United States v. Mshihiri

• Decision Date: 14 March 2016
• Docket Number: No. 14–3802.,14–3802.
• Citation: 816 F.3d 997
• Parties: UNITED STATES of America, Plaintiff–Appellee v. Alpha Rashidi MSHIHIRI, Defendant–Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

816 F.3d 997

UNITED STATES of America, Plaintiff–Appellee

v.Alpha Rashidi MSHIHIRI, Defendant–Appellant.

No. 14–3802.

United States Court of Appeals, Eighth Circuit.

Submitted: Oct. 19, 2015.

Filed: March 14, 2016.

David Genrich, AUSA, Minneapolis, MN, for Plaintiff–Appellee.

Rick E. Mattox, Prior Lake, MN, for Defendant–Appellant.

Before WOLLMAN, BEAM, and GRUENDER, Circuit Judges.

WOLLMAN

, Circuit Judge.

Alpha Rashidi Mshihiri was convicted of one count of conspiracy to commit bank fraud, in violation of 18 U.S.C. §§ 1344

and 1349 ; three counts of bank fraud, in violation of 18 U.S.C. §§ 1344 and 2; one count of mail fraud, in violation of 18 U.S.C. §§ 1341 and 2; and one count of wire fraud, in violation of 18 U.S.C. §§ 1343 and 2. The district court¹ sentenced Mshihiri to 150 months' imprisonment and ordered him to pay restitution in the amount of $1,971,091.91. We affirm.

I. General Background

Mshihiri has a bachelor's degree and had worked as a business analyst for a large national bank, servicing a no-money-down mortgage product. In 2003 or 2004, Mshihiri founded a mortgage company named GWP Mortgage (GWP), at which he served as president and chief executive officer. He became a licensed mortgage broker in Minnesota in 2005.

At GWP, Mshihiri supervised the processing of loan applications; he was also responsible for compliance with state and federal law; he formed GWP's policies, directed its initiatives, and managed its day-to-day operations. In October 2007, GWP went out of business and filed for bankruptcy. Its operations, however, carried on through two successor companies, Pristine Home Loans (Pristine) and Pristine Finance. Pristine was located in the building where GWP had operated, and it employed many of the individuals who had worked for GWP. Mshihiri identified himself as a consultant to Pristine and as CEO of Pristine Finance. Mshihiri also formed Kilimanjaro Investment Group (KIG), which bought and resold foreclosed properties, and a company called VANY, which was also used in real estate transactions. As explained more fully below, Mshihiri used these companies in an elaborate mortgage fraud scheme.

In July 2013, a grand jury returned an indictment charging Mshihiri with the counts set forth above. The indictment alleged that Mshihiri had engaged in a scheme to defraud mortgage lenders from June 2006 through April 2009. Specifically, the scheme involved obtaining funds from financial institutions by recruiting straw buyers to participate in the purchase of residential properties and submitting false information and documentation in support of their mortgage applications. The indictment identified four properties involved in the scheme: a penthouse condominium in Bloomington, Minnesota (the Penthouse); a duplex in Minneapolis, Minnesota (the Inglewood Duplex); a single-family home in Minneapolis (the 33rd Street Property); and Mshihiri's own single-family home in Independence, Minnesota (the Broadmoor Residence). With inflated purchase prices and, in most cases, sales by a co-conspirator to a straw buyer, Mshihiri and others derived profits from the sales of the properties. Recruiters, brokers, loan officers, and others were paid kickbacks for their roles in the scheme.

Mshihiri has raised several arguments on appeal. He contends that the district court should have suppressed evidence seized pursuant to a warrant, as well as evidence of statements that he made to federal agents. He also argues that the government failed to prove a single conspiracy and that the evidence instead established multiple transactions or conspiracies. He contends that the district court should have suppressed his pretrial and in-court identification by a witness. Finally, he claims that the district court made factual errors in determining his sentence. We address each argument in turn, recounting additional facts as necessary.

