635 F.3d 704 (5th Cir. 2011), 09-20491, United States v. Curtis
|Citation:||635 F.3d 704|
|Opinion Judge:||PATRICK E. HIGGINBOTHAM, Circuit Judge:|
|Party Name:||UNITED STATES of America, Plaintiff-Appellee, v. Craig CURTIS, Defendant-Appellant.|
|Attorney:||Jeffery Alan Babcock (argued) and James Lee Turner, Asst. U.S. Attys., Houston, TX, for U.S. Nancy C. Harrison (argued), (Court-Appointed), Nancy Harrison & Associates, Houston, TX, for Curtis.|
|Judge Panel:||Before HIGGINBOTHAM, SMITH and ELROD, Circuit Judges.|
|Case Date:||March 11, 2011|
|Court:||United States Courts of Appeals, Court of Appeals for the Fifth Circuit|
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Appeal from the United States District Court for the Southern District of Texas.
A jury convicted the defendant Craig Curtis of one count of conspiracy to commit wire fraud, three counts of wire fraud, and two counts of aggravated identity theft. The district court sentenced him to 144 months in prison. Curtis alleges five issues on appeal. Finding none to be well-taken, we affirm.
Curtis's convictions arise out of his participation in a criminal conspiracy to commit mortgage fraud. We recite the factual details of that conspiracy in the light most favorable to the jury's verdict.1 The essence of the conspiracy was an agreement to consummate a series of fraudulent real-estate transactions— specifically, purchases of condominiums and townhouses in the midtown area of Houston, Texas. Curtis and others conspired to obtain mortgage loans in amounts that substantially exceeded the fair market values of the properties the loans were used to purchase. For each property they purchased, the conspirators would use a portion of the proceeds of the loan to pay off the balance of the construction loan or other first-lien mortgage that was open on the property at the time the conspiracy purchased it. The rest of the loan proceeds— which would be disbursed to Curtis at each closing— represented the conspiracy's profits. Curtis would distribute the profits from each purchase among each of the coconspirators who had participated in the transaction.
The Government put on evidence at trial that the conspiracy purchased at least ten properties. However, the Government prosecuted Curtis for completed wire fraud only as to three of those transactions: purchases of properties located at 2105 Crocker, 704 Welch, and 4420 Austin (all in Houston). The process by which the conspiracy purchased these three properties proceeded in six steps.
First, Curtis obtained control of each property. He did so either through a consulting agreement or a flip transaction. Curtis obtained control of 2105 Crocker and 704 Welch through a consulting agreement he entered into with a builder. The agreement authorized him to market the properties and required him to pay a fixed price to the builder ($410,000 for 2105 Crocker and $415,000 for 704 Welch) upon the sale of the properties. If Curtis was able to negotiate a sale price that exceeded those figures, the consulting agreement allowed him to keep the difference as a fee for his services. Curtis acquired 4420 Austin through a flip transaction. Curtis purchased 4420 Austin for $295,000 from a bank that had foreclosed on it. The very same day he purchased it, he turned around and sold it to one of the straw buyers for $445,000. Curtis obtained payment from the straw buyer before he was required to make payment to the bank, so he was able to use the money he got from the sale to the straw buyer to fund his purchase from the bank.
Second, Curtis located a " straw buyer," the person whose name would be listed as the purchaser on the loan documents. Curtis recruited two of his friends, Melvin Holloway and Trevor Cherry, to serve as the straw buyers for 2105 Crocker and 704 Welch, respectively. For the purchase of 4420 Austin, Curtis used two intermediaries to locate a straw buyer. The intermediaries recruited a woman named Chi Van Nguyen to serve as that property's straw
buyer. Because the straw buyers were purchasing the properties with 100 percent financing, they had to have good credit scores (700 or above). Van Nguyen legitimately had a credit score above 700, so she purchased 4420 Austin using her own name and Social Security Number (" SSN" ). Holloway and Cherry had poor credit scores, so they enlisted the assistance of a woman named Carlin Joubert, an identity thief who ran what she called a credit-repair business. For a substantial fee, Joubert would take an SSN that had been assigned to a minor and build a phony credit history showing that the SSN was associated with the straw buyer's name and that the straw buyer had a good credit score. Holloway chose to attach his own name to the SSN assigned to a twelve-year-old boy who lived in Arizona, while Cherry attached the name Deondra LeBlanc to the SSN assigned to his nine-year-old son.
