U.S. v. Cassiere

• Decision Date: 07 April 1993
• Docket Number: Nos. 92-2073,92-2074 and 92-2182,s. 92-2073
• Citation: 4 F.3d 1006
• Parties: 39 Fed. R. Evid. Serv. 539 UNITED STATES, Appellee, v. Joseph N. CASSIERE, Defendant, Appellant. UNITED STATES, Appellee, v. Janet M. PEZZULLO, Defendant, Appellant. UNITED STATES, Appellee, v. Janet DOLBER, Defendant, Appellant. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 1006

4 F.3d 1006

39 Fed. R. Evid. Serv. 539

UNITED STATES, Appellee, v. Joseph N. CASSIERE, Defendant, Appellant.

UNITED STATES, Appellee, v. Janet M. PEZZULLO, Defendant, Appellant.

UNITED STATES, Appellee, v. Janet DOLBER, Defendant, Appellant.

Nos. 92-2073, 92-2074 and 92-2182.

United States Court of Appeals First Circuit.

Heard April 7, 1993.

Decided Sept. 16, 1993.

Robert B. Mann with whom Mann & Mitchell, Providence, RI, was on brief, for defendant, appellant Joseph Cassiere.

John A. MacFadyen, Providence, RI, for appellant Janet M. Pezzullo.

Kenneth J. Fishman with whom Peter Charles Horstmann, Susan J. Naughton and Bailey, Fishman & Leonard, Boston, MA, were on brief, for defendant, appellant Janet Dolber.

Margaret R. Hinkle, Sp. Asst. U.S. Atty., with whom A. John Pappalardo, U.S. Atty., Boston, MA, was on brief, for appellee.

Before SELYA, Circuit Judge, FRIEDMAN, ^* Senior Circuit Judge, and CYR, Circuit Judge.

FRIEDMAN, Senior Circuit Judge.

In these consolidated appeals the three defendants challenge their convictions of wire fraud and conspiracy to commit that offense on various grounds. The fraud involved an intricate and sophisticated scheme involving a technique known as a "land flip," under which real property is purchased for a low price, immediately resold at a much higher price to a straw or fictitious buyer, and the higher resale price is used as the basis for obtaining a mortgage loan that finances the entire transaction. One of the defendants also challenges her sentence. We affirm.

I.

A jury in the United States District Court for the District of Massachusetts convicted the defendants Cassiere and Pezzullo of fifteen counts of wire fraud and aiding and abetting wire fraud, and the defendant Dolber of thirteen counts of that crime (it acquitted her on one count), in violation of 18 U.S.C. Sec. 1343 (1988), and all three defendants of one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. Sec. 371 (1988). The district court sentenced Cassiere to 46 months imprisonment, followed by five years of supervised release, Pezzullo to 24 months imprisonment, followed by three years of supervised release, and Dolber to 39 months imprisonment, followed by three years of supervised release. Each defendant also was ordered to make restitution.

The substantive crimes for which the three defendants were convicted involved their participation in a scheme to defraud six mortgage lenders through a series of fifteen land flips, in all but one of which the two sales of the property were closed on the same day, often the second immediately following the first. Cassiere was the senior partner of Pezzullo in a two-person law firm that handled all the closings in the land flip transactions. Dolber was a real estate appraiser, whose appraisals of the properties were relied on by the mortgage lenders in making their loans.

Rate Line was a mortgage broker which, for a fee, took loan applications and referred them to lenders. Thomas DeNunzio owned Rate Line, and he and his employee loan broker, Glenn Monteiro, controlled Rate Line. DeNunzio and Monteiro planned and organized the fraudulent scheme, under which one of three straw corporations they controlled (Half & Half, Inc., ZBA Corp. and Chantel, Inc.) purchased foreclosed property for cash and resold the property on the same day to straw buyers at a much higher price. Mortgage loan funds received from the lending institutions were used to pay the corporation controlled by Rate Line and that corporation then paid for the first sale. The balance then went to DeNunzio and Monteiro, channeled through Rate Line.

DeNunzio and Monteiro pleaded guilty to another indictment and they both testified for the government in the present case. They described in detail how the scheme operated, the roles Cassiere, Pezzullo, and Dolber played in the scheme, and DeNunzio's and Monteiro's relationship with the three defendants.

An example of the operation of the scheme was as follows:

On April 12, 1991, Half & Half Corporation closed the purchase of property at 104 Menlo Street for $102,900. Moments later Half & Half closed the sale of the property to Fred Strangis, one of the dummy purchasers, for $228,000. Dolber previously had appraised the property at $228,000. Based on this appraisal and Strangis' certification that he would reside at 104 Menlo Street, Rate Line gave Strangis a mortgage loan of $182,400, which was eighty percent of the final sale price. Rate Line, in turn, sold Strangis' mortgage to CenTrust Mortgage Corporation. Neither Half and Half nor Strangis brought a down payment to the double closing. Instead, Monteiro provided a cashier's check for the twenty percent down payment ($45,600) the lender required the purchaser to make.

