Court Opinion

ID: 4019919
Source: CourtListenerOpinion
Date Created: 2016-07-28 20:00:59.631324+00
Date Added: 2024-06-11T07:44:58.613770
License: Public Domain

NOT FOR PUBLICATION                        FILED
                       UNITED STATES COURT OF APPEALS                     JUL 28 2016
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                              FOR THE NINTH CIRCUIT

 UNITED STATES OF AMERICA,                         No.    15-50234

                     Plaintiff-Appellee,           D.C. No.
                                                   3:12-cr-04031-BEN-1
    v.

 DEAN GREGORY CHANDLER,                            MEMORANDUM*

                     Defendant-Appellant.

 UNITED STATES OF AMERICA,                         No.    15-50235

                     Plaintiff-Appellee,           D.C. No.
                                                   3:12-cr-04031-BEN-4
    v.

 MICHAEL ECCLES,

                     Defendant-Appellant.

                       Appeal from the United States District Court
                         for the Southern District of California
                       Roger T. Benitez, District Judge, Presiding

             Argued as to 15-50234 and Submitted as to 15-50235 July 6, 2016
                                  Pasadena, California

         *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Before: FERNANDEZ, CLIFTON, and FRIEDLAND, Circuit Judges.

      Dean Chandler and Michael Eccles appeal their convictions for conspiracy,

mail fraud, and wire fraud arising out of a loan modification fraud scheme run

through the company 1st American Law Center, Inc. (“First American”).

Chandler also appeals his 144-month prison sentence. We have jurisdiction under

28 U.S.C. § 1291, and we affirm in both cases.

      1. The Government neither violated Federal Rule of Criminal Procedure

16(a)(1)(G) nor committed prosecutorial misconduct in proffering financial

testimony through First American’s bookkeeper, Patricia Bryant. The

Government was not required to provide a written summary of Bryant’s testimony

under Rule 16(a)(1)(G) because Bryant testified only in a lay capacity. See United

States v. W.R. Grace, 526 F.3d 499, 510 (9th Cir. 2008) (en banc) (explaining that

Rule 16 does not “mandate the disclosure of nonexpert witnesses”). The

Government’s compliance with Rule 16 requirements for its noticed expert witness

undermines the premise of Chandler’s assertion that the Government tried to

circumvent that rule by putting Bryant on the stand instead. Chandler has also

failed to show that Bryant’s financial gain figures were false—the disparities from

other expert calculations could have resulted from differing opinions as to which

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data to aggregate. See United States v. Houston, 648 F.3d 806, 814 (9th Cir.

2001). Even if there were a discovery rule violation or a question about the

testimony’s accuracy, reversal would be unwarranted because any possible

prejudice was cured by the district court’s overly corrective decision to strike the

testimony for lack of foundation.1

      2. The district court did not abuse its discretion in declining to order a new

trial after it was revealed that a juror had given an incorrect answer about her

mortgage default history during voir dire. To obtain retrial, Chandler must show

that the juror “failed to answer honestly a material question on voir dire” and that

“a correct response would have provided a valid basis for a challenge for cause.”

McDonough Power Equip. v. Greenwood, 464 U.S. 548, 556 (1984). The district

court did not clearly err in finding that the juror’s answer, though mistaken, was

honest, given that the juror testified that she believed “default” to mean losing a

home rather than being behind on payments and gave her answers in voir dire in

accord with that definition. Chandler has also failed to show that the district court

1
  Because Bryant had firsthand knowledge of the matters about which she testified,
there does not appear to have been any actual lack of foundation. Thus, if
anything, the court’s rulings on this issue were more favorable to Defendants than
they should have been.

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erred in finding neither “actual [n]or implied bias” on the part of the juror, as

would be required to provide a valid basis to challenge her for cause. United

States v. Gonzalez, 214 F.3d 1109, 1111 (9th Cir. 2000). The juror averred

without hesitation that her default experience had no bearing on her decision in the

case, and her experience being briefly behind on her mortgage payments is not

meaningfully similar to the experiences of the victims of the First American

scheme.

      3. We reject Chandler’s argument that the Government failed to present

sufficient evidence to prove that Chandler entered into an agreement to engage in

criminal activity and that he had the specific intent to defraud.

      The Government presented both direct and circumstantial evidence from

which a rational juror could have found that Chandler entered into an agreement to

engage in fraud, including: Chandler’s meeting with co-conspirators to establish

First American, his execution of a written contract governing sharing of First

American profits, his role as CEO/President of First American throughout the

company’s existence, and his receipt of a commission for every client file created.

See United States v. Green, 592 F.3d 1057, 1067 (9th Cir. 2010).

      A rational juror could also have inferred that Chandler specifically intended

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to defraud from the nature of First American’s scheme—which charged substantial

and generally non-refunded up-front fees in return for unrequited promises of

attorney-backed loan modification services—and from evidence of Chandler’s

participation in perpetuating and concealing its fraud. See United States v.

Sullivan, 522 F.3d 967, 974 (9th Cir. 2008) (per curiam) (providing that “intent to

defraud may be established by circumstantial evidence,” including

“misrepresentations made by the defendants” and “the scheme itself” (quoting

United States v. Rogers, 321 F.3d 1226, 1230 (9th Cir. 2003))). Although

Chandler testified that the dishonest scripts used by First American telemarketers

were crafted without his knowledge or approval, the jury was entitled to discount

this testimony as lacking in credibility.

