Court Opinion

ID: 804576
Source: CourtListenerOpinion
Date Created: 2012-07-18 14:05:24+00
Date Added: 2024-06-11T18:00:12.723245
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                           File Name: 12a0776n.06
                                                                                           FILED
                                           No. 11-3826
                                                                                       Jul 18, 2012
                          UNITED STATES COURT OF APPEALS                        LEONARD GREEN, Clerk
                               FOR THE SIXTH CIRCUIT

UNITED STATES OF AMERICA,                             )
                                                      )
       Plaintiff-Appellee,                            )      ON APPEAL FROM THE
                                                      )      UNITED STATES DISTRICT
v.                                                    )      COURT FOR THE NORTHERN
                                                      )      DISTRICT OF OHIO
ROMERO MINOR,                                         )
                                                      )
       Defendant-Appellant.                           )
                                                      )

       BEFORE: SILER and KETHLEDGE, Circuit Judges; MURPHY, District Judge.*

       PER CURIAM. Romero Minor appeals his sixty-nine-month sentence for wire fraud,

specifically challenging the district court’s determination of the amount of loss resulting from his

offenses. For the reasons set forth below, we affirm.

       Minor pleaded guilty to one count of conspiracy to commit wire fraud in violation of 18

U.S.C. § 371 and forty-eight counts of wire fraud in violation of 18 U.S.C. § 1343. These charges

arose from a mortgage fraud scheme in which Minor recruited investors/straw buyers to purchase

houses, directed the submission of mortgage loan applications containing false information to lenders

to secure loans to purchase the properties, obtained inflated appraisals for the properties, and kept

the excess funds created by the inflated appraisals, using a portion to make kickback payments to

the investors/straw buyers and his co-conspirators.

       *
       The Honorable Stephen J. Murphy, III, United States District Judge for the Eastern District
of Michigan, sitting by designation.
No. 11-3826
United States v. Minor

       According to the plea agreement, the parties were unable to agree on a guidelines calculation

because of their differing views as to the amount of loss attributable to Minor under USSG

§ 2B1.1(b)(1). In the plea agreement, the government took the position that the loss in the case

exceeded $1,000,000, resulting in a 16-level increase to the base offense level; Minor reserved the

right to argue against that calculation.

       The presentence report prepared by the probation office included a chart showing the forty-

eight properties involved in the conspiracy and the corresponding loss amounts. The chart presented

three different methods for calculating the loss sustained by the victim lenders. Using the lowest loss

total, $1,311,672.51, the presentence report increased Minor’s base offense level by 16 levels

because the amount of loss exceeded $1,000,000 but was less than $2,500,000. See USSG

§ 2B1.1(b)(1)(I). Minor filed objections to the presentence report’s loss calculation.

       At sentencing, the district court heard the arguments of counsel and the testimony of FBI

Special Agent Tom Donnelly regarding the loss calculation. The district court overruled Minor’s

objections, and determined that the loss involved in the case exceeded $1,000,000, specifically

amounting to $1,311,672.51. Applying the corresponding 16-level increase, the district court

calculated Minor’s guidelines range as sixty-three to seventy-eight months. The district court

sentenced Minor to the statutory maximum of sixty months on the conspiracy count and sixty-nine

months on the forty-eight wire fraud counts, all to run concurrently.

       This timely appeal followed. Minor raises two issues regarding the loss calculation: (1) the

government’s reliance on a chart to establish the loss calculation violated his constitutional right of

confrontation where the plea agreement reserved his right to argue loss at sentencing and (2) the

district court improperly applied USSG § 2B1.1 in determining “reasonably foreseeable pecuniary

                                                 -2-
No. 11-3826
United States v. Minor

harm” where the government failed to present any evidence that he could have reasonably foreseen

the crash of the real estate market or the practice by lenders of reselling mortgages.

