In the 

United States Court of Appeals 

For the Seventh Circuit ____________________

Nos. 11‐3006 & 11‐3018

UNITED STATES OF AMERICA,

Plaintiff‐Appellee,

v.

SAMANTHA JOHNSON and TRACI GRAY,

Defendants‐Appellants.

____________________

Appeals from the United States District Court for the

Western District of Wisconsin.

Nos. 3:11‐cr‐13‐bbc‐2 & 3:11‐cr‐13‐bbc‐1 — Barbara B. Crabb, Judge.

____________________

ARGUED JUNE 1, 2012 — DECIDED SEPTEMBER 6, 2013

____________________

Before FLAUM, ROVNER, and WILLIAMS, Circuit Judges.

WILLIAMS, Circuit Judge. Like many other couples, Traci

Gray and Vince Anderson wanted to buy a home for their

family. With the help of Gray’s friend, Samantha Johnson,

and the assistance of a shady mortgage broker, Gray and

Anderson were able to obtain a loan to finance their home

purchase—albeit with a falsified loan application. Several

years after they bought the home, a jury convicted Gray and
2 Nos. 11‐3006 & 11‐3018

Johnson on charges of mortgage fraud and conspiring to

commit mortgage fraud.

On appeal, Gray and Johnson argue that the government

failed to present sufficient evidence to prove they conspired

to commit mortgage fraud beyond a reasonable doubt. But

we think the jury had enough evidence to conclude that

Gray and Johnson conspired with their mortgage broker to

submit a loan application that included statements they

knew to be false in order to influence the lender’s decision.

Gray and Johnson also contend that the district court abused

its discretion by denying them the opportunity to present

testimony from other borrowers to show their mortgage

broker’s history of duping his clients. Because the broker’s

prior wrongdoing was not very probative of Gray’s and

Johnson’s guilt, the district court acted within its discretion

when it granted the government’s motion in limine to ex‐

clude testimony from other borrowers about the broker’s in‐

teractions with them. We affirm.

I. BACKGROUND

In 2006, Gray, a legal secretary, and Anderson, her boy‐

friend, decided to purchase a $322,000 home in Prairie du

Sac, Wisconsin. They planned to live in the home with their

children, with Anderson paying half the mortgage. Gray

sought financing with the assistance of Brian Bowling, a

mortgage broker who owned a company called Platinum

Concepts. Due to Anderson’s bad credit, however, the couple

did not qualify for financing. Gray then tried to qualify with

her brother, but they too were unsuccessful.

On October 3, Gray’s friend Samantha Johnson sent Gray

an email offering to be her co‐borrower, under the condition
Nos. 11‐3006 & 11‐3018 3

that Gray provide her with a written promise that she would

only be on the loan as a co‐borrower for two years. (Johnson

received a finder’s fee from Shannon Barman, who was the

general contractor, the daughter of the builder/seller, and

Johnson’s childhood friend.) Gray forwarded the email to

Bowling and asked whether Johnson could apply for the

loan with her as a non‐occupant borrower. Bowling, who be‐

lieved the arrangement was feasible, informed Gray that she

could now qualify for a non‐occupant, stated‐income loan.

After reviewing the proposed terms of that loan, however,

Gray decided against applying because the monthly pay‐

ment was too high. Bowling then offered an owner‐occupy,

stated‐income loan for her and Johnson. Although the own‐

er‐occupy loan required Gray and Johnson to obtain a larger

second mortgage to finance their home purchase, they de‐

cided to go ahead and apply anyway. Bowling sent their ap‐

plication to Fremont Investment & Loan, a federally insured

lender who specialized in stated‐income loans, also known

as “liars’ loans” because the lender typically did not verify

the financial information supplied by applicants for such fi‐

nancing. See United States v. Phillips, Nos. 11‐3822 & 11‐3824,

2013 U.S. App. LEXIS 18430, at *4 (7th Cir. Sept. 4, 2013) (en

banc).1

                                                 

1 A recent en banc decision dealt with another instance of alleged mort‐

gage fraud involving the same dishonest mortgage broker from this case.

