of preparing an initial application. At the bottom of the initial application form was a box to check as a means of indicating that the initial application was taken by a face-to-face interview. After taking the initial application, the loan originator was required to verify certain information and then prepare HUD Form 2900, the final application. The loan originator was required to have the borrower sign the form, and then the loan originator was to sign the form as well, certifying that the information about the borrower's personal and financial status had been taken directly from the borrower. The loan originator then would submit the loan package to a lending institution for underwriting. If the lending institution determined that the borrower qualified for the HUD-insured loan based on the information in the package, the package was returned to the loan originator, who then submitted the package to HUD for closing.

Lutz allegedly violated HUD policies by failing to conduct the required face-to-face interviews. She provided application forms to real estate agents who submitted fraudulent documents and verification information, such as W-2's, pay stubs, and social security cards, to Lutz for processing. The agents had their clients sign blank application forms, and Lutz then allegedly completed the signed blank applications with the false information provided by the real estate agents and falsely indicated on them that she had conducted face-to-face interviews with the borrowers. Lutz prepared the Form 2900s with the false information and allegedly only sometimes met with the borrowers to have them sign the forms, but did not have them verify the information on the forms. Lutz then falsely certified that the personal and financial information on the Form 2900s had been obtained directly from the borrowers.

Lutz was charged in eleven counts of a twenty-four count indictment with violations of 18 U.S.C. § 1001 (1994), making false statements in a matter within the jurisdiction of a federal agency. Her two co-defendants pleaded guilty, and Lutz was tried alone before a jury. At trial, the government's first theory of guilt was based upon Lutz's submission to the lending institutions of the initial application forms wherein she certified that she had held face-to-face interviews with the proposed borrowers. The government's second theory of guilt was that Lutz falsely certified on the Form 2900s that she had obtained the required information on the form directly from the borrower. On October 14, 1996, the jury returned a general verdict of guilt on all eleven counts. On February 21, 1997, Lutz was sentenced to twenty-one months imprisonment and ordered to pay restitution in the amount of $135,209.00.

II.

A.

The indictment in this case was returned on June 11, 1996. Thus, pursuant to the relevant statute of limitations, 18 U.S.C. § 3282 (1994), which imposes a five-year statute of limitations, the government was required to prove that the offense occurred after June 11, 1991. Lutz argues that the district court erred in denying her motion to dismiss Counts Five, Six, Nine, Ten, Eleven, Twelve, Thirteen, Eighteen, and Twenty-Two on the basis that there was insufficient evidence that the acts constituting the violation of 18 U.S.C. § 1001 under the government's first theory of guilt occurred within the limitations period.

18 U.S.C. § 1001 (1994) provides as follows:

Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies, conceals or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent statements or representations, or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry, shall be fined under this title or imprisoned not more than five years, or both.

The government's first theory of guilt was based upon Lutz's submission to a lending institution of initial application forms which indicated, allegedly falsely, that Lutz certified that she had held a face-to-face interview with the proposed borrowers. With respect to the above-mentioned counts, the initial application forms were dated prior to June 11, 1991, and Lutz asserts that there was no evidence presented at trial as to when these forms were submitted to the lending institution. Because Lutz maintains that the crime was completed when she submitted the loan applications to the lender, she argues that the five-year statute of limitations had run by the time of the indictment on June 11, 1996.

The statute of limitations begins to run when the crime is complete. Toussie v. United States, 397 U.S. 112, 115, 90 S.Ct. 858, 25 L.Ed.2d 156 (1970). A crime is complete when each element of the crime has occurred. United States v. Smith, 740 F.2d 734, 736 (9th Cir.1984). In the Smith case, on which both parties rely, the Ninth Circuit held that in offenses involving the submission of false statements to the government in violation of 18 U.S.C. § 1001, the offense is complete when the false statement is submitted. Id. Lutz claims that this means that her crime was complete when she submitted the initial application forms to the lender. However, no offense has occurred under the statute unless a false statement is made regarding a matter within the jurisdiction of a federal agency. See id. at 737. A matter is within the jurisdiction of a federal agency for purposes of § 1001 when the agency has the power to exercise authority in a particular situation. United States v. Rodgers, 466 U.S. 475, 479, 104 S.Ct. 1942, 80 L.Ed.2d 492 (1984). At the time Lutz submitted the forms to the lending institution certifying that she had held face-to-face interviews HUD did not yet have jurisdiction because the final loan application package had not yet been submitted to it. Furthermore, HUD had no authority over the lending institution at this point with regard to whether or not the institution would accept the loan. Therefore, the matter was not within HUD's jurisdiction, and thus the crime was not complete. Because all of the final loan packages were submitted to HUD after June 11, 1991, Lutz's indictment was not barred by the statute of limitations.

Alternatively, Lutz argues that if the statute of limitations does not bar the prosecution of these counts, then prosecution is barred on the basis that there is insufficient evidence that a crime has been committed because the forms containing the face-to-face interview certification were not included in the final loan package or otherwise ever submitted to HUD. Lutz asserts that since these initial application forms were never submitted to HUD, no crime has been committed that would permit a finding of guilt under the government's first theory. ¹

Lutz misconstrues, however, what is required for a conviction under § 1001. "There is no implicit requirement that the [false] statements be made directly to, or even be received by, the federal department or agency." United States v. Gibson, 881 F.2d 318, 322 (6th Cir.1989) (involving false statements made to a private mining company under contract with the TVA). False statements made in any matter within the agency's jurisdiction are within the scope of § 1001, and courts have upheld § 1001 convictions for false statements made to private entities receiving federal funds or subject to federal regulation or supervision. See id.

HUD had supervisory authority over the lending institution with regard to the loans at issue. HUD had various requirements and rules that the lending institutions and loan originators were expected to comply with in accepting loans for the program, including the requirement that face-to-face interviews occur. When Lutz submitted the final loan packages to HUD, which were approved by the lending institution in part on the basis of the false certification, this was sufficient to constitute a false statement in violation of § 1001. Cf. United States v. Lewis, 587 F.2d 854, 856 (6th Cir.1978) (finding that benefits applicant who falsified eligibility information given to a state agency was within jurisdiction of the federal agency because her actions...