U.S. v. Edelkind

• Decision Date: 31 October 2006
• Docket Number: No. 05-2125.,No. 05-2228.,05-2125.,05-2228.
• Citation: 467 F.3d 791
• Parties: UNITED STATES of America, Appellee, v. Jamie EDELKIND, Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

467 F.3d 791

UNITED STATES of America, Appellee, v. Jamie EDELKIND, Defendant, Appellant.

No. 05-2125.

No. 05-2228.

United States Court of Appeals, First Circuit.

Heard July 31, 2006.

Decided October 31, 2006.

Michael J. Liston, by appointment of the court, for appellant.

Paul G. Levenson, Assistant United States Attorney, with whom Michael J. Sullivan, United States Attorney, and Kristina E. Barclay, Assistant United States Attorney, were on consolidated brief for appellee.

Before BOUDIN, Chief Judge, TORRUELLA and DYK,^* Circuit Judges.

BOUDIN, Chief Judge.

Jamie Edelkind was convicted of four counts of bank fraud directed against federally insured banks, 18 U.S.C. § 1344 (2000),¹ and he now appeals. The story can be briefly told, reserving details for our discussion of specific issues raised on appeal. So far as those issues concern sufficiency of the evidence, we set forth the facts assuming that the jury resolved credibility disputes and drew inferences in the government's favor. United States v. Romero-Carrion, 54 F.3d 15, 17 (1st Cir. 1995).

Facing bankruptcy in the summer of 2000, Edelkind concocted a false resume for his stay-at-home wife Linda, forging documents to make her appear to be a well-paid executive in a (sham) technology company he called "Apostille, Inc." Using the forged documents, Edelkind convinced a lender, America's Moneyline ("Moneyline"), to extend a mortgage of $800,000 in Linda's name in order to purchase the former "Honey Fitz" mansion in Hull, Massachusetts.

Edelkind then repeatedly refinanced the Hull property for larger and larger amounts, each time paying down outstanding previous loans and retaining the surplus or "cash out" amount. He persuaded lenders to extend the loans on the basis of false representations and fabricated documents, including tax forms, showing Linda to be earning from $200,000 to over $1 million per year. Specifically:

• In September 2001, Edelkind refinanced the Hull property by securing a $1 million mortgage in Linda's name from South Shore Savings Bank ("South Shore"), a federally insured lender. He retained $143,781.53 after paying down the Moneyline loan.

• In spring 2002, Edelkind used the property as collateral to obtain several home equity loans in Linda's name, including a $350,000 line of credit from Wells Fargo, a federally insured bank.

• In March 2003, Edelkind refinanced the Hull property again, this time with a $2.1 million mortgage in Linda's name from Washington Mutual Bank ("Washington Mutual"), another federally insured bank. He retained $205,370.29 after paying off South Shore, Wells Fargo, and other lenders.

• In August 2004, representing that Linda's income was $1.1 million a year, Edelkind obtained a $3.3 million loan through Fairmont Funding ("Fairmont"), a non-federally insured mortgage broker, which funded the loan with the approval of Aurora Loan Services ("Aurora"), itself a subsidiary of Lehman Brothers, a federally insured bank. Lehman Brothers later purchased the loan. Edelkind used the proceeds to pay off the Washington Mutual loan and an additional $356,242.38 that had been run up on the Wells Fargo credit line, leaving him with $569,878.83 in cash surplus.

Remarkably, the last of these loans was secured after the government in March 2004 had filed a three-count information charging Edelkind with bank fraud in connection with the loans from South Shore, Wells Fargo, and Washington Mutual. In early November 2004, Linda and her children fled to Norway. Approximately $273,000 was wired to Norway and $47,000 withdrawn from ATMs in Massachusetts and Norway between August and December 2004.

In February 2005, the government filed a superseding information adding a fourth count directed to the Fairmont transaction and including criminal forfeiture allegations under 18 U.S.C. § 981(a)(1)(C) (2000) and 28 U.S.C.A. § 2461(c) (West Supp. 2005) (subsequently amended 2006). After a jury trial later that month, the district court entered a judgment of conviction on each of the four counts. In June, the court forfeited the Hull property and two bank checks deemed to be funds derived from the offenses. In July, Edelkind was sentenced to 60 months in prison and ordered to pay restitution.

