United States v. Jackson
| Decision Date | 03 June 2015 |
| Docket Number | 13–3523.,Nos. 13–2649,s. 13–2649 |
| Citation | 787 F.3d 1153 |
| Parties | UNITED STATES of America, Plaintiff–Appellee, v. Gwendolyn JACKSON and Latonja Spencer, Defendants–Appellants. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Jason A. Yonan, Attorney, Office of the United States Attorney, Chicago, IL, for Plaintiff–Appellee.
Thomas C. Brandstrader, Attorney, Law Office of Thomas C. Brandstrader, Chicago, IL, for Defendants–Appellants.
Before RIPPLE, KANNE, and TINDER, Circuit Judges.
Gwendolyn Jackson and Latonja Spencer were convicted in the United States District Court for the Northern District of Illinois on charges arising out of a scheme to defraud mortgage lenders. The district court sentenced Ms. Jackson to 112 months' imprisonment and Ms. Spencer to 36 months' imprisonment. Both defendants now appeal their respective convictions and sentences. For the reasons set forth in this opinion, we vacate Ms. Jackson's sentence and remand for resentencing. In all other respects, we affirm the judgments of the district court.
Ms. Jackson and Ms. Spencer participated in a scheme to defraud various Chicago-area mortgage lenders from approximately August 2004 to May 2008. Bobbie Brown Jr. was the scheme's leader. Brown arranged with home builders and other sellers of newly constructed residences to receive finder's fees or commissions for locating buyers to purchase their properties at inflated prices. Using various businesses that he operated, including Chicago Global Investments, Inc. (“Chicago Global”), Brown then located nominee buyers willing to purchase the properties. To obtain financing for the purchases, the nominees were referred to loan officers, including Ms. Spencer, who fraudulently qualified the buyers for loans through false statements in loan applications and other documents submitted to lenders. Once a purchase was finalized, Brown and his coconspirators kept the surplus proceeds of the sale—that is, the inflated amount above what the seller was seeking.
As president and co-owner of Chicago Global, Ms. Jackson recruited nominee buyers to participate in the scheme. She and others also provided, and caused to be provided, funds for the real estate deals and falsely represented the nominees as the source of those funds. Ms. Jackson's participation in the scheme resulted in losses to mortgage lenders of approximately $8,515,570.
For her part, Ms. Spencer participated in the scheme through her job as a loan officer at Oxford Financial. As part of the scheme, she assisted Brown's nominee buyers in obtaining funding for twelve different fraudulent real estate transactions. Specifically, Ms. Spencer knowingly provided false information, including falsely inflated income amounts and job histories, to lenders so that the nominees would qualify for mortgages. Ms. Spencer's participation in the scheme resulted in losses to mortgage lenders of approximately $3,091,050.
On June 3, 2008, a grand jury returned a twenty-six count indictment against Ms. Jackson, Ms. Spencer, and nineteen other individuals, alleging that the defendants knowingly devised and participated in a scheme to defraud financial institutions and mortgage lenders. Ms. Jackson was charged with two counts of wire fraud, in violation of 18 U.S.C. § 1343, and one count of mail fraud, in violation of 18 U.S.C. § 1341. Ms. Spencer was charged with two counts of bank fraud, in violation of 18 U.S.C. § 1344, and two counts of mail fraud, in violation of 18 U.S.C. § 1341.
Ms. Jackson and Ms. Spencer, along with four of their codefendants, were tried together in a two-week jury trial. In the end, both defendants were convicted on all counts charged in the indictment. The district court sentenced Ms. Jackson to 112 months' imprisonment on each of her three counts, to be served concurrently, and ordered her to pay $8,515,570 in restitution. As for Ms. Spencer, the court sentenced her to 36 months' imprisonment on each of her four counts, also to be served concurrently, and ordered her to pay $3,091,050 in restitution.1 Both defendants timely appealed.2
Ms. Jackson and Ms. Spencer each challenge one aspect of the guilt phase of their trial. First, Ms. Jackson contends that the district court erred by excluding evidence of Brown's physical violence toward her. Ms. Spencer contends that the district court abused its discretion by failing to sever her trial from that of her codefendants. Both defendants also submit that the district court erred in applying a two-level obstruction-of-justice enhancement when calculating their respective sentences. We first will review the contentions from the guilt phase of the trial. Then we will review the sentencing phase.