See Phillips, 2013 U.S. App. LEXIS 18430, at *2‐4. The appellants in Phillips

challenged the exclusion of testimony regarding statements their broker

made to them concerning the meaning of certain terms in the mortgage

application and the importance that the lender would attach to certain

information in their application. See id. at *9‐13. A majority of this court

found this exclusion to be erroneous. Id. at *21‐22. Gray and Johnson

(continued)
4 Nos. 11‐3006 & 11‐3018

Bowling testified that, at some point prior to the closing,

he had a telephone conversation with both Johnson and

Gray to review the information he supplied in their final

loan application. According to Bowling, he told both women

that they would be listed as occupants of the property, that

their incomes would be inflated, and what the monthly

payment for the loan would be. Bowling did this to avoid

any possibility that Johnson and Gray would be surprised by

the application information or the loan terms and refuse to

go forward with the closing.  

Shortly before the closing, Bowling held an in‐person

meeting at his office with Gray, Johnson, builder/seller Dick

Hinrichs, and Barman to review the terms of the proposed

owner‐occupy loan and to discuss the need for a second

mortgage from Hinrichs. Although Hinrichs initially balked

at the second mortgage because its terms required him to

lend more than he expected, he ultimately relented and even

agreed to forgive $32,000 of the $48,000 second mortgage.

The parties signed the second mortgage that evening and

forward‐dated it to November 16, the date of the closing.

Gray, Johnson, Bowling, Hinrichs, Barman, and the clos‐

ing agent all attended the closing. Gray and Johnson ini‐

tialed every page of the final loan application and signed it

in four places, including once above a written notice that it is

                                                 

have not raised such an argument here. Instead, their appeal challenges

the sufficiency of the evidence to sustain the conspiracy verdict and the

exclusion of extrinsic evidence related to their broker’s prior bad acts in

preparing fraudulent loan documents for other clients. Given the differ‐

ences in the claims raised in each case, we do not rely on Phillips in de‐

ciding this appeal.
Nos. 11‐3006 & 11‐3018 5

a federal crime to knowingly make a false statement on a

loan application. The closing proceeded without incident,

and Gray and Johnson received a $273,700 mortgage from

Fremont and, at least on paper, a $48,300 second mortgage

from the seller.

Gray and Johnson acknowledge that the final loan appli‐

cation which they initialed and signed contained a number

of false statements. Among other untrue assertions, both

Gray and Johnson stated that they: earned a combined

$11,000 per month; would live in the home together as their

primary residence; would make the mortgage payments to‐

gether; and would have a second mortgage with the seller

for $48,300 to cover the difference between the purchase

price of the home and the mortgage they received from

Fremont. In reality, Gray and Johnson had a combined

monthly income of approximately $5,000, Johnson would

not be living in the home or contributing to the mortgage,

and the seller forgave $32,000 of the $48,300 second mort‐

gage before the closing.

Mortgage broker Bowling became the subject of a federal

investigation into his involvement in mortgage fraud. Sen‐

tenced to fifty‐one months’ imprisonment, he agreed to testi‐

fy against Gray, Johnson, and other clients, in hopes of hav‐

ing his sentence reduced. At Gray’s and Johnson’s June 2011

trial, Bowling testified about the scheme to falsify the loan

documents, his discussions with Gray and Johnson regard‐

ing the false information he included in the loan application,

and a meeting where the parties discussed the details of the

scheme. He could not, however, remember the dates of these

interactions.  
6 Nos. 11‐3006 & 11‐3018

On cross examination, Bowling admitted to submitting

false loan applications, inflating applicants’ income, exag‐

gerating assets, understating liabilities, falsifying job titles

and employment histories, misrepresenting the sources of

down payments, and engaging in silent second mortgages.

Counsel also impeached Bowling with specific instances of

untruthful conduct including forging signatures on loan

documents.