Cassiere and Pezzullo recorded both deeds and disbursed the funds they had received from the lender. They paid the original owner the $102,900 owed by Half & Half, they paid the closing costs, including attorneys' fees due them, and gave the balance to Monteiro and DeNunzio.

Cassiere, assisted by Pezzullo, was the closing attorney in each of the double closings. They represented the interests of the lending institution that was providing, through Rate Line, the mortgage loan to the final buyer. The closing attorney serves as "the eyes and ears" of the lending institution at the closing. The lenders expected the attorneys to alert them to anything unusual. Neither Cassiere nor Pezzullo notified any of the six lenders that their law firm was closing twice on the same property on the same day at substantially different prices. Dolber was the real estate appraiser in thirteen of the flips. The lending institutions relied on her appraisals to determine the value of the properties upon which they were making loans. The appraisal alerts the lenders to the property's condition and allows them to determine their ability to recoup their investment should the borrower default on the mortgage.

The lenders generally made loans of the lesser of eighty percent of the sale price or fair market value of the property. The six lenders made mortgage loans totalling more than $2.6 million on the properties that were the subject of the land flips involved in this case.

Ten of the thirteen appraisals Dolber made of the properties involved in the land flips were for an amount identical to the final sale price, which ranged from $160,000 to $231,000. (The original sale prices of those properties ranged from $42,000 to $132,000.) Two of the three other appraisals were for $1,000 higher than the second sale price; the third was for $2,000 higher.

II. Sufficiency of the Evidence

Pezzullo and Dolber, but not Cassiere, challenge the sufficiency of the evidence to support their convictions.

In reviewing the record in such a challenge, we "look[ ] to the evidence as a whole, including reasonable inferences drawn from it, in the light most favorable to the verdict, to determine whether a rational trier of fact could have found the defendant guilty beyond a reasonable doubt." United States v. Plummer, 964 F.2d 1251, 1254 (1st Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 350, 121 L.Ed.2d 265 (1992). "We do not weigh witness credibility, but resolve all credibility issues in favor of the verdict. The evidence may be entirely circumstantial and need not exclude every reasonable hypothesis of innocence; that is, the factfinder may decide among reasonable interpretations of the evidence." United States v. Batista-Polanco, 927 F.2d 14, 17 (1st Cir.1991) (citations omitted). Thus viewed, the record supports the convictions.

A. The Wire Fraud Convictions

To prove wire fraud the government must show: 1) a scheme to defraud by means of false pretenses, 2) the defendant's knowing and willful participation in the scheme with the intent to defraud, and 3) the use of interstate wire communications in furtherance of the scheme. United States v. Serrano, 870 F.2d 1, 6 (1st Cir.1989). To support convictions of aiding and abetting wire fraud, the government must prove that the "defendant associated [herself] with the underlying venture, participated in it as something [she] wished to bring about, and sought by [her] actions to make it succeed." United States v. Clifford, 979 F.2d 896, 899 (1st Cir.1992) (citing Nye & Nissen v. United States, 336 U.S. 613, 619, 69 S.Ct. 766, 769, 93 L.Ed. 919 (1949)).

Neither Pezzullo nor Dolber challenges the existence of a scheme to defraud. The scheme is shown by DeNunzio's and Monteiro's lengthy testimony about the details of their plan to trick the lending institutions into making risky loans that were warranted by neither the final purchaser's ability to repay the loan nor the particular property's true market value. Pezzullo and Dolber also do not challenge the use of interstate wire communications to effectuate the plan, as demonstrated at trial by testimonial and physical evidence of the use of fax machines and telephone conversations throughout the scheme.

Pezzullo and Dolber, however, claim that they were unaware of the scheme and therefore were not knowing and willful participants in it. We hold, however, that the jury reasonably could have concluded from the voluminous evidence at trial that both Pezzullo and Dolber knowingly participated in the scheme with intent to defraud, and also aided and abetted the fraud.

1. Pezzullo

Pezzullo participated in all the double closings, almost all of which took place at the office of the Cassiere & Pezzullo law firm. Fred Strangis testified that Pezzullo's role was to "prepare all the papers and as you're signing them, would bring them to you, try to get you to read them, try to explain them to you." Frank Andrews and Dennis Griffin, two other straw final buyers, and Marlissa Pina, representing one of the controlled corporate purchasers, corroborated Strangis' testimony.

Because the lending institutions give higher mortgages to individuals who live in...