We begin with Ms. Jackson's contention that the district court erroneously excluded evidence that Brown, with whom she had a personal relationship, abused her. We review the district court's evidentiary rulings for abuse of discretion. United States v. Khan, 771 F.3d 367, 377 (7th Cir.2014).
At trial, Ms. Jackson sought to introduce a police report from November 12, 2007, detailing a domestic battery allegation that she had filed against Brown. The point of this evidence, according to Ms. Jackson, was to rebut testimony introduced by the Government that she and Brown were in a business relationship. As defense counsel explained, the police report was probative in this regard because “business partnerships and battery are opposites.”3
The district court refused to admit the report. In doing so, the court rejected Ms. Jackson's contention that battery and business relationships are uncommon, stating that defense counsel “would have to have some expert witness come in and testify” to that fact.4 Further, because the incident described in the report occurred approximately four months after the last real estate transaction in the case, the court determined it was irrelevant to Ms. Jackson's defense.
In response, defense counsel inquired whether Ms. Jackson could introduce evidence of Brown's abuse for a different purpose, namely, to corroborate her defense that she was unaware of Brown's fraudulent activities because she was afraid to confront him. The district court responded to this request in the affirmative:
If she wants to say that she didn't confront him because she was afraid of him, she's perfectly entitled to do that. I mean, absolutely. What she's not entitled to do is use a post-event incident as proof that she was right to fear him at the time, because it's a post-event incident.[ 5 ]
The next day, prior to Ms. Jackson's testimony, the following colloquy took place between the district court and defense counsel regarding the court's ruling excluding the November 2007 police report:
During her testimony, Ms. Jackson testified that Brown controlled her and her company and that she did not know the details of his fraudulent scheme because she was afraid to confront him. In particular, Ms. Jackson testified that Brown did not allow her to know the details of Chicago Global's business transactions and that he “would holler and scream” if she ever inquired about such information.7 Notably, when asked whether she ever insisted on knowing more about the company's business transactions, Ms. Jackson responded, 8 Finally, on cross-examination, when asked why she continued to do business with Brown, Ms. Jackson responded that she “had been dealing with an abusive situation with him.”9
Following the jury's verdict, Ms. Jackson filed two separate motions for a new trial. In both motions, she asserted that the district court had erred by excluding evidence of Brown's physical abuse toward her. The district court denied the motions. In doing so, the court concluded that Ms. Jackson's proffered evidence of abuse was inadmissible because it “failed for lack of a proper foundation as to time.”10 Further, the court noted that Ms. Jackson's defense—i.e., that she failed to confront Brown because she was afraid of him—“was admitted more than once as was her accusation that Brown was abusive.”11
On appeal, Ms. Jackson contends that the district court abused its discretion by precluding her from “presenting any evidence that [she] was the victim of physical and mental abuse at the hands of Bobbie Brown.”12 Such evidence, she maintains, was necessary to corroborate her defense that she was unaware of Brown's fraudulent activities because she feared challenging him. In response, the Government submits that the district court made no such ruling, but rather merely precluded Ms. Jackson from introducing a post-event police report in order to show that she and Brown were not in a business relationship.
We agree with the Government's assessment of the district court's order. The only evidence of Brown's physical abuse ever proffered by Ms. Jackson was the instance described in the November 2007 police report. The district court excluded that report as irrelevant to Ms. Jackson's mental state at the time of the offense. Aside from the report, the district court did not exclude any other evidence of Brown's physical abuse. Although the court later stated that Ms. Jackson could not testify about “any” physical abuse, we believe that those remarks, when read in context, refer only to the instances of abuse described in the November 2007 police report. Prior to those remarks, the record contains no mention of any other instance of physical abuse. The court...
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