U.S. v. Caldwell

• Decision Date: 30 March 2009
• Docket Number: No. 07-6254.,07-6254.
• Citation: 560 F.3d 1214
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Gayle L. CALDWELL, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

560 F.3d 1214

UNITED STATES of America, Plaintiff-Appellee, v. Gayle L. CALDWELL, Defendant-Appellant.

No. 07-6254.

United States Court of Appeals, Tenth Circuit.

March 30, 2009.

Alleen Castellani VanBebber, McDowell, Rice, Smith & Buchanan, P.C., Kansas City, MO, for Defendant-Appellant.

Susan Dickerson Cox, Assistant United States Attorney, (John C. Richter, United States Attorney, with her on the brief), Oklahoma City, OK, for Plaintiff-Appellee.

Before HARTZ, Circuit Judge, McWILLIAMS, Senior Circuit Judge, and McCONNELL, Circuit Judge.

HARTZ, Circuit Judge.

Gayle Caldwell appeals her convictions on charges of wire fraud, see 18 U.S.C. § 1343, and money laundering, see id. § 1956(a)(1)(B)(i), arising from her role in a fraudulent scheme that involved securing loans for homes at artificially inflated prices. Mrs. Caldwell contends that (1) there was insufficient evidence to convict her of either offense; (2) the district court erroneously admitted evidence of mortgage loans not charged in the indictment; (3) her trial was improperly joined with that of her husband and two other codefendants; and (4) the district court improperly denied her motion to sever her trial from that of her codefendants. We have jurisdiction under 28 U.S.C. § 1291. We hold that there was insufficient evidence to sustain her money-laundering conviction but reject her other contentions.

I. BACKGROUND

Mrs. Caldwell and six codefendants were charged in a 14-count indictment in the United States District Court for the Western District of Oklahoma. The charges arose out of fraudulently obtained mortgage loans for six homes in the Oak Tree subdivision in Edmond, Oklahoma, between 2003 and 2005. Mrs. Caldwell was charged with respect to one of the loans.

The fraudulent scheme enabled persons with weak credit to obtain loans that paid the entire purchase price of the homes and gave them money back besides. The mortgage lenders were defrauded in at least two respects. First, the purchase agreement provided to the lender inflated the value of the home. Rather than stating the seller's asking price, it added an additional sum (the Excess Amount) to that price and then, in an addendum not disclosed to the lender, provided that the Excess Amount would not go to the seller but would be used to pay a contractor for repairs or remodeling of the home. The named contractor, however, was a sham, merely a bank account used to funnel money to the purchaser and other participants in the scheme. Second, the lenders were told that the purchasers had used their own funds to make the down payments on the homes. But the purchaser in fact borrowed the down payment from participants in the scheme and paid them back out of the Excess Amount. At trial, representatives of the lenders said that each loan application would have been rejected if the lender had known of either the addendum or the down-payment loan.

Mrs. Caldwell and her husband, Charles E. Caldwell Jr., had full-time jobs as pharmaceutical representatives. Although Mrs. Caldwell had obtained a real-estate license some 15 years earlier, she had never worked in that field and got involved in the charged scheme through her husband. In 2002 he began to supplement his income as a part-time mortgage broker. At first he worked for Skyline Mortgage (which had no involvement in the scheme). He then moved to United Lending, where he participated in three fraudulent loan transactions for which he was convicted. See United States v. Charles Caldwell, No. 07-6251, 2009 WL 806578, 560 F.3d 1202 (10th Cir.2009). United Lending was owned by Linda Jew and managed by her husband Anthony, a central figure in the fraudulent loans.

About 15 months after Mr. Caldwell began working for United Lending, Mrs. Caldwell purchased a company named Access Marketing Services, Inc. from Mr. and Mrs. Jew for $500. The sole business of the company was lending money to home purchasers to make their down payments.

Mrs. Caldwell's convictions arose out of one transaction in January 2005, a mortgage loan to Fenella Balang for the purchase of 1709 Irvine Drive. The property had been listed at $575,000 before the seller reduced the asking price to $550,000. Yet the purchase agreement stated a sale price of $800,000 and included an addendum requiring the seller to make payments at closing totaling $220,000. The seller was led to believe that the money was for repairs to the home, although the addendum did not name a specific (sham) construction company. As was the case with the other transactions charged in the scheme, the addendum was not disclosed to the lender.

Balang borrowed her $120,000 down payment, yet indicated on her loan application that no part of the down payment had been borrowed. The loan officer listed on her application was Mr. Caldwell. The down-payment loan was repaid out of the mortgage-loan proceeds, which also were used to pay Balang $92,000.