       We review de novo Minor’s claim that his rights under the Confrontation Clause were

violated. United States v. Katzopoulos, 437 F.3d 569, 573 (6th Cir. 2006). Relying on the Supreme

Court’s recent line of cases addressing the right of confrontation, Bullcoming v. New Mexico, 131

S. Ct. 2705 (2011), Melendez-Diaz v. Massachusetts, 557 U.S. 305 (2009), and Crawford v.

Washington, 541 U.S. 36 (2004), Minor argues that the district court should have required the

production of live witnesses and admissible documents to establish loss. We have repeatedly held,

post-Crawford, that the Confrontation Clause does not apply in sentencing proceedings. See United

States v. Paull, 551 F.3d 516, 527-28 (6th Cir. 2009); Katzopoulos, 437 F.3d at 575-76; United

States v. Stone, 432 F.3d 651, 654 (6th Cir. 2005). Minor contends that the plea agreement’s

reservation of his right to argue loss at sentencing excepts his case from the general rule that

confrontation rights do not apply at sentencing. But if that were the case, Minor's "exception" would

swallow the rule. It implies that a defendant sentenced without a plea agreement, who therefore

retains the ability to raise any relevant sentencing issue, would also have confrontation rights. In any

case, regardless of any confrontation rights, one of the agents who prepared the loss calculation chart

testified at Minor’s sentencing hearing and was subject to cross-examination.

       We review de novo the district court’s method of calculating loss for purposes of USSG

§ 2B1.1(b)(1). United States v. Triana, 468 F.3d 308, 321 (6th Cir. 2006). “[T]he district court is

to determine the amount of loss by a preponderance of the evidence, and the district court’s findings

are not to be overturned unless they are clearly erroneous.” United States v. Rothwell, 387 F.3d 579,

582 (6th Cir. 2004). The application notes under USSG § 2B1.1 provide that the district court “need

                                                  -3-
No. 11-3826
United States v. Minor

only make a reasonable estimate of the loss.” USSG § 2B1.1, comment. (n.3(C)). Because “[t]he

sentencing judge is in a unique position to assess the evidence and estimate the loss based upon that

evidence,” the district court’s “loss determination is entitled to appropriate deference.” Id.

        Under USSG § 2B1.1’s application notes, loss generally is “the greater of actual loss or

intended loss.” Id. comment. (n.3(A)). “Actual loss” is defined as “the reasonably foreseeable

pecuniary harm that resulted from the offense,” which in turn is defined as “pecuniary harm that the

defendant knew or, under the circumstances, reasonably should have known, was a potential result

of the offense.” Id. comment. (n.3(A)(i), (iv)). In a case involving collateral, the defendant is

entitled to a credit against loss in “the amount the victim has recovered at the time of sentencing

from disposition of the collateral, or if the collateral has not been disposed of by that time, the fair

market value of the collateral at the time of sentencing.” Id. comment. (n.3(E)(ii)).

        Here, the district court calculated the loss resulting from Minor’s offenses by taking the

mortgage loan amount and subtracting the fair market value of the collateral at the time of

sentencing, which was determined by using the higher of either average neighborhood sales or

average neighborhood county tax appraisals. Using the fair market value rather than the amount that

the lenders recovered through foreclosure sales benefitted Minor; crediting Minor with the recovery

from foreclosure sales would have resulted in a loss calculation in excess of $2,500,000 and an

additional 2-level increase to his base offense level.

        Minor contends that he could not have reasonably foreseen the real estate market crash and

the resulting significant reduction in the fair market value of the properties at issue. Unlike the

application note regarding the determination of loss, the application note regarding credits against

loss does not speak in terms of foreseeability. Id. comment. (n.3(A), (E)). The sentencing

                                                  -4-
No. 11-3826
United States v. Minor

guidelines, therefore, require foreseeability of the loss of the unpaid principal, but do not require

foreseeability with respect to the future value of the collateral. See United States v. Turk, 626 F.3d

743, 749-50 (2d Cir. 2010).

       Minor also argues that he could not have reasonably foreseen that lenders would resell the

mortgages at a profit. But we agree with the district court that although whether the lender's resold

the mortgages at a profit may be relevant to restitution, it is not relevant to determining loss. The

“reasonably foreseeable pecuniary harm” in this case is the amount of the mortgage loans.

       For the foregoing reasons, we AFFIRM Minor’s sentence.

                                                 -5-