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Parties Involved:
Dianne Lewis
Appellant
United States of America
Appellee

Document Text:

UNITED STATES COURT OF 

TENTH CIRCUIT 

UNITED STATES OF AMERICA, 

Plaintiff-Appellee, 

v. 

DIANNE LEWIS, 

Defendant-Appellant. 

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u.fs~cJoRppeals APPEALdJn•IAM Tenth Circuit 

SEP O 5 1991 

ROBERT L. HOECKER 

Clerk 

No. 90-4066 

(D.C. No. 89-CR-64-W) 

(D. Utah) 

ORDER AND JUDGMENT* 

Before LOGAN and BRORBY, Circuit Judges, and BRIMMER,** Chief 

District Judge. 

Dianne Lewis (Lewis or Appellant) appeals her conviction for 

three counts of false statement to a bank, two counts of 

bankruptcy fraud, and three counts of perjury. She also appeals 

one aspect of her sentence on the false statement and bankruptcy 

fraud charges. We affirm. 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 

36.3. 

** The Honorable Clarence A. Brimmer, Chief Judge, United States 

District Court for the District of Wyoming, sitting by 

designation. 

Appellate Case: 90-4066 Document: 010110084290 Date Filed: 09/05/1991 Page: 1 
Background 

Lewis was indicted under eight counts of a nine-count federal 

indictment that charged her and her husband with various acts of 

fraud and dishonesty. Counts I-III charged Lewis with lying to 

three federally _insured financial institutions in violation of 18 

U.S.C. § 1014. The false statements were made within days of her 

husband's declaration of bankruptcy, when Lewis used false income 

information, a false name, and her daughter's social security 

number to secure loans which she used to purchase and furnish a 

house. Count IV charged Lewis with concealing assets from her 

husband's trustee and creditors in bankruptcy in violation of 18 

u.s.c. §§ 152 and 2. That charge stemmed from Lewis's plundering 

of the physical assets of her failed business venture, including 

building fixtures, office equipment, electronic equipment, 

household appliances, and video tapes, before the business's 

creditors could secure their collateral. Count V charged Lewis 

with fraudulently transferring certain accounts receivable 

(customer sales contracts from the failed business) with intent to 

defeat the bankruptcy code, also in violation of 18 u.s.c. §§ 152 

and 2. Finally, Counts VII-IX charged Lewis with lying under oath 

on three separate occasions before proceedings of a bankruptcy 

court, in violation of 18 U.S.C. § 1623. After a six-day jury 

trial, Lewis was found guilty on all counts. 

Lewis was sentenced by the district court on April 6, 1990. 

The bankruptcy fraud for which Lewis was convicted under Count V 

occurred before November 1, 1987, the effective date of the United 

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Appellate Case: 90-4066 Document: 010110084290 Date Filed: 09/05/1991 Page: 2 
States Sentencing Guidelines (U.S.S.G.). Lewis was sentenced on 

that count to a five year term under pre-guidelines law. 

Appellant does not challenge that aspect of her sentence. 

Lewis was sentenced under the sentencing guidelines for the 

remaining false statement, bankruptcy fraud, and perjury charges. 

A comprehensive Presentence Report was prepared by the United 

States Probation Officer. With respect to the false statement 

offenses and the Count IV bankruptcy fraud offense, the report 

1 determined a base offense level of six under U.S.S.G. § 2Fl.1. 

The report recommended upward adjustment of the offense level for 

the following specific offense characteristics: more than minimal 

planning, two levels; obstruction of justice, two levels; 

adjustment for role in the offense, two levels. 

not challenge those adjustments. 

Appellant does 

The presentence report also calculated the applicable 

adjustment for loss under u.s.s.G. § 2Fl.l(b)(l). The elements of 

loss caused by Lewis's fraudulent acts include the value of the 

fraudulently induced loans as well as outstanding debt to the 

bankruptcy trustee. The report found the loss range for these 

offenses to be $500,001-$1,000,000, and recommended an upward 

adjustment of eight offense levels under§ 2Fl.l(b)(l)(I). The 

report calculated a total offense level of twenty; a criminal 

1 Guidelines§ 2Fl.l(b)(l) was amended, effective November 

1989, to make the loss calculation table consistent with that 

tax evasion crimes. We apply the version in effect before 

1989 amendment. See u.s.s.G. App. C.78-C.79 (1990). 

