U.S. v. Romer, s. 97-4342

• Decision Date: 24 June 1998
• Docket Number: Nos. 97-4342,97-4343,s. 97-4342
• Citation: 148 F.3d 359
• Parties: -5123, 1998-1 Trade Cases P 72,197, 49 Fed. R. Evid. Serv. 982 UNITED STATES of America, Plaintiff-Appellee, v. Mija S. ROMER, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Khem C. BATRA, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 359

148 F.3d 359

82 A.F.T.R.2d 98-5123, 1998-1 Trade Cases P 72,197,

49 Fed. R. Evid. Serv. 982

UNITED STATES of America, Plaintiff-Appellee, v. Mija S. ROMER, Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellee, v. Khem C. BATRA, Defendant-Appellant.

Nos. 97-4342, 97-4343.

United States Court of Appeals Fourth Circuit.

Argued Jan. 29, 1998.

Decided June 24, 1998.

ARGUED: John Hale Shenefield, Morgan, Lewis & Bockius, L.L.P., Washington, DC; Cary Steven Greenberg, Greenberg, Bracken & Tran, P.C., Alexandria, Virginia, for Appellants. John J. Powers, III, Antitrust Division, United States Department of Justice, Washington, DC, for Appellee. ON BRIEF: Donald C. Klawiter, Morgan, Lewis & Bockius Before MURNAGHAN, NIEMEYER, and MOTZ, Circuit Judges.

L.L.P., Washington, DC; John M. Tran, Greenberg, Bracken & Tran, P.C., Alexandria, Virginia, for Appellants. Joel I. Klein, Assistant Attorney General, A. Douglas Melamed, Deputy Assistant Attorney General, Marion L. Jetton, Anthony V. Nanni, James T. Clancy, Kathleen M. Mahoney, Antitrust Division, United States Department of Justice, Washington, DC, for Appellee.

Affirmed by published opinion. Judge MURNAGHAN wrote the opinion, in which Judge NIEMEYER and Judge DIANA GRIBBON MOTZ joined.

OPINION

MURNAGHAN, Circuit Judge:

Mija Romer and Khem Batra (Appellants), were tried by a jury for various offenses stemming from their involvement in a conspiracy to rig bids at real estate foreclosure auctions. Both Appellants were convicted of violating the Sherman Act, 15 U.S.C. § 1. In addition, Romer was convicted of bank fraud, in violation of 18 U.S.C. § 1344, and tax fraud in violation of 18 U.S.C. § 371. On appeal, Appellants make various assignments of error with respect to their convictions, and Romer challenges her sentence. Finding no error, we affirm.

I.

Appellants are real estate speculators who, together with others, participated in a conspiracy to limit bidding competition at certain public foreclosure auctions in Fairfax County, Virginia. The purpose of the conspiracy was to hold down the price of auctioned properties by agreeing not to bid against one another at auctions--an activity commonly known as "bid-rigging." During an auction, most members of the conspiracy would refrain from bidding, while one designated member would bid on and receive the property at a much-reduced price. Following the auction, members of the conspiracy would hold a private auction amongst themselves, at which point they would discuss the price they each would have bid for the property. The person with the highest bid would be given the deed, and the conspirators would divide amongst themselves the money saved by artificially holding down the price of the property.

Under Virginia law, all sales of foreclosed properties must be conducted at public auctions. See Va.Code Ann. § 55-59(7). If the lender who initiates the foreclosure is an out-of-state entity, a Virginia resident must be appointed to serve as "trustee." See Va.Code Ann. § 55-58.1(2). The trustee has a fiduciary duty to obtain the highest possible purchase price for the property. Following the auction, the trustee remits all proceeds to the appropriate parties--the lender receives sufficient funds to pay off the mortgage and the remainder is returned to the homeowner or used to satisfy remaining liens.

As a result of their bid-rigging activities, Appellants were indicted by a federal grand jury on September 12, 1996. The indictment charged both Appellants, inter alia, with violating the Sherman Act, 15 U.S.C. § 1, by conspiring to rig bids on nine properties sold at public auction. Appellants were also indicted for conspiracy to evade the payment of federal taxes, in violation of 18 U.S.C. § 371. Romer was individually indicted for bank fraud, in violation of 18 U.S.C. § 1344, for obtaining a loan by submission of false earnings information.

The case proceeded to a jury trial on January 21, 1997, in the United States District Court for the Eastern District of Virginia. At trial, Romer testified that she had attended and bid at private auctions on ten properties, and Batra admitted his involvement with six. The Government introduced evidence suggesting that members of the conspiracy had been concerned about having their illegal earnings detected and that they had agreed to make auction payments in cash in order to evade the Internal Revenue Service (IRS). Co-conspirator Leo Gulley testified that, following one private auction in March of 1994, members of the conspiracy, including both Appellants, had discussed the danger of creating a "paper trail" by making payments to each other with checks. Those present agreed that all payments would be made in cash. Gulley's testimony was confirmed by that of coconspirator Alexander Giap, who had become a government informant and surreptitiously tape-recorded a number of the conspiracy's meetings. During one taped conversation, Romer cautioned the others that "you can't report it on your taxes." She later emphasized that "we don't want any check writing between us. If we get caught by IRS, we'll be dead."