There was evidence at trial that Mrs. Caldwell was involved in two aspects of the transaction. First, she testified that when Mr. Jew had asked her whether her company, Access Marketing, could lend the $120,000 for Balang's down payment, she referred him to ProSpect Marketing Services, which ultimately supplied the down payment. Second, at closing, which Mr. Caldwell attended, $10,000 of the loan proceeds went to Access Marketing. An Access Marketing invoice for the $10,000 was provided to the title company that handled the closing, although Mrs. Caldwell denied preparing the invoice and suggested that Mr. or Mrs. Jew must have been responsible for it. According to the closing statement, the $10,000 was for "marketing service to Access Marketing." Add. to Br. of Pl.-Aplee. (Gayle Caldwell) at 228. Mrs. Caldwell testified that the $10,000 was a referral fee because she had told Mr. Jew about ProSpect Marketing. Of the $10,000, Mrs. Caldwell disbursed $4,500 to her husband (the transaction that formed the basis of her money-laundering charge) and $3,500 to Mrs. Jew, apparently keeping the remaining $2,000 in Access Marketing's account. These payments were in addition to the mortgage brokerage fee to United Lending (of which Mr. Caldwell received 65%), which was listed on the closing statement.

Mrs. Caldwell's account of her involvement in the Balang transaction was contradicted by testimony from Mr. Jew. He denied that Mrs. Caldwell (or anyone else) had referred him to ProSpect Marketing. He testified that he spoke only with Mr. Caldwell, asking him if Access Marketing could lend $120,000 to Balang for her down payment, but that Mr. Caldwell had replied that the amount was too large. As for the $10,000 paid to Access Marketing at closing, he denied that he or his wife prepared the invoice and said that the involvement of Access Marketing was only to help the mortgage brokers (Mr. and Mrs. Jew and Mr. Caldwell) take money out of the transaction. He explained that "out of greed" they had decided to take another $10,000 from the loan proceeds and used Access Marketing to facilitate that action. R., Trial Tr. Vol. 10 at 1586.

To help prove Mrs. Caldwell's motive, intent, and knowledge of a common scheme and design, the government presented evidence of two uncharged mortgage-loan transactions in which she had been involved. The first transaction was the loan for the Caldwells' own home purchase, which occurred in August 2003, more than a year before the Balang loan. The Caldwells' loan presented many of the features of the fraudulent scheme. The seller listed the home at $320,000, but the purchase agreement, which was signed by the Caldwells and provided to the mortgage lender, set the price at $350,000. Also, the Caldwells borrowed $17,914.14 for their $19,255.59 down payment. Yet the loan application, which Mrs. Caldwell signed, represented that they had not borrowed funds to make their down payment. Although the purchase agreement did not include an addendum requiring the seller to pay for remodeling or repairs, the transaction was nevertheless conducted with the understanding that the seller would return $34,500 of the loan proceeds. From that $34,500 the Caldwells' down-payment loan was repaid and they received more than $12,000 to boot.

The other uncharged transaction was a mortgage loan to Decell Lewis in November 2004, two months before the Balang transaction. Mr. Caldwell was the loan officer. As with the charged transactions, the sale price had been inflated (from the listed price of $225,000 to $360,000 on the purchase agreement), an addendum to the purchase agreement required the seller to pay $97,000 at closing for repairs, and the purchaser borrowed money for the down payment. Access Marketing was the down-payment lender. This was Access Marketing's second loan since Mrs. Caldwell had acquired the company a month earlier. The down-payment loan to Lewis was $17,267.87, but at closing Access Marketing submitted to the title company handling the closing an invoice for a much larger sum, $113,155.07, as a "Marketing Service Fee." Add. to Br. of Pl.-Aplee. (Gayle Caldwell) at 292. Mrs. Caldwell testified that Mr. or Mrs. Jew, not she, prepared the invoice, an allegation denied by Mr. Jew. At closing Mr. Caldwell endorsed the $113,155.07 check for deposit in Access Marketing's account. Out of that sum, Mrs. Caldwell wrote a $59,000 check to Lewis, and $10,000 to Lewis's real-estate agent. She also wrote a $16,000 check to her husband, and a $5,000 check to herself, leaving $23,155.07 in the Access Marketing account.

II. DISCUSSION

We address the issues on appeal in the following order: (1) sufficiency of the evidence of wire fraud; (2) admissibility of evidence of the uncharged transactions; (3) Mrs. Caldwell's joinder with codefendants in the indictment; (4) failure to sever her trial from that of the codefendants; and (5) sufficiency of the evidence of money laundering.

A. Sufficiency of the Evidence of Wire Fraud

We review the evidence de novo to...