Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-04-01947/USCOURTS-ca8-04-01947-0/pdf.json

Parties Involved:
John Lloyd Halloran
Appellant
United States of America
Appellee

Document Text:

1

The Honorable Michael J. Davis, United States District Judge for the District

of Minnesota.

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 04-1947

___________

United States of America, *

*

Plaintiff–Appellee, *

* Appeal from the United States

v. * District Court for the

* District of Minnesota.

John Lloyd Halloran, *

*

Defendant–Appellant. *

___________

Submitted: May 12, 2005

Filed: July 28, 2005

___________

Before WOLLMAN, BYE, and COLLOTON, Circuit Judges.

___________

BYE, Circuit Judge.

John Lloyd Halloran appeals the thirty-seven month sentence imposed by the

district court1

 after he pleaded guilty to wire fraud in violation of 18 U.S.C. § 1343.

On appeal, he challenges the district court’s sentencing findings with respect to the

amount of loss and the sophistication of his means to commit the fraud. Halloran also

argues for the first time on appeal he is entitled to be resentenced because his

sentence violates the Sixth Amendment. For the following reasons, we affirm the

judgment of the district court.

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I.

On February 22, 2003, Halloran placed an advertisement on the Internet

offering to sell a mortgage on a piece of real estate located at 3835 Lyndale Avenue

North in Minneapolis, Minnesota. The principal sum of the mortgage was purported

to be $160,000 with a note balance of $124,400. In reality, however, the mortgage

did not exist, and Halloran did not own the property which was allegedly encumbered

by it. Nevertheless, on February 24, 2003, a mortgage broker from Wes-Com

Funding, Limited responded to Halloran’s offer to sell the mortgage on the Lyndale

property. In an effort to foster the sale of the mortgage, Halloran provided Wes-Com

with numerous fraudulent documents purporting to show that Halloran had a valid

mortgage to sell. He created these fraudulent documents using a typewriter from

CopyMax. Halloran used the name Jay Hawthorne,Vice President of The Gallery,

Incorporated when he provided these documents. Halloran identified himself as

President of The Gallery. 

On April 2, 2003, Wes-Com advised Halloran that Metropolitan Mortgage had

agreed to purchase the fraudulent mortgage for $115,000. Wes-Com requested

Halloran provide it specific documents to facilitate the sale of the mortgage. On May

13, 2002, in response to the documentary request, Halloran faxed numerous

fraudulently created documents to Wes-Com. The documents included an option

agreement; page one of a purchase agreement regarding the non-existent mortgage;

a U.S. Bank down payment check from a fabricated buyer, Chester Pepper, in the

amount of $35,000; and a fictitious deposit slip purporting to corroborate the deposit

of the $35,000 down payment. 

In addition to the fraudulent documents faxed to Wes-Com, to further execute

his scheme Halloran created a fake mortgage and made it appear as if he had the

authority to sell the mortgage. He accomplished this by creating a fictitious warranty

deed that purported to transfer ownership of the Lyndale property from its rightful

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owner, Howard Garren, to The Gallery. Halloran then created a second fictitious

warranty deed which purported to transfer the property from The Gallery to Chester

Pepper. These deeds contained forged signatures and were fraudulently notarized.

After creating the fraudulent warranty deeds, Halloran filed them with the Hennepin

County Recorder’s Office. Halloran then made it appear as if The Gallery had loaned

funds to Pepper to purchase the Lyndale property. Based on this purported financing

by The Gallery, Halloran created the fake mortgage between Pepper and The Gallery,

the mortgage he was attempting to sell. 

Once the fraudulent mortgage and other fake documents were created and

recorded, Halloran was in a position to close on the sale of the fraudulent mortgage

to Metropolitan Mortgage. The closing was being arranged by John F. Bonner, a

Minneapolis lawyer. Bonner, however, discovered Halloran was attempting to sell

a fraudulent mortgage and contacted the Federal Bureau of Investigation (FBI). On

June 23, 2003, Halloran contacted Bonner, who by that time had agreed to work with

the FBI, to set up the closing for June 30. Halloran proceeded to closing and was

subsequently arrested in possession of the $115,000 check he received from the sale

of the mortgage. 

As Halloran attempted to sell the mortgage to Wes-Com, his Internet

advertisement received two additional responses. The first additional response came

from a broker representing Greater Assets Investments (GAI) in Bolinbrook, Illinois,

who offered to purchase the mortgage for $117,000. On May 2, 2003, Halloran

provided GAI with numerous fraudulent documents in an effort to market the

fraudulent mortgage to GAI. An appraisal on the property was completed for GAI

on May 29, 2003, and Halloran continued to provide GAI with information and

documentation as late as June 23, 2003, when, approximately an hour after Halloran

had spoken with Bonner about scheduling the Metropolitan Mortgage closing,

Halloran faxed to GAI the fraudulent deposit slip purporting to show a down payment

by Pepper. A telephone conference between Halloran and GAI was scheduled on July

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2, 2003, two days after the Metropolitan Mortgage closing, to discuss the proposed

sale of the mortgage, but this telephone conference did not occur because of

Halloran’s intervening arrest.

