Source: https://law.justia.com/cases/federal/appellate-courts/F3/152/1042/543939/
Timestamp: 2020-06-05 07:19:17
Document Index: 177589365

Matched Legal Cases: ['§ 1344', '§ 1014', '§ 1341', '§ 371', '§ 2', '§ 2', '§ 2', '§ 2', '§ 3']

United States of America, Appellee, v. Lauree Anne Brekke, Appellant.united States of America, Appellee, v. James Stanley Brekke, Appellant, 152 F.3d 1042 (8th Cir. 1998) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Eighth Circuit › 1998 › United States of America, Appellee, v. Lauree Anne Brekke, Appellant.united States of America, Appel...
United States of America, Appellee, v. Lauree Anne Brekke, Appellant.united States of America, Appellee, v. James Stanley Brekke, Appellant, 152 F.3d 1042 (8th Cir. 1998)
U.S. Court of Appeals for the Eighth Circuit - 152 F.3d 1042 (8th Cir. 1998) Submitted June 11, 1998. Decided Aug. 26, 1998
James and Lauree Brekke, husband and wife, were charged in a seven count indictment with bank fraud in violation of 18 U.S.C. § 1344 (1994), making false statements to a financial institution in violation of 18 U.S.C. § 1014 (Supp. II 1996), mail fraud in violation of 18 U.S.C. § 1341 (1994), and conspiracy to commit bank fraud and mail fraud in violation of 18 U.S.C. § 371 (1994). The District Court dismissed the indictment, ruling that an earlier settlement in a civil action precluded criminal prosecution. We reversed and remanded for reinstatement of the indictment. See United States v. Brekke, 97 F.3d 1043, 1050 (8th Cir. 1996), cert. denied, --- U.S. ----, 117 S. Ct. 1281, 137 L. Ed. 2d 356 (1997). Upon trial, a jury convicted Lauree Brekke of bank fraud, making a false statement, and mail fraud, and convicted James Brekke of bank fraud and mail fraud.1 Both James and Lauree were sentenced to 27 months' imprisonment. The Brekkes appeal.
The indictment was dismissed and subsequently reinstated. See Brekke, 97 F.3d at 1050. After the arraignment, the government moved under Federal Rule of Criminal Procedure 44(c) to inquire as to the potential conflict arising out of attorney Jonathan Garaas's joint representation of the Brekkes. The presiding magistrate judge held a hearing at which the Brekkes both were represented by separate counsel. At the hearing, the court individually questioned James and Lauree about their desire to be jointly represented by counsel. The court explained that a conflict might arise and gave several illustrative examples. The court reminded James and Lauree that they each had a right to appointed counsel if they could not afford an attorney. The court also informed them that, by waiving any potential conflict, " [Y]ou will not be heard at anytime in the future either on appeal or any post conviction remedies if you are convicted of any crime to say that you didn't get a fair trial because you had one lawyer who represented the both of you." Tr. of Criminal Mot. Proceedings at 8. Finally, the court opined:
James and Lauree Brekke first argue that Mr. Garaas's joint representation violated their Sixth Amendment right to effective assistance of counsel. The Brekkes assert that they did not knowingly and intelligently waive their right to conflict-free counsel and that an actual conflict of interest during trial affected Mr. Garaas's performance. We review for clear error a district court's factual findings that underlie a determination of whether a defendant waived his right to conflict-free counsel, but we review de novo the ultimate determination of whether a waiver occurred. Cf. United States v. Caldwell, 954 F.2d 496, 504 (8th Cir.), cert. denied, 506 U.S. 819, 113 S. Ct. 65, 121 L. Ed. 2d 32 (1992).