II. Motion to Suppress Evidence

After Mshihiri became a suspect in a mortgage fraud investigation, federal agents applied for warrants to search the Broadmoor Residence, Mshihiri's laptop computer, and his electronic storage devices. Internal Revenue Service Special Agent Jim Shoup submitted an affidavit in support of the warrants, stating that he had interviewed a confidential reliable informant (CRI) on several occasions and that the CRI had implicated himself and Mshihiri in fraudulent conduct. The affidavit set forth specific acts completed by the CRI in furtherance of the mortgage fraud conspiracy, explaining that the CRI knew of Mshihiri's fraudulent conduct "because CRI # 1 committed fraud with ... Mshihiri." Shoup also stated that he had reviewed loan records, real estate purchase records, bank records, and state charging documents that indicated that Mshihiri was involved in fraudulent conduct. Shoup attested that the CRI had identified another individual, Oluwaleye Oluwatula, who had assisted Mshihiri in fraudulent acts. When interviewed by Shoup, Oluwatula admitted that he had worked with Mshihiri to obtain fraudulent mortgage loans. The applications for the search warrants were granted, and agents searched the Broadmoor Residence on June 30, 2010, while Mshihiri was traveling abroad.

On September 16, 2010, Shoup and United States Secret Service Special Agent Michael Olson coordinated with Customs and Border Protection (Customs) officers to interview Mshihiri and to execute a search of his laptop upon Mshihiri's return from Dar es Salaam, Tanzania. Accordingly, when Mshihiri arrived at the Minneapolis–St. Paul International Airport, a Customs officer intercepted him at the immigration entry point, led him to baggage claim, and then escorted him to a reception area.

According to Olson, he and Shoup met Mshihiri in the reception area, where they identified themselves as federal agents and presented their credentials. They asked whether Mshihiri would be willing to speak with them, explaining that Mshihiri was not under arrest or obligated to answer questions. Olson testified that Mshihiri agreed to be interviewed and voluntarily accompanied them to an interview room. The agents entered the room first and sat at a table across from Mshihiri, who sat "right next to the door." The agents were wearing casual clothes, and Olson testified that if he was wearing his service weapon, it would have been concealed. According to Olson, no Customs officer was present during the interview.

Olson described Mshihiri's demeanor as calm, inquisitive, and alert. Using a normal tone and volume, Shoup asked Mshihiri several questions about the suspected mortgage fraud, including whether Mshihiri's wife was involved. Mshihiri also asked questions, trying to understand the purpose of the investigation. Olson testified that during the forty-minute interview, Mshihiri did not request a break or try to access his cell phone. He also did not ask to consult a lawyer or ask to call his wife so that she could call a lawyer on his behalf. Olson testified that "[i]f [Mshihiri] would have asked for a lawyer, we wouldn't have questioned him."

Shoup ended the interview abruptly, after changing the tone of his voice and accusing Mshihiri of lying. Shoup gave Mshihiri a copy of the search warrant and advised him that the U.S. Attorney's office had issued a target letter for him. Olson could not remember whether Mshihiri's laptop was searched at the beginning or the end of the interview, but he testified that he and Shoup searched Mshihiri's person after the interview ended. Olson testified that he and Shoup then left the airport and that Mshihiri probably "went out the normal way, back out through the passport control area in the main terminal."

According to Mshihiri, a Customs officer escorted him to an interview room, where he met Olson and Shoup. Mshihiri testified that he was exhausted from his travels and the time difference. When Mshihiri asked to call his wife, the Customs officer seized his cell phone, and thereafter told him, "You need to cooperate; otherwise, your Immigration status is going to be compromised." Mshihiri claimed that the agents disregarded his request for an attorney and his request to call his wife so that she could contact an attorney. As the interview continued, Shoup threatened Mshihiri and his wife, saying that they were "going down" and that they should make arrangements for their children. The Customs officer looked inside the interview room numerous times during the interview. Mshihiri testified that he was never told he was free to leave and that he answered the agents' questions because he "didn't have a choice" and "it felt like [he] couldn't get out of that room."

Mshihiri moved to suppress the evidence seized as a result of the search warrants and the statements he made during the September 16, 2010, interview. He argued that the affidavit in support of the search warrants was insufficient to establish probable cause, that the interview constituted a custodial interrogation during which he was not advised of his rights under Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966)

, and that the statements he made during the interview were not voluntary. Adopting the report and recommendation of the magistrate judge,² the district court denied the motion.

Mshihiri first argues that the affidavit in support of the search warrant was insufficient to establish probable cause because the affidavit wrongly identified the CRI as a confidential reliable informant. According to Mshihiri, the CRI should have been identified as a cooperating witness, and the CRI's misidentification prevented the issuing judge from making a fair probable cause determination. "As a reviewing court, we pay ‘great deference’ to the probable cause determinations of the issuing judge or magistrate, and our inquiry is limited to discerning whether the issuing judge had a substantial basis for concluding that probable cause existed." United States v. Lucca, 377 F.3d 927, 933 (8th Cir.2004)

(quoting Illinois v. Gates,...