The government called several other witnesses, including

Anderson, Hinrichs, the general contractor, and the closing

agent. Anderson testified that Johnson did not live at the

home or contribute to the mortgage and that the plan was to

have her on the loan for two years until he could improve his

credit score. The closing agent testified that with Gray and

Johnson she would have followed her standard practice at

closing, which is to review each document with the buyer,

provide a brief overview, and allow the buyers time to read

the document if they so choose.  

Neither Gray nor Johnson testified. They called a few

witnesses, including two former loan officers who worked

for Bowling and who testified that he was not a truthful per‐

son by reputation or in their personal opinion.  

The jury convicted Gray and Johnson on both counts,

and the court sentenced Gray to two months’ imprisonment

and Johnson to one day of confinement. The court also or‐

dered both women to pay $66,377 in restitution. Gray and

Johnson appeal, challenging the sufficiency of the evidence

for the conspiracy count and the district court’s decision to

exclude extrinsic evidence of Bowling’s history of duping

innocent borrowers.
Nos. 11‐3006 & 11‐3018 7

II. ANALYSIS

A. Sufficient Evidence to Support Gray’s and Johnson’s

Conspiracy Convictions

Gray and Johnson first argue that the evidence before the

jury was insufficient to sustain a conviction on the conspira‐

cy count. A defendant challenging a jury verdict must

demonstrate that no reasonable jury could have reached the

same verdict. United States v. Farris, 532 F.3d 615, 618 (7th Cir.

2008). We will “overturn a conviction based on insufficient

evidence only if the record is devoid of evidence from which

a reasonable jury could find guilt beyond a reasonable

doubt.” United States v. Hills, 618 F.3d 619, 637 (7th Cir. 2010).

Under 18 U.S.C. § 1014, it is a crime to “knowingly

make[] any false statement or report ... for the purpose of

influencing in any way the action of” a federally insured in‐

stitution. To satisfy its burden of showing that the appellants

engaged in a conspiracy to violate § 1014, the government

must prove that (1) the conspiracy charged in the indictment

existed; (2) each defendant knowingly became a member of

the conspiracy with an intention to further the conspiracy;

and (3) a member of the conspiracy committed an overt act

in furtherance of the conspiracy. United States v. Lee, 558 F.3d

638, 645 (7th Cir. 2009).

The government’s evidence was sufficient to support the

jury’s verdict. First, Bowling’s testimony that he brokered the

loan at issue, that he reviewed the false statements he made

in the final loan application with Gray and Johnson prior to
8 Nos. 11‐3006 & 11‐3018

the closing, and that Gray and Johnson agreed to those falsi‐

ties to obtain the desired loan strongly support the existence

of the conspiracy to knowingly make false representations to

influence the lender’s decision. The government also pre‐

sented evidence that both Gray and Johnson knowingly par‐

ticipated in the conspiracy. Bowling testified that he, Gray,

Johnson, and Hinrichs met before the closing to discuss the

terms of the owner‐occupy loan and the second mortgage

from Hinrichs. He also testified that Gray turned down the

non‐occupant borrower loan (in favor of the owner‐occupant

loan) because the monthly payments were too high. In addi‐

tion to Bowling’s testimony, the government introduced the

October 3 email from Johnson to Gray in which Johnson of‐

fered to be on the loan for two years and which Gray then

forwarded to Bowling. The government also offered into ev‐

idence the final loan application, which included the false

statements and Gray’s and Johnson’s initials and signatures.

Finally, the government proved overt acts in furtherance of

the conspiracy with the October 3 email and the signed and

submitted false loan application. A reasonable jury could

have found Gray and Johnson guilty of conspiracy based on

this evidence.

On appeal, Gray and Johnson contend that they never

reviewed the falsified loan application and that Bowling’s

testimony to the contrary is not credible. Without that testi‐

mony, Gray and Johnson argue, the government’s evidence

of conspiracy is insufficient. This argument is unpersuasive.  

