2009 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

7-16-2009

USA v. Black

Precedential or Non-Precedential: Non-Precedential

Docket No. 07-3285

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Recommended Citation

"USA v. Black" (2009). 2009 Decisions. Paper 992.

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 NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 07-3285

UNITED STATES OF AMERICA

v.

DEBORAH BLACK,

 Appellant

On Appeal from the United States District Court

for the Middle District of Pennsylvania

D.C. Criminal No. 06-cr-0336

(Honorable Sylvia H. Rambo)

Submitted Pursuant to Third Circuit LAR 34.1(a)

April 20, 2009

Before: SCIRICA, Chief Judge, SLOVITER and FISHER, Circuit Judges.

(Filed: July 16, 2009)

OPINION OF THE COURT

SCIRICA, Chief Judge.

On October 24, 2006, Deborah Black pleaded guilty to fraud against the United

States Department of Housing and Urban Development (HUD), in violation of 18 U.S.C.
 She pleaded guilty to criminal actions continuing from at least as early as March 1

1998, until October 5, 2006. Presentence Investigation Report (PSR) ¶ 1.

 The District Court has jurisdiction under 18 U.S.C. § 3231. We have jurisdiction 2

under 28 U.S.C. § 1291. 

2

§§ 1010 and 2. She was sentenced to serve a 12-month term of imprisonment and a 1- 1

year term of supervised release, to pay restitution in the amount of $511,251.56 and to

pay a special assessment of $100. Black appealed her sentence and we will affirm.2

I.

Black was a manager at Sunset Mortgage Company office in York, Pennsylvania. 

She frequently worked with Earl Ginter, David Walsh, and Ronald Furth, who bought,

refurbished and then resold houses in that area of Pennsylvania. Ginter, Walsh and Furth

used Black to secure mortgage loans for buyers who might be able to qualify for federally

funded mortgages through HUD. Appellee’s Br. 6. Black consistently violated the

requirements of the Federal Housing Administration Agency 203(b) insured mortgage

program. This federally funded mortgage insurance program allows certain applicants to

receive 100% of their down payment for the home purchase as a gift. The regulations of

the program preclude the seller of the property from being the gift donor except in two

circumstances: first, if a waiver is requested from HUD or second, if the seller provides

the funds in question in addition to a processing fee to a charitable non-profit 501(c)(3)

organization who then re-gift the funds to the purchaser. See Withdrawal of Proposed
 The District Court applied the guidelines in effect at the time of sentencing and 3

adopted the loss calculation based on the sale prices at the foreclosure sales. The court

also granted a downward departure because the seriousness of Black’s offense was

overstated with regard to the amount of loss in comparison to Black’s own personal

financial gain. 

3

Rule on Sources of Homeowner Downpayment Pursuant to Section 203 of the National

Housing Act, 66 Fed. Reg. 2851 (Jan. 12, 2001). 

Over the course of eight years, Black would inform Ginter, Walsh, and Furth when

a potential buyer needed a gift either to pay off debts or to make a down payment in order

to secure the government-insured mortgages. PSR ¶ 5. Black would then provide the

sellers with a forged “gift letter” so the sellers could provide the funds to the buyers but

make it look as though the funds came from a friend or a relative as a legitimate gift in

compliance with the federally funded program. Id. Several of these buyers defaulted on

their loans, causing substantial loss to HUD in the amount of $511,251.56. PSR ¶ 6. 

3

Black raises three issues on appeal: (1) whether the sentence imposed violates the

Ex Post Facto Clause of the Constitution, U.S. Const. art.1, § 9, cl. 3, by using the 2005

United States Sentencing Guidelines (U.S.S.G.) instead of the 2000 U.S.S.G. to calculate

its range; (2) whether the District Court erred in calculating the amount of loss owed by

Black, affecting both the amount of restitution she must pay and also her guidelines base
 The amount of loss attributed to Black is critical to the determination of her initial 4

guideline calculation, as it will be increased incrementally with the increase in the loss

attributable to her. United States v. Feldman, 338 F.3d 212, 215 (3d Cir. 2003). 

 We review the District Court’s interpretation of the sentencing guidelines de novo. 5

United States v. Langford, 516 F.3d 205, 209 (3d Cir. 2008). 

 Black does not describe exactly what amendment created this constitutional error but 6

simply contends that “it resulted in an adjusted offense level of twenty (20) versus an

offense level of sixteen (16) under the 2000 Guidelines (or lower if Black’s loss

(continued...)

4

offense level; and (3) whether the District Court erred in failing to grant a downward 4

departure under 2005 U.S.S.G. § 5K2.0.

II.

As a general rule, courts must conduct their initial advisory guideline calculation

with the guidelines in effect at the time of sentencing, not at the time of the crime. United

States v. Wood, 486 F.3d 781, 790 (3d Cir. 2007). Ex Post Facto Clause problems may 5

arise when the guidelines in effect at sentencing are more severe than those in effect when

the crime was committed: “[i]f the court determines that the use of the Guidelines Manual

in effect on the date that the defendant is sentenced would violate the ex post facto clause

of the United States Constitution, the court shall use the Guidelines Manual in effect on

the date that the offense of conviction was committed.” 2005 U.S.S.G. § 1B1.11(b)(1). 

