United States v. Duruisseau
| Decision Date | 13 December 2019 |
| Docket Number | No. 18-30815,C/w 18-30822,18-30815 |
| Parties | UNITED STATES OF AMERICA, Plaintiff - Appellee v. DEION A. DURUISSEAU; HAROLD L. LEE, Defendants - Appellants UNITED STATES OF AMERICA, Plaintiff - Appellee v. LASHAWN A. DURUISSEAU, Defendant - Appellant |
| Court | U.S. Court of Appeals — Fifth Circuit |
Appeals from the United States District Court for the Western District of Louisiana
Before JONES, SMITH, and HAYNES, Circuit Judges.
*
Deion A. Duruisseau, Lashawn A. Duruisseau, and Harold L. Lee (collectively, "Appellants") appeal their convictions of conspiracy to commit bank fraud and fraud against a financial institution on several grounds. For the reasons explained below, we AFFIRM the convictions. However, we conclude that the loss calculation method used to determine the sentencing ranges was improper, so we VACATE the sentences and REMAND for resentencing.
This case involves a married couple and a title attorney who were convicted of conspiracy to commit bank fraud and fraud against a financial institution. Deion and Lashawn Duruisseau ran Billionaire Properties ("Billionaire"), a real-estate development company that ostensibly sought to flip homes—that is, the Duruisseaus claimed to purchase properties, remodel them, and sell them at a higher price. The Duruisseaus entered into a partnership with Harold Lee, their title attorney: Lee funded property purchases, served as a closing agent for sales, and had undisclosed financial interests in the properties.
The Duruisseaus solicited buyers—family and friends from church—to purchase investment properties even though the buyers lacked the funds for a down payment. When homes were purchased, the buyers did not actually provide money for the purchase. Instead, the Duruisseaus paid the down payments at closing, leaving the buyers responsible only for mortgage payments. Some buyers purchased several homes under this scheme: Andreand Marilyn Long, for example, purchased twenty-four homes (and quickly lost them after defaulting on the payments).
To obtain a mortgage, the parties to the transaction must file certain forms. HUD-1 Settlement Statements are forms that require specified information to be disclosed to the lender (here, Wells Fargo or Wachovia Bank). Wells Fargo's form required that the seller pay no more than two percent of the buyer's closing costs and specified that there could be no cash credits to the buyer. Wachovia's form required that the closing agent disclose refunds, repair allowances, the seller's payment of buyer's fees, or similar concessions.
The HUD-1 forms submitted by the Duruisseaus' buyers contained several misrepresentations. The buyers represented that they provided cash at closing even though they did not. Andre Long misrepresented his assets under Deion's direction. Further, the Duruisseaus stated that they were owed tens of thousands of dollars for repairs done on certain homes even though those repairs were actually not completed.
At closings, Lee signed the forms in his capacity as settlement agent.1 The Duruisseaus also signed the forms, indicating that they were the properties' sellers.
Based on these facts, criminal charges arose. A grand jury initially returned an indictment charging the Duruisseaus with one count of attempted bank fraud. The grand jury then returned a superseding indictment, which added a charge of false statements to a bank. Then, on February 27, 2014, the grand jury returned a second superseding indictment, which charged the Duruisseaus and Lee with: Count One - conspiracy to commit bank fraudunder 18 U.S.C. § 1349, Count Two - bank fraud against Well Fargo under 18 U.S.C. § 1344, and Count Three - bank fraud against Wachovia under 18 U.S.C. § 1344. It also charged the Duruisseaus alone with Count Four - making a false statement to Southern Heritage Bank under 18 U.S.C. § 1014.
Appellants filed two pretrial motions for bills of particulars. The district court granted their motion in part as to Count One, requiring the Government to provide particulars as to (1) all the bank transactions that were part of the conspiracy (and with which Lee was involved); and (2) the dates, times, and places of the conspiracy and the identities of the named co-conspirators. The court also granted Appellants' motion as to Count Two, requiring that the Government (1) identify all of the fraudulent real estate transactions, (2) specify which fraudulent real estate transactions involved fraud committed by Lee, (3) designate which specific documents contained false or misleading statements for each transaction, and (4) provide the dates and places of the fraudulent transactions.
After a jury trial, Appellants moved for a judgment of acquittal, which the district court granted as to Count Four of the indictment. Counts One, Two, and Three were submitted to the jury, and the jury returned a verdict of guilty for all three Appellants on those counts.
