United States v. Sheneman
| Decision Date | 18 May 2012 |
| Docket Number | Case No. 3:10-CR-120 JD |
| Parties | UNITED STATES OF AMERICA v. JEREMIE SHENEMAN |
| Court | U.S. District Court — Northern District of Indiana |
Pending before the Court is Defendant Jeremie Sheneman's Motion for a New Trial filed pursuant to Federal Rule of Criminal Procedure 33 [DE 92].
On September 9, 2010, an indictment was filed charging Defendant Jeremie Sheneman with three counts of wire fraud under 18 U.S.C. § 1343. Specifically, count 1 of the indictment alleged that on or about October 3, 2005, Mr. Sheneman knowingly caused a wire transfer to be transmitted in the approximate amount of $561,945.58 from Mellon Bank to Real Estate Closing Account, and the funds were the proceeds of a mortgage loan for the purchase of 11-09A 128th Street, College Point, New York; count 2 of the indictment alleged that on or about September 14, 2005, Mr. Sheneman knowingly caused a fax transmission to be sent from GreenPoint Mortgage to Equity Settlement Services that requested completion of closing forms on the property located at 11-11 128th Street, College Point, New York; and, count 3 of the indictment alleged that on or about October 3, 2005, Mr. Sheneman knowingly caused a fax transmission to be sent from Equity Settlement Services to A.W. First Source Funding that consisted of broker fee request submissions and an insurance binder for the property located at 11-11 128th Street, College Point, New York.
To sustain the charges, the government had to prove that Mr. Sheneman knowingly devised or participated in the scheme to defraud or to obtain money or property by means of false pretenses, representations or promises, as described in the count of the indictment; that he did so knowingly and with the intent to defraud; that the false pretenses, representations or promises were material; and that for the purpose of carrying out the scheme or attempting to do so, he caused interstate wire communications to take place in the manner charged in the particular count. See United States v. Henningsen, 387 F.3d 585, 589 (7th Cir. 2004); Pattern Criminal Federal Jury Instructions for the Seventh Circuit, p. 214.
The government's theory of the case was that Mr. Sheneman provided materially false information to mortgage brokers, Mr. Andrew Weiske and Mr. Alex Veksler, which was then relayed to prospective lenders to secure four million dollars in residential mortgage loans on behalf of his grandmother, Phyllis Sheneman. Mr. Sheneman himself had terrible credit and could not get approved for the loans, so he used Phyllis Sheneman's name and good credit to secure the mortgages on eight different properties. Although there was no evidence to indicate whether all of the mortgage loans were subprime or another type of loan, the government argued that regardless of the loan type, the lenders would (and did) rely on the information provided in the loan applications to determine the lenders' risk of lending before providing the mortgages.
The government contended that the scheme worked because Mr. Sheneman had knowledge of the lending process and prerequisites on account of his previous employment as a loan officer at Tri State Mortgage. Mr. Sheneman knew what false information to provide to get the loan applications approved, and then processed the loans through Superior Mortgage. Inparticular, Mr. Sheneman submitted false information relative to Phyllis Sheneman's employment income, the nature and scope of her consignment shop, the extent of Phyllis Sheneman's actual financial liabilities, the intended use of the properties, and the source of the purchase price funds.1
Mr. Sheneman's defense theory was that he merely assisted his grandmother in locating, purchasing, and managing the eight investment properties. And although he managed real estate from an office at Superior Mortgage, he was never a loan officer at Superior Mortgage and he did not process Phyllis Sheneman's loans. Mr. Sheneman acknowledged that he sent Phyllis Sheneman's actual bank statements and financial information2 to Mr. Weiske and Mr. Veksler for the purpose of securing the mortgages; however, Mr. Sheneman denied completing the residential loan applications and denied reviewing the completed loan applications prior to their submission to the lenders. Mr. Sheneman maintained that the false information that ultimately appeared in the residential loan applications was the fault of the brokers and/or lenders, who assisted Phyllis Sheneman with completing the loan applications and calculated her income based on subprime lending programs available at the time. In particular, Mr. Sheneman wouldargue that some of the mortgages were issued pursuant to a 'twelve-month bank statement subprime lending program' whereby income was calculated by the lender after a self-employed borrower sent the lender a year's worth of bank statements.
Mr. Sheneman contended that once the loan applications were completed by brokers and/or lenders, they were sent directly to Phyllis Sheneman, who signed all of them. Mr. Sheneman's position was that given the lending climate and loose lending standards at the time, the lenders never sought verification of the information contained in the loan applications and essentially subjected themselves to fraud by others.
