Opinion ID: 2810874
Heading Depth: 4
Heading Rank: 3

Heading: Susanne Zar

Text: The PSR grouped Susanne Zar’s three wire fraud convictions and one money laundering conviction producing a base offense level of 7. See U.S.S.G. § 3D1.2(c), (d); § 3D1.3(b). The PSR then assigned a 16-level increase based on a loss calculation of $1,519,114, see U.S.S.G. § 2B1.1(b)(1)(I), and a one-level increase for the money laundering conviction, see U.S.S.G. § 2S1.1(b)(2)(A). Susanne Zar’s total offense level of 24 and criminal history of I produced an advisory Guidelines range of 51-63 months’ imprisonment for each of her four convictions. At sentencing, the district court found Susanne Zar responsible for less actual loss than indicated in the PSR but enough to warrant the recommended 16-level increase under U.S.S.G. § 2B1.1(b)(1)(I). The court granted a downward variance, imposed a 24-month controlling prison sentence followed by three years of supervised release, and ordered restitution of $1,283,835. 31 B. Apprendi/Alleyne Error (Derek Zar, Susanne Zar, and Jacoby) The defendants jointly contend the loss amount necessary to support an increase in the base offense level under U.S.S.G. § 2B1.1(b)(1) is an “element” of the offense that must be charged in the indictment, submitted to a jury, and proved beyond a reasonable doubt to satisfy the Fifth and Sixth Amendments as interpreted in Alleyne v. United States, 133 S. Ct. 2151 (2013), and Apprendi v. New Jersey, 530 U.S. 466 (2000). The defendants’ reliance on Apprendi and Alleyne is misplaced as none of the defendants were subject to mandatory minimum sentences or sentenced beyond the statutory maximums for their convictions. See Alleyne, 133 S. Ct. at 2155, 2160 (holding any fact increasing mandatory minimum sentence is element that must be submitted to jury); Apprendi, 530 U.S. at 490 (holding any fact increasing sentence beyond statutory maximum must be submitted to jury). Cf. 18 U.S.C. §§ 1957, 1343, 1344 (providing statutory maximum sentences for money laundering, wire fraud and bank fraud of imprisonment of not more than 10 years, 20 years, and 30 years, respectively). Instead, the judicial fact finding the defendants complain of occurred in the context of determining their applicable sentencing ranges under the advisory sentencing Guidelines. The Apprendi/Alleyne rule does not apply in this context. See United States v. Ray, 704 F.3d 1307, 1314 (10th Cir.) (noting Supreme Court has definitively rejected Apprendi’s application to present advisory-Guidelines regime), cert. denied, 133 S. Ct. 2812 (2013); see also United States v. Cassius, 777 F.3d 32 1093, 1096-99 (10th Cir. 2015) (explaining that Alleyne applies only to judicial findings that alter the applicable statutory sentencing range, as opposed to findings that impact the applicable advisory Guidelines range). C. Method of Loss Calculation (Derek Zar and Susanne Zar) The Zars argue the district court failed to use a reasonable method to calculate the loss amount for purposes of determining their Guidelines sentencing ranges and for purposes of imposing restitution under the Mandatory Victim Restitution Act of 1996, 18 U.S.C. §§ 3663A-3664 (“MVRA”). The Zars concede that in calculating the loss amount for Guidelines purposes the district court followed our precedent in United States v. Washington, 634 F.3d 1180, 1184 (10th Cir. 2011), but they raise the issue to preserve it for further review. Bound by our precedent, we find no error. Likewise, we find no error in the district court’s calculation of loss for purposes of restitution. Citing United States v. Yeung, 672 F.3d 594 (9th Cir. 2012), the Zars argue the district court erred as a matter of law by not calculating the restitution offset amount based on the fair market value of the collateral real estate at the date of foreclosure when the victim-lender took title and could have sold it for cash. We easily reject this argument as the Supreme Court has expressly abrogated the Yeung methodology. See Robers v. United States, 134 S. Ct. 1854, 1856 (2014) (holding that a sentencing court imposing restitution under the MVRA “must reduce the restitution amount by the amount of money the victim received in selling the collateral, not the value of the collateral when the victim received it”). 