Appellants filed a post-trial motion for a judgment of acquittal, which the district court granted as to Count Three because the Government had failed to offer proof that Wachovia Mortgage Corporation was insured by the Federal Deposit Insurance Corporation ("FDIC"), which was required to be a "financial institution" for purposes of the bank-fraud statute. The court denied the motion with respect to Counts One and Two.
Before sentencing, Appellants filed objections to their presentence investigation reports ("PSRs"), including objections to the loss calculations, which affect the offense level used to calculate a defendant's sentencingguidelines range. The district court held sentencing hearings for each appellant, and it overruled their objections to the loss calculations and adopted the methods used in the PSRs. Ultimately, Deion was sentenced to 144 months' concurrent imprisonment, restitution, and a fine. Lee was sentenced to sixty months' concurrent imprisonment, restitution, and a fine. Lashawn was sentenced to a day of imprisonment, supervised release conditions including fifty-two weekends in jail, restitution, and a fine.
Appellants now appeal their convictions on several grounds.
Lashawn contends that the Government did not proffer sufficient evidence to support an inference that she knowingly assisted a fraudulent scheme. We review the district court's denial of a motion for a judgment of acquittal de novo but remain "highly deferential to the verdict." United States v. Velasquez, 881 F.3d 314, 328 (5th Cir. 2018) (internal quotation marks omitted). We resolve any credibility determinations, inferences, and conflicts in the evidence in favor of the verdict. Id. at 328-29. We therefore uphold the conviction if "any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." United States v. Imo, 739 F.3d 226, 235 (5th Cir. 2014) (per curiam) (internal quotation marks omitted).
To support a conspiracy conviction under 18 U.S.C. § 1349, the factfinder must determine, beyond a reasonable doubt, "(1) [that] two or more persons made an agreement to commit . . . fraud; (2) that the defendant knew the unlawful purpose of the agreement; and (3) that the defendant joined in the agreement willfully, that is, with the intent to further the unlawful purpose." United States v. Eghobor, 812 F.3d 352, 362 (5th Cir. 2015) (internal quotation marks omitted).
Our inquiry centers on whether sufficient evidence existed to support an inference that Lashawn knowingly assisted in the fraudulent scheme. The mere existence of a "family relationship or other type[] of close association" does not prove a conspiracy. United States v. White, 569 F.2d 263, 268 (5th Cir. 1978). Similarly, a defendant who provides leadership for a company may not be convicted simply because the defendant "should have known" that some employees under their oversight were committing fraud. United States v. Ganji, 880 F.3d 760, 775-76 (5th Cir. 2018) (emphasis removed). We agree, therefore, that Lashawn's familial relationship with Deion would not support a conviction. On the other hand, direct evidence of involvement in a conspiracy is not necessary, and a jury may base a conviction on exclusively circumstantial evidence. See Nye & Nissen v. United States, 336 U.S. 613, 619 (1949).
Here, Lashawn signed Billionaire's articles of organization and identified herself as one of only two members owning the LLC. Then she prepared, signed, and filed Billionaire's annual reports. Moreover, an accountant who prepared personal tax returns for the Duruisseaus and corporate tax returns for Billionaire testified that Deion and Lashawn were "equal partners" and shareholders for Billionaire. At times, the accountant communicated solely with Lashawn, who was "knowledgeable" about Billionaire, to obtain information needed for tax returns. In addition, Agent Pamela McCarthy, who interviewed Lee as part of the investigation, testified that Lee said Lashawn "did in fact play a role" in the scheme, "handled the paperwork," and "was knowledgeable" about Billionaire's business of buying and selling real estate. To be sure, the evidence on this point was not overwhelming, and contradictory evidence existed. For example, at trial, Lee testified that he never saw Lashawn handle paperwork. But we accept the jury's credibility determinations and reasonable inferences. See Imo, 739 F.3d at 235.
Resolving inferences in favor of the verdict, the evidence supports a determination that Lashawn handled some financial paperwork for, was knowledgeable about, and was a part owner of Billionaire. A reasonable juror could draw the inference that a person who co-owns and prepares financial documents for a company would be aware of financial documents showing that the company was paid for home repairs (and would be aware that the company never actually completed the repairs). A reasonable...
To continue reading
Request your trial