The second additional response came from All Fund Mortgage in Eagan,

Minnesota. While pursuing the sale of the mortgage to Metropolitan Mortgage and

GAI, Halloran was also seeking to refinance the loan through All Fund in the amount

of $110,600. As with the other transactions, Halloran provided fraudulent documents

to various parties in an effort to accomplish this refinancing. On June 30, 2003, All

Fund scheduled the closing on the refinancing for July 3, 2003, three days after the

scheduled closing with Metropolitan Mortgage. The refinancing did not close, again

because of Halloran’s intervening arrest.

After Halloran’s arrest, a federal grand jury indicted him on one count of wire

fraud in violation of 18 U.S.C. § 1343. He pleaded guilty, and the matter proceeded

to sentencing. Prior to sentencing, the district court ordered the probation officer to

conduct a presentence investigation and prepare a report. Upon submission of the

report, as relevant to this appeal, Halloran objected to the probation officer’s

guideline enhancement for amount of loss. He maintained the probation officer

incorrectly calculated the loss figure using all three attempted transactions, rather

than the single transaction with Metropolitan Mortgage. Halloran also objected to the

probation officer’s inclusion of an enhancement for use of sophisticated means.

The district court issued an order addressing the disputed enhancements. The

district court found the loss figure for guideline purposes was $342,600, a figure

which included all three attempts to sell and refinance the mortgage. As a factual

matter, the district court found Halloran intended to close on all three transactions.

The district court also found the sophisticated means enhancement applicable. In

making this finding the district court recited the numerous actions taken by the

Halloran and concluded that he “coordinated a complex series of false property

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transfers using false identification, a corporate front, forged notary stamps, fraudulent

documents, forged signatures, fraudulently filed documents and the internet to

achieve his goals.”

Based on these findings, the district court determined Halloran’s total offense

level, with a three point reduction for acceptance of responsibility, was seventeen.

Halloran was in Criminal History Category III, which resulted in a guideline

imprisonment range of thirty to thirty-seven months. On April 14, 2004, the district

court sentenced Halloran to thirty-seven months imprisonment. He thereafter filed

a timely notice of appeal, Fed. R. App. P. 4(b), and we exercise jurisdiction pursuant

to 28 U.S.C. § 1291.

II.

On appeal, Halloran challenges the factual findings underlying the district

court’s imposition of guideline enhancements for amount of loss and sophisticated

means. We review these factual findings for clear error. United States v. Fink, 407

F.3d 908, 913 (8th Cir. 2005). To the extent Halloran challenges the application of

the sentencing guidelines to these factual findings, we review the district court’s

application de novo. Id. Halloran also contends, in a claim brought for the first time

on appeal, that his sentence was imposed in violation of the Sixth Amendment. We

review this claim for plain error. United States v. Olano, 507 U.S. 725, 731 (1993).

A.

Halloran contends the district court committed clear error when it found the

amount of loss was $342,600, an amount which included losses from all three

attempted transactions. Halloran argues he intended to peddle the counterfeit

mortgage only once, and the record does not support the district court’s finding to the

contrary. He argues the district court committed clear error by finding he intended

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to finance the mortgage three times because recording requirements would render

multiple attempts impossible. He dealt with multiple brokers, he asserts, only to

ensure that one deal would actually go through. 

In view of the clearly erroneous standard, we reject Halloran’s claim of error.

See Burns v. McGregor Elec. Indus., 955 F.2d 559, 563 (8th Cir. 1992) (“A factual

finding is clearly erroneous if it is not supported by substantial evidence in the record,

if it is based on an erroneous view of the law, or if the reviewing court is left with the

definite and firm conviction that an error has been made.”). The record contains

numerous pieces of evidence tending to show Halloran’s actions were not those of a

man seeking to finance a fraudulent mortgage on a one time basis. The record

indicates Halloran simultaneously proceeded on parallel tracks with each mortgage

company. His reason for simultaneous dealing may have been as innocuous as he

contends, but it is also reasonable to infer a nefarious purpose because his

simultaneous dealing increased the chances the companies would not find out about

each other. 

