USA. v. Wildor Wash.

Decision Date02 June 2010
Docket NumberCase No. 09-20107-1-JWL.
Citation724 F.Supp.2d 1122
PartiesUNITED STATES of America., Plaintiff, v. Wildor WASHINGTON, Sr., Defendant.
CourtU.S. District Court — District of Kansas

OPINION TEXT STARTS HERE

COPYRIGHT MATERIAL OMITTED.

COPYRIGHT MATERIAL OMITTED.

Donald Christopher Oakley, Office of United States Attorney, Kansas City, KS, for Plaintiff.

G. Gordon Atcheson, The Atcheson Law Office, Westwood, KS, for Defendant.

MEMORANDUM AND ORDER

JOHN W. LUNGSTRUM, District Judge.

On August 12, 2009, an Indictment was filed charging defendant Wildor Washington Sr. and Emma Jean Holmes with various federal offenses arising from an alleged scheme to purchase real estate using fraudulently obtained mortgages. On February 26, 2010, a jury convicted Mr. Washington on four of these felony charges: conspiracy to defraud, wire fraud in violation of 18 U.S.C. § 1343, commercial carrier fraud in violation of 18 U.S.C. § 1341, and money laundering in violation of 18 U.S.C. § 1956. 1 The matter is currently before the Court on Mr. Washington's Motion for New Trial (doc. # 99) and Motion for Judgment of Acquittal (doc. # 100). As explained more fully herein, the Court denies Mr. Washington's Motion for New Trial. As for Mr. Washington's Motion for Judgment of Acquittal, the Court grants the Motion as concerns Mr. Washington's conviction for money laundering under 18 U.S.C. § 1956, but otherwise denies the Motion.

I. Factual and Procedural Background
The Fraudulent Loan Applications

The testimony at trial established that Mr. Washington acted as mortgage broker for Ms. Emma Jean Holmes' purchase of three residential properties in Johnson County, Kansas. 2 The loan applications submitted for the purpose of obtaining these residential properties contained inaccurate and false information. Each application required Ms. Holmes to disclose her annual income and to indicate whether she intended to use the property as her primary residence. It is undisputed that the applications each overstated her income and assets, and falsely indicated that she would use the property as her primary residence. 3 Mr. Washington's signature appeared on one of the loan applications, the application for property located at 7917 W. 155th Place, Overland Park, Kansas. At trial, Mr. Washington testified that he did not prepare the loan applications containing the false information, and that the one signature that appeared on a loan application for 7917 W. 155th Place was not his own signature, but rather a forgery.

In furtherance of this defense, Mr. Washington presented evidence concerning a simultaneous mortgage fraud scheme conducted by Mr. Washington Sr.'s son, Wildor Washington, Jr. (Bill Washington, Jr.) and his girlfriend, Victoria (Ima) Bennett, a scheme which involved the use of forged signatures. For example, Mr. Washington introduced testimony Ms. Bennett provided as a witness in another criminal prosecution concerning the fraudulent scheme she engaged in with Bill Washington, Jr. Mr. Washington also pointed to evidence introduced concerning Ms. Bennett's role in the loan transactions with Ms. Holmes, contending that those involved in the Bill Washington, Jr.-Ima Bennett fraud scheme were responsible for the fraudulent signature appearing on the loan application.

However, during the course of an Internal Revenue Service investigation into these matters, Special Agent Henry Herron interviewed Mr. Washington, Sr. 4 Special Agent Herron testified that Mr. Washington admitted he had helped to prepare the loan applications for Ms. Holmes knowing that they contained false information concerning her financial status and her intent to live in the properties. 5 Agent Herron also testified that Mr. Washington admitted to signing the loan application for the property at 7917 W. 155th Place. At trial, Mr. Washington denied making these statements to Mr. Herron. Special Agent Herron also questioned Mr. Washington about whether Ima Bennett worked for Amstar Mortgage and Mr. Washington allegedly informed Mr. Herron that she did not in fact work for Amstar. For this statement, Mr. Washington was charged with making a false statement to a federal agent, in violation of 18 U.S.C. § 1001, a charge for which he was ultimately acquitted.

The Association with Amstar Mortgage

Yolanda Carrington owned a branch of Amstar Mortgage in the St. Louis metropolitan area, specifically Creve Coure. In April 2004, Mr. Washington, Sr., 6 Bill Washington, Jr., Ima Bennett and other individuals (“the Washington group”) travelled from Kansas City to St. Louis to discuss the possibility of the Washington group merging with and operating under Ms. Carrington's Amstar branch. However, corporate approval from Amstar was required in order for the Washington group to operate under the Amstar name. Ms. Carrington testified that she clearly expressed to the Washington group that they were not to close loans under the Amstar name until they received approval to do so, and that they never received such approval. Despite the fact they were not given permission to broker loans under the Amstar name, 7 the Amstar name appeared on two of Ms. Holmes's loan applications as the broker, and for all three transactions it was understood by the closing agents that the Washington's were operating as Amstar in providing broker services.