The jury did not believe Mr. Sheneman's story and found Mr. Sheneman guilty of all three counts of wire fraud on March 30, 2011. After the jury was discharged, counsel for Mr. Sheneman orally moved for a judgment of acquittal consistent with Rule 29(c), arguing that the verdicts were inconsistent with the evidence. The Court denied the motion on the basis of Rule 29's standard, finding that the evidence amply supported the verdicts.
Thereafter, Mr. Sheneman claimed that his convictions were the result of his trial counsel's ineffectiveness, thus denying Mr. Sheneman his Sixth Amendment right to an effective advocate. Given that Mr. Sheneman wanted his Rule 33 motion to allege the ineffectiveness of trial counsel, Mr. Robert Truitt, the Court: appointed Mr. Sheneman new counsel, Mr. Clark Holesinger [DE 82, 102]; gave Mr. Holesinger additional time to file the Rule 33 motion—which was filed [DE 92, 92-1, 93] and responded to [DE 105]; determined by agreement of the parties that Mr. Sheneman waived the attorney-client privilege with respect to Mr. Truitt's alleged ineffective assistance [DE 102]; and, held an evidentiary hearing on January 11, 2012 [DE 118].During the evidentiary hearing, Mr. Truitt and Mr. Sheneman testified, and argument was presented by Mr. Holesinger and by counsel for the government [DE 118]. After the evidentiary hearing, counsel were afforded an opportunity to file supplemental briefs because Mr. Holesinger wanted additional time to consider whether he would be advancing arguments in addition to the issues identified at the evidentiary hearing. On January 26 and 30, 2012, counsel filed their supplemental briefs [DE 121, 122], and the matter is ripe for ruling.
Mr. Holesinger's original motion and memorandum [DE 92, 92-1, 93] provided an extensive list of vacuous contentions concerning Mr. Truitt's trial performance. For instance, Mr. Holesinger indicated that Mr. Truitt failed to limit evidence of mortgages outside of the indictment, failed to "call witnesses" including lenders and loan officers who would testify to subprime lending guidelines and requirements, and failed to do thirty-nine other identified actions that Mr. Sheneman and his family summarily listed in a three page document [DE 92-1, Exhibit A]. These contentions were not supported with any argument or analysis of how the identified conduct constituted deficient performance or resulted in prejudice to Mr. Sheneman. Mr. Holesinger specifically admitted that the concerns listed in Exhibit A, standing alone, did not meet Mr. Sheneman's burden in showing that had those concerns been addressed by Mr. Truitt, then the outcome of trial would have been altered. Thus, Mr. Holesinger represented to the Court that the Court should focus its attention only on the arguments made during the evidentiary hearing. Mr. Holesinger later confirmed that in fact he did not wish to elaborate on any items that were not raised at the hearing [DE 121].
As a result, Mr. Holesinger withdrew the Defendant's host of undeveloped andunsupported arguments,3 and presented only the following allegations of ineffectiveness for the Court's consideration: (1) Mr. Truitt's failure to call an expert on subprime mortgage lending, attorney Phillip Bornstein, and accountant Kenneth Daniel; (2) Mr. Truitt's failure to pursue the origin and validity of the "411" letters; (3) Mr. Truitt's failure to assert the insanity defense; and, (4) Mr. Truitt's statement during closing argument that a person "can't defraud someone or an institution or a bank if they don't care if they are defrauded, and that's what has happened." [DE 81 at 132, Trial Transcript Vol. III]. The Court now addresses each of Mr. Sheneman's claims.
Under Federal Rule of Criminal Procedure 33, "the court may vacate any judgment and grant a new trial if the interest of justice so requires." The motion is addressed to the discretion of the court and the power to grant a new trial should be invoked only in the most extreme cases. United States v. Linwood, 142 F.3d 418, 422 (7th Cir. 1998), cert. denied, 525 U.S. 897 (1998); United States v. Gonzalez, 93 F.3d 311, 315 (7th Cir. 1996) (citations omitted).
On a motion for a new trial, the court does not need to view all evidence in favor of thegovernment, "[r]ather, the court considers whether the verdict is against the manifest weight of the evidence, taking into account the credibility of the witnesses." United States v. Washington, 184 F.3d 653, 657 (7th Cir. 1999), cert. denied, 533 U.S. 961 (2001). A court must...
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