U.S. v. Brodie

• Decision Date: 06 May 2008
• Docket Number: No. 05-3131.,05-3131.
• Parties: UNITED STATES of America, Appellee v. Wilbert S. BRODIE a/k/a Kharii Wilston Anthony Brodie, Appellant.
• Court: U.S. Court of Appeals — District of Columbia Circuit

524 F.3d 259

UNITED STATES of America, Appellee v. Wilbert S. BRODIE a/k/a Kharii Wilston Anthony Brodie, Appellant.

No. 05-3131.

United States Court of Appeals, District of Columbia Circuit.

Argued November 13, 2007.

Decided May 6, 2008.

Appeal from the United States District Court for the District of Columbia, (No. 02cr00190-01).

A.J. Kramer, appointed by the court, argued the cause as amicus curiae in support of the appellant.

Wilbert S. Brodie was on brief, pro se.

John P. Mannarino, Assistant United States Attorney, argued the cause for the appellee. Jeffrey A. Taylor, United States Attorney, and Roy W. McLeese III and Thomas J. Tourish, Jr., Assistant United States Attorneys, were on brief. Ann K. Simon, Assistant United States Attorney, entered an appearance.

Before: HENDERSON, GARLAND and BROWN, Circuit Judges.

Opinion for the court filed by Circuit Judge HENDERSON.

KAREN LECRAFT HENDERSON, Circuit Judge:

A jury found appellant Wilbert Brodie (Brodie) guilty of conspiracy to make false statements to financial institutions to obtain mortgage loans in violation of 18 U.S.C. § 371 and wire fraud in violation of 18 U.S.C. § 1343. Brodie was sentenced to 57 months' imprisonment and ordered to pay $355,449.70 in restitution. Brodie appeals his conviction on ten grounds in five pro se filings. Additionally, the Federal Public Defender (Amicus) filed an amicus brief claiming that the district court committed three errors: (1) sustaining an objection to defense counsel's closing argument; (2) denying Brodie's new trial motion based on an alleged Brady violation; and (3) applying a four-point "leader or organizer" enhancement to Brodie's offense level under the United States Sentencing Guidelines (Guidelines or USSG). Amicus also asserts that Brodie's trial counsel provided ineffective assistance of counsel because he failed to request a downward departure based on Brodie's immigration status pursuant to United States v. Smith, 27 F.3d 649 (D.C.Cir.1994). For the reasons set forth below, we affirm Brodie's conviction and sentence.

I.

Pursuant to a second superseding grand jury indictment filed on August 12, 2004, Brodie was charged with four counts relating to a mortgage flipping scheme: one count of conspiracy to make false statements to financial institutions to obtain mortgage loans and to use wire transmissions in furtherance of a scheme to defraud and obtain money and property under false pretenses in violation of 18 U.S.C. § 371 and three counts of wire fraud in violation of 18 U.S.C. § 1343. The indictment also sought the forfeiture of $239,970.56 pursuant to 18 U.S.C. § 982(a)(2)(A), which requires "a person convicted of a violation of, or a conspiracy to violate [18 U.S.C. § 1343], affecting a financial institution ... [to] forfeit to the United States any property constituting, or derived from, proceeds the person obtained directly or indirectly, as the result of such violation." 18 U.S.C § 982(a)(2)(A).¹ Two other participants in the scheme, Olurotimi Padonu (Padonu) and Sarafa Kareem (Kareem), were charged with the same four counts as Brodie as well as an additional conspiracy count based on a separate fraud.

A. Overview of the Scheme

Brodie was the president, CEO and only employee of a shell company named Inter Communication Network (ICN). The charged scheme involved ICN's purchase of dilapidated real estate properties—the second superseding indictment focused on eight properties purchased between December 1995 and June 1997—and the subsequent resale of the properties to Brodie at inflated values.² Brodie simultaneously applied for a loan based on the inflated resale price, using a portion of the loan to cover ICN's initial purchase of the property at the lower value and keeping the remaining funds for himself. For example, on July 10, 1996, ICN purchased a house for $45,000 (the 15th Street property) and resold it to Brodie for $125,000 on the same day. Brodie obtained a personal loan based on the inflated resale price, using part of the loan to cover ICN's $45,000 purchase price and keeping the remainder of the loan proceeds for himself. Over the course of the scheme, Brodie obtained loans totaling $867,500.

