United States v. Zar, Nos. 13–1111

• Court: U.S. Court of Appeals — Tenth Circuit
• Writing for the Court: MORITZ, Circuit Judge.
• Citation: 790 F.3d 1036
• Parties: UNITED STATES of America, Plaintiff–Appellee, v. Derek ZAR, Defendant–Appellant. United States of America, Plaintiff–Appellee, v. Michael Jacoby, Defendant–Appellant. United States of America, Plaintiff–Appellee, v. Susanne Zar, a/k/a Susanne Hames, Defendant–Appellant.
• Decision Date: 23 June 2015
• Docket Number: 13–1302.,13–1119,Nos. 13–1111

790 F.3d 1036

UNITED STATES of America, Plaintiff–Appellee
v.
Derek ZAR, Defendant–Appellant.

United States of America, Plaintiff–Appellee
v.
Michael Jacoby, Defendant–Appellant.

United States of America, Plaintiff–Appellee
v.
Susanne Zar, a/k/a Susanne Hames, Defendant–Appellant.

Nos. 13–1111
13–1119
13–1302.

United States Court of Appeals, Tenth Circuit.

June 23, 2015.

790 F.3d 1040

Ann Marie Taliaferro, Brown, Bradsha & Moffat, L.L.P., Salt Lake City, UT, for Defendant–Appellant Derek Zar.

Richard A. Hostetler, Law Firm of Richard A. Hostetler, Denver, CO, for Defendant–Appellant Michael Jacoby.

Jonathan D. Reppucci, Reppucci Law Firm, P.C., Denver, CO, for Defendant–Appellant Susanne Zar.

J. Bishop Grewell, Assistant United States Attorney (John F. Walsh, United States Attorney, with him on the brief) Office of the United States Attorney, Denver, CO, for Plaintiff–Appellee.

Before HARTZ, MATHESON, and MORITZ, Circuit Judges.

Opinion

MORITZ, Circuit Judge.

Defendants Michael Jacoby, Derek Zar, and Susanne Zar appeal convictions and sentences arising from their participation in a mortgage fraud scheme. The government tried the defendants together, but each defendant separately appealed and filed separate briefs. Because the defendants assert both joint and individual challenges to their convictions and sentences, we permitted the government to file a single consolidated answer brief and heard combined oral argument. We now resolve these three related appeals in a single opinion. Exercising jurisdiction under 28 U.S.C. § 1291 and finding no reversible errors, we affirm each defendant's convictions and sentences.

Background

Between January 2005 and September 2006, real estate agent Michael Jacoby devised and executed a mortgage fraud scheme involving the purchase of 18 residential properties in Colorado. Jacoby recruited willing sellers to sell homes at inflated prices, willing buyers to purchase the homes by obtaining mortgage loans based on falsified loan applications, and willing investors to supply short-term loans to cover the buyers' down payments.

Jacoby acted as realtor for each transaction, while Derek Zar and his mother, Susanne Zar (collectively, “the Zars”), were buyers. Derek Zar purchased seven of the properties with fraudulent loan applications and participated in the sales of four other properties either by arranging for the sale of or selling three properties to Susanne Zar and one to another buyer. Susanne Zar purchased six of the properties with fraudulent loan applications and participated in the sales of four other properties by preparing false documents to support Derek Zar's purchases.

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For some transactions, Jacoby arranged for sellers to “donate” part of the sales proceeds to grant programs without disclosing to lenders that the “donation” would be funneled back to buyers to repay short-term loans from investors covering the buyers' down payments. In other transactions, Jacoby arranged for back-to-back sales involving the same property. In the first sale, an LLC—usually one formed by the individual who acted as the buyer for the second sale—would purchase a new construction home from the home builder for cash at a discounted sales price. The LLC would then sell the home to the LLC's founder, as an individual buyer, at an artificially inflated price. As part of the second sale, the buyer would obtain a mortgage loan with a fraudulent loan application. The buyer would then use some of the excess loan proceeds to repay investors who contributed cash for the first sale to the LLC. Lenders eventually foreclosed on and sold all 18 homes but experienced collective losses of nearly $3 million.

Additionally, in 2007 Jacoby personally obtained two loans—one from First Bank to purchase a home and another from Citibank to refinance the same home. While securing the two loans, Jacoby made material misrepresentations and omissions by lying about his down payment source and income, failing to disclose that he did not initially purchase the home in an arm's length transaction, artificially inflating the home's sales price, and supplying an artificially inflated appraisal for the refinancing loan.

