613 F.3d 1273 (10th Cir. 2010), 09-1031, United States v. Mullins
|Docket Nº:||09-1031, 09-1091.|
|Citation:||613 F.3d 1273|
|Opinion Judge:||GORSUCH, Circuit Judge.|
|Party Name:||UNITED STATES of America, Plaintiff-Appellee, v. Ladonna MULLINS and Linda Edwards, Defendants-Appellants.|
|Attorney:||Scott T. Poland, Lakewood, CO, for Defendant-Appellant, LaDonna Mullins. Robert T. Fishman, of Ridley, McGreevy & Weisz, PC, Denver, CO, for Defendant-Appellant, Linda Edwards. Martha A. Paluch, Assistant United States Attorney (David M. Gaouette, United States Attorney; Patricia W. Davies, Assis...|
|Judge Panel:||Before MURPHY, Circuit Judge, McWILLIAMS, Senior Circuit Judge, and GORSUCH, Circuit Judge.|
|Case Date:||July 29, 2010|
|Court:||United States Courts of Appeals, Court of Appeals for the Tenth Circuit|
[Copyrighted Material Omitted]
LaDonna Mullins and Linda Edwards both owned real estate businesses in the Denver metro area. Both also entered into a scheme to defraud the U.S. Department of Housing and Urban Development (" HUD" ) by using false information to obtain loans insured by the Federal Housing Administration (" FHA" ). For this, Ms. Mullins and Ms. Edwards were indicted for and convicted of wire fraud, among other things. Both now challenge their convictions, and Ms. Edwards her sentence, on multiple grounds, including on the grounds that certain counts were time-barred; that the interstate wires underlying the wire fraud charges weren't reasonably foreseeable; that the government's investigatory methods violated the Sixth Amendment; and that, in sentencing Ms. Edwards, the district court erred in calculating the loss her fraud caused. In the end, however, we discern no reversible error in the district court's proceedings and affirm the judgments against both defendants.
Though complex in its detail, the basic thrust of the fraudulent scheme at issue in this case is fairly straightforward. A prospective home buyer would employ either Ms. Mullins or Ms. Edwards as his or her real estate agent. If it turned out the buyer had poor credit that might impede obtaining a mortgage loan, the agent would refer the buyer to Warren Williams or Rod Wesson to " clean up" the buyer's credit so the buyer could qualify for an FHA-insured loan, which is generally easier to obtain than a standard loan. Other times, Mr. Williams or Mr. Wesson would find prospective buyers and refer them to one of the real estate agents to find a property for them.
Either way, once all the players were in place, Messrs. Williams and Wesson, appropriately known as " document makers," would supply the buyer with false pay stubs, W-2 forms, Social Security numbers, rent verifications, and gift letters to help support the buyer's loan application. To " back up" the documents, Messrs. Williams and Wesson listed one of several fake companies they'd established-including " W & W Enterprises," " Comp. Systems," and " Neighborstat" -as the buyer's employer. The telephone numbers provided for those " employers" rang to the document makers, where Mr. Williams or Mr. Wesson would purport to verify the fraudulent employment information on the documents they'd created.
Once a buyer qualified for an FHA-insured loan and bought a property using false credit information, the document maker and real estate agent on that transaction would divide the spoils. The closing real estate agent would kick back part of her commission to the document maker who prepared the buyer's file, while the document maker would pay the referring agent a cut of the fee he charged the buyer.
Authorities cottoned on to this scheme in 2001, when a HUD review of mortgage companies turned up a suspicious recurrence of the same three companies-W & W Enterprises, Comp. Systems, and Neighborstat-listed as employers on a number of applications for FHA-insured loans. Further investigation revealed that the documents supporting the loan applications in question contained false information
and Social Security numbers that didn't match borrowers' names.
In February 2004, a grand jury issued a 48-count indictment accusing twenty-seven defendants, Ms. Edwards among them, of false statements, the use of false Social Security numbers, and conspiracy. Later, however, the government sought and won the dismissal of its own indictment, for the stated purpose of investigating further suspected criminal conduct by Ms. Edwards and others, and then reindicting them on more comprehensive charges. As part of its investigation, and with the permission of the district court, the government used Mr. Williams, one of Ms. Edwards's erstwhile co-defendants, as an informant. At the government's direction, Mr. Williams initiated and recorded a number of telephone calls and meetings with Ms. Edwards. Those conversations primarily concerned two property sales Ms. Edwards was arranging, and for which she wanted Mr. Williams to prepare false documents. Those transactions, together with other conduct uncovered during the government's investigation as well as the counts alleged in the original indictment, were charged in a superseding indictment brought against Ms. Edwards in February 2005. That indictment also added Ms. Mullins as a defendant.