Joint representation clouded by conflict of interests may violate the Sixth Amendment's right to effective assistance of counsel. A defendant, however, "may waive his right to the assistance of an attorney unhindered by a conflict of interests." Holloway v. Arkansas, 435 U.S. 475, 483 n. 5, 98 S. Ct. 1173, 55 L. Ed. 2d 426 (1978). The waiver must be knowing, voluntary, and intelligent. See United States v. Poston, 727 F.2d 734, 738 (8th Cir.), cert. denied, 466 U.S. 962, 104 S. Ct. 2179, 80 L. Ed. 2d 561 (1984). Specifically, the trial court must conduct a pretrial inquiry into the propriety of joint representation and advise both defendants of their right to separate representation. See Fed. R. Crim. P. 44(c). This circuit specifically requires:
United States v. Lawriw, 568 F.2d 98, 104 (8th Cir. 1977) (quoting State v. Olsen, 258 N.W.2d 898, 907 (Minn.1977) (footnote omitted)), cert. denied, 435 U.S. 969, 98 S. Ct. 1607, 56 L. Ed. 2d 60 (1978).
The Brekkes next argue that the District Court erred in finding for purposes of sentencing under the guidelines the amount of loss. The District Court determined that the amount of loss caused by the Brekkes' fraud was $350,000, or the full amount of the loan. Based on this figure, the District Court increased their base offense by eight levels. See U.S. Sentencing Guidelines Manual § 2F1.1(b) (1) (I) (1997). We review a district court's calculation of loss under USSG § 2F1.1 for clear error. See United States v. George, 986 F.2d 1176, 1179 (8th Cir. 1993).
USSG § 2F1.1, comment. (n.7(b)). We construe the guidelines to mean, "Where the district court finds ... that the defendant intended to defraud the bank of the entire amount of the loans obtained by a false loan application, it remains free to use the total amount as the loss for purposes of section 2F1.1." United States v. Willis, 997 F.2d 407, 418 (8th Cir. 1993), cert. denied, 510 U.S. 1050, 114 S. Ct. 704, 126 L. Ed. 2d 670 (1994). As evidence of their intent not to defraud the bank of the entire amount, the Brekkes point to the fact that they had made a couple of payments before they defaulted, that the bank still possessed subordinate liens on the properties they pledged as security, and that they repaid almost $130,000 to the SBA in accordance with the settlement. The Brekkes therefore argue that the District Court should have calculated the amount of loss at no more than $150,000. We disagree.
Even taking into account that the Brekkes made several payments on the loan, which payments amounted to less than $20,000,3 the figure with which we are left is still well within the $200,000 to $350,000 range requiring an eight-level enhancement. See USSG § 2F1.1(b) (1) (I). Further, we will not consider the Brekkes' repayment to the SBA in determining the amount of loss, see United States v. Prendergast, 979 F.2d 1289, 1291-92 (8th Cir. 1992), particularly in light of the fact that their repayment was in response to legal action taken by the SBA, see United States v. Mills, 987 F.2d 1311, 1316 (8th Cir.), cert. denied, 510 U.S. 953, 114 S. Ct. 403, 126 L. Ed. 2d 351 (1993). We also reject the claim that the amount of loss should be reduced because the bank still possessed subordinate liens on those properties pledged by the Brekkes. When the Brekkes defaulted, the bank received nothing from the properties, on which the Brekkes had led the bank to believe it had first priority liens. The subordinate liens thus provide no basis for reducing the amount of the loss. Finally, it is important to note that the District Court had the benefit of observing both James and Lauree testify and was therefore in a better position than we are to determine the issue of the Brekkes' intent. We cannot conclude that the District Court clearly erred in finding that the Brekkes intended to inflict on the bank a loss of over $200,000.
Finally, James Brekke argues that the District Court erred in increasing his base offense level by two levels for obstructing justice.4 Section 3C1.1 of the sentencing guidelines provides for a two-level increase " [i]f the defendant willfully obstructed or impeded, or attempted to obstruct or impede, the administration of justice during the investigation, prosecution, or sentencing of the instant offense." USSG § 3C1.1 (1997). The District Court found that James knowingly and willfully lied under oath at trial about matters material to the charges against him. "We reverse a district court's factual finding in support of a section 3C1.1 enhancement only if it is clearly erroneous." United States v. Clay, 16 F.3d 892, 896 (8th Cir. 1994) (citing Mills, 987 F.2d at 1317).