33 D. Relevant Conduct (Susanne Zar) Susanne Zar individually contends the district court erred by including three properties in its loss calculation—1065 Ridge Oaks, 1490 Rose, and 30848 E. 151st—to determine her Guidelines sentencing range. She acknowledges that these properties were among the 18 properties involved in the mortgage fraud scheme but she maintains the government failed to sufficiently prove that the losses attributable to these three specific properties constituted relevant conduct under U.S.S.G. § 1B1.3 for purposes of calculating her Guidelines sentence. Preliminarily, the parties disagree on whether Susanne Zar properly preserved this claim. But even if we assume she preserved her objection, we conclude the district court did not clearly err in attributing these losses to her. See United States v. Sells, 541 F.3d 1227, 1234 (10th Cir. 2008) (considering Guidelines calculation under § 1B1.3(a)(1)(B) and applying clear error to district court’s factual determinations). Section 1B1.3(a)(1)(B) makes clear that a participant in a fraudulent scheme “undertaken by the defendant in concert with others” must be held responsible for “all reasonably foreseeable acts and omissions in furtherance of the jointly undertaken criminal activity.” This is true regardless of a defendant’s direct participation in a specific transaction. Sells, 541 F.3d at 1234. As the government notes, the indictment listed the three properties among the 18 properties involved in the mortgage fraud scheme and the evidence at trial demonstrated that losses from these three properties were reasonably foreseeable to 34 Susanne Zar regardless of whether she directly participated in the real estate transactions related to these three specific properties. Thus, we conclude the district court did not clearly err in including the three challenged properties in calculating the loss attributable to Susanne Zar. E. Three-Level “Manager/Supervisor” Enhancement (Derek Zar) Derek Zar individually argues the district court erroneously increased his base offense level under U.S.S.G. § 3B1.1(b), which calls for a three-level increase “[i]f the defendant was a manager or supervisor (but not an organizer or leader) and the criminal activity involved five or more participants or was otherwise extensive.” Over Derek Zar’s objections, the district court found the trial evidence demonstrated that he was a manager or supervisor and agreed with the PSR’s recommendation to apply the three-level enhancement. We review a district court’s finding that a defendant is a manager or supervisor under § 3B1.1(b) for clear error. United States v. James, 592 F.3d 1109, 1113 (10th Cir. 2010); see United States v. Cruz Camacho, 137 F.3d 1220, 1223-24 (10th Cir. 1998) (discussing tension between two lines of this court’s precedent regarding appropriate standard of review and concluding clear error review is appropriate). “Under this standard, we will not reverse the district court’s finding unless, ‘on the entire evidence, we are left with the definite and firm conviction that a mistake has been committed.’” James, 592 F.3d at 1113 (quoting United States v. Wilfong, 475 F.3d 1214, 1218 (10th Cir. 2007)). 35 1. Additional Relevant Facts The PSR recommended the three-level enhancement citing evidence from the record that Derek Zar “recruited other individuals, including relatives, to participate in the scheme and help[ed] them to participate in the fraudulent home purchases.” PSR, Doc. 596, at 42 (sealed). The PSR further indicated, “[b]ased on information obtained from the case agent and review of discovery materials,” that Derek Zar “had a managerial role” in the scheme. Id. at 43. Finally, the PSR urged application of the enhancement because Derek Zar “recruited others to participate in the fraudulent purchase of multiple homes” and “benefitted from their involvement and directed their activities in order to facilitate completion of the fraudulent transactions.” Id. at 45. Derek Zar filed written objections to these portions of the PSR and argued at sentencing that the trial evidence did not support the trial court’s finding that he was a manager or supervisor. Specifically, he argued he did not exercise any decisionmaking authority, recruit any accomplices, claim a larger share of the fruits of the crime, plan or organize the fraudulent scheme, or exert control or authority over others. In response, the prosecutor reminded the court that two witnesses testified at trial that Derek Zar encouraged them to participate in fraudulent real estate transactions, identified certain properties for them to buy, informed them of the prices for those properties, explained how the grant programs worked, and introduced them to Jacoby, who acted as the realtor for the witnesses’ purchases of the 36 properties. The prosecutor also pointed out that the government was seeking a fourlevel enhancement for Jacoby’s aggravating role and argued the three-level increase was proportionately appropriate for Derek Zar’s role in the scheme. After hearing these arguments and the prosecutor’s recitation of the trial evidence, the district court overruled the objections, finding Derek Zar’s role as a manager or supervisor to be supported by the record and the PSR. 2. Analysis Derek Zar argues the district court failed to make adequate specific factual findings to support its general finding that he was a manager or supervisor. He further argues the trial evidence does not support the court’s general finding as to his role in the mortgage fraud scheme.6