The Real Estate Transactions

Ms. Holmes purchased three properties, in all of which James and Doris Moser had an ownership interest. Each was in foreclosure at the time of sale. The transactions are discussed in detail below.

1. The Property at 7917 W. 155th Place

In July 2004, Ms. Holmes purchased a home at 7917 155th Place, for $314,000. The original price for the property set forth in the real estate contract was $305,000, but on the day of closing, Ms. Holmes agreed to pay $314,000 instead, and she and the sellers signed an addendum to the contract providing for the change. National City Mortgage provided Ms. Holmes with the loan to purchase the property, and Denise Robinett of Kansas Secured Title served as the closing agent for the sale of the property. Mr. Washington's signature appeared on the loan application as the broker. The application also listed Amstar Mortgage in St. Louis, Missouri, despite the fact that Mr. Washington never received permission to broker loans under the Amstar name. However, Mr. Washington testified at trial that he never wrote a loan under Amstar. He also testified that he had neither assisted in the preparation of the application nor had signed the application.

Ms. Robinett testified that Ms. Holmes, Mr. Washington and Mr. Moser, the seller, were all present at Ms. Holmes' closing. She explained that the mortgage broker (Mr. Washington) is typically present at closing. However, she found Mr. Moser's presence to be unusual, as the buyers and sellers typically sign the relevant documents at different times (i.e., there is a “buyer's closing” and a “seller's closing”). Moreover, she testified that she overheard Mr. Washington and Mr. Moser bickering about money at the closing. She also testified that she had Mr. Washington sign the loan application in her presence at closing. Mr. Washington denied having signed the loan application.

Ms. Robinett also explained that Mr. Washington did not receive a commission at closing on the sale, as would normally have occurred. Instead, he was required to pay the lender $1,962.50. Heritage Financial Investments, a company owned by Bill Washington, Jr., wrote a check to Kansas Secured Title for payment to the lender. However, the check was dishonored for insufficient funds, and the sellers instead agreed to pay the lender the money the broker owed. Ms. Robinett testified that she had the seller's promise to pay set forth in a written agreement because she found it unusual for the seller to offer to do so. Moreover, the sellers received nearly $40,000 from the sale of the property despite the fact that the property was in foreclosure. 8

2. The Property on Birch Street

In September 2004, Ms. Holmes purchased a home on Birch Street, for $360,000. People's Choice Home Loan, Inc. provided Ms. Holmes with the loan to purchase the property, and Denise Robinett again served as the closing agent. Thomas Carlson's signature appeared on the loan application as the broker. Off to the side, the application listed as his employer Amstar Mortgage, in Leawood, Kansas. Ms. Carrington and Mr. Greer each testified that they were not aware of an Amstar branch located in Leawood, Kansas. Mr. Carlson was not present at closing, and Ms. Robinett testified that she did not know him. She explained that she had worked on the sale with “Amstar,” represented by Washington Jr. and Washington Sr. 9 At trial, she could not recall whether or not Mr. Washington Sr. was present at the sale of the Birch property, although she stated was quite sure he had been present at the closing for the property at 7917 W. 155th Place. 10 Ms. Robinett also testified that the Washingtons, operating as Amstar, received $4,329 on the sale. 11 Although the property was in foreclosure, the Mosers again received nearly $40,000 from the sale. 12

During the closing on this property, Kansas Secured Title drafted a check payable to South and Associates, a law firm representing the lender of the sellers, for $312,617.80, to pay off the mortgage incurred by the sellers, as well as foreclosure costs. This check was paid from the proceeds of the loan obtained by Ms. Holmes. The government charged Mr. Washington and Ms. Holmes with money laundering in connection with this financial transaction.

Ms. Robinett testified that the lender for the sale of this property required as a condition of the loan that the closing documents be sent to the lender immediately after closing. 13 Pursuant to her usual practice, Ms. Robinett sent the closing documents to the lender via FedEx Priority Overnight, after the closing on September 9, 2004. Ms. Robinett also testified that it...

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    ...loans, then the scheme reached fruition only once all the requirements for obtaining the loan were satisfied.” United States v. Washington, 724 F.Supp.2d 1122, 1136 (D.Kan.2010). Because mailing the form was a required step in the process of obtaining the loan, the court reasoned, it “would......
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