Black contends the 2005 U.S.S.G. contained post-offense amendments that

required a more severe sentence than that prescribed by the 2000 U.S.S.G., creating Ex

Post Facto constitutional errors. Appellant’s Br. 1. Application Note 2 of 2005 U.S.S.G. 6
 (...continued) 6

calculation was correct).” Appellant’s Br. 1. The Government contends that this would

have made the offense level 13 instead of 17. Appellee’s Br. 11. 

 “We review the factual determinations underlying the application of the Sentencing 7

Guidelines for clear error, but we have plenary review over the legal determinations.” 

Feldman, 338 F.3d at 219. “[W]e exercise plenary review over whether an award of

restitution is permitted under law, but we review specific awards of restitution for abuse

of discretion.” Id. (internal quotation marks and citations omitted.). “If the district

court’s account of the evidence is plausible in light of the record viewed in its entirety,

the court of appeals may not reverse it. . . . Where there are two permissible views of the

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

v. City of Bessemer City, 470 U.S. 564, 573–74 (1985). 

5

§ 1B1.11 states that “the last date of the offense of conviction is the controlling date for

ex post facto purposes.” Black pleaded guilty to HUD fraud from at least as early as

March 1998 through October 5, 2006. PSR ¶ 1. As a guilty plea is an admission the

defendant “committed the crime charged against him,” North Carolina v. Alford, 400 U.S.

25, 32 (1970), Black’s admission of fraud through 2006 is sufficient for the District Court

to apply the 2005 edition of the Guidelines. Accordingly, no ex post facto problem arises

by applying the 2005 guidelines to Black’s sentence. 

III.

Black’s second issue on appeal is the amount of loss for which she is being held

responsible. Black contests both the amount of loss included as part of her guidelines 7

calculation and the actual restitution award imposed by the District Court. “[L]oss under

the Sentencing Guidelines is the greater of the actual loss caused by the defendant’s

illegal actions or the amount of loss the defendant intended to cause.” Feldman, 338 F.3d
 On remand, the district court found the exemptions were not proper and had caused 8

actual loss. See United States v. Feldman, 2004 WL 1964910 (E.D. Pa. 2004). 

6

at 215. However, “a restitution award can only be based upon actual loss.” Id. at 216. 

The Government bears the burden of establishing, by a preponderance of the evidence,

the amount of the loss. See United States v. Jimenez, 513 F.3d 62, 86 (3d Cir. 2008). 

Black contends that under Feldman, actual loss is determined by “compar[ing]

what actually happened with what would have happened” if Black had acted lawfully.

338 F.3d at 221. According to Black, the crime she committed had no effect on the

amount of money HUD ultimately lost because the loans could have been made lawfully

through non-profit charitable organizations and HUD would have still lost the same

amount of money. She alleges that when we compare what actually happened with what

could have happened lawfully, there will be a finding of zero loss. 

Feldman was a bankruptcy fraud case where we determined that the amount of loss

the defendant had to pay might not include improperly concealed assets and remanded so

that the district court could determine whether the concealed assets should be properly

exempted. Id. at 220-21. Feldman is distinguishable. Feldman did not properly disclose 8

his assets, yet even if he had, it might not have made a difference. In other words, the

illegality of Feldman’s actions was in question, whereas here, the illegality of Black’s

actions is proven. In the instant case, Black did not properly disclose who was providing
7

the money for the buyers, as was legally required. There is no question of the illegality of

her fraud and as such, Feldman is distinguishable. 

Black also contends that the amounts obtained by HUD for the properties at the

time of the initial resales were not accurate representations of their values as determined

by the real estate market. As a result of these low sale prices, Black alleges the amount of

loss attributed to her fraud is overstated. Black specifically points to five properties as

being severely undervalued by HUD because of the significant resale value they received

after they were sold by HUD. In BFP v. Resolution Trust Corp., the Supreme Court held

that “[m]arket value cannot be the criterion of equivalence in the foreclosure-sale

context.” 511 U.S. 531, 538 (1994). “‘[F]air market value’ presumes market conditions

that, by definition, simply do not obtain in the context of a forced sale.” Id. HUD sold

the houses as part of foreclosure sales; therefore, Black’s allegations of undervaluation

with respect to the fair market value of the properties are irrelevant in this context. These

properties were sold as is, without the benefit of open market conditions. The District

Court neither erred in imposing the restitution amount of $511,251.56 nor in using the

same number for guideline calculation purposes because the amount is an accurate

representation of actual loss. 

IV.

Finally, Black contends that under U.S.S.G. § 5K2.0, the District Court should

have granted a downward departure because her conduct (using the phony gift letters to
8

allow the sellers to finance the purchases) could have been legitimate (using non-profit

organizations to funnel the money from the seller to the buyer). Because there was a legal

method available which might have produced the same result, Black alleges she should

not be held as accountable for her unlawful conduct. Appellant’s Br. 9. We do not

address the merits of this contention because “[w]e do not have jurisdiction to review

discretionary decisions by district courts to not depart downward.” United States v.

Vargas, 477 F.3d 94, 103 (3d Cir. 2007).

V.

For the forgoing reasons, we will affirm the judgment of conviction and sentence.