Third, the conspiracy secured an appraisal stating an inflated value for the property. Obtaining inflated appraisal reports was a critical leg of the conspiracy, as the conspiracy was only profitable to the extent that it brought in loan proceeds in excess of the properties' fair market values.2 The Government offered little evidence about how the conspiracy obtained the inflated appraisal reports, but its evidence left no doubt that the values stated in the appraisal reports were in fact inflated. As to the values of the properties located at 2105 Crocker and 704 Welch, the government offered the testimony of Joel Rankin, the Houston real-estate agent who resold both properties on behalf of the lenders who obtained them from the straw buyers in foreclosure. Rankin testified that, based on his twenty-three years of experience as a Houston real-estate agent selling approximately 200 properties a year, it was impossible that either property had ever been worth what the straw buyers paid for them. As to the value of 4420 Austin, the government offered documents showing that Curtis paid $295,000 for the property in an arms-length transaction on the same day that Chi Van Nguyen purchased the property from Curtis for $445,000. Thomas Reardon, an assistant vice president at the lending institution that funded the loan with which Van Nguyen purchased the property from Curtis, testified that the fact that Curtis had been able to purchase the property for $295,000 on the open market established it was not worth $445,000.
Fourth, the straw buyer— with assistance from other participants in the conspiracy— completed a mortgage-loan application. A standard-form mortgage-loan application asks the applicant to provide, inter alia, his name, his SSN, the name of his employer, his annual income, and the amounts of any funds he has on deposit in accounts at banks or credit unions. Each of the straw buyers lied in answering one or more of these questions. Melvin Holloway used someone else's SSN, overstated his annual income, and claimed he had funds on deposit at a credit union where he did not have an account. Trevor Cherry used a fabricated name, used someone else's SSN, stated that he was employed by an employer whom he did not work for, and overstated his annual income. Chi Van Nguyen stated that she was employed by an employer whom she did not work for, overstated her annual income, and claimed that funds on deposit with a bank
belonged to her when in fact they belonged to someone else.
Fifth, the straw buyer attended a closing and completed the purchase. At each of the closings the straw buyers signed the same set of standard-form documents, including an occupancy affidavit (in which the buyer swears that she intends to use the property she is purchasing as her primary residence) and a promissory note (in which the buyer swears that he intends to repay the principal balance of and interest on the mortgage loan). The evidence at trial established that at the time they signed these documents, Holloway, Cherry, and Van Nguyen neither intended to occupy the properties they were purchasing as their primary residences nor intended to repay the loans they were taking out. Settlement statements from the closings establish that Curtis received a payment of $197,853.05 upon the sale of 2105 Crocker to Melvin Holloway; a payment of $110,918 upon the sale of 704 Welch to Trevor Cherry; and a payment of $135,686.20 upon the sale of 4420 Austin to Chi Van Nguyen.
Finally, after each transaction was complete, Curtis disbursed portions of the proceeds he received at the closing to his fellow coconspirators. After Holloway's purchase of 2105 Crocker closed, Curtis made payments to Holloway and the mortgage broker who handled the transaction (who was also a defendant in this case and pled guilty to conspiring to defraud lenders). Curtis paid Cherry for his purchase of 704 Welch, and after the sale of 4420 Austin he paid Van Nguyen and the two men who recruited her to be a straw buyer.
The jury found Curtis guilty on six counts: one count of conspiracy to commit wire fraud,3 three counts of wire fraud,4 and two counts of aggravated identity theft.5 On appeal, Curtis raises five challenges to the proceedings below.6 He contends that (1) the district court should have granted his motion to suppress certain text messages recovered from his cell phone; (2) his right to be present at all phases of the trial was violated because he was not in the courtroom when his attorney exercised his peremptory challenges; (3) the district court abused its discretion by admitting into evidence certain text messages exchanged between two of Curtis's coconspirators; (4) the evidence is insufficient to sustain his convictions; and (5) the district court erred at sentencing when it applied the organizer/leader sentencing enhancement under § 3B1.1(a) of the United States Sentencing Guidelines. Each of these...
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