N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT
UNITED STATES OF AM ER IC A, Plaintiff - Appe lle e , v. NIC HOLAS LINDSEY, De fe nda

nt - Appe lla

nt. No. 14-10004

D.C . No. 2:11-c r-00217-LDGC W H-1
M EM O R ANDUM *

Appe a l from

the Unite d

Stat e s Distric t C ourt for the Distric t of Ne v a da L loy d D. Ge orge , Se nior Distric t Judge , Pre siding Argue d a nd Subm itte d M arc h

18, 2016 San Fran c isc o , C a lifornia B e fore : NOONAN, GOULD, a nd FR IEDLAND, C irc uit Judge s. Nic hola s Lindse y

a ppe a ls his jury

c onvic tion a

n d se nte nc e for nine c ounts of wire fra ud in viola

tion of 18 U.S.C . § 1343 a nd one c ount of a ggravate d ide ntity the ft in viola

tion of 18 U.S.C . § 1028A. The distric t c ourt se nte nc e d Lindse y to
c onse c utive se nte nc e s of 108 m onths for wire fra ud a nd 24 m onths for ide ntity



# FIL ED
JUN 28 2016 M OLLY C. DW Y ER, CLERK U

. S. CO URT O F APPEALS

* This disposition is not a ppropria te for public at ion a

nd is not pre c e de nt e xc e pt a s provide d

by 9th C ir. R . 36-3.the ft. The c o urt a l so im pose d $2,286,911 in re stitution. Lindse y tim e l y a ppe a le d. W e hav e jurisdic tion unde r 18 U.S.C § 3742(a ) and 28 U.S.C . § 1291. In a n opinion file d c onc urre ntly with this me m orandum disposition, we

hold tha t le nde r
ne glige nc e in ve rify ing loa n a pplic ation inform ation, or e ve n inte ntiona l disre ga rd of the inform a tion, is not a de fe nse to fra

ud, so e vide nc e of suc h ne g lige nc e or inte ntiona l disre ga

rd is ina dm issiblea s a de fe n s e a ga inst c ha rge s of m o rtga g e fraud. W e furthe r hold, a s a m a tte r of la

w , tha t whe n a le n de r re que sts spe c ific inform a t ion in its loa

n a pplic a tions, fa lse re s ponse s to thosere que sts a re obje c tive ly

m a te ria l for purpose s of proving fra ud. In this me m orandum disposition, we

a ddre ss the re m a inde r of Lindse y ’ s c la im s, a ffirm i ng in pa rt a s to the c onvic tions, a

nd va c a ting these n te nc e and re m anding be c a u se of our rulings on the o bstruc tion of justic e e nha nc e m e nt a

nd the re stitution c a lc ulation. W e a lso de ny Lindse y ’ s a

pplic a tion for ba il pe nding a ppe a l
. 1. In his ope ning brie f, Lindse y c onte nde d tha

t the re we re thre e side b ar
c onfe re nc e s tha

t do not a ppe ar in the tria l tra

n sc ript c o nc e rning Lindse y ’ s c hose n de fe nse , the a dm ission of e xpe rt witne ss te stim ony by unqua lifie d individuals, a nd Lindse y ’ s de c ision to te stify on his own beha lf. Lindse y argue s tha

t the la c k of a transc ript le ave s him

una ble to prove tha

t he pre s e rve d his obje c tions a s to the first two issue s, subje c ting him to a m ore diffic ult sta

nda rd of re v ie w on a

p pe a l tha n he 2would fa c e if his obje c tions we re pre se rve d. As to the third issue , Lindse y argue s that the la c k of tra

nsc ript pre ve nts him

from proving tha

t he wa s not prope rly
warne d of the risks of te stify ing. Although c ourt re porte rs a re re quire d to re c ord
a ll proc e e dings in open c ourt, se e 28 U.S.C . § 753(b)(1), to wa rrant a re ve rsa l a de fe nda n t m ust suffe r pre