Before applying an aggravating-role enhancement under § 3B1.1(b), the district court must make specific factual findings as to the defendant’s role in the offense. United States v. Cordoba, 71 F.3d 1543, 1547 (10th Cir. 1995); United States v. Roberts, 14 F.3d 502, 522 (10th Cir. 1993); see also Fed. R. Crim. P. 32(i)(3)(B) (requiring district court to rule on “any disputed portion of the presentence report” before imposing a sentence). 6 Derek Zar also contends the facts supporting the manager/supervisor enhancement must be charged in the indictment, submitted to a jury, and proved beyond a reasonable doubt to satisfy the Fifth and Sixth Amendments as interpreted in Alleyne and Apprendi. We reject this argument because, as discussed, the Apprendi/Alleyne rule does not apply to calculation of an advisory guidelines sentence. See Ray, 704 F.3d at 1314; see also Cassius, 777 F.3d at 1096-99. 37 Relying on these authorities, Derek Zar argues “the district court articulated no specific findings or factual basis” to support the three-level enhancement. D. Zar. Br., at 39. Ordinarily, when a district court fails to make adequate findings or comply with Rule 32, we remand for further findings. See, e.g., United States v. PeñaHermosillo, 522 F.3d 1108, 1113 (10th Cir. 2008); United States v. Brown, 164 F.3d 518, 522 (10th Cir. 1998). But Derek Zar does not seek that remedy. Instead, he urges us to review the record and conclude it does not support the enhancement. We see no need to remand for further findings. The district court satisfied Rule 32 by ruling on Derek Zar’s objections to the PSR before imposing sentence. And while the court’s specific factual findings are admittedly sparse, the findings are not so deficient as to hinder our review. See United States v. Gonzalez Edeza, 359 F.3d 1246, 1249 (10th Cir. 2004) (suggesting remand is appropriate when absence of factual findings hinders review or findings are “so conclusory as to render the enhancement unreviewable”). Significantly, the court ruled on the matter immediately after the prosecutor directed the court’s attention to specific portions of the trial record and the court concluded the “record clearly reflect[ed]” Derek Zar’s role as a manager or supervisor. The court’s reliance on specific portions of the record is sufficient to guide our review and, as discussed next, sufficient to support its application of the three-level enhancement.
U.S.S.G. § 3B1.1 does not define the terms “manager,” “supervisor,” “organizer,” or “leader.” Instead, the Commentary provides several factors to 38 consider in “distinguishing a leadership and organizational role from one of mere management or supervision.” U.S.S.G. § 3B1.1, cmt. n.4. Those factors are, the exercise of decision making authority, the nature of participation in the commission of the offense, the recruitment of accomplices, the claimed right to a larger share of the fruits of the crime, the degree of participation in planning or organizing the offense, the nature and scope of the illegal activity, and the degree of control and authority exercised over others. U.S.S.G. § 3B1.1, comment. (n.4). Relying on these factors, this court has consistently interpreted the “manager/supervisor” role as one requiring the defendant to exercise some degree of “decision-making authority,” “control,” or “organizational authority” over a subordinate participant in the offense. See, e.g., United States v. Beltran, 571 F.3d 1013, 1020-21 (10th Cir. 2009) (noting that for three-level enhancement to apply “defendant must also exercise some degree of ‘decision-making authority or control over a subordinate’”); Peña-Hermosillo, 522 F.3d 1108, 1112 (10th Cir. 2008) (same); Gonzalez Edeza, 359 F.3d at 1248 (explaining enhancement is appropriate when defendant is “responsible for organizing others for the purpose of carrying out the crime”); United States v. Backas, 901 F.2d 1528, 1530 (10th Cir. 1990) (“In order to be a supervisor, one needs merely to give some form of direction or supervision