Opinion ID: 676993
Heading Depth: 2
Heading Rank: 4

Heading: Verdict, Fatico Hearing and Sentencing

Text: 19 The next morning the jury returned its verdict. Reese was found guilty on the conspiracy count in connection with the HUD-insured mortgage and the Citibank bank mortgage obtained on the Maida Avenue property, and the HUD-insured mortgage on the Duke Street property. He was also found guilty on two substantive counts of making false statements to HUD relating to the mortgage applications for the Duke Street and High Lane properties, respectively. He was acquitted on the substantive fraud counts relating to the Citibank mortgage and a bank mortgage obtained for the Duke Street property. 20 The presentencing report prepared by the United States Probation Department recommended a base offense level of six and an addition of 10 levels pursuant to U.S.S.G. Sec. 2F1.1(b)(1)(K), which prescribes the specific offense characteristic for the amount of loss. Another two level boost was recommended for more than minimal planning, resulting in an offense level of 18, which at Reese's Criminal History Category I yielded a sentence range of 27-33 months. Reese objected to the report's findings regarding the losses, and the district judge scheduled a Fatico hearing. 21 At the hearing the government introduced a summary list, Government Exhibit 1 Revised, showing 37 mortgages (all but two of which were HUD-insured) that were allegedly based on fraudulent applications or documents. The government notes that the underlying documentation for the summary was available to Reese for inspection. Investigator Carlucci testified that the information contained in the exhibit was derived from his investigation of Vanguard and Turnpike. Defendant also testified at the hearing. 22 Relying on the figures from the list, Judge Wexler calculated the loss at approximately $1,437,000. Both parties now recognize his calculations were $30,000 too high, but this discrepancy is irrelevant to the Sentencing Guideline range selected, which is between $1,000,001 and $2,000,000. See U.S.S.G. Sec. 2F1.1(b)(1)(J). The sentencing court's total included the losses incurred by HUD on 13 loans that had been foreclosed ($237,677) and by Citibank on the Maida Street loan ($157,113), and the potential claims on nine loans in foreclosure ($1,013,021); it did not include the amount of one loan that was lawfully obtained or of those loans not in foreclosure. 23 Based on these losses the district judge arrived at an offense level of 17, rather than the 18 recommended in the presentence report. The sentencing range at level 17 was 24-30 months. Judge Wexler sentenced Reese to 26 months, to be followed by three years of supervised release, and a $150 special assessment. This appeal followed.