Opinion ID: 866146
Heading Depth: 4
Heading Rank: 1

Heading: Counts Two and Three (Third Street

Text: Transaction) Counts Two and Three arose from Ralph's participation in the sale of the East Third Street property to Ralph's mother-inlaw, Clemendore. Appellant's challenge to these counts concerns the materiality of his misrepresentations. A material statement -7- has a natural tendency to influence, or [is] capable of influencing, the decision of the decisionmaking body to which it was addressed. Neder, 527 U.S. at 16 (quoting United States v. Gaudin, 515 U.S. 506, 509 (1995)) (internal quotation marks omitted) (alteration in original). The government need not prove that the decisionmaker actually relied on the falsehood or that the falsehood led to actual damages. See id. at 24-25 (The common-law requirements of justifiable reliance and damages . . . plainly have no place in the federal fraud statutes. (internal quotation marks omitted)). Here, the misrepresentations at issue were contained in the mortgage application Ralph prepared and submitted to Long Beach Mortgage. Ralph observes that the government presented no evidence regarding Long Beach Mortgage's loan evaluation process, in contrast to the Washington Street transaction, where the government presented witness testimony from a WMC Mortgage representative who spoke about the types of factors that company used when evaluating an application. Without any information regarding the types of information that Long Beach found relevant in deciding whether to approve a loan, Ralph argues, the government could not establish that any of the misrepresentations on the application were factors in the company's decisionmaking. The record defeats this contention. The Long Beach loan file for the Third Street transaction included application forms -8- that specifically sought information regarding the purchaser's income, assets, and intent to reside in the property, all of which were designed to assess the borrower's creditworthiness. Cf. United States v. Kenrick, 221 F.3d 19, 32 (1st Cir. 2000) (stating, in context of bank fraud conviction, that misrepresentation about a borrower's creditworthiness can certainly be a material falsehood that supports a []conviction). Ralph provided responses to these requests that the trial testimony established as untrue, including a verification of Clemendore's rent, information regarding her employment, and an occupancy agreement that certified her intent to live at the Third Street residence. The fact that Long Beach's loan application explicitly sought this information from the applicant indicates that Clemendore's responses were capable of influencing its decision. Moreover, the government adduced other evidence regarding the types of information material to Long Beach's decisionmaking process. Specifically, the government called Diane Taylor, a representative of WMC Mortgage, the lender for the Washington Street transaction, to testify about WMC Mortgage's practices. Although Taylor could not speak to Long Beach's lending protocols, she testified about a range of criteria relevant to WMC Mortgage's lending decisions, including information regarding income and employment, assets, and residence at the purchased property. As noted above, Long Beach's mortgage application requested the same -9- information. Indeed, the trial testimony establishes that the loan file for the Third Street transaction contained loan applications substantially similar to WMC Mortgage's applications, strongly supporting the inference that the two mortgage companies used the same types of information in assessing mortgage applications. A reasonable jury could thus rely on Taylor's testimony, combined with the similarity between Long Beach's and WMC Mortgage's loan applications, to conclude that Long Beach would have considered the same types of factors in assessing Clemendore's loan application. In light of all this evidence, it is of no moment that the government did not introduce testimony from a Long Beach representative regarding the specific types of information it found material. This challenge therefore fails.