A federal grand jury indicted Jacoby, Derek Zar and Susanne Zar on charges of wire fraud and aiding and abetting in violation of 18 U.S.C. §§ 1343 and 2 and money laundering in violation of 18 U.S.C. § 1957. Additionally, in connection with his two personal loans in 2007, the grand jury indicted Jacoby on two counts of bank fraud in violation of 18 U.S.C. § 1344.

Following a three-week joint trial, the jury convicted Jacoby of 11 counts of wire fraud, three counts of money laundering, and two counts of bank fraud; Derek Zar of four counts of wire fraud and one count of money laundering; and Susanne Zar of three counts of wire fraud and one count of money laundering. The district court sentenced each defendant to a term of imprisonment followed by a period of supervised release and ordered each defendant to pay restitution.

Discussion

We first consider challenges by Derek Zar and Susanne Zar to the district court's denial of three pretrial rulings: the Zars' joint motion to sever their trial from Jacoby's and their joint motion to dismiss the indictment, both of which were based on alleged violations of the statutory speedy trial right, and the Zars' joint motion to suppress statements they made to IRS agents. Next, we consider alleged trial errors, including the defendants' joint challenge to a jury instruction and Susanne Zar's individual argument that the district court violated her Sixth Amendment right to confront the witnesses against her, namely Derek Zar. Then, we consider whether to address the defendants' ineffective assistance of counsel claims, which they jointly raise for the first time on appeal. Finally, we turn to the defendants' sentencing challenges.

I. Pretrial Rulings

A. Speedy Trial Act (Derek Zar and Susanne Zar)

Both Zars challenge two pretrial rulings: (1) the denial of their motion to sever their trial from Jacoby's trial, and (2) the denial of their motion, jointly filed pro se, to dismiss the indictment. Both motions alleged

790 F.3d 1042

violations of the Speedy Trial Act, 18 U.S.C. §§ 3161 –3174 (“the Act”).¹

Under the Act, federal criminal trials must commence within 70 days of public indictment or the defendant's first appearance, whichever is later. 18 U.S.C. § 3161(c)(1). But certain delays are excludable under 18 U.S.C. § 3161(h). As relevant here, § 3161(h)(1)(D) excludes periods of “delay resulting from any pretrial motion, from the filing of the motion through the conclusion of the hearing on, or other prompt disposition of, such motion.” Section 3161(h)(6) excludes “[a] reasonable period of delay when the defendant is joined for trial with a codefendant as to whom the time for trial has not run and no motion for severance has been granted.” And, § 3161(h)(7)(A) excludes “[a]ny period of delay resulting from a continuance granted by any judge ... on the basis of his findings that the ends of justice served by taking such action outweigh the best interest of the public and the defendant in a speedy trial.”

If a defendant is not brought to trial within the time limit set by § 3161(c) as extended by § 3161(h), “the information or indictment shall be dismissed on the motion of the defendant.” 18 U.S.C. § 3162(a)(2).

Here, all parties agree the Zars' speedy trial clock began to run on October 19, 2010, the date of Derek Zar's initial appearance. The government brought the Zars to trial on August 7, 2012—658 days later. The parties also agree that the 51–day period from October 28, 2010, the date Susanne Zar filed a motion for continuance, through December 17, 2010, the date the court heard the motion, is excludable under § 3161(h)(1)(D). But the parties disagree as to the number of remaining days that can be excluded, and the Zars reassert two alleged speedy trial violations they raised below in a motion to sever and a subsequent motion to dismiss the indictment.² We address each motion in turn.

1. Motion to Sever

The Zars challenge the excludability of the 130–day delay between March 19, 2012, and July 26, 2012, resulting from the district court's decision, on March 1, 2012, to vacate the March 19, 2012, trial date without setting a new one.³ Susanne Zar objected to vacating the trial date and, on March 8, 2012, moved to sever her trial from Jacoby's. The district court denied the motion on April 25, 2012. The Zars contend the district court abused its discretion in denying the severance motion because the 130–day delay violated their statutory speedy trial right.

We review the denial of a severance motion based on an alleged speedy trial violation for an abuse of discretion.

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United States v. Apperson, 441 F.3d 1162, 1190 (10th Cir.2006). But compliance with the Speedy Trial Act's legal requirements is subject to de novo review. United...