to someone subordinate in the criminal activity for which the sentence is given.”). Citing several of these cases, Derek Zar argues the trial evidence fails to demonstrate that he “exercise[d] decision-making authority” or otherwise “exerted control and authority” over any subordinates in the mortgage fraud scheme. Rather, 39 he characterizes himself a lowly buyer in the scheme who, at most, advised other buyers who were essentially his peers. But the evidence at trial established otherwise. For example, one witness testified that Derek Zar advised her to buy two of the properties listed in the indictment so she could resell one to him and one to Susanne Zar. He also informed her of the price of each property, explained how the real estate transaction would work, including how she would use the grant program to “donate” a portion of her sales proceeds back to Derek Zar, and introduced her to Jacoby, who then acted as the real estate agent for both transactions and provided cashier’s checks to cover the down payments for each home. Similarly, a second witness testified that Derek Zar encouraged her to join him in investing in real estate, explained how she could buy homes utilizing the grant programs, and introduced her to Jacoby. The witness purchased six homes with Derek Zar, utilizing the grant programs and Jacoby’s real estate services for five of those purchases. Our independent review of the record establishes that Derek Zar recruited others to participate in the mortgage fraud scheme, advised them as to which homes to buy and sell, directed their utilization of the grant programs, and introduced them to Jacoby so he could act as the real estate agent and, in some cases, provide hardmoney loans for down payments. These activities sufficiently demonstrate Derek Zar’s role as a manager or supervisor in the mortgage fraud scheme. See, e.g., Gonzalez Edeza, 359 F.3d at 1248-49 (affirming three-level enhancement for “manager/supervisor” role on findings that defendant gave instructions to, directed 40 the conduct of, and coordinated another participant’s delivery of methamphetamine); United States v. Pofahl, 990 F.2d 1456, 1480-81 (5th Cir. 1993) (finding no error in applying § 3B1.1(b) to defendant who negotiated drug prices, recruited other conspirators, and directed other members of conspiracy). We conclude the district court did not clearly err in finding that Derek Zar was a manager or supervisor and we affirm its application of the three-level enhancement. F. Motion for Variance Under 18 U.S.C. § 3553(a) (Derek Zar) Finally, Derek Zar challenges the district court’s denial of his motion for a variance under 18 U.S.C. § 3553(a). “We review sentences for reasonableness under a deferential abuse of discretion standard.” United States v. Haley, 529 F.3d 1308, 1311 (10th Cir. 2008). Because the district court “sees and hears the evidence, makes credibility determinations, and actually crafts Guidelines sentences day after day” it has a distinct advantage over this court in determining “whether the facts of an individual case justify a variance pursuant to § 3553(a) . . . [and] we generally defer to its decision to grant, or not grant, a variance based upon its balancing of the § 3553(a) factors.” Id. At sentencing, Derek Zar asserted several factors supported his variance request. In denying the motion, the district court concluded most of the factors he asserted already had been accounted for in the advisory sentencing Guidelines, that his conduct was planned rather than aberrational, and that while others had recruited him into the fraudulent scheme, they had not done so through coercion or duress. On 41 appeal, Derek Zar contends the district court abused its discretion by essentially presuming the reasonableness of the advisory Guidelines sentence and failing to adequately consider his reasons for seeking a lower sentence. We agree with the government that the district court did all it was required to do before imposing a within-Guidelines sentence. See United States v. Lente, 647 F.3d 1021, 1034-35 (10th Cir. 2011) (noting that when court imposes withinGuidelines sentence, it need neither explicitly refer to § 3553(a) factors nor respond to every argument for leniency; instead, a general statement of its reasons will suffice). Here, the district court noted the advisory sentencing range of 63-78 months, discussed several § 3553(a) factors, considered Derek Zar’s arguments for a variance, and stated its reasons for rejecting those arguments before imposing the low-end prison sentence of 63 months. We find no abuse of discretion under these circumstances.