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1, 

for 

the 

Appellate Case: 90-4066 Document: 010110084290 Date Filed: 09/05/1991 Page: 3 
history category of I; and a guideline sentencing range of thirtythree to forty-one months. 2 

At the sentencing hearing, the district court adopted the 

presentence report . subject to any objections presented. Lewis 

objected solely to the loss calculation, and argued the loss 

adjustment should be based on actual loss to the victims rather 

than the face value of the loans. The defense admitted the actual 

loss exceeded $200,000, but claimed it was less than $500,000, so 

that Lewis's total offense level would be nineteen, rather than 

twenty. The court rejected the argument and found the amount of 

loss is in the range of $500,001-$1,000,000. The court selected a 

sentence at the upper end of the guideline range, and imposed a 

sentence of forty-one months, to be followed by a three-year 

period of supervised release. 

Issues on Appeal 

Appellant timely appealed, raising four issues. Appellant 

argues that: the district court erred in not excusing a 

particular juror for cause; the testimony of appellant's prior 

attorney violated the attorney-client privilege; trial counsel 

provided ineffective assistance; and the district court improperly 

included the entire value of the loan in calculating the 

guidelines sentence. We turn now to the merits. 

2 With respect to the perjury counts, the presentence report 

calculated a total offense level of fifteen, which was less than 

the offense level calculated for the false statement and 

bankruptcy fraud counts. See U.S.S.G. § 3D1.4. 

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Appellate Case: 90-4066 Document: 010110084290 Date Filed: 09/05/1991 Page: 4 
Juror Bias 

Appellant first argues "[t]he lower court allowed a juror, 

who by her testimony and actions demonstrated clear bias toward 

individuals in Bankruptcy, to sit on the appellant's jury." 

Appellant identifies "a woman by the name of Lalonde" as the 

allegedly biased juror. However, Appellant failed to inform this 

court that Ms. Lalonde was not selected and did not sit on 

Appellant's jury. 

The transcript unmistakably reveals that Ms. Lalonde was not 

among the fourteen jurors impaneled in this case. Notwithstanding 

that fact, Appellant's discussion of this issue in brief concludes 

that "[t]he panel which served as the jury for the appellant in 

this matter was composed of at least one individual whose actions 

and words indicated that she was biased and prejudiced against the 

appellant for reasons of her bankruptcy situation." Whether this 

misrepresentation was made intentionally or inadvertently, we 

consider it inexcusable. 

Because the juror mentioned in Appellant's Brief did not even 

serve on Appellant's jury, this issue is frivolous. Appellant has 

not demonstrated any prejudice flowing from the district court's 

decision not to strike for cause a prospective juror who did not 

serve on Appellant's jury. We note Appellant did not even 

challenge Juror Lalonde. we thus find no error in the district 

court's exercise of its discretion. United States v. Porth, 426 

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Appellate Case: 90-4066 Document: 010110084290 Date Filed: 09/05/1991 Page: 5 
F.2d 519, 523 (10th Cir.), cert. denied, 400 U.S. 824 (1970). 

Attorney Testimony 

Appellant next argues the trial court allowed a prosecution 

witness to testify in violation of her attorney-client privilege. 

The witness was the attorney who represented Lewis at the time she 

gave perjurious testimony before a bankruptcy proceeding. 

Appellant claims the attorney's trial testimony violated the 

attorney-client privilege and prejudiced the Appellant by damaging 

her credibility. We disagree. 

On direct examination during the defense phase of trial, 

Lewis was asked to explain her testimony before a bankruptcy 

proceeding. 3 During that proceeding Lewis denied, under oath, 

having purchased a house and claimed her daughter purchased it. 