To the extent the jury credited Bowling’s testimony, we

will only set that credibility determination aside if the testi‐

mony is “exceedingly improbable.” United States v. Smith,

576 F.3d 681, 687 (7th Cir. 2009) (internal quotation marks
Nos. 11‐3006 & 11‐3018 9

and citations omitted). Exceedingly improbable testimony is

that which is “internally inconsistent or implausible on its

face.” United States v. Cardona‐Rivera, 904 F.2d 1149, 1152 (7th

Cir. 1990).  

Gray and Johnson repeatedly characterize Bowling’s tes‐

timony as “internally inconsistent.” This characterization is

inaccurate. A fairer representation of Bowling’s testimony

would be “imprecise.” For example, Bowling admitted that

he could not recall the dates of a key meeting and phone

conversations with Gray and Johnson. But he consistently

testified that the meeting and phone calls occurred, and

Gray and Johnson presented no evidence to the contrary.

Bowling’s inability to recall dates does not make his testimo‐

ny internally inconsistent.

Gray and Johnson also argue that Bowling’s testimony is

improbable because the government failed to introduce evi‐

dence confirming the phone calls between Bowling and the

Defendants. According to their reasoning, since the govern‐

ment did not introduce evidence corroborating the phone

calls, they must not have happened. But the jury was not re‐

quired to make the same leap in logic.

Key documents and other witnesses corroborated many

portions of Bowling’s testimony as to Gray’s and Johnson’s

involvement in the conspiracy. The most important piece of

evidence was the loan application containing numerous false

statements which Gray and Johnson initialed and signed in

the presence of Bowling and others at the closing. The Octo‐

ber 3 email showed the terms of the actual agreement be‐

tween Gray and Johnson in writing. And Gray’s boyfriend

testified that Johnson did not live with the couple and that

they planned to replace Johnson on the loan within two
10 Nos. 11‐3006 & 11‐3018

years. Both Hinrichs and Barman testified that they met with

Gray, Johnson, and Bowling at Bowling’s office shortly be‐

fore the closing to discuss the loan and the second mortgage

from Hinrichs. Furthermore, the evidence before the jury

showed that Gray and her boyfriend found the home, that

Gray recruited other potential co‐borrowers, and that John‐

son reached out to Gray and received a finder’s fee.  

Gray and Johnson emphasize Bowling’s lack of credibil‐

ity, pointing specifically to his admission of illegal activity.

The jury was aware of Bowling’s fraud and dishonesty, and

defense counsel impeached him on specific instances of un‐

truthful conduct. That the jury credited his testimony in

spite of his history is not grounds for overturning the jury’s

verdict. See, e.g., United States v. Wilson, 31 F.3d 510, 514 (7th

Cir. 1994) (holding that evidence will not be considered in‐

credible as a matter of law even if “totally uncorroborated

and comes from an admitted liar, convicted felon, large‐scale

drug dealing, paid government informant”).

B. Excluding Extrinsic Evidence of Bowling’s Dealings

with Other Borrowers Was Not an Abuse of Discre‐

tion

Before trial, the government filed a motion in limine to

preclude Gray and Johnson from introducing extrinsic evi‐

dence that Bowling prepared false loan applications for oth‐

er borrowers who were not aware that he was doing so. The

court granted the motion, explaining that Gray and Johnson

could cross‐examine Bowling about his prior bad acts and

whether he duped other borrowers but under Federal Rule

of Evidence 608(b), they could not prove those prior bad acts

with extrinsic evidence—namely, the testimony of borrowers

duped by Bowling. The district court also rejected Gray’s
Nos. 11‐3006 & 11‐3018 11

and Johnson’s argument that such testimony would be ad‐

missible under Rule 404(b). Gray and Johnson challenge that

decision, arguing that the court’s refusal to allow them to in‐

troduce evidence of Bowling’s past dealings with unsuspect‐

ing borrowers prevented them from negating one of the key

elements of the government’s case: that they knowingly par‐

ticipated in the conspiracy.  

