U.S.A. v. Logan

Decision Date31 January 2001
Docket NumberNos. 99-6176,99-6198,s. 99-6176
Citation250 F.3d 350
Parties(6th Cir. 2001) United States of America, Plaintiff-Appellee, v. John M. Logan (99-6176); Alan Michael Laws(99-6198), Defendants-Appellants. Argued:
CourtU.S. Court of Appeals — Sixth Circuit

Appeal from the United States District Court for the Eastern District of Tennessee at Greeneville. No. 96-00017, James H. Jarvis, District Judge. [Copyrighted Material Omitted]

[Copyrighted Material Omitted]

[Copyrighted Material Omitted]

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] M. Neil Smith, ASSISTANT UNITED STATES ATTORNEY, Greeneville, Tennessee, for Appellee.

John T. Milburn Rogers, Jerry W. Laughlin, ROGERS, LAUGHLIN, NUNNALLY, Greeneville, Tennessee, for Defendant-Appellant.

Robert W. Ritchie, W.Thomas Dillard, RITCHIE, FELS & DILLARD, Knoxville, Tennessee, for Appellants.

Before: MARTIN, Chief Judge; COLE, Circuit Judge; NUGENT, District Judge*.

OPINION

NUGENT, District Judge.

Appellants John M. Logan and Alan Michael Laws were found guilty by a jury sitting in the United States District Court for the Eastern District of Tennessee on ninety-four counts of criminal charges, which included making false statements, false entries, false claims, and one count of conspiracy. Appellants filed a timely notice of appeal to this Court, challenging their convictions and the corresponding sentences. We exercise jurisdiction pursuant to 28 U.S.C. § 1291 to review the final judgment of the district court and pursuant to 18 U.S.C. § 3742(a) to review the sentence imposed. For the reasons set forth below, we hereby AFFIRM the judgment reached and sentences imposed by the district court.

I. BACKGROUND

Appellants in this case are the sole shareholders and controlling officers of Logan-Laws Financial Corporation ("LLFC"), an entity which made mortgage loans co-insured by the Federal Housing Administration of the Department of Housing and Urban Development ("HUD/FHA"). Through LLFC, Appellants issued securities backed by pools of federally insured mortgages to secondary market purchasers under the Government National Mortgage Association's ("GNMA's") mortgage-backed securities program ("MBS program"). As an issuer of securities under the MBS program, LLFC was required to collect monthly principal and interest payments from property owners, which it passed through to the security holders, less servicing fees. In the event that a property owner failed to make a monthly payment, LLFC's role as a HUD/FHA co-insured lender required it to pay security holders from its own funds. If LLFC failed to make such payments, GNMA guaranteed payment to the security holders. Thus, the United States, through GNMA, was ultimately responsible for the timely payment of principal and interest due on LLFC's mortgage-backed securities.

In connection with this practice, a grand jury returned a ninety-six count Indictment against Appellants, charging them with conspiring to defraud and commit offenses against the United States; making false claims to HUD/FHA; making false entries in reports to GNMA; making false statements to GNMA; and wire fraud. Prior to trial, one count of making false claims to HUD/FHA and the wire fraud count were dismissed. A jury convicted Appellants on each of the remaining Counts in the Indictment. Pursuant to the United States Sentencing Guidelines (the "Guidelines"), the district court sentenced Appellants to serve eighty-seven months of imprisonment, to be followed by three years of supervised release. In addition, the district court ordered Appellants to make restitution to HUD/FHA and GNMA in the amount of one million dollars.