judic e from

an inc o m p le te tra n sc ript. U

nite d State

s v . C arrillo , 902 F.2d 1405, 1409 (9th C ir. 1990). Afte r Lindse y ’ s ope ning brie f wa s file d , the gove rnm e nt provide d tra nsc ripts of one of the pre v iously se a l e d side ba

rs. The tra nsc ript of this side

ba r showe d tha

t Lindse y ha d pre se rve d his obje c tions to the e xpe rt witne ss te stim ony . Although the transc ript doe s not re v e a l whe the r Lindse y p re se rve d his m at e ria lity c la im , we re vie wLindse y ’ s m at e ria lity c la im de
nov o , a s oppose d to unde r the m ore de fe re ntia l pla in e rror sta nda rd, in the opinion file d c o nc urre ntly

with this me m orandum

disposition. Ac c ordingly , we c onc lude that Lindse y suffe re d no pre

judic e a s a

re sult of thec ourt re porte r’ s fa ilure to transc ribe the se side ba

rs with re spe c t to pre s e rvation of theobje c t ions re ga rding the e xpe rt witne ss a

n d m a te ria lity

issue s. As to the unre c o rde d side ba r in whic h the d istric t c o urt c anva sse d Lindse y re ga rding his de c ision to te stify , the re c ord is insuffic ie nt to te l l whe t

he r this omission from

the tra nsc ript wa s pre

j udic ia l to Lindse y . For e xam

ple , the re is no de c la

ra t ion from

Lindse y or his tria l attorne y
re ga rding whe the r Lindse y

volunta rily te stifie d. This c la im

is m ore a p propria te for 3a

ha b e a s c orpus proc e e ding, in whic h Lindse y m ay supple m e nt the re c ord with
e vide nc e if he is a

ble to de m onstra

t e tha t the om ission of this side ba r from the transc ript wa s pre

judic ia l. Se e 28 U.S.C . § 2255(b). His curre nt c la i m of e rror from la c k of side ba

r tra nsc ript re lating to his de c i sion to te stify is the re fore de nie d without pre

judic e to his re n e wing tha t c la im if a ble to do so in a

ha be a s c o rpus pe tition properly

file d un de r 28 U.S.C . § 2255. 2. The distric t c ourt did not a buse its disc re tion in pe rm itting le nde rs’
e m ploy e e s to te stify

a s la y witne sse s rathe r tha

n a s e xpe rt witne sse s . Unde r Fe d. R . Evid. 701, a

la y witne ss’ s te stim ony m

ust be , i nte r alia , “ ra t iona lly ba se d on the pe rc e ption of thewitne ss.” A la y witne ss’ s te stim ony

“ ba se d upon pe rsona l obse rvation a

nd re c olle c tion of c onc re te fa c ts” sat isfie s tha t sta nda rd. Unite d State s v . Be c k , 418 F.3d 1008, 1015 (9th C ir. 2005) (quoting Unite d State s v . Alle n , 787 F.2d 933, 935 (4th C ir. 1986), v a c ate d on othe r grounds , 479 U.S. 1077 (1987)). Lindse y

ha s offe re d no e xpla

nation for why

the witne s se s’ te stim ony , whic h wa s ba se d on the ir pe rsona l obse rvat ions while working for the le nde rs— ra the r tha n on sc ie ntific , te c hnic a l, or spe c ia l iz e d knowle dge