The Government also produced evidence regarding Romer's fraudulent effort to obtain a loan from Herbert Bank and Trust Co. in October 1993. The evidence showed that in order to obtain approval for the loan, Romer, who is a CPA, informed bank officials that her gross income for 1992 was approximately $90,000. The bank approved Romer's loan based on her oral statement, but requested that Romer submit a tax return to substantiate her income. In response to that request, Romer submitted a bogus IRS Form 1040, which she claimed to be her 1992 tax return and which overstated her gross income by approximately $85,000.

Appellants were convicted of violating the Sherman Act, and Romer was convicted of bank fraud and conspiracy to defraud the IRS. In determining Romer's sentence, the district court began with a base-offense level of 10, pursuant to U.S.S.G. § 2R1.1(a). The court then granted a 1-level enhancement, as authorized by U.S.S.G. § 2R1.1(b)(1), for submitting non-competitive bids in an antitrust conspiracy. The court also granted a 2-level enhancement for obstruction of justice, under U.S.S.G. § 3C1.1, based on the court's finding that Romer had intentionally withheld material information during sentencing. After grouping Romer's antitrust and tax conspiracy offenses, pursuant to U.S.S.G. § 3D1.2(c), and combining the result, as required by U.S.S.G. § 3D1.4, with Romer's bank fraud conviction, the court arrived at an offense level of 14. The court then sentenced Romer, within the applicable range, to a term of 18 months imprisonment on each count, followed by a total of 3 years supervised release, and ordered Romer to pay $27,269 in fines and restitution. This appeal followed.

II.

Appellants contend that the district court erred in denying their motion for judgment of acquittal, pursuant to Fed.R.Crim.P. 29(c), since the Government failed to demonstrate that the conspiracy's bid rigging activities involved "commerce among the several states," as required by § 1 of the Sherman Act. We review de novo the district court's decision to deny judgment of acquittal. See United States v. United Med. & Surgical Supply Corp., 989 F.2d 1390, 1401-02 (4th Cir.1993) (citing United States v. Garcia, 868 F.2d 114, 115 (4th Cir.1989)). Where, as here, a motion for judgment of acquittal is based on insufficiency of the evidence, the conviction must be sustained if the evidence, when viewed in the light most favorable to the Government, is sufficient for any rational trier of fact to find the essential elements of the crime beyond a reasonable doubt. See Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979) (citation omitted). In reviewing the sufficiency of the evidence, we are not entitled to weigh the evidence or to assess the credibility of witnesses, "but must assume that the jury resolved all contradictions ... in favor of the Government." United Medical, 989 F.2d at 1402 (citation omitted). With these standards in mind, we now consider the merits of Romer's argument.

Section 1 of the Sherman Act provides in pertinent part that "[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, ... is hereby declared to be illegal." 15 U.S.C. § 1. The language of the Sherman Act is conspicuous for its breadth. See United States v. South-Eastern Underwriters Ass'n, 322 U.S. 533, 553, 64 S.Ct. 1162, 88 L.Ed. 1440 (1944) ("Language more comprehensive [than that used in § 1 of the Sherman Act] is difficult to conceive."). Indeed, the Supreme Court has noted that by using the phrase "commerce among the several States," Congress intended the Sherman Act to reach the constitutional limits of the commerce power. See Summit Health, Ltd. v. Pinhas, 500 U.S. 322, 329 n. 10, 111 S.Ct. 1842, 114 L.Ed.2d 366 (1991) ("Congress 'meant to deal comprehensively and effectively with the evils resulting from contracts, combinations and conspiracies in restraint of trade, and to that end to exercise all the power it possessed.' ") (quoting Atlantic Cleaners & Dyers, v. United States, 286 U.S. 427, 435, 52 S.Ct. 607, 76 L.Ed. 1204 (1932)).

In a Sherman Act prosecution, the government bears the burden of proving beyond a reasonable doubt a connection between the defendant's activities and interstate commerce. ¹ See McLain v. Real Estate Bd. of New Orleans, Inc., 444 U.S. 232, 242, 100 S.Ct. 502, 62 L.Ed.2d 441 (1980). In McLain, the Supreme Court explained that in order to meet its burden the government must "demonstrate by submission of evidence beyond the pleadings either that the defendants' activity is itself in interstate commerce or, if it is local in nature, that it has an effect on some other appreciable activity demonstrably in interstate commerce." 444 U.S. at 242, 100 S.Ct....