U.S. v. Weiss

• Decision Date: 17 August 2010
• Docket Number: No. 08–1477.,08–1477.
• Citation: 630 F.3d 1263
• Parties: UNITED STATES of America, Plaintiff–Appellee,v.Arvin WEISS, Defendant–Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

630 F.3d 1263

UNITED STATES of America, Plaintiff–Appellee,

v.Arvin WEISS, Defendant–Appellant.

No. 08–1477.

United States Court of Appeals, Tenth Circuit.

July 27, 2010.Ordered Published Aug. 17, 2010.

Steven Alan Reiss, Weil, Gotshal & Manges LLP, New York, NY (Lisa R. Eskow and Arthur C. D'Andrea, Weil Gotshal & Manges LLP, Austin, TX, with him on the briefs), for Defendant–Appellant.Linda Kaufman, Assistant United States Attorney (David M. Gaouette, United States Attorney and Andrew A. Vogt, Assistant United States Attorney, with her on the brief), Denver, CO, for Plaintiff–Appellee.Before KELLY, EBEL, and MURPHY, Circuit Judges.

MURPHY, Circuit Judge.I. INTRODUCTION

Following a three-week jury trial, Arvin Weiss was convicted of eight counts of mail fraud and aiding and abetting in violation of 18 U.S.C. §§ 1341 and 2(a), five counts of wire fraud and aiding and abetting in violation of 18 U.S.C. §§ 1343 and 2(a), and three counts of witness tampering and aiding and abetting in violation of 18 U.S.C. §§ 1512(b)(3) and 2(a). In this appeal, Weiss argues the evidence presented at trial was insufficient to support his convictions. As to the mail fraud counts, Weiss argues the charged mailings—deeds of trust sent from the Denver County Clerk and Recorder to the lenders—were not sufficiently essential to his scheme to be actionable as mail fraud. As to the wire fraud counts, Weiss argues the charged wire transmissions—internet communications from mortgage brokers to the Federal Housing Authority (“FHA”)—did not meet the causation requirement of the wire fraud statute. As to the witness tampering counts, Weiss argues the evidence was insufficient to support the “corruptly persuade” element of the witness tampering statute and the witness tampering counts were improperly charged because they allowed the jury to convict Weiss if it found he merely persuaded witnesses not to talk to investigators. Finally, Weiss also challenges his sentence, arguing the district court both violated the Ex Post Facto Clause by applying the 2007 Sentencing Manual to all of his offenses and erred by applying the sophisticated means enhancement. Exercising jurisdiction pursuant to 28 U.S.C. § 1291 and 18 U.S.C. § 3742, this court AFFIRMS Weiss's convictions and sentence.

II. BACKGROUND

On September 27, 2005, Weiss, a Colorado real estate broker, was indicted on several counts of mail fraud, wire fraud, and witness tampering. The indictment alleged Weiss organized a scheme to obtain mortgage loans for low-income, unsophisticated home buyers through an FHA program sponsored by the United States Department of Housing and Urban Development (“HUD”). In furtherance of this scheme, Weiss helped borrowers obtain subsidized loans through the FHA's Single Family Home Mortgage program ¹ even though they were ineligible, provided lenders with false information about the buyers, and paid the buyers' down payments in violation of HUD rules.

The charged mailings in the mail fraud counts were recorded deeds of trust sent from the Denver County Clerk and Recorder to the lenders involved in the various home sales which comprised Weiss's scheme. Each lender required its closing agent to have a deed of trust executed at the closing, and required the deed of trust to be promptly recorded and sent to the lender. The lenders needed these original recorded deeds of trust to facilitate the smooth securitization and marketing of the mortgages in the secondary market.

Representatives from several lenders, as well as the Government National Mortgage Association (“Ginnie Mae”), testified as to the importance of these recorded deeds of trusts in marketing FHA loans in the secondary mortgage market. A manager at Old Kent Mortgage testified federally insured loans were particularly attractive to lenders because they could easily be sold to Ginnie Mae to generate funds for future loans. The manager also testified lenders needed the original recorded deeds of trust to meet Ginnie Mae's certification requirements, and that lenders such as Old Kent tried to avoid any deviation from this practice.

A representative from Union Planters Bank similarly testified it was required by Ginnie Mae to have the original recorded deeds of trust to market the loans in the secondary market. The representative testified Union Planters would make every possible contact to get the original recorded deeds of trust, including contacting the title company and the mortgage broker.