— did not qua lify a s la y te stim ony . 3. The distric t c ourt did not pla inly e rr in pe rm itting te stim ony re g a rding prior ba d a c ts. Although the a dm ission of te stim ony

tha t Lindse y posse sse d stole n 4c ars or worke d without a m ortga ge lic e nse wa s like ly e rrone o us unde r Fe d. R
. Evid. 404(b), Lindse

y ha s not shown how the

a dm ission of this e

vide nc e a ffe c te d his substa ntia l rights, i.e
. , c h ange d the outc om e of the tria l
. Se e Unite d State s v . Brac y , 67 F.3d 1421, 1433 (9th C ir. 1995). 4. The distric t c ourt did not a buse its disc re tion in a

pply ing the a

buse of a position of trust e

nha nc e m e nt. Unde r U.S.S.G.§ 3B 1.3, the distric t c ourt m ay inc re a se the offe nse le ve l by t wo if the “ d e fe nda

nt a buse d a position of public or priva te trust . . . in a

m anne r that signific antly fa c ilita te d the c o m

m ission or
c onc e a l m e nt of the offe nse .” This e nha n c e m e n t is a

ppropria te for de fe nda

nts who posse s s profe ssiona l or m ana g e ria l disc re t ion. U.S.S.G. § 3B 1.3, Applic ation Note 1; se e also United State

s v . Laurie nti , 731 F.3d 967, 973 (9th C ir. 2013) (“ [T] he pre s e nc e or la c k of profe ssiona l or m ana ge ria l disc re tion re p re se nts the de c isive fa c t or in de c i ding whe the r a de fe nda n t oc c upie d a

position of trust.” (inte rna l quota t ions a nd c i t a tions omitte d )). Lindse y wa s e m ploy e d a s a

m o rtga ge loa

n offic e r a nd a te am le a de r for his m ortga ge group, a nd use d tha

t position of
a uthority to pe rpe trate the sc he m e . 5. The distric t c ourt did not a buse its disc re t ion in a

pply ing the sophistic ate d
m e ans e nha

nc e m e nt. Unde r U.S.S.G. § 2B 1.1(b)(10)(C ), the distric t c ourt m ay inc re a se the offe nse le ve l by t wo for c rim e s of “ sophistic ate d m e ans.” This is

5de fine d a s a

n “ e spe c ia lly

c om ple x or e spe c ia lly

intric at e offe nse c onduc t pe rta ining to the e xe c ution or c onc e a lm e nt of a n offe n s e ,” for e xam

ple , solic iting ope ra tions in a se pa ra te jurisdic tion. U.S.S.G. § 2B 1.1, Applic ation Note9(B ). This
e nha nc e m e nt a

pplie s whe n the c rim ina l sc h e m e is e xte n sive ly pla nne d a nd is m ore sophistic a te d tha

n a routine offe nse . Unite d State s v . Aragbay e

, 234 F.3d 1101, 1108 (9th C ir. 2000), supe rse d e d by statute on othe r grounds as rec ognize d by Unite d State s v . Mc Enry , 659 F.3d 893, 899 n.8 (9th C ir. 2011). Lindsey wa s
c onvic te d of ope ra ting a sc he m e in whic h he solic ite d stra w buy e rs from

othe r sta te s, pa id the m

for the i r ide ntitie s, a

nd c ontrolle d the m o rtga g e d prope rtie s to ge ne ra te inc om e . This sc h e m e wa s e xte nsive ly pla nne d a n d m ore sophistic ate d tha n a routine m ortga ge fra

u d. 6. The distric t c ourt found tha t Lindse y pe rjure d him se lf during tria l a nd
a pplie d a n obstruc tion of justic e e nha nc e m e n t, but did not expla in a t se nte n c ing why the pe rjury wa s m a te ria l or willful. Ac c ordingly , we m ust va c ate the se nte nc e
and re m and for the distric t c ourt to fully e xpla i n its re a soning on the e nha nc e m e nt. Se e Unite d State

s v . J ime n e z-Orte ga , 472 F.3d 1102, 1103 (9th C i r. 2007) (pe r
c uriam ). 7. W e a lso va c a te the am ount of re stitution a n d re m a n d for furthe r proc e e dings. The Pre se nte nc e R e port a nd te stim ony at se nte nc i ng indic ate s tha t 6the v ic tim s in this c a se are the fina nc ia l institutions tha

t suffe re d losse s at

the tim e of fore c losure , a s oppose d to the le nde rs who m a d e the origina l loa n s. The c orre c t
re stitution c a lc u lation in this c irc um sta nc e be gins with the am ount thevic tim pa id for the loa

n a nd/or c olla

te ra l, a n d subtra c t s the am ount re c oupe d from the re sa le of the c olla te ra l at fore c l osure . Se e Unite d State s v . Luis , 765 F.3d 1061, 1067 (9th C ir. 2014); se e also Robe rs v . Unite d State s , 134 S. C t. 1954, 1856 (2014). Howe ve r, Age n t