“We review a district court’s decision to admit or exclude

evidence for abuse of discretion.” United States v. Boros, 668

F.3d 901, 907 (7th Cir. 2012). Federal Rule of Evidence 404(b)

generally prohibits “[e]vidence of a crime, wrong, or other

act ... to prove a person’s character in order to show that on

a particular occasion the person acted in accordance with the

character.” That rule allows such evidence in limited situa‐

tions, namely to prove “motive, opportunity, intent, prepara‐

tion, plan, knowledge, identity, absence of mistake, or lack of

accident.” Fed. R. Evid. 404(b)(2).

A defendant can “introduce evidence of a government

witness’s prior bad acts if that evidence tends to negate the

defendant’s guilt.” United States v. Sanders, 708 F.3d 976, 992

(7th Cir. 2013). When a defendant seeks to admit this “non‐

defendant” or “reverse” 404(b) evidence, “a district court

should balance the evidence’s probative value under Rule

401 against considerations such as prejudice, undue waste of

time[,] and confusion of the issues under Rule 403.” United

States v. Reed, 259 F.3d 631, 634 (7th Cir. 2001); see also United

States v. Seals, 419 F.3d 600, 606 (7th Cir. 2005). We have not‐

ed that in most cases “the only serious objection to [reverse

404(b)] evidence is that its probative value is slight, as it may

just amount to pointing a finger at someone else who, hav‐

ing a criminal record, might have committed the crime the
12 Nos. 11‐3006 & 11‐3018

defendant is accused of committing.” United States v. Murray,

474 F.3d 938, 939 (7th Cir. 2007).

The district court did not abuse its discretion in exclud‐

ing extrinsic evidence of Bowling’s prior instances of falsify‐

ing loan documents without the applicants’ knowledge. The

probative value of the reverse 404(b) evidence here was

slight. Whether Bowling had a pattern and practice of pre‐

paring fraudulent loan applications that defrauded both

lenders and borrowers was not the issue in this trial. The dis‐

trict court acted within its discretion when it determined

that allowing extrinsic evidence to prove Bowling’s prior bad

acts would distract jurors from the issue at hand—whether

Gray and Johnson knew that the documents they initialed

and signed contained false statements. See United States v.

Alayeto, 628 F.3d 917, 922 (7th Cir. 2010) (affirming exclusion

of reverse 404(b) evidence in light of “danger that the jurors

would be distracted from the central issue in the case—

[defendant]’s intent—by prolonged discussions of [accom‐

plice]’s post‐arrest activities”). Even if Bowling had a history

of duping borrowers, Gray and Johnson still could have will‐

ingly conspired with him to submit their falsified applica‐

tion. Their knowledge—not his history—was what the jury

needed to determine. See, e.g., id. (affirming trial court’s ex‐

clusion of instances in which accomplice convinced other

drug mules to transport drugs when “contested evidence

may have demonstrated [accomplice’s] intent to deliver the

narcotics, but it would not have been significantly probative

of [defendant]’s intent”).

Furthermore, the district court was within its discretion

in excluding this extrinsic evidence because Bowling’s testi‐

mony made the jury well aware of his capacity for defraud‐
Nos. 11‐3006 & 11‐3018 13

ing others without their knowledge. On cross‐examination,

Bowling admitted to committing a number of acts of mort‐

gage fraud over the years, including falsifying income val‐

ues, forging signatures, and mischaracterizing the occupan‐

cy status of applicants. Although Bowling never testified

that he did these things without the applicants’ knowledge,

the jury was still aware that Bowling had previously made

material misrepresentations to lenders and the lenders had

no idea Bowling lied to them. In light of the jury’s awareness

of Bowling’s nature as a serial fraudster, the extrinsic evi‐

dence Gray and Johnson sought to introduce would have

added little to the jury’s understanding of Bowling’s in‐

volvement in the mortgage fraud conspiracy.  

III. CONCLUSION

For the reasons set forth above, we AFFIRM the judg‐

ment of the district court.