When asked about that answer during trial, Lewis explained that 

her attorney at the time of the deposition, Steven Dougherty, told 

her the home legally belonged to her daughter. The prosecution 

subsequently called Mr. Dougherty as a rebuttal witness, and 

sought his explanation of the advice he gave Lewis at the 

bankruptcy deposition. Dougherty was unable to remember his 

3 The testimony at issue formed the basis of the perjury charge 

contained in indictment Count VII. During the bankruptcy 

deposition, Lewis was asked the following question: "Now, Mrs. 

Lewis, I believe you purchased 7544 South Pebblesprings Court last 

November, is that correct?" After a pause during which, the 

transcript indicates, "[t]here was an attorney-client discussion," 

Lewis answered, "No, I did not purchase the home, Elisha Dianne 

Lewis did." Appellant has a daughter named Elisha Dianne Parker; 

she was eight years old at the time of the deposition. Elisha 

Dianne Lewis is apparently a fictitious name. 

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Appellate Case: 90-4066 Document: 010110084290 Date Filed: 09/05/1991 Page: 6 
specific discussions with Lewis, but said he told her to tell the 

t h t th d "t" 4 rut a e eposi ion. It is this ineffectual testimony that 

Appellant challenges on appeal. 

The proponent of the attorney-client privilege bears the 

burden of establishing both that the communications at issue are 

privileged and that the privilege was not waived. United States 

v. Jones, 696 F.2d 1069, 1072 (4th Cir. 1982); United States v. 

Bump, 605 F.2d 548, 551 (10th Cir. 1979). "The attorney-client 

privilege is lost if the client discloses the substance of an 

otherwise privileged communication to a third party." United 

States v. Ryans, 903 F.2d 731, 741 n.13 (10th Cir.) (citing Bump, 

605 F.2d at 551 ("Even if the privilege exists it is waived when 

the client voluntarily reveals the information to another .... ")), 

cert. denied, 111 S. Ct. 152 (1990). 

In this case, Appellant failed to establish the privileged 

nature of the communications she seeks to protect. Furthermore, 

even if the communications were privileged at one time, Lewis 

waived the privilege by disclosing the substance of the 

communications during her trial testimony. Ryans, 903 F.2d at 741 

n.13. During an in camera hearing about the admissibility of Mr. 

Dougherty's testimony, the trial judge held, with respect to 

4 When the trial questioning finally focused on the 

of the attorney-client discussion which took place 

deposition, Mr. Dougherty stated "I can't remember 

substance of what I said, and I can't remember if at 

told her to tell the truth. But I do remember telling 

the truth, and it could have been that time, yes." 

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substance 

during the 

the exact 

that time I 

her to tell 

Appellate Case: 90-4066 Document: 010110084290 Date Filed: 09/05/1991 Page: 7 
"specific things that [Lewis] testified to that were in any sense 

accusatory of [Dougherty] or indicating that he gave her 

particular advice, that [Dougherty] can be asked whether he gave 

her the advice that she claims was given." We agree, and find no 

error in the - district court's admission of Mr. Dougherty's 

rebuttal testimony. 

Ineffective Assistance 

Appellant next argues her "trial counsel's conduct rose to a 

level of ineffective assistance of counsel." The conduct 

Appellant offers in support of this argument involves nothing 

besides trial counsel's tolerance of the two alleged errors 

discussed above, and his failure to object and preserve those two 

issues for appeal. 

The government simply responds: 

Because Mrs. Lewis's contention that she was 

rendered ineffective assistance of trial counsel is 

based only on the notion that counsel simply sat idly by 

while the court committed error as outlined in her first 

two points on appeal, and since, for the reasons set 

forth above, the trial court did not err, this third 

contention must necessarily fail. 

We agree. Because Lewis cannot plausibly argue that "counsel made 

errors so serious that counsel was not functioning as the 

'counsel' guaranteed the defendant by the Sixth Amendment," 

Strickland v. Washington, 466 U.S. 668, 687 (1984), we reject her 

contention that trial counsel was constitutionally ineffective. 

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Appellate Case: 90-4066 Document: 010110084290 Date Filed: 09/05/1991 Page: 8 
Guidelines Sentence 

Finally, Appellant argues the district court erred by 

considering the entire value of the loan she fraudulently procured 

in calculating her guidelines sentence. Appellant argues we 

should remand this matter so the district court can determine the 

actual loss to the lending institution, apparently by subtracting 

the salvage value of the house from the face value of the loan. 