B urris’ te stim o ny re ga

rding the c a lc u lation of re s titution is not
e ntire l y c le ar. W e c annot disc e rn from the re c ord whe the r the vic t im s purc ha se d loa n s, or c olla

t e ra l prope rtie s, or both. Also, it is not c le a r whe the r Age nt B urris be ga n he r c a l c ulations with the origina l loa

n am ount, or with the

am ount the
se c o nd fina

nc ia l institution pa

i d for the loa

n a nd/or c olla

te ra l. If Age n t B urris’
c a lc ulat ions be ga

n with theorigina l loa

n am ount, the n the re stitution c a lc ulation
wa s e rrone ous. Ac c ordingly , we re m and for the distric t c o urt to re c a lc ulate the
am ount of re stitution in a c c o rdanc e with Luis a

n d Robe rs. 8. Lindse y

ha s a lso file d a

m otion for ba il pe nding a ppe a l. Se e Fe d. R . App. P. 9(b). 1 The distric t c ourt found tha t Lindse y ha d not shown by c le ar and

1 Although on a

p pe a l Lindse y

e rrone o usly

la be le d this a

m otion pursua

nt to Fe d. R . App. P. 9(a ), whic h de s c ribe s the sta nda rd for re le a se be fore judgm e nt of c onvic tion, we c onstrue it a s a Fe d. R . App. P. 9(b) m otion, a s this is apostc onvic tion m otion. 7c onvinc i ng e vide nc e tha t he wa s not a

da nge r to the sa fe ty

of a ny othe r pe rson or the c om m unity , or tha

t he wa s not like ly

to fle e . Se e 1 8 U.S.C . § 3143(b)(A). W e
re vie w the se findings for c le ar e rror, se e Unite d State s v . Handy , 761 F.2d 1279, 1283 (9th C ir. 1985), a

nd c o nc l ude tha

t the distric t c ourt’ s c o nc lusions we re not
c le arly e rrone ous. In Unite d State s v . Re y nolds , we he ld tha

t “ da nge r m a y , at le a s t in som e
c a se s, e nc om

p a ss pe c unia

ry or e c onom ic ha

rm .” 956 F.2d 192, 192 (9th C ir. 1992). This is a

n a ppropria te c a se in whic h to c onc l ude tha t the e c onom i c or
m one ta ry ha rm s c a u se d by Lindse y show his da

nge rousne ss. Lindse y

ran a n
e la borate m ortga ge fra

u d sc he m e tha

t ta rge te d vulne ra

ble and im

p ove rishe d individuals a

nd c o nvinc e d the m

to a c t a s stra

w buy e rs for prope rtie s in La s Ve ga s. He a lso stolethe ir ide ntitie s a nd purc ha s e d othe r prope rtie s without the ir knowle dge . Whe n the sc he m e c a use d fore c losure s on the prope rtie s, Lindse y profite d while le n de rs lost m one y and the stra

wbuy e rs we re le ft with ruine d c re dit. This c onduc t shows tha

t Lindse y is a da nge r to individua

ls a nd the c om

m unity , a nd that the distric t c ourt’ s findings were not c le arly e rrone ous. W e re

j e c t the
c ha lle nge on a

ppe a l to thedistric t c ourt’ s de nia l of ba i l pe nding a ppe a l. AFFIRM E D IN PART , V ACAT E D AND RE M ANDE D IN PART .

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