Evidence of his nefarious purpose can also be gained from his actions after he

established a closing date with Metropolitan Mortgage. When Metropolitan

Mortgage informed him they intended to close, Halloran immediately faxed fake

documents to GAI. This could reasonably be construed as an effort to push another

closing forward. Furthermore, Halloran scheduled a closing with All Fund two days

after the first scheduled closing with Metropolitan Mortgage. Because of the

suspicious timing of this second closing, the district court again could have

reasonably inferred Halloran intended to close on more than one transaction.

Even though Halloran argues three separate closings would have been

impossible, we believe the district court reasonably inferred it would not have been

impossible because of Halloran’s proven skill and propensity to create sham

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2

See also U.S.S.G. § 2B1.1 cmt. 2 (stating that impossibility is not a valid

consideration in determining the intended amount of loss).

-7-

documents.2

 Thus, while it is plausible Halloran intended to sell the counterfeit

mortgage only once, it is equally plausible he could have intended to execute on his

scheme three times. See United States v. Jackson, 155 F.3d 942, 948 (8th Cir. 1998)

(“As long as the loss determination is plausible in light of the record as a whole, clear

error does not exist.”). The district court therefore did not commit clear error by

figuring all three transactions into the amount of loss. See United States v. Tucker,

243 F.3d 499, 506 (8th Cir. 2001) (“Where there are two permissible views of the

evidence, the factfinder’s choice between them cannot be clearly erroneous.”). 

B.

Next, Halloran argues the district court committed clear error when it found,

for purposes of the two-level enhancement under U.S.S.G. § 2B1.1(b)(8)(C), that his

mortgage scheme involved the use of sophisticated means. According to Halloran,

his scheme did not employ sophisticated means–he simply used a typewriter to forge

documents which he filed with the County Recorder. 

Applying the previously mentioned standards of review to the present case, we

find no error in either the district court’s findings of fact or its application of the

guidelines thereto. While certain aspects of Halloran’s scheme were not especially

complex or especially intricate, see U.S.S.G. § 2B1.1 cmt. 6 (defining sophisticated

means as especially complex or especially intricate offense conduct pertaining to the

execution or concealment of an offense), his total scheme was undoubtably

sophisticated. See United States v. Jackson, 346 F.3d 22, 25 (2d Cir. 2003) (stating

that a scheme may be sophisticated even if each step in the scheme was not elaborate,

as long as the total scheme was sophisticated). Halloran’s scheme did not involve a

single fraudulent act, but a complex series of fraudulent transactions. To accomplish

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his multi-layered plot, Halloran required the use of a corporate entity, numerous

fraudulent documents and forged notary stamps. His elaborate scheme also required

him to manipulate official property records by recording fictitious transfers of

property and to exploit numerous individuals by forging their signatures on various

fraudulent documents. We therefore hold the district court did not commit clear error

by recognizing an enhancement for the use of sophisticated means where the scheme

involved “a complex series of false property transfers using false identifications, a

corporate front, forged notary stamps, fraudulent documents, forged signatures,

fraudulently filed documents.” See Tadlock v. Powell, 291 F.3d 541, 546 (8th Cir.

2002) (“A factual finding supported by substantial evidence on the record is not

clearly erroneous.”). 

C.

Finally, Halloran claims the district court violated the Sixth Amendment by

mandatorily enhancing his sentence based upon judge found facts. See United States

v. Blakely, 542 U.S. 296 (2004). Most of his arguments were put to rest in United

States v. Booker, 125 S. Ct. 738 (2005), and we will not resurrect them here. To the

extent a claim of error remains unsettled by Booker, he raised it for the first time on

appeal and therefore review is for plain error. See Olano, 507 U.S. at 731. To prevail

under plain error review, Halloran must show: there was error, the error was plain or

obvious, and the error affects his substantial rights. Finck, 407 F.3d at 916. If these

conditions are met, we exercise our discretion to notice a plain error “only if the error

seriously affects the fairness, integrity, or public reputation of judicial proceedings.”

Id.

“As in our en banc Pirani decision, it is obvious the first two plain error factors

are met here. The district court committed Booker error by applying the guidelines

as mandatory, and such error is clear and obvious at this time.” Id. (citing United

States v. Pirani, 406 F.3d 543, 550 (8th Cir. 2005) (en banc)). Halloran, however,

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cannot show the plain error affects his substantial rights. To do so, he must show by

a reasonable probability, based on the record as a whole, he would receive a more

favorable sentence under an advisory guideline regime. Id. Our independent review

of the sentencing transcript reveals nothing to suggest that the district court would

have imposed a lesser sentence under an advisory regime. We therefore conclude

Halloran cannot satisfy his burden of demonstrating plain error.

III.

We affirm the judgment of the district court.

______________________________

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