In this Court, Appellants challenge both their convictions and sentences. More specifically, Appellants raise the following issues: (1) whether the search warrant executed by the government of LLFC's premises was a general warrant in violation of the Fourth Amendment of the United States Constitution; (2) whether there was sufficient evidence to find Appellants guilty of false claims; (3) whether there was sufficient evidence to find Appellants guilty of false entries or false statements; (4) whether there was sufficient evidence to demonstrate that there was a knowing and willing agreement between Appellants to commit a crime; (5) whether the district court erred in admitting evidence of a settlement agreement between HUD/FHA and LLFC; (6) whether the district court erred in permitting the government to inquire as to Appellants' reported taxable income; (7) whether the district court incorrectly calculated loss under the Guidelines; (8) whether the district court improperly refused to depart downward from Appellant Laws's sentencing computation under the Guidelines; (9) whether the district court erred by enhancing Appellants' sentences for obstruction of justice; (10) whether the district court incorrectly calculated Appellant Laws's criminal history category under the Guidelines; and (11) whether the district court improperly refused to allow investigation of alleged jury misconduct. The Court considers each of these issues below.

II. DISCUSSION

The issues raised on appeal in this case generally fall into three categories. First, Appellants challenge the sufficiency of the evidence leading to their convictions. Next, Appellants assert that the district court erred in making several material evidentiary rulings. Finally, Appellants raise various challenges to the post-trial rulings made in the court below. We consider these categories in turn.

A. Sufficiency of the Evidence

In considering claims for sufficiency of the evidence to support a conviction, this Court, while reviewing the record in the light most favorable to the prosecution, should grant relief only if it is found that upon the record evidence adduced at trial, no rational trier of fact could have found proof of guilt beyond a reasonable doubt. See Jackson v. Virginia, 443 U.S. 307, 324 (1979).

1. False Claims Convictions

On appeal, Appellants argue that the evidence presented at trial was insufficient to support their convictions for making, or causing to be made, false HUD/FHA loan insurance claims under 18 U.S.C. § 287. Appellants contend that the false claims counts were based upon submission of either a Verification of Employment form ("VOE") or a Verification of Deposit form ("VOD"), neither of which satisfies the materiality requirement present in the false claims statute. Thus, Appellants argue that these forms, even if false, did not render the claims "false" within the meaning of the statute because the required element of materiality remains unsatisfied.

This Circuit first addressed the particular issue of whether materiality is an element of a false claims offense in United States v. Nash, 175 F.3d 429, 433-34 (6th Cir. 1999). As in this case, the appellant in Nash argued that materiality is an element of this offense, and that because the government failed to prove that his statements were material, no rational trier of fact could find him guilty beyond a reasonable doubt of making false statements. Id. at 433.

In determining whether materiality was an element of the false claims statute in Nash, this Court first looked to the plain language of 18 U.S.C. § 287. That language provides:

Whoever makes or presents to any person or officer in the civil, military, or naval service of the United States, or to any department or agency thereof, any claim upon or against the United States, or any department or agency thereof, knowing such claim to be false, fictitious, or fraudulent, shall be imprisoned not more than five years and shall be subject to a fine in the amount provided in this title.

Id. Based upon that section, this Court noted that the plain language neither mentions materiality nor in any way implies that the claim must be material. Nash, 175 F.3d at 434. Furthermore, we recognized that: (1) reading materiality into the statute would make surplusage of Congress's explicit use of the term in other statutes; (2) the legislative history of §287 does not indicate that Congress intended to make materiality a necessary element of the statute; and (3) the requirement of materiality "would set up an incongruous 'heads I win, tails you lose' dichotomy." Id. This being the case, we made clear inNash that the Sixth Circuit joined the Second, Fifth, Ninth, and Tenth Circuits in finding that materiality is not an element of 18 U.S.C. § 287. Id. On this basis alone, we find Appellants' argument concerning insufficiency of the evidence as to the false claims convictions to be entirely without merit. Under the law of this Circuit, materiality is not an element of an offense arising under 18 U.S.C. § 287.

