U.S. v. James
| Decision Date | 05 May 2009 |
| Docket Number | No. 08-1292.,08-1292. |
| Citation | 564 F.3d 1237 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. Torrence K. JAMES, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Elizabeth L. Harris, Jacobs Chase Frick Kleinkopf & Kelley, LLC, Denver, CO, for Defendant-Appellant.
Before BARRETT, ANDERSON, and BRORBY, Circuit Judges.
Appellant Torrence James pled guilty to one count of wire fraud and aiding and abetting, in violation of 18 U.S.C. §§ 2 and 1343, was sentenced to thirty months imprisonment and three years supervised release, and was ordered to pay $467,767.31 in restitution, both jointly and severally with two other co-conspirators. Mr. James appeals the district court's order of restitution, contending it erred because the amount is unsupported by the evidence and greater than the actual losses to all three victim mortgage holders at issue. For relief, he asks this court to remand his case to the district court to enter a corrected restitution order. In response, the government concedes the district court order of restitution exceeds the actual losses sustained by MortgageIt and Specialized Loan Servicing—two of the three victim mortgage holders. However, it disputes Mr. James's proposed calculation as to the amount of restitution owed to them and to the other mortgage holder, Freedom Mortgage. It asks this court to remand with instructions for the district court to modify its restitution order regarding the amount of loss attributable to two of the mortgage holders based on what it asserts are the correct calculations and affirm the district court's restitution order as to the amount attributable to the third victim mortgage holder, Freedom Mortgage. We exercise jurisdiction pursuant to 28 U.S.C. § 1291 and remand, in part, and affirm, in part, the district court's restitution order.
For the purposes of this appeal, we find it unnecessary to recount in full detail the interstate wire fraud transfer scheme involved in the count charged, other than to provide first a general account of the scheme and then some of the relevant undisputed facts underlying that scheme and the parties' arguments concerning calculation of the actual losses attributable to each victim mortgage holder and the proper restitution to be awarded.
In short, in late 2006, Mr. James and others arranged for and facilitated Tremayne Miller's purchase of three homes using the name and identification of an individual whose identity had been stolen. After Mr. Miller obtained loans for the purchase of those homes from three lenders by using materially false and fraudulent information, he received money from those lenders for improvements to the properties which were never made and then failed to pay on the loans, causing the foreclosure of those properties at a financial loss to the mortgage holders.
More specifically, Mr. Miller purchased three homes in Colorado, located at: (1) Stardance Circle, in Longmont (Stardance property); (2) Emerson Street, in Denver (Emerson property); and (3) Stay Sail Drive, in Windsor (Stay Sail property). The Stardance property was purchased on November 14, 2006, with a loan from MortgageIt in the amount of $975,000. Similarly, the Emerson property was purchased on November 30, 2006, with a loan from First Magnus Financial in the amount of $760,000. Finally, the Stay Sail property was purchased on December 4, 2005, with a loan from Freedom Mortgage in the amount of $650,000. In each instance, the lenders disbursed funds using interstate wire transfers. Because the loans covered one hundred percent of the purchase price each lender was required to separate the loan amount into first and second mortgages, and, therefore, each property was financed with two separate loans from each of the lenders. After closing on each property, the original mortgage lenders either sold one or both first and second mortgages to another entity, as follows:
-----------------------------------------------------------------------------------------
Total Amt. of 1st Amt. of 2nd
Original Amount Mortgage & Mortgage &
Property Lender Financed [Holder] [Holder] Miscellaneous
-----------------------------------------------------------------------------------------
Stardance MortgageIt $975,000 $780,000 $195,000 MortgageIt sold and
Circle [Unknown] [MortgageIt] then repurchased the
2nd mortgage from Citibank
for $213,785.11
-----------------------------------------------------------------------------------------
Stay Sail Freedom $650,000 $520,000 $130,000
Drive Mortgage [Specialized [Freedom
Loan Mortgage]
Servicing]
-----------------------------------------------------------------------------------------
Emerson First Magnus $760,000 Unknown Unknown The original lender
Street Financial amount amount First Magnus Financial
[Unknown] [Unknown] declared bankruptcy
and provided no
additional information
on current mortgage
holders
-----------------------------------------------------------------------------------------
As part of the scheme to defraud, Mr. Miller convinced the property sellers to "kick back" a portion of the selling price or loan money to him to ostensibly cover needed repairs on the property. These funds were disbursed at closing by the original lenders and, in two instances, the funds were distributed to a shell corporation set up by Mr. James called T & T Contractors. In the third instance, for the Emerson property, the money was funneled to another account, under another name. The kickbacks to the defendants on the properties totaled $395,783, and none of that money was ever used for improvements, nor were the properties ever occupied. Eventually, after no payments were made on the loans, the mortgage holders foreclosed on the properties and sold those properties at foreclosure sales for less than the loan amounts due.
Following Mr. James's arrest and indictment, he pled guilty to one count of wire fraud and aiding and abetting, in violation of 18 U.S.C. §§ 2 and 1343, regarding the bank loan and "kick back" scheme involved with the purchase of the three homes. Pursuant to the plea agreement, Mr. James agreed to pay restitution to the victim mortgage holders "in amounts to be determined by the time of sentencing." R., Vol. 1, Doc. 93 at 1. At the plea hearing, the parties and the district court confirmed that no restitution amount had yet been determined and no agreement as to the amount of restitution was reached.
Following Mr. James's guilty plea, a probation officer prepared a presentence report calculating his sentence under the applicable 2007 United States Sentencing Guidelines ("U.S.S.G." or "Guidelines"). The probation officer calculated Mr. James's base offense level at seven under U.S.S.G. § 2B1.1(a)(1). The probation officer then applied a fourteen-level upward adjustment under § 2B1.1(b)(1)(H) because the loss attributable to the defendant was more than $400,000 but less than $1,000,000. To arrive at this figure, the probation officer subtracted the total amount of resale of the properties after foreclosure from the total amount financed through loans to Mr. Miller, and then deducted all identified interest, fees, penalties, and liquidation expenses, for a total loss amount of $948,082.31. The following chart breaks down information provided in the presentence report:
--------------------------------------------------------------------------------------
Total Lender Funds
Property Original Amount Amount Distributed for
Address Lender Financed Resold of Resale Actual Loss Improvements
--------------------------------------------------------------------------------------
Stardance MortgageIt $975,000 04/30/08 $623,900 $351,100 $176,865 to
Circle T & T Contr.
--------------------------------------------------------------------------------------
Emerson First Magnus $760,000 01/04/08 $417,000 $343,000 $98,000 to
Street Financial Melanie Caple
--------------------------------------------------------------------------------------
Stay Sail Freedom $650,000 04/11/08 $428,500 $253,982.31 $120,918 to
Drive Mortgage (per lenders) T & T Contr.
--------------------------------------------------------------------------------------
______________________________
TOTAL TOTAL:
ACTUAL $395,783
LOSS:
$948,082.31
------------------------------
After applying a two-level increase in the offense level for use of fraudulent identification and a three-level decrease for acceptance of responsibility, the probation officer calculated the total offense level at twenty, which, together with Mr. James's criminal history category of III, resulted in a Guidelines...
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