Finally, an account executive for Ginnie Mae testified Ginnie Mae required the original recorded deeds of trust to perfect its interest in the mortgage so that in the event of default, Ginnie Mae could file a claim with the FHA. The account executive stated Ginnie Mae would request the original deed of trust if the lender failed to produce it, but would also accept a certified copy if the original was lost. Nevertheless, the Ginnie Mae representative highlighted that prompt receipt of the original deed of trust improved the marketability of the loans.

The charged transmissions in the wire fraud counts were internet messages sent by a loan processor in Colorado to the FHA in Maryland, requesting an FHA case number in connection with the FHA loan for a property in Weiss's scheme. The initial step in every application for an FHA-insured loan is the generation of an FHA case number. The evidence at trial established that Weiss sought out FHA-approved loan brokers for several reasons: (1) his buyers would not qualify for conventional loans, (2) FHA loans required smaller down payments, and (3) FHA loans were readily marketable in the secondary market. Indeed, all of the loans in Weiss's scheme were federally insured and funded by direct endorsement lenders with ongoing sponsor/correspondent relationships with local, FHA-approved mortgage brokers or the companies for which the FHA-approved brokers worked.

In addition, the jury heard evidence from which it could infer Weiss intended to procure FHA-insured loans. Weiss was an experienced, licensed real estate broker. At the time the charged transmissions took place, Weiss already had several years of experience in transactions involving FHA loans. When seeking to develop relationships with mortgage brokers, Weiss specifically held himself out as a FHA-approved real estate broker who was looking for an FHA-approved mortgage broker. As a real estate broker, Weiss had access to the buyers' credit reports and knew many prospective buyers would have difficulty qualifying for loans. Nevertheless, he realized they could qualify for FHA-insured loans because he knew the HUD accepted alternative forms of credit documentation. To this end, Weiss generated fraudulent credit letters to include in the loan application packages, often without the borrower's knowledge, that specifically catered to the HUD's requirements for FHA loans.

Finally, as to the witness tampering charges, the jury heard evidence that Weiss, through his translator and co-defendant Jesus Guevara, told a number of the buyers not to reveal the true source of their down payments to investigators, and to tell investigators they had used their own funds to make the down payments. Three buyers in Weiss's scheme, Sergio Nunez, Fernando Salazar, and Edgar Torres, each testified Weiss told them to lie about the true source of the down payments.

Following a three-week jury trial, Weiss was convicted of eight counts of mail fraud and aiding and abetting in violation of 18 U.S.C. §§ 1341 and 2(a); five counts of wire fraud and aiding and abetting in violation of 18 U.S.C. §§ 1343 and 2(a); and three counts of witness tampering and aiding and abetting in violation of 18 U.S.C. §§ 1512(b)(3) and 2(a). On December 2, 2008, the district court sentenced Weiss to eighty-four months on each of the witness tampering counts and sixty months on each of the mail and wire fraud counts, all to be served concurrently.

Weiss appeals, arguing there was insufficient evidence to support his mail fraud, wire fraud, and witness tampering convictions. Further, he argues the witness tampering counts impermissibly involved allegations of lawful conduct. Finally, he also challenges his sentence, asserting the district court's use of the 2007 Guidelines Manual violated the Ex Post Facto Clause and its application of a two-level sophisticated means enhancement was error.

III. ANALYSISA. Sufficiency of the Evidence

Sufficiency of the evidence challenges are reviewed de novo “to determine whether, viewing the evidence in the light most favorable to the government, any rational trier of fact could have found the defendant guilty beyond a reasonable doubt.” United States v. Flanders, 491 F.3d 1197, 1207 (10th Cir.2007).² In making this determination, this court “will not weigh conflicting evidence or second-guess the fact-finding decisions of the jury.” United States v. Gallant, 537 F.3d 1202, 1222 (10th Cir.2008) (quotation omitted). Rather, this court “evaluate[s] the sufficiency of the evidence by considering the collective inferences to be drawn from the evidence as a whole.” Id. at 1223 (quotations omitted).

1. Mail Fraud

The federal mail fraud statute, 18 U.S.C. § 1341, prohibits the mailing of any matter for the purpose of executing “any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses.” The federal mail fraud statute reaches only “instances in which the use of the mails is a part of the execution of the fraud.” Schmuck v. United States, 489 U.S. 705, 710, 109 S.Ct. 1443, 103 L.Ed.2d 734 (1989). To be actionable as mail fraud, however, use of the mails “need not be an essential element of the scheme, as long as it is incident to an essential part of the scheme or a step in the plot.” United States v. Cardall, 885 F.2d 656, 680 (10th Cir.1989) (quotations and citation omitted). Indeed, routine mailings may supply the basis for a mail fraud conviction even if they...