To obtain a loan based on the inflated resale price, Brodie had to provide a false appraisal and other documentation to the mortgage lender—Brodie therefore recruited the assistance of several co-conspirators. Esther Stroy-Harper (Harper), a licensed real estate appraiser in Maryland and Washington, D.C., provided a false appraisal for each of the nine properties at Brodie's direction. Harper testified at trial that, although an appraiser is hired by the seller and should not meet with the buyer, she met with Brodie before appraising each property. Harper stated that Brodie directed her to make an inflated appraisal so that Brodie could obtain a loan at the higher value. For example, Harper testified that Brodie paid her $300 to appraise a property (the 6th Street property) at $125,000 even though the property was not worth more than $55,000. Harper justified each inflated appraisal by comparing the subject property to other properties in "neighborhoods that were better and higher in value." Trial Tr. 378, Jan. 12, 2005. Harper also testified that Brodie asked her to omit from the appraisals the original contract price on ICN's purchase of the property and the fact that several of the properties had been sold to ICN at foreclosure and at one-half of the value of her appraisal.

Mortgage brokers Padonu and Kareem, who pleaded guilty, assisted Brodie by preparing false mortgage applications and submitting the applications to mortgage lenders at Brodie's direction. Additionally, George Akinmurele, a CPA, prepared false tax documentation for Brodie's mortgage loan applications. Bank records show that Brodie paid Padonu and Akinmurele for their services.

B. Trial

The jury trial began on January 10, 2005. FBI Special Agent Christine Taylor testified, summarizing the transactions relating to the eight properties charged in the scheme.³ Taylor explained that ICN initially purchased seven of the eight properties and promptly resold them to Brodie at higher values.

Bill Brewster, an underwriting expert at the Federal National Mortgage Association (Fannie Mae), testified as an expert witness for the Government regarding loan underwriting and underwriting guidelines. Brewster described the loan application and approval process in general and described how a false appraisal is used to inflate the value of a loan. In particular, Brewster testified that a loan amount is based on an independent appraisal of the property and the sales price. He further explained that the lender relies in part on the sales history of a property because any significant change in value can indicate that the property is inflated in value. Brewster noted that a lender would not know if ICN's original purchase of the property took place on the same day as the resale to Brodie and the issuance of the loan unless the appraiser disclosed this information to the lender. Brewster also stated that a lender would not make a loan if it discovered that the loan was being used to pay for the seller's (ICN's) original purchase of the property.

Six real estate brokers and appraisers who had participated in transactions involving the various properties testified about the values of the properties, the sale of the properties to the shell company and Brodie's involvement with the sales. Harold Huggins appraised the 15th Street property on July 28, 1995 at $39,000. ICN bought the property one year later for $45,000 and sold it to Brodie on the same day for $125,000. Robert Casper (Casper), a real estate agent and former appraiser specializing in bank foreclosures, valued the same property in 1999 at $64,000. Casper also appraised the 5th Street property on September 12, 1996 at $48,000—ICN purchased the property on April 29, 1997 for $56,000 and resold it to Brodie for $130,000 less than six months later. Casper further testified that several of the appraisals Brodie used to obtain loans were inflated. For example, an appraisal of the 5th Street property done on July 3, 1997 estimated the value of the property at $132,000. Casper explained that even if the property had been renovated after ICN's April 1997 purchase for $56,000—which it was not—it would not be worth even $90,000.

Larry Gardner (Gardner) created a "broker's price opinion" for the sale of the 7th Street property which ICN purchased on May 2, 1997. Gardner estimated the value of the property at $60-65,000 and ICN purchased the property for $69,000. On the same day, ICN resold the property to Brodie for $162,000. At trial, Gardner reviewed a February 7, 1997 report that appraised the property at $160,000. Gardner testified that the property was not worth one-half of that estimate and noted that the report also falsely stated that the property included a full basement with a half-bath and a recreation room.

Gary Wing (Wing), who was the listing agent for the 18th Street property, attended the settlement at which the property was sold to ICN for $47,000 on November 19, 1996. Wing testified that the property was not worth even half of the $121,000 Brodie paid for it one month later. Charles Nucciarone (Nucciarone) marketed and managed foreclosed properties, including the 18th Street property, and testified that it was not worth the $121,000 purchase price Brodie paid (due to extensive water damage) and thus appraised it at only $60-65,000.

Daniel Elias (Elias) inspected the R Street property and attended the November 13, 1996 settlement at which ICN purchased it for $60,000. Elias testified that the house was uninhabitable at the time; nonetheless ICN resold it to Brodie on the same day for $130,000. Elias was also the selling agent for the Bates Street and MLK properties. ICN purchased the Bates Street property—which, according to Elias, was also...