      4. The district court did not undermine Chandler’s defense by delaying

rulings on his Federal Rule of Criminal Procedure 17(b) subpoena requests and

then by denying some of those requests. Chandler has not shown that it was

unreasonable for the district court to delay ruling until Chandler provided

additional information to support his subpoena requests, and he fails to show that

he was in any way prejudiced by the delay. Nor has he shown that the district

court abused its discretion in denying some of the Rule 17(b) requests, which

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sought cumulative or irrelevant testimony. See United States v. Sims, 637 F.2d
625, 629 (9th Cir. 1980).

      5. Chandler fails to show that any unfair prejudice attendant to testimony

about the restitution obligations of one of his co-defendants and the use of the

word “victim” at trial outweighed the evidence’s probative value so as to warrant

exclusion under Federal Rule of Evidence 403. See United States v. Lloyd, 807
F.3d 1128, 1152 (9th Cir. 2015) (providing that “[a] district court’s Rule 403

determination is subject to great deference” (quoting United States v. Hinkson, 585
F.3d 1247, 1267 (9th Cir. 2009) (en banc))). Because Chandler has failed to show

individual evidentiary errors, we also deny his request to reverse for cumulative

error. See Mancuso v. Olivarez, 292 F.3d 939, 957 (9th Cir. 2002), overruled on

other grounds by Slack v. McDaniel, 529 U.S. 473 (2000).

      6. We agree with Chandler that the district court procedurally erred in

failing to calculate loss amount as required by U.S.S.G. § 2B1.1(b)(1). “When

calculating the Guidelines range for . . . fraud, a district court must determine the

amount of loss caused by the fraud,” United States v. Armstead, 552 F.3d 769, 778

(9th Cir. 2008), and it “must ‘provide reasoning to explain its determination of

[the] loss,’” United States v. Stargell, 738 F.3d 1018, 1024 (9th Cir. 2013) (quoting

                                           6
United States v. Yeung, 672 F.3d 594, 604-05 (9th Cir. 2012), abrogated on other

grounds by Robers v. United States, 134 S. Ct. 1854 (2014)). The district court

did not do so here. Instead, it imposed a 16-level enhancement without stating the

loss amount on which that enhancement was based or explaining its reasoning

beyond cursorily rejecting the Government’s proposed 20-level enhancement.

      We hold, however, that the district court’s procedural error does not warrant

reversal in this case. Because Chandler did not object at sentencing to the district

court’s failure to calculate loss amount, plain error review applies and reversal is

only appropriate if Chandler can show a “reasonable probability” that his sentence

would have been different absent procedural error. United States v. Waknine, 543
F.3d 546, 554 (9th Cir. 2008). Chandler has not made this showing. Pursuant to

U.S.S.G. § 1B1.3(a)(B), Chandler is responsible for all reasonably foreseeable

losses in furtherance of criminal activity he jointly undertook. The evidence at

trial showed that Chandler was intimately involved in the entire course of First

American’s activity, and that his knowledge embraced the entire scope of its

activity. Chandler also failed to controvert evidence at trial that First American’s

total gain was $13 million. Chandler has not shown that subtracting from this

total the fees for the fraction of clients who received either successful loan

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modifications or refunds would produce a loss amount below the $1 - 2.5 million

range corresponding to a 16-level increase. See U.S.S.G. § 2B1.1(b)(1)(I) (2014).

      We also reject Chandler’s other challenges to his sentence. Chandler’s

argument that the district court procedurally erred in failing to determine the

number of victims is waived because he conceded that there were more than 250

victims, making a six-level enhancement appropriate under U.S.S.G.

§ 2B1.1(b)(2)(C) (2014). See United States v. Gaither, 245 F.3d 1064, 1069 (9th

Cir. 2001). Chandler’s below-Guidelines-range, 144-month sentence is not

substantively unreasonable in light of his position at the helm of the First American

scheme. And Chandler’s argument that the district court’s factual findings

increased his Guidelines range in violation of the Sixth Amendment is directly

foreclosed by this court’s decision in United States v. Hickey, 580 F.3d 922, 932

(9th Cir. 2009).

      7. We deny Eccles’s challenge that the Government failed to present

sufficient evidence to establish the knowledge and intent elements of his mail and

wire fraud convictions.

      There was sufficient evidence for a rational juror to have inferred that Eccles

“willful[ly] participate[d]” in the First American scheme “with knowledge of its

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fraudulent nature.” United States v. Lothian, 976 F.2d 1257, 1267 (9th Cir. 1992)

(alterations in original) (quoting United States v. Price, 623 F.2d 587, 591 (9th Cir.

1980), overruled on other grounds by United States v. De Bright, 730 F.2d 1255

(9th Cir. 1984) (en banc)). This evidence included testimony by First American’s

bookkeeper that she twice informed Eccles that the telemarketers he oversaw were

misrepresenting First American’s history and services. Because Eccles has not

shown that this testimony was “facial[ly] incredib[le],” we may not “question the

jury’s assessment of [this witness’s] credibility.” United States v. Tam, 240 F.3d
797, 806 (9th Cir. 2001). The jury could also have inferred Eccles’s knowledge

from his managerial position at First American and his work there in multiple

capacities from its inception until even after it was raided by the Federal Bureau of

Investigations. Evidence that Eccles “personally knew that the venture was

operating deceitfully” likewise supports an inference that he had the specific intent

to defraud. Phillips v. United States, 356 F.2d 297, 303 (9th Cir. 1965).

AFFIRMED.

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