Eventually, after two further amendments, the currently operative indictment was issued in March 2007. It accused Ms. Mullins of five counts of wire fraud and aiding and abetting. 18 U.S.C. §§ 1343 & 2. Meanwhile, Ms. Edwards, who was involved in significantly more fraudulent loan transactions than Ms. Mullins, was charged with seven counts of wire fraud, six counts of making false statements to HUD, 18 U.S.C. § 1001(a)(3), and two counts of use of a false Social Security number, 42 U.S.C. § 408(a)(7)(B); each count included an aiding and abetting charge.1 In addition, the indictment called for forfeiture of any proceeds either defendant derived from her crimes.
Ms. Mullins and Ms. Edwards were tried together in a thirteen-day jury trial. In the end, Ms. Mullins was convicted of four counts of wire fraud and acquitted of the fifth. The district court sentenced her to three years' probation and ordered her to pay $66,459.33 in restitution. The court also determined that Ms. Mullins had derived $44,292.00 in proceeds from her fraud and declared that amount subject to forfeiture. Ms. Edwards was acquitted of one count of wire fraud and one count of false statements, but convicted of all other counts against her. The court sentenced Ms. Edwards to forty-one months' imprisonment, ordered her to pay $646,521.87 in restitution, and entered a forfeiture judgment of $139,854.96.
Ms. Mullins now appeals her conviction; Ms. Edwards appeals her conviction, sentence, and forfeiture. We address their arguments in turn, beginning with Ms. Mullins.
Ms. Mullins offers four arguments on appeal which, she says, warrant the reversal of her convictions. First, she argues that three of the charges on which she was convicted were time-barred because the applicable statute of limitations expired before she was indicted. Second, she contends that her wire fraud convictions cannot stand because there wasn't sufficient evidence for the jury to find that she caused interstate wire transmissions.
Third, she urges us to hold that the district court plainly erred in limiting her cross-examination of a government witness regarding the benefits he expected to receive in exchange for his testimony. Fourth, and finally, Ms. Mullins argues that the district court erred in refusing to give her proposed instruction charging the jury that it could find her guilty of a lesser included offense. On examination, we find none availing.
Ms. Mullins's first challenge to her conviction concerns the applicable statute of limitations for the wire fraud counts against her. She argues that, for three of the four counts on which she was convicted, the limitations period expired before she was indicted and thus barred her prosecution. We disagree.
In general, a five-year statute of limitations applies to non-capital federal crimes. 18 U.S.C. § 3282(a). This default applies to wire fraud charges, but 18 U.S.C. § 3293(2) carves out an important exception: " if the offense affects a financial institution," the government has ten years to indict a defendant before the prosecution becomes time-barred. 18 U.S.C. § 3293(2). The three counts Ms. Mullins challenges as brought outside the statute of limitations involve wire transmissions sent in 1999 but not charged until 2007, as part of the third superseding indictment. Accordingly, the viability of Ms. Mullins's convictions on those counts depends on whether the evidence adduced at her trial supported a finding that those offenses " affect[ed] a financial institution."
First things first: what does it mean to " affect[ ] a financial institution" ? The district court took this statutory language to mean that " the scheme to defraud exposes a financial institution to a new or increased risk of loss or causes the financial institution to suffer an actual loss." Mullins R. Vol. V at 361. Ms. Mullins, meanwhile, would have us read § 3293(2)'s ten-year limitations period to apply only when the financial institution suffers an actual financial loss attributable to the fraud. We think the district court has the better interpretation. While Congress certainly could have extended the limitations period only when wire fraud " causes a loss" to a financial institution, it chose instead to use the considerably broader term " affects." And that means simply to " make a material impression on; to act upon, influence, move, touch, or have an effect on," I Oxford English Dictionary 211 (2d ed.1989), or, perhaps...
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