Opinion ID: 2790833
Heading Depth: 3
Heading Rank: 5

Heading: 343 Centre Street

Text: Foley finally argues that the district court erred in granting $118,104 in restitution to Argent Mortgage for the loss arising from Foley's fraudulent purchase in November 2005 of property at 343 Centre Street in Dorchester, Massachusetts -- a figure also included in the district court's Guidelines loss calculation.18 As detailed in Foley's presentence report, after purchasing this building with Reed in the name of a friend, Foley then purchased a condominium unit in the building. Foley financed the condominium purchase with a mortgage loan from Argent, and signed a HUD-1 form falsely indicating that he had brought money to the loan closing. After Foley defaulted on the loan and the condominium unit was foreclosed upon, Argent lost $118,104. Section 3663A(a)(2) defines a victim entitled to restitution as a person directly and proximately harmed as a result of the commission of an offense for which restitution may be ordered including, in the case of an offense that involves as an element a scheme, conspiracy, or pattern of criminal activity, any person directly harmed 18 As discussed in section III.A.1.i supra, the inclusion of this figure in the Guidelines calculation was ultimately immaterial to Foley's base offense level under U.S.S.G. §2B1.1(b)(1). -46- by the defendant's criminal conduct in the course of the scheme, conspiracy, or pattern. Because wire fraud involves a scheme or artifice to defraud, 18 U.S.C. § 1343, we have allowed restitution without regard to whether the conduct that harmed the victim was conduct underlying the offense of conviction. United States v. Matos, 611 F.3d 31, 43 (1st Cir. 2010) (internal quotation marks omitted) (citation omitted). Instead, a restitution order encompass[es] all direct harm from the criminal conduct of the defendant which was within any scheme, conspiracy, or pattern of activity that was an element of any offense of conviction. United States v. Hensley, 91 F.3d 274, 277 (1st Cir. 1996). Hence, in determining whether particular criminal conduct comprised part of a unitary scheme to defraud, the sentencing court should consider the totality of the circumstances, including the nature of the scheme, the identity of its participants and victims, and any commonality in timing, goals, and modus operandi. Id. at 278. In Foley's estimation, the 343 Centre Street transaction did not fall within the wire fraud scheme for which he was convicted. We agree. In determining the extent of the underlying scheme, we begin with the terms of the indictment. See id. at 277; see also, e.g., United States v. Turino, 978 F.2d 315, 319 (7th Cir. 1992). The indictment alleged that Foley engaged in a scheme to defraud mortgage lenders [f]rom in or about December of 2006 to in or about January of 2007 . . . in connection with the financing of -47- residential real estate purchases of condominiums at 135 Neponset Avenue in Dorchester, Massachusetts. As part of the alleged scheme, Foley agreed with [Reed] to act as the settlement agent, to prepare loan closing documents, and to conduct the closings of mortgage loans in the names of the straw buyers. Even focusing on the broad 'boilerplate' language . . . rather than the specific conduct alleged in the indictment, Hensley, 91 F.3d at 277, we think the district court stretched the underlying scheme too far in extending it to the 343 Centre Street transaction. Although the participants were identical (Foley, Reed, and Robbins) and although the 343 Centre Street transaction also involved a falsified HUD-1 form representing that the buyer had brought funds to closing, Foley played a different role, acting as the fraudulent purchaser rather than as the settlement agent. More importantly, the 343 Centre Street transaction occurred over a year before the scheme for which Foley was convicted, which (according to the indictment) ran from in or about December of 2006 to in or about January of 2007. That is in stark contrast to Hensley, which involved a unitary scheme spanning a mere two weeks. Id. at 278. Furthermore, the indictment expressly delimited the scheme to the financing of residential real estate purchases of condominiums at 135 Neponset Avenue. We accordingly vacate the district court's award of $118,104 in restitution to Argent Mortgage. -48-