Edelkind's first claim on appeal is that no proper verdict of conviction was ever returned by the jury. Instead of having the jury return a written verdict of "guilty" or "not guilty" on each count, the district judge submitted to the jury a four-part form whose first question asked the jury to say ("yes" or "no") whether they "unanimously find that the government has proven beyond a reasonable doubt that Jamie Edelkind knowingly executed or attempted to execute a scheme to defraud" South Shore. The form then asked the same question as to Wells Fargo, Washington Mutual, and Fairmont, respectively.

The jury returned a written verdict of "yes" on all four counts. The judge then asked the foreperson, "As I read your verdict, your answer, whether you find the defendant guilty as to Count 1, is `yes'; on Count 2 is `yes'; on Count 3 is `yes'; and Count 4 is `yes.' Am I correct?" The foreperson responded, "Yes." Defense counsel declined the judge's offer to poll the jury and also did not inquire whether the jury intended its verdict to be one of "guilty" on each count.

Although we have not adopted a flat rule against special interrogatories in criminal cases, they pose special dangers. See, e.g., United States v. Spock, 416 F.2d 165, 182 (1st Cir.1969) (progression of special questions can exert judicial pressure on jury). They also sometimes offer benefits, notably in very complex criminal cases, where they can reduce risk of juror confusion. See, e.g., United States v. Palmeri, 630 F.2d 192, 202 (3d Cir.1980). The present appeal better illustrates the dangers than the benefits.

Edelkind's broadest claim is that no guilty verdict was delivered by the jury on any of the counts. The form did not in terms ask whether Edelkind was guilty, and his appellate counsel suggests that the foreperson's response when questioned by the trial judge was ambiguous. Counsel posits that the foreperson might have meant only that the "yes" lines had been checked-not that the jury had intended to find Edelkind "guilty" of the offenses specified in the indictment.

Nothing in the rules requires a written verdict at all. See Fed.R.Crim.P. 31. Here, there was a written verdict which, if ambiguous, was clarified when the judge asked whether the defendant has been found "guilty" on each count. The lack of any objection when the foreperson answered and the judge proceeded to enter a judgment of conviction shows that trial counsel had no doubt that the jury had equated its verdict with guilt. There was no error, plain or otherwise, in treating the verdict as one of guilty on each count.

A narrower version of the argument, also made on appeal, has more bite. Edelkind points out that the phrasing of the verdict form itself omitted, for each count, an element of the statutory offense—specifically, that the defrauded institution be one that was federally insured. This is itself an example of the problems with using detailed verdict forms rather than simply asking whether the defendant was guilty of the offense charged.

Nevertheless, we conclude that there was no prejudicial error in the omission of the federally insured requirement from the verdict form. Special verdicts are not required in criminal cases, and, when they are used, there is no automatic requirement that a special verdict form include every element of the offense so long as the jury is instructed as to all elements. See, e.g., United States v. Stonefish, 402 F.3d 691, 699 (6th Cir.2005). Here the jury was specifically instructed that they "must be convinced beyond a reasonable doubt" of each of the four elements of the offense, including (as one of the four elements) that "the financial institution in question was federally insured."

The defendant's next argument is that the verdict form and the jury instructions charged him with defrauding Fairmont and not with defrauding Lehman Brothers, and that he could not properly be convicted of defrauding Fairmont, which was not a federally insured institution. The district court's initial jury instruction (which was given orally but later provided to the jury in written form) described count 4 as charging Edelkind with executing "a scheme to defraud ... upon Fairmont Funding, LTD, which [is a] financial institution." The special verdict form submitted to the jury asked, as to count 4, whether the government had proved

a scheme to defraud Fairmont Funding, LTD in connection with a loan ... originated by Fairmont Funding, LTD, and subsequently assigned to Lehman Brothers Bank, FSB.

Just before the court read the jury instructions and provided the jury with the special verdict form, Edelkind filed a motion for judgment of acquittal arguing that "Count Four is entirely dependant on Fairmont Funding [and] the Government has failed to prove federal jurisdiction" because Fairmont is not a financial institution under 18 U.S.C. § 20. The basis for defense counsel's motion was that Edelkind had to know that a "financial institution" would be the ultimate victim of his fraud. The district judge rightly found this position to be at odds with Brandon, 17 F.3d at 425, and rejected the motion for acquittal.

After the instructions were read to the jury, defense counsel orally objected to them and to the verdict form on the ground that Fairmont was not a financial institution, and reiterated his position that Edelkind needed to know that a "financial institution" would be injured. The court then provided a curative instruction "stating that `Fairmont is not a financial institution but Lehman Brothers, to which it sold the note, is.'" Since the court had already told the jury that a financial institution had to be defrauded or deprived of money by fraud,² the jury was...