Whether the district court correctly computed the loss 

attributable to Lewis's fraud depends on whether the full value of 

the loan, or just the actual loss to the lender, should be 

considered. This is a legal question, which we review de novo. 

United States v. Whitehead, 912 F.2d 448, 451 (10th Cir. 1990). 

Guidelines§ 2Fl.l(b)(l) directs the sentencing court to 

increase the offense level for a fraud-based crime "[i]f the loss 

exceeded $2,000." The Commentary to § 2Fl. 1 explains: 

The amount of loss need not be precise. The court is 

not expected to identify each victim and the loss he 

suffered to arrive at an exact figure. The court need 

only make a reasonable estimate of the range of loss, 

given the available information.... The offender's 

gross gain from committing the fraud is an alternative 

estimate that ordinarily will understate the loss. 

u.s.s.G. § 2Fl.1, comment. (n.8). The commentary also refers to 

the commentary to§ 2Bl.1, which states "'Loss' means the value of 

the property taken, damaged, or destroyed." 

comment. ( n. 2 ) . 

u.s.s.G. s 2B1.1, 

Appellant's presentence report explained the loss calculation 

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in these terms: 

The ICA Mortgage Corporation foreclosed on the home Mrs. 

Lewis purchased with the $495,000 loan. Once the home 

is sold the proceeds will go toward paying her loan. 

However, ICA will suffer a loss, but the amount of that 

loss has not been determined. Mrs. Lewis owes 

restitution to American First Credit and Trans West 

Credit Union in the amount of $5,000 and $15,000 

respectively. Mrs. Lewis owes approximately $185,505 to 

the Bankruptcy Trustee in uncontested debt and there is 

another $240,284 in debt which is contested. 

The report determined "[t]he loss range for this offense is 

$500,001-$1,000,000 and is found in Section 2Fl.l(b)(l)(I)." 

After hearing testimony about the existence of substantial and 

unquantified materialmen's liens that significantly reduce the 

value of the house as collateral to the lender, the district court 

adopted the report's recommendation. 

"[A] defendant's offense level should not turn on whether or 

not the banks recovered some of their potential loan losses." 

United States v. Johnson, 908 F.2d 396, 398 (8th Cir. 1990). 

Rather, the sentencing court should focus on the amount of the 

possible loss which the defendant attempted to inflict. Id.; and 

see U.S.S.G. § 2Fl.1, comment. (n.7) ("if a probable or intended 

loss that the defendant was attempting to inflict can be 

determined, that figure would be used if it was larger than the 

actual loss"). 

We recently considered the meaning of the term "loss" in 

response to a similar argument. In United States v. Johnson, 

F.2d __ , (No. 90-6235, 10th Cir., filed August 15, 1991, slip 

op. at 27), we rejected an argument that the value of recovered 

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real estate should not be included in the loss caused by 

defendant's mail fraud and equity skimming. We stated "[t]he 

Government's reacquisition of the real estate through foreclosure 

does not change the fact that the Defendant took the real estate 

in the first place." . Id. at 26. To the same effect, see United 

States v. Westmoreland, 911 F.2d 398, 399 (10th Cir. 1990) ("that 

good police work diminished the actual loss to the employer victim 

should not affect the determination of the extent of defendant's 

culpability and responsibility for purposes of sentencing"). 

Likewise, the fortuity that the lender may be able to 

mitigate its actual loss through recourse to the house does not in 

any way reduce Lewis's culpability for fraudulently inducing a 

$495,000 loan. Appellant fraudulently borrowed and spent the full 

face value of the loan. She would not have received the loan but 

for her fraudulent acts. Combined with the other losses Appellant 

inflicted, the total loss figure is well within the $500,001-

$1,000,000 range of§ 2Fl.l(b)(l)(I). We hold the district court 

did not err in considering the full face value of the loan in 

calculating loss under the guidelines. 

Conclusion 

Finding no error, we AFFIRM Appellant's conviction and 

sentence. 

Entered for the Court: 

WADE BRORBY 

United States Circuit Judge 

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