Moreover, even if materiality were to be considered an element of this offense, the evidence was still sufficient to support Appellants' convictions under 18 U.S.C. § 287. That is, in light of the fact that the trial in the instant case took place pre-Nash, the jury was charged that materiality was required. 1 The jury found that the false VOEs and VODs were, in fact, material to HUD/FHA's decision concerning whether to pay particular claims upon default. The record reveals that claims manager James Gibson testified at trial that the VOEs and VODs for the relevant claims were fraudulent. More specifically, Mr. Gibson explained that he, Appellants, or other LLFC employees forged the documents to make the loan files acceptable to HUD/FHA for payment on the loan insurance claims. J.A. at 1711-56. Furthermore, Allen Stailey, a marketing and outreach specialist for HUD, testified that because the program is primarily based on the creditworthiness of the borrower, it is critical that the lenders follow procedures and that they are truthful in the verification of employment and deposit information so that HUD/FHA can determine whether to pay on a particular claim. J.A. at 1779. Based upon this...

To continue reading

Request your trial
98 cases
  • Basham v. United States
    • United States
    • U.S. District Court — District of South Carolina
    • June 5, 2013
    ... ... E.g., United States v. Logan, 250 F.3d 350, 38081 (6th Cir.2001) (Rule prohibits post-verdict interrogation about internal jury influences, including premature deliberations); ... ...
  • Lang v. Bobby
    • United States
    • U.S. District Court — Northern District of Ohio
    • March 27, 2015
    ... ... Logan , 250 F.3d 350, 378 (6th Cir. 2001) superseded by rule on other grounds as recognized in McAuliffe v. United States , 514 F. App'x 542, 549 (6th ... ...
  • U.S. v. Saybolt
    • United States
    • U.S. Court of Appeals — Third Circuit
    • August 18, 2009
    ... ... See United States v. Logan, 250 F.3d 350, 358 (6th Cir. 2001) ... 3. The Appellants argue that McNally v. United States, 483 U.S. 350, 107 S.Ct. 2875, 97 L.Ed.2d 292 ... ...
  • Maldonado v. US
    • United States
    • U.S. District Court — Northern District of West Virginia
    • January 15, 2010
    ... ... Cruz-Alcala, 338 F.3d 1194, 1196-98 (10th Cir.2003); United States v. Logan, 250 F.3d 350, 377 (6th Cir.2001); United States v. Allen, 153 F.3d 1037, 1040-41 (9th Cir.1998); United States v. Morrow, 177 F.3d 272, 305-06 ... ...
  • Request a trial to view additional results
25 books & journal articles
  • Health care fraud.
    • United States
    • American Criminal Law Review Vol. 47 No. 2, March 2010
    • March 22, 2010
    ...citations omitted). (323.) Some circuits have held that materiality is not an element of [section] 287. See United States v. Logan, 250 F.3d 350, 358 (6th Cir. 2001) (considering plain language and legislative history); United States v. Harvard, 103 F.3d 412, 419 (5th Cir. 1997) ("Had Congr......
  • Obstruction of justice.
    • United States
    • American Criminal Law Review Vol. 49 No. 2, March 2012
    • March 22, 2012
    ...821 (5th Cir. 2001) (upholding sentence enhancement for obstruction of justice where defendant lied at trial); United States v. Logan, 250 F.3d 350, 374 (6th Cir. 2001) (upholding sentence enhancement for obstruction of justice where defendant testified falsely under (74.) Brogan v. United ......
  • Related civil litigation
    • United States
    • James Publishing Practical Law Books Criminal Defense Tools and Techniques
    • March 30, 2017
    ...States v. Bailey , 327 F.3d 1131, 1143-47 (10th Cir. 2003) (Rule 408 applies in both criminal and civil cases) United States v. Logan , 250 F.3d 350, 366-67 (6th Cir. 2001).] The 2006 Amendments to Rule 408 adopt the position that Rule 408 precludes the use in criminal cases of admissions m......
  • Is Vagueness Choking the White-collar Statute?
    • United States
    • University of Georgia School of Law Georgia Law Review (FC Access) No. 53-2, 2019
    • Invalid date
    ...967 F.2d 452, 455 (10th Cir. 1992) (noting that "materiality is not an element required by 18 U.S.C. § 287"), United States v. Logan, 250 F.3d 350, 358 (6th Cir. 2001) ("[M]ateriality is not an element of . . . 18 U.S.C. § 287"), United States v. Upton, 91 F.3d 677, 685 (5th Cir. 1996) (hol......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT