Court Opinion

ID: 808803
Source: CourtListenerOpinion
Date Created: 2012-09-19 18:12:31+00
Date Added: 2024-06-11T18:00:32.136430
License: Public Domain

United States Court of Appeals
                     For the First Circuit

Nos. 10-2243, 10-2266, 10-2313, 10-2350, 11-1130

                    UNITED STATES OF AMERICA,

                            Appellee,

                               v.

       DANIEL APPOLON; ERNST APPOLON; LATOYA HALTIWANGER;
             J. DANIEL LINDLEY; and ERIC L. LEVINE,

                     Defendants, Appellants.

          APPEALS FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF MASSACHUSETTS

          [Hon. George A. O'Toole, U.S. District Judge]

                             Before

          Torruella, Boudin, and Lipez, Circuit Judges.

     Jeanne M. Kempthorne for appellant Daniel Apollon.
     Mark E. Howard for appellant Ernst Appolon.
     Tina Schneider for appellant Latoya Haltiwanger.
     James C. Rehnquist for appellant J. Daniel Lindley.
     Dana A. Curhan for appellant Eric L. Levine.
     Vijay Shanker, Attorney, United States Department of Justice,
Criminal Division, Appellate Section, with whom Carmen Milagros
Ortiz, United States Attorney, Victor A. Wild, Ryan M. DiSantis,
and Mary Beth Murrane, Assistant United States Attorneys, Lanny A.
Breuer, Assistant Attorney General, and Greg D. Andres, Acting
Deputy Assistant Attorney General, were on brief, for appellee.
September 19, 2012
           LIPEZ,   Circuit    Judge.       Appellants        Daniel   Appolon

("Daniel"), Ernst Appolon ("Ernst"), Latoya Haltiwanger, J. Daniel

Lindley, and Eric L. Levine were players in the Boston real estate

market.    Along with six coconspirators, appellants devised and

executed a mortgage fraud scheme which netted them illegal profits

of nearly $2 million between May 2005 and June 2006.               The scheme

itself was   uncomplicated:    appellants       and   their    coconspirators

arranged for straw buyers to purchase real property at the asking

price, falsified mortgage loan applications for the straw buyers to

obtain financing for an artificially-inflated purchase price, and

pocketed   the   difference.    The     loans   secured   by    each   of   the

properties involved in appellants' scheme eventually went into

default, and most of the properties were forced into foreclosure at

huge losses for the lenders.

           Appellants and their coconspirators were indicted by a

federal grand jury on May 15, 2008.        Appellants were each charged

with one count of conspiring to commit wire fraud in violation of

18 U.S.C. § 371 and with multiple counts of committing wire fraud

in violation of 18 U.S.C. § 1343.         (Daniel was charged with five

counts of wire fraud, Ernst with thirty-four, Haltiwanger with

seven, and Lindley and Levine each with forty-one.)              In addition,

Lindley and Levine were charged with nineteen counts of money

laundering in violation of 18 U.S.C. § 1957.          All of the counts in

                                  -3-
the   indictment   included   a   charge    of   aiding   and   abetting   in

violation of 18 U.S.C. § 2.

            On June 2, 2010, after a six-week jury trial in the

United States District Court for the District of Massachusetts,

appellants were found guilty of the charges against them, except

that Lindley was found not guilty of eleven counts of wire fraud

and four counts of money laundering.1        Each appellant was sentenced

to a term of imprisonment, followed by a period of supervised

release.2

            Appellants now raise a series of challenges to the

district court's management of this case, evidentiary rulings, jury

instructions, sentencing calculations, and other orders.           Included

in our analysis of these challenges is a rejection of Haltiwanger's

argument    that   a   district   court    may   not   undermine   a   jury's

nullification power by explicitly instructing the jury that it has

a duty to return a guilty verdict if it is convinced beyond a

      1
       Five of appellants' coconspirators pleaded guilty before
trial. The sixth, Ralph Appolon, was tried separately because his
attorney withdrew shortly before trial.      He was convicted on
February 22, 2011, and his appeal is currently pending before this
court. See United States v. Appolon, No. 11-1627.
      2
       Daniel was sentenced to forty-two months of imprisonment and
three years of supervised release; Ernst to one hundred and twenty
months of imprisonment and three years of supervised release;
Haltiwanger to thirty months of imprisonment and two years of
supervised release; Lindley to seventy-two months of imprisonment
and three years of supervised release; and Levine to one hundred
and forty-four months of imprisonment and two years of supervised
release.

                                    -4-
reasonable doubt of a defendant's guilt.       We also explain the

proper method of calculating loss in a mortgage fraud case such as

this.

           After carefully considering each challenge, we affirm.

                                  I.

           We provide here only a brief synopsis of the essential

facts of this case, in the light most favorable to the jury's

verdict, see United States v. Mubayyid, 654 F.3d 35, 41 (1st Cir.

2011), reserving additional detail for the analysis that follows.

           Levine, a real estate attorney who had been suspended

from the practice of law, shared office space in Boston with

Lindley,   another   attorney.    During   Levine's   suspension,   he

transferred components of his real estate practice in early 2005 to

Lindley, who thereafter handled all property closings for Levine.

Levine and Lindley sometimes worked with Haltiwanger, a residential

mortgage broker at Topdot Mortgage Company, and with Ernst, a

realtor at New England Merchants and a principal at Oligarchy

Funding.   Daniel, Ernst's brother, recruited clients and did odd

jobs for New England Merchants.

           In mid-2005, appellants hatched their mortgage fraud

scheme, which began with Ernst identifying properties for sale in

the Boston area and negotiating purchase prices with the sellers.

Assisted by Daniel and others, Ernst then recruited straw buyers

for these properties, targeting individuals with good credit scores

                                  -5-
who were willing to trade their complicity in appellants' scheme

for a cut of the profits.     The standard pitch delivered to a straw

buyer was that, in exchange for the use of his or her name, the

straw buyer could expect to earn approximately $10,000 and would

not be responsible for any down payment or mortgage payments.

Next, aided by Lindsay MacPhee (Levine's administrative assistant),

Levine,   Lindley,   Ernst,   and   Haltiwanger   prepared    and   filed

falsified mortgage loan applications, purchase-and-sale agreements,

and HUD-1 settlement statements on behalf of the straw buyers,

misrepresenting the straw buyers' eligibility for the loans and

overstating the purchase prices of the properties.3          (Haltiwanger

also served as a straw buyer for one property.)     Once the falsified

applications were approved by unsuspecting mortgage lenders, the

loan proceeds were wired to Lindley's Interest on Lawyers Trust

Account ("IOLTA"), from which the actual purchase prices were paid

to the sellers and the excess was disbursed to the conspirators,

usually after passing through bank accounts held by Levine.          The

loans secured by the properties were then permitted to default.

     3
       The Real Estate Settlement Procedures Act of 1974, 12 U.S.C.
§§ 2601-2617, requires that a HUD-1 settlement statement be used in
every real estate settlement "involving a federally related
mortgage loan in which there is a borrower and a seller."        24
C.F.R. § 3500.8(a). Among other things, the HUD-1 form is meant to
"conspicuously and clearly itemize all charges imposed upon the
borrower and all charges imposed upon the seller in connection with
the settlement." 12 U.S.C. § 2603; see also BancOklahoma Mortg.
Corp. v. Capital Tide Co., 194 F.3d 1089, 1096 (10th Cir. 1999)
("HUD-1 forms provide a detailed account of the disbursements of
money [that] borrowers are to receive.").

                                    -6-
Most of the properties were forced into foreclosure, and one was

burned for insurance money.

           In   all,   twenty-one     properties   were   involved   in

appellants' scheme.    For each of these properties, two separate

HUD-1 forms were created, with one form reflecting the actual

purchase price and the other reflecting the artificially-inflated

price listed on the falsified mortgage loan application.             In

addition, separate closings, presided over by Lindley, were held

for many of the properties in order to distance the straw buyers

from the sellers and keep secret the existence of the scheme.        By

June 2006, the conspirators had earned nearly $2 million in illegal

profits, commissions, and fees.

                                    II.

           Our analysis begins with Ernst's pretrial motion for

severance. It then turns to the sufficiency of the evidence, moves

to assorted evidentiary issues raised by appellants during trial,

proceeds to the district court's jury instructions and sentencing

calculations, and concludes with Levine's post-trial motion for an

evidentiary hearing or discovery.

A.   Ernst's Motion for Severance

           Levine was represented at trial by Isaac Borenstein of

the law firm Denner Pellegrino, LLP ("Denner Pellegrino").4 During

     4
       Levine was also represented by another Denner Pellegrino
attorney, Bruce Levin.      Ernst does not challenge Levin's
participation in Levine's defense.

                                    -7-
jury selection, Ernst's counsel notified the district court that,

prior to trial, another Denner Pellegrino attorney, Jeffrey Denner,

had discussed with Ernst the possibility of representing him in

this case.      Although Denner Pellegrino never took on Ernst's

representation, Ernst's counsel asserted that a severance of Ernst

from   his    co-defendants    was     necessary     to   preserve    Ernst's

constitutional right to testify in his own defense, see Rock v.

Arkansas, 483 U.S. 44, 51 (1987), since Ernst's interests at trial

differed from Levine's, and Borenstein had the ability to cross-

examine Ernst with confidential information that he disclosed to

Denner.

             Borenstein   explained    to    the   district   court   that   he

brought Levine's representation with him when he joined Denner

Pellegrino from another law firm.             When Borenstein arrived at

Denner Pellegrino, Denner informed him that he had previously had

a non-substantive conversation with "someone whose name [was]

Appolon" about taking over his representation in this case.

Borenstein and Denner then consulted with Levine, who waived any

potential conflict of interest.             Borenstein represented to the

court that he had no further discussions with Denner "or anybody at

Denner Pellegrino" about Ernst and had acquired no confidential

information about him.

             The district court then held an in camera hearing on the

conflict claim followed by fact-finding.            In 2008, while awaiting

                                      -8-
trial, Ralph Appolon (Ernst's brother and coconspirator in this

case)   became    frustrated     with    his    court-appointed       counsel   and

contacted Denner, who had represented him in 2005 in an unrelated

matter.       Denner   sent    Paul     Andrews,    an    associate     at   Denner

Pellegrino, to meet with Ralph and Ernst, who also was represented

by court-appointed counsel at the time.             Denner also may have met

personally with Ralph.          He did not meet with Ernst, however.

Neither Ralph nor Ernst retained Denner Pellegrino's services.

              The district court found that it was unclear what exactly

transpired in these preliminary meetings.                Ralph testified that he

provided one of the Denner Pellegrino attorneys with detailed

written notes that he and Ernst had prepared.                         However, the

attorneys stated that they had no notes from the meetings and that

there were no relevant documents in Denner Pellegrino's files. The

court found that "there must have been some discussion of the

indictment, at least in general terms, . . . between Ernst and

Andrews," but that any discussion was "exploratory as to whether

there would be representation" and could not have been "in-depth."

The   court     concluded     that    "the     extent    to   which    substantive

confidential information was exchanged was probably not very great"

and that no confidential information about Ernst was subsequently

shared with Borenstein.

              The court expressed some concern that Andrews played a

"minor" role in Levine's defense after Borenstein joined Denner

                                        -9-
Pellegrino,     including      drafting     proposed jury           instructions      and

meeting with Levine on one occasion. However, the court reiterated

that there was no evidence that any confidential information about

Ernst was ever disclosed improperly. Accordingly, the court denied

Ernst's motion for severance.          As a prophylactic measure, however,

it    barred    Andrews      from   participating           further        in   Levine's

representation.        Ernst appeals the denial of his severance motion.

            "[T]he general rule is that those indicted together are

tried together to prevent inconsistent verdicts and to conserve

judicial and prosecutorial resources."                  United States v. Soto-

Beníquez, 356 F.3d 1, 29 (1st Cir. 2004).                     However, a district

court is empowered to sever co-defendants' trials if "there is a

serious risk that a joint trial would compromise a specific trial

right of one of the defendants, or prevent the jury from making a

reliable judgment about guilt or innocence."                        Zafiro v. United

States, 506 U.S. 534, 529 (1993); see also Fed. R. Crim. P. 14(a).

"If   the   district     court   decides     not   to       sever    the    trial,    the

defendant      bears   the    burden   of   making      a    strong    showing       that

prejudice resulted from the denial of severance, and prejudice in

this context 'means more than just a better chance of acquittal at

a separate trial.'"          United States v. DeCologero, 530 F.3d 36, 52

(1st Cir. 2008) (quoting United States v. Boylan, 898 F.2d 230, 246

(1st Cir. 1990)).       We review a district court's denial of a motion

for severance for manifest abuse of discretion, see United States

                                       -10-
v. Celestin, 612 F.3d 14, 19 (1st Cir. 2010); DeCologero, 530 F.3d

at 52, and any predicate findings of fact for clear error, see

United States v. Allen, 491 F.3d 178, 189 (4th Cir. 2007).

            We discern no clear error in the district court's factual

findings. To the extent that Ernst disclosed protected information

to Andrews while discussing the possibility of Denner Pellegrino

taking on his representation, there is ample support for the

court's finding that no such information was relayed to Borenstein,

who obviously could not have cross-examined Ernst with confidential

information he did not possess.        As a result, we see no reasonable

basis for Ernst to have feared cross-examination more than any

other criminal defendant.         Therefore, we find no manifest abuse of

discretion in the denial of his severance motion.

B.   The Sufficiency of the Evidence (Lindley, Ernest, and Levine)

            At the close of the government's case, the defendants

moved for judgments of acquittal based on the insufficiency of the

evidence against them.       See Fed. R. Crim. P. 29(a).            The court

reserved its ruling, the defendants renewed their motions at the

close of all the evidence, and the court denied the motions at that

time.   See Fed. R. Crim. P. 29(b).         Only Lindley, Ernst, and Levine

now challenge the court's ruling.            We review their challenges de

novo, appraising the evidence in the light most favorable to the

jury's verdict, see United States v. Rodríguez-Vélez, 597 F.3d 32,

38   (1st   Cir.   2010),   and    giving    equal   weight   to   direct   and

                                     -11-
circumstantial evidence, see United States v. Ortiz, 447 F.3d 28,

32 (1st Cir. 2006).       "The verdict must stand unless the evidence is

so scant that a rational factfinder could not conclude that the

government proved all the essential elements of the charged crime

beyond a reasonable doubt."        Rodríguez-Vélez, 597 F.3d at 39.

          1.   Lindley

          Lindley argues that the evidence adduced at trial was

insufficient to prove that he either had actual knowledge of or was

willfully blind to the mortgage fraud scheme.            Such knowledge or

willful blindness is an essential element of the thirty wire fraud

counts, see 18 U.S.C. § 1343; United States v. Vázquez-Botet, 532

F.3d 37, 63 (1st Cir. 2008), fifteen money laundering counts, see

18 U.S.C. § 1957; United States v. Carucci, 364 F.3d 339, 343 (1st

Cir. 2004), and one conspiracy count, see 18 U.S.C. § 371; United

States v. Yefsky, 994 F.2d 885, 890 (1st Cir. 1993), of which he

was convicted.

                     a.   Actual Knowledge

          The following incidents, which are illustrative, were

recounted in detail at trial by one of the government's star

witnesses,   Andre    Junior    Lamerique,    and   corroborated   by   other

witnesses and documentary evidence.          Lamerique, a coconspirator of

appellants, testified at trial in exchange for the government's

agreement to recommend a reduced sentence.            However, it was well

within the jury's province to choose to believe the testimony of a

                                    -12-
cooperating witness.    See United States v. Rivera-Donate, 682 F.3d

120, 135 (1st Cir. 2012); United States v. Calderón, 77 F.3d 6, 10

(1st Cir. 1996).

             For one of the properties involved in the scheme, the

initial straw buyer, Shonette Tomlinson, failed to qualify for

financing.    As a fallback, appellants used a straw buyer they had

worked with previously, Elio Garay.       Lindley helped to prepare

Garay's mortgage loan application package by signing the HUD-1

settlement statement and occupancy affidavit, which certified that

Garay would occupy the premises upon close of escrow.         However,

Lindley also drafted and signed a side agreement between Tomlinson

and Garay providing that Tomlinson would occupy the property,

flatly contradicting Garay's affidavit.           In addition, Lindley

executed a construction holdback agreement between the mortgage

lender and Garay providing that $41,000 of the loan proceeds would

be held in escrow by Lindley for the purpose of bringing the

property into compliance with the Massachusetts Building Code.

There   is    nothing   inherently   suspicious    about   construction

holdbacks, see Reyes v. Remington Hybrid Seed Co., 495 F.3d 403,

409 (7th Cir. 2007), but Lindley failed to list this holdback on

the HUD-1 form and, instead of using the funds for repairs pursuant

to the agreement, he transferred them from his IOLTA to one of

Levine's bank accounts.

                                 -13-
           For another property, $10,000 was wired from Lindley's

IOLTA to the straw buyer, Kimyli Recca, although the HUD-1 form

Lindley signed did not list a payment to Recca in that amount.

Lindley also signed a $30,000 check drawn on his IOLTA for a

fictitious construction holdback on this property.                   The check was

made out to a shell company controlled by Levine.

           For a third property, Lindley conducted a closing at

which one of the sellers, Taslim Chowdhury, somehow discovered that

the straw buyer's HUD-1 form reflected a purchase price that was

$101,000 higher than the price on his own form.                 Chowdhury began

arguing with Lindley about the discrepancy and refused to proceed

with the sale until he was offered $20,000 by Levine and Ernst to

offset   any    additional     tax    liability     flowing    from    the   higher

purchase price.        Lindley then signed a check to Chowdhury for

$20,000 but did not record that amount on the HUD-1 form.

           Lindley attempts to blunt the force of this evidence by

chalking   up   his    behavior      to    inattentiveness     and    professional

incompetence.         He   points    out    that   Lindsay    MacPhee,   Levine's

administrative assistant, testified that she prepared the checks

and much of the paperwork he signed, insisting that he "simply

signed [what] his staff handed to him."                He also cites evidence

that his signature was forged on a number of HUD-1 forms and other

loan documents, and Lamerique's testimony that Levine instructed

some of appellants' coconspirators not to discuss the mortgage

                                          -14-
fraud scheme with him.        He notes that after a straw buyer,

Elizabeth   Son, disclosed    the    existence   of   the   scheme   to   law

enforcement officers in his presence, he gave agents from the

Federal Bureau of Investigation free access to his records.5              On

this basis, Lindley argues that the jury reasonably could have

drawn an inference that he was "sloppy, but not [a] criminal."

            We acknowledge the reasonableness of that inference.

However, it is not the only reasonable inference that could be

drawn.    When the evidence is construed in the light most favorable

to the jury's verdict, see Rodríguez-Vélez, 597 F.3d at 38, this is

not a case in equipoise, see Ortiz, 447 F.3d at 34.           The evidence

of   Lindley's   knowing   participation   in    appellants'    scheme    is

unusually strong and more than sufficient to prove his actual

knowledge beyond a reasonable doubt. See Rodríguez-Vélez, 597 F.3d

at 40 ("[W]here, as here, the evidence can be viewed in different

ways, we must honor the jury's evaluative choice among plausible,

albeit competing, inferences."); United States v. Hughes, 211 F.3d

      5
       In his briefing, Lindley claims that, "after being told by
Elizabeth Son that she was not in fact the true owner of the house
she had 'bought,' he took her to the Boston Police." The record
reveals a different scenario. The relevant testimony came from
Son. She explained that, after someone was murdered in her house,
Lindley accompanied her to a condemnation hearing. In the course
of that proceeding, Lindley and Son met with two homicide
detectives from the Boston Police Department. It was during that
meeting that Son revealed to the police officers that she "just had
the house underneath [her] name." There was no testimony at trial
that Lindley brought Son to the meeting for the purpose of making
that disclosure or that they had discussed ahead of time the fact
that Son was a straw buyer.

                                    -15-
676, 681 (1st Cir. 2000) ("[T]he jury is generally at liberty to

select   freely    among      a   variety   of   reasonable   alternative

constructions     of    the   evidence."    (internal   quotation    marks

omitted)).

                   b.    Willful Blindness

          For the sake of completeness, and to emphasize the

strength of the evidence against Lindley, we also address his

argument that the evidence was insufficient to prove that he

willfully blinded himself to the existence of appellants' scheme.

As we have explained, "[w]illful blindness serves as an alternate

theory on which the government may prove knowledge." United States

v. Pérez-Meléndez, 599 F.3d 31, 41 (1st Cir. 2010).           "The purpose

of the willful blindness theory is to impose criminal liability on

people who, recognizing the likelihood of wrongdoing, nonetheless

consciously refuse to take basic investigatory steps."              United

States v. Rothrock, 806 F.2d 318, 323 (1st Cir. 1986).         In order to

establish a defendant's willful blindness to criminal activity, the

government must show that (1) the defendant was aware of a high

probability of wrongdoing and (2) consciously and deliberately

avoided learning of the wrongdoing.         See Pérez-Meléndez, 599 F.3d

at 41; United States v. Azubike, 564 F.3d 59, 66 (1st Cir. 2009).

Direct evidence is not required; "what is needed are sufficient

warning signs that call out for investigation or evidence of

deliberate avoidance of knowledge."         Azubike, 564 F.3d at 66.

                                    -16-
           The government identified a number of warning signs or

"red flags," United States v. Frigerio-Migiano, 254 F.3d 30, 35

(1st Cir. 2001), that, uninvestigated, suggest Lindley's willful

blindness. Three stand out in particular. First, MacPhee included

in Lindley's files two sets of loan documents for nearly every

property involved in appellants' scheme. Second, Lindley conducted

several   closings   involving   repeat       buyers.   For   example,   Son

purchased two properties for $520,000 each within a six-day span,

signing an occupancy affidavit each time, and Garay (or someone

posing as him) purchased three properties within seven weeks.

Third, Lindley conducted one closing involving a buyer, Andrew

Caputo, who was listed on the HUD-1 form as living in a property

which Levine had recently sold to a different straw buyer and for

which Lindley had staged the closing.

           Lindley attempts to explain away these red flags in

various ways.    He claims, for instance, that he simply did not

notice Caputo's address on the HUD-1 form or other "individual

details in closing packets often spanning hundreds of pages," and

that he never inspected his files and thus was unaware that they

contained dual sets of loan documents for any properties.

           Again,    we   acknowledge   the    plausibility   of   Lindley's

explanations. The jury could have concluded that Caputo's address

escaped his attention or that he did not carefully examine his own

closing files.   But the jury also was entitled to disbelieve those

                                   -17-
explanations, see Rodríguez-Vélez, 597 F.3d at 40, and to find, for

instance, that Lindley was aware that his files held two sets of

documents for certain properties and that, if Lindley did not

compare the two to find out why, it was only because he was

consciously avoiding the knowledge that they recorded different

purchase prices or otherwise contained discrepancies.

             Relying on our decision in United States v. Martin, 815

F.2d 818 (1987), Lindley also argues that the government failed to

call   any   witnesses   who   could   explain    to   the   jury   why       these

"business    irregularities"    should    have    alerted    him    to    a    high

probability of wrongdoing, even if he had detected them.                        In

Martin, the defendants were convicted of crimes arising out of

their operation of a car theft ring.          See 815 F.2d at 820-21.          The

government relied on three factors in arguing that one of the

defendants, a used car salesman who had helped to resell the stolen

vehicles, had willfully blinded himself to the fact that the

vehicles'     title   certificates     were      forged:     (1)    the       title

certificates were duplicates; (2) the cars, which were received in

Rhode Island, were resold in New York; and (3) the salesman had

been directed by his supervisor not to list his own name on the

title certificates as assignee.          See id. at 826.       Reversing the

salesman's conviction, we noted that "[t]he trouble with these

factors is that [a jury] not experienced in marketing used cars

cannot tell what to make of them."        Id.     We elaborated:

                                   -18-
            [T]he government was asking the jury to draw
            inferences beyond their unaided competence.
            It may well be that to an experienced eye each
            of the above factors would have been dead
            giveaways that the cars were likely stolen.
            But a jury is unable to draw such inferences
            from its ordinary experience.    Evidence was
            required.

Id.

            This case is distinguishable from Martin for two reasons.

First, it was not necessary for a witness to explain to the jury

the significance of some of the red flags in this case.           A jury

without experience in real estate closings could nevertheless infer

that Lindley should have been alerted to a high probability of

wrongdoing from the fact that multiple buyers purchased properties,

signed occupancy affidavits declaring their intention to reside in

those properties, and then turned around and bought new properties

within the week.      Second, the government did call witnesses to

testify to the suspicious nature of certain less obvious red flags.

For example, MacPhee testified that Lindley's files only contained

dual sets of loan documents for closings involving New England

Merchants, the real estate company where Ernst was employed.            By

contrast,   Shirley   David,   a   mortgage   originator   who   was   not

connected to appellants' scheme, testified that only one set of

documents was used in all of the twenty or so closings on which she

and Lindley worked together.       The jury thus could have concluded

that the existence of two sets of documents for the properties

involved in appellants' scheme was sufficiently unusual that it

                                   -19-
should have aroused Lindley's suspicion.             We therefore hold that

there was sufficient evidence to support Lindley's conviction on a

willful blindness theory.6

            2.    Ernst

            The    scope    of   Ernst's    sufficiency   of   the   evidence

challenge is narrow.        Rather than disclaim any role in appellants'

scheme, Ernst contests only the evidentiary basis for seven of his

thirty-four wire fraud convictions, arguing that the government did

not prove that he knowingly and willingly participated in the

scheme with respect to the four properties implicated in these

seven counts.      See 18 U.S.C. § 1343.

            The four properties in question are located in the

Dorchester, Mattapan, and Hyde Park neighborhoods of Boston, and in

nearby Brockton.          Lamerique tied Ernst to each property.            He

testified that it was Ernst who identified the Dorchester property

as suitable for appellants' scheme and delivered a pitch to the

straw    buyer,   also     instructing     Samuel   Jean-Louis,   another   of

appellants' coconspirators, how to structure the loan application

     6
       The government also argues that other red flags existed.
For example, for seventeen of the twenty-one properties involved in
appellants' scheme, MacPhee gave Lindley checks to sign that split
the loan proceeds due to the seller into two payments. However, a
lay jury does not have the specialized knowledge to appreciate why
splitting loan proceeds into two payments should have warned
Lindley of a high probability of wrongdoing. None of the witnesses
called by the government explained whether or not sellers usually
receive loan proceeds in one lump sum. Therefore, it was beyond
the jury's "unaided competence" to view the check-splitting as a
red flag. Martin, 815 F.2d at 826.

                                     -20-
and purchase-and-sale agreement.         Lamerique also testified that

Ernst recruited and pitched the straw buyer for the Mattapan

property, collecting fees of $11,125, and that he identified and

negotiated a purchase price for the Brockton property, doctoring

the purchase-and-sale agreement to conceal $20,000 in illegal

profits.     In addition, Lamerique testified that Ernst identified

the   Hyde    Park   property   and   prepared   the   purchase-and-sale

agreement, earning a commission of $11,375.

             In the context of this case, and against the backdrop of

Ernst's general awareness of the mechanics of appellants' scheme,

which is undisputed, the foregoing evidence was sufficient for the

jury to convict him of the seven counts in question.

             3.   Levine

             Levine challenges the sufficiency of the evidence for his

convictions on eight of the forty-one wire fraud counts and three

of the nineteen money laundering counts.          Nevertheless, Levine

concedes that "the evidence, viewed in the light most favorable to

the government, certainly established that [he] involved himself in

some [unlawful] activities" and "could certainly support a finding

that [he] conspired with various players at New England Merchants

to defraud various lenders." He maintains, though, that he did not

knowingly participate in wrongdoing with respect to the four

properties implicated in the eleven challenged counts, see 18

U.S.C. §§ 1343, 1957, which are located in South Boston, Brockton,

                                  -21-
Hyde Park, and Dorchester.           In support of this claim, he points to

evidence that he became upset when he discovered that the straw

buyer for the Hyde Park property had used a stolen identity.

            The evidence shows that proceeds from the South Boston,

Brockton, and Hyde Park properties passed through bank accounts

held by Levine.        The fact that he did not want to engage in

identity theft with respect to one or more of these properties has

no bearing on his knowing participation in other aspects of the

mortgage fraud scheme.             The evidence also establishes that the

Dorchester   property        was    burned       by   Lamerique    and    another     of

appellants' coconspirators for insurance money, that Levine advised

Lamerique how to form a shell company to fraudulently conceal the

insurance money from the property's mortgage lender, and that

Levine personally handled $40,000 of the insurance money.                        There

was, in short, sufficient evidence for the jury to infer the

requisite knowledge to convict Levine of the eleven counts in

question.

C.   The Proceeds of the Scheme (Daniel)

            Daniel,    who    by    all    accounts      played    a     bit   part   in

appellants' scheme, argues that the district court ran afoul of

Federal Rule of Evidence 404(b) in allowing Lamerique to testify

that Daniel had used some of the proceeds of the scheme to

purchase, among other things, firearms and marijuana.                          Because

Daniel   failed   to    lodge        a    contemporaneous         objection     during

                                          -22-
Lamerique's testimony, our review is for plain error.   See United

States v. Meserve, 271 F.3d 314, 321 (1st Cir. 2001). Accordingly,

Daniel must show that (1) an error occurred (2) which was clear or

obvious and which not only (3) affected his substantial rights, but

also (4) seriously impaired the fairness, integrity, or public

reputation of judicial proceedings.   See id. at 321-22.

          Federal Rule of Evidence 404(b) prohibits the admission

of evidence of a defendant's other crimes or bad acts to establish

his or her character or propensity to commit a crime.   See Fed. R.

Evid. 404(b); see also United States v. Fulmer, 108 F.3d 1486, 1501

(1st Cir. 1997) ("Rule 404(b) is intended to 'forbid judging a

person on the basis of innuendo arising from conduct [that] is

irrelevant to the charges for which he or she is presently standing

trial, i.e., against finding present guilt based on a bad character

profile.'" (quoting United States v. Cortijo–Díaz, 875 F.2d 13, 15

(1st Cir. 1989))).   We employ a two-part test to evaluate whether

evidence is admissible under Rule 404(b).    See United States v.

Pelletier, 666 F.3d 1, 5 (1st Cir. 2011).     First, we determine

whether the evidence has special relevance -- "that is, whether it

is relevant to any purpose other than to prove that a defendant has

a propensity to commit a crime."   Id.   If so, we look to Federal

Rule of Evidence 403 to determine whether the probative value of

the evidence is substantially outweighed by its danger of unfair

                               -23-
prejudice.    See id.; United States v. Rodríguez–Berríos, 573 F.3d

55, 64 (1st Cir. 2009).

            Daniel apparently had no legitimate source of disposable

income.      Therefore, evidence that he used money derived from

appellants'    scheme   to    buy    "marijuana,    clothes,      vehicles,    and

firearms" had special relevance because it established his motive

for participating in the scheme -- his need to finance a lavish

lifestyle.    See United States v. Cole, 631 F.3d 146, 155-56 (4th

Cir. 2011) (evidence of defendant's "lavish spending" was probative

of motive for violating tax laws); United States v. Jackson-

Randolph,    282 F.3d     369,     376-80   (6th   Cir.   2002)    (evidence    of

defendant's    shopping      and   gambling    expenses    showed   motive     for

committing financial crimes); United States v. Kadouh, 768 F.2d 20,

21 (1st Cir. 1985) (evidence of defendant's use of cocaine, an

expensive    drug,   offered       financial   motive     for   trafficking     in

heroin).    As such, the evidence had significant probative value.

            The evidence also was not unfairly prejudicial.                   "For

purposes of Rule 403, 'unfair prejudice' occurs where there is 'an

undue tendency to suggest decision on an improper basis, commonly,

though not necessarily, an emotional one.'"                 United States v.

Symonevich, No. 11-1236, 2012 WL 3083491, at *7 (1st Cir. July 31,

2012) (quoting Fed. R. Evid. 403 advisory committee's note). Here,

the reference to Daniel's purchase of firearms and marijuana was

brief and unaccompanied by hints of either actual gun violence or

                                      -24-
drug abuse.      Therefore, we find no error in the admission of the

testimony, plain or otherwise.

D.   The Summary Evidence Objection (Daniel and Haltiwanger)

           1.    The Summary Charts

           Daniel and Haltiwanger argue that the district court

erred by admitting into evidence four charts summarizing the reams

of financial data in this case. As with other evidentiary rulings,

our review is for abuse of discretion.                   See United States v.

McElroy,   587    F.3d    73,    80   (1st   Cir.     2009);    United   States   v.

Stierhoff, 549 F.3d 19, 27 (1st Cir. 2008).

           The government's final witness was Thomas Zappala, an

auditor employed by the United States Attorney's Office.                   Through

Zappala, the government introduced four charts that he created

outlining the mechanics of appellants' scheme.                    The first chart

depicted, for each of the twenty-one properties involved in the

scheme, the buyer and seller, the difference between the actual

sale price and the falsely-inflated price represented on the

mortgage loan applications, and the proceeds laundered through

Lindley's IOLTA.       The second chart listed, for each property, the

profits accruing to each conspirator.               The third aligned the wire

fraud   counts    in     the    indictment     with    the     corresponding   wire

transfers and property sales.           The fourth chart did the same for

the money laundering counts.

                                        -25-
           The     government     argued    that     Zappala's      charts    were

admissible under Federal Rules of Evidence 611 and 1006.                      Over

objections from Daniel and Haltiwanger, the district court admitted

the charts into evidence "under the rules and law relating to

summaries" and made them available to the jury.                   The court also

denied requests for Daniel and Haltiwanger for contemporaneous

limiting     instructions,      although    it     did    provide    a   limiting

instruction before jury deliberations, admonishing the jury that

summaries should be scrutinized closely.

           As we have explained, various summary tools may be used

"to clarify complex testimony and evidence" for a jury.                  McElroy,

587 F.3d at 81; see also United States v. Milkiewicz, 470 F.3d 390,

396-98 (1st Cir. 2006); Fraser v. Major League Soccer, L.L.C., 284

F.3d 47, 67 (1st Cir. 2002). Of particular relevance, Federal Rule

of Evidence 1006 provides that a party may summarize the contents

of voluminous writings, recordings, or photographs which cannot

conveniently be examined in court, so long as the summary is

accurate, the underlying documents are made available to the other

parties,   and    both   the   summary     and   the     source   materials    are

admissible.      See Fed. R. Evid. 1006; see also Milkiewicz, 470 F.3d

at 396-98.     A Rule 1006 summary may be offered into evidence and

made available to the jury.        See 31 Charles A. Wright & Victor J.

Gold, Federal Practice and Procedure § 8044 (2000).

                                     -26-
              No    precise   test   dictates     when   source    materials   are

sufficiently indigestible to permit summarization under Rule 1006.

Instead, district courts are advised to carefully weigh the volume

and complexity of the materials.                  These two factors have an

inversely proportionate relationship: as either the volume or

complexity increases, relatively less is required of the other

factor.   See id.         The ultimate question, of course, is whether

summarization will remove logistic or cognitive barriers to the

jury's discharge of its duties, see United States v. Bakker, 925

F.2d 728, 736 (4th Cir. 1991); United States v. Johnson, 594 F.2d

1253, 1255 (9th Cir. 1979), and we are poorly positioned to second

guess a district court's on-the-spot answer to this question, see

Fraser, 284 F.3d at 67 ("It is hard to imagine an issue on which a

trial judge enjoys more discretion than as to whether summary

exhibits will be helpful.").

              The summary evidence in this case obviated the need for

the government to introduce, and the jury to sift through, mortgage

and sale records for each of the twenty-one properties involved in

appellants' scheme, and also facilitated tracing the scheme's

proceeds through Lindley's IOLTA.               As such, it comported with the

purpose of Rule 1006.         See Bakker, 925 F.2d at 736 ("The purpose of

Rule   1006    is    to   provide    a   practicable     means    of   summarizing

voluminous information.").           However, Daniel and Haltiwanger argue

that the summary evidence nevertheless should have been excluded

                                         -27-
for two reasons: (1) it impermissibly summarized testimony, in

addition to documents, see McElroy, 587 F.3d at 80 (noting that

Rule 1006 "only allows the introduction of summary evidence that

summarizes   documents,     as   opposed   to    evidence   that   summarizes

testimony"); and (2) it was based in part on inadmissible source

materials, see Colón-Fontánez v. Municipality of San Juan, 660 F.3d

17, 29-30 (1st Cir. 2011) (noting that for summary evidence to be

admissible, the materials on which it is based also must be

admissible).   These arguments are non-starters.

           As to the first argument, there has been no showing that

the summary charts in fact summarized testimony.            To the contrary,

the charts, in certain respects, summarized documentary evidence

that corroborated witness testimony.             For example, Haltiwanger

claims that the charts should not have linked her receipt of

$17,000 to her participation in appellants' scheme because the only

evidence   drawing   that   connection     was   Lamerique's    testimony.

However, the documentary evidence on which the charts were based

reveals that Haltiwanger received $17,000 in two installments from

a bank account associated with appellants' scheme within three

months of purchasing one of the properties involved in the scheme.

           Similarly, Daniel asserts that the summary charts should

not have indicated that he received three checks totaling $16,000

because the only proof that he earned any money from appellants'

scheme came from Lamerique's testimony.            The checks themselves,

                                    -28-
though, corroborated that testimony and were appropriately provided

to the jury.    Two of the checks were endorsed by Daniel, and the

third was made out to him by Levine.       That a particular fact may

have been the subject of testimony does not mean that it cannot be

corroborated through admissible documents summarized under Rule

1006.

           As to the second argument, we understand Daniel and

Haltiwanger to be contending that the summary evidence relied upon

source materials, such as the sale records for the properties

involved in the scheme, that were inadmissible for the truth of the

matter asserted and thus barred by the hearsay rule codified in

Federal Rule of Evidence 801.     See Milkiewicz, 470 F.3d at 398 n.15

("The records summarized must . . . be admissible.").                 This

contention misses the point. The sale records were admissible, not

to prove that the purchase prices reflected the true value of the

properties, but for the limited purpose of showing that these

prices   were   lower   than   those   listed   on   the   mortgage   loan

applications.   Accordingly, they were not within the scope of the

hearsay rule.     See DeCologero, 530 F.3d at 58 (1st Cir. 2008)

("'[I]f the significance of an offered statement lies solely in the

fact that it was made, no issue is raised as to the truth of

anything asserted, and the statement is not hearsay.'" (quoting

Fed. R. Evid. 801(c) advisory committee's note)).           There was no

                                  -29-
abuse of discretion in the admission of the summary charts under

Rule 1006.7

            2.   Zappala's Testimony

            Citing our decision in United States v. Flores-De-Jesús,

569 F.3d 8 (1st Cir. 2009), Daniel and Haltiwanger also challenge

Zappala's testimony as a summary witness.        In Flores-De-Jesús, we

expressed concern that the government's use of a summary witness

can generate imbalances in a trial if the summary witness endorses

the credibility of other witnesses.          See 569 F.3d at 18-19; see

also United States v. Moore, 651 F.3d 30, 56 (D.C. Cir. 2011);

United States v. Fullwood, 342 F.3d 409, 413-14 (5th Cir. 2003).

That problem did not arise here.      Zappala did not bolster the trial

testimony     of other   witnesses.    His   testimony   was   limited   to

introducing and explaining the summary charts he prepared.          There

was no abuse of discretion in permitting him to testify.

E.   The Willful Blindness Instruction (Lindley and Haltiwanger)

            Lindley and Haltiwanger argue that the district court

should not have instructed the jury on willful blindness.8               "We

     7
       The court did not specify that it was admitting the summary
charts under Rule 1006, simply stating that it was admitting the
charts "under the rules and law relating to summaries."       This
statement is obviously broad enough to encompass Rule 1006. Still,
it would be a better practice if the court specified which
evidentiary rule it was relying upon because these summaries are
subject to different rules with different requirements and
purposes. See Milkiewicz, 470 F.3d at 395-98.
     8
      Drawing on pattern jury instructions, see Pattern Criminal
Jury Instructions for the District Courts of the First Circuit

                                  -30-
have not definitively resolved what standard of review we apply to

the   district   court's   decision   to     give   a   willful    blindness

instruction," United States v. Anthony, 545 F.3d 60, 64 (1st Cir.

2008),   and   have   oscillated   between   "de    novo   and    deferential

standards of review," Azubike, 564 F.3d at 66 n.5.          However, "[w]e

need not determine the issue in this case, because applying either

standard, the evidence supported the district court's decision to

§ 2.15 (1998), the court instructed the jury as follows:

            When considering whether a defendant has acted
      knowingly, you may infer that a person has knowledge of
      a particular fact if you find that that person
      deliberately closed his eyes to a fact that otherwise
      would have been obvious to him.        A conscious and
      deliberate attempt to avoid information or enlightenment
      is sometimes called willful blindness. That is, someone
      who is willfully blind to a fact that would under
      ordinary circumstances otherwise be obvious to him or
      her.
            In order to infer the fact of a person's knowledge
      of something by reason of willful blindness, you must
      find two things have been established: First, that that
      person, the defendant, was aware of a high probability
      that the fact was true; and second, that the defendant
      conscientiously and deliberately avoided learning the
      fact.    That is to say, the defendant willfully made
      himself blind to the fact. If that's happened, you may
      attribute knowledge to that person by reason of this
      doctrine.
            Now, that does not mean that a person who was
      careless or negligent in learning what the fact are or
      makes a mistake in learning the facts would be guilty of
      having that knowledge.      There must be a deliberate
      attempt, an effort made to remain ignorant of the fact.

     As we have noted previously, although pattern instructions may
be helpful, they are only a guide and "have not been officially
adopted by th[is] court." United States v. Charlton, 502 F.3d 1,
3 n.2 (1st Cir. 2007); see also United States v. Jadlowe, 628 F.3d
1, 17 (1st Cir. 2010).

                                   -31-
charge the jury on willful blindness."        United States v. Mitrano,

658 F.3d 117, 123 (1st Cir. 2011); see also Anthony, 545 F.3d at

64.

          A willful blindness instruction is appropriate if three

requirements are met: "'(1) a defendant claims a lack of knowledge,

(2) the facts suggest a conscious course of deliberate ignorance,

and (3) the instruction, taken as a whole, cannot be misunderstood

as mandating an inference of knowledge.'" Mitrano, 658 F.3d at 123

(quoting Azubike, 564 F.3d at 66).           Of the second requirement,

which is the only one contested in this case, we have said that,

"[i]n determining whether the facts suggest the type of deliberate

avoidance warranting a willful blindness instruction, we must

consider whether the record evidence reveals flags of suspicion

that, uninvestigated, suggest willful blindness."           Id. (internal

quotation marks omitted); see also Azubike, 564 F.3d at 66 ("Direct

evidence of willful blindness is not required; what is needed are

sufficient   warning   signs   that   call   out   for   investigation   or

evidence of deliberate avoidance of knowledge.").

          We have already established that the evidence adduced at

trial was sufficient to prove beyond a reasonable doubt that

Lindley willfully blinded himself to the existence of appellants'

scheme.   This holding necessarily means that a willful blindness

instruction was appropriate as to Lindley.         See Azubike, 564 F.3d

at 69.

                                  -32-
          The instruction also was appropriate as to Haltiwanger,

an experienced residential mortgage broker.        The evidence shows

that Ernst and two of appellants' coconspirators pitched the

mortgage fraud scheme to Haltiwanger, promising that if she served

as a straw buyer she "should be able to make . . . around $10,000,

and that the mortgage would be taken care of."       While waiting for

the conspirators to identify a property for which she could be the

straw   buyer,   Haltiwanger    processed    falsified   mortgage   loan

applications on behalf of other straw buyers through her employer,

Topdot Mortgage Company, and collected commissions.           On two of

these loan   applications,     Haltiwanger   misrepresented   the   straw

buyer's employer as Oligarchy Funding, where Ernst was a principal.

She did the same on her own loan application.            The government

argues, and we agree, that, "[g]iven this ample evidence that . . .

Haltiwanger proceeded with multiple transactions in the face of

circumstances that, as [a] real estate professional[], [she] could

only have deemed fraudulent, the district court did not err in

permitting the jury to consider whether [her] actions evinced

willful blindness."

          Haltiwanger protests that the government forfeited its

right to a willful blindness instruction by stating in its closing

argument that she "knew what was going on," implying that she had

actual knowledge of appellants' scheme.           "These theories can

coexist," however.    Griffin, 524 F.3d at 79; see also Azubike, 564

                                  -33-
F.3d at 67-69; United States v. Cassiere, 4 F.3d 1006, 1024 (1st

Cir. 1993) ("Although the government's main contention at trial was

that all three defendants were knowing participants in the scheme,

the government presented evidence from which the jury could have

concluded that if they did not know what was going on, it was only

because they chose to turn a blind eye.").      The evidence against

Haltiwanger could support either a finding of actual knowledge or

a finding of willful blindness and "did not require the jury to

make a binary choice between actual knowledge and innocence."

Azubike, 564 F.3d at 68.     As a result, the district court did not

err by giving a willful blindness instruction.

F.   Haltiwanger's Jury Nullification Challenge

             Haltiwanger argues that the district court should not

have instructed the jury that it had a duty to return a guilty

verdict if it concluded that the government had proven its case

beyond a reasonable doubt.9     She complains that this instruction

      9
          In pertinent part, the court instructed the jury:

          The burden of proof rests with the government. A
     defendant assumes no burden to prove that he is innocent.
     The question is never which side has convinced me but,
     rather, has the government convinced me beyond a
     reasonable doubt that the defendant is guilty? If the
     answer to that question is yes, then the government is
     entitled to your verdict of conviction. If that answer
     is no, then the defendant is entitled to be and must be
     acquitted.

     . . . .

             The government must establish each element of an

                                 -34-
wrongly suggested that the jury lacked the power to nullify.            See

United States v. Thomas, 116 F.3d 606, 615 (2d Cir. 1997) (defining

nullification as "a practice whereby a juror votes in purposeful

disregard of the evidence, defying the court's instructions on the

law"). Because no objection to this instruction was made at trial,

our review is for plain error.    See United States v. Troy, 618 F.3d

27, 33 (1st Cir. 2010).    Here, there was no error at all.

           "We have consistently held that a district court may not

instruct the jury as to its power to nullify."          United States v.

Manning, 79 F.3d 212, 219 (1st Cir. 1996); see also United States

v. Bunchan, 626 F.3d 29, 34 (1st Cir. 2010) ("Neither the court nor

counsel   should   encourage   jurors   to   exercise   their   power    to

nullify."); United States v. Sepulveda, 15 F.3d 1161, 1190 (1st

Cir. 1993) ("Though jury nullification has a long and sometimes

storied past, the case law makes plain that a judge may not

instruct the jury anent its history, vitality, or use." (internal

citation omitted)); United States v. DesMarais, 938 F.2d 347, 350

(1st Cir. 1991) ("[I]t would [be] improper to urge the jury to

nullify applicable law.").     This is because "jurors may have the

     offense by proof that convinces you and leaves you with
     no reasonable doubt and thus satisfies that you can
     consistent with your oath as jurors base your verdict on
     it. Again, if you are so convinced, it is your duty to
     return a verdict of guilty. If, on the other hand, you
     have a reasonable doubt as to whether the defendant is
     guilty of any crime charged, the defendant must be given
     the benefit of that doubt and you must find him not
     guilty.

                                 -35-
power to ignore the law, but their duty is to apply the law as

interpreted by the court, and they should be so instructed."

United States v. Boardman, 419 F.2d 110, 116 (1st Cir. 1969); see

also Bunchan, 626 F.3d at 34 ("A juror's duty is to apply the law

as provided by the court."); Sepulveda, 15 F.3d at 1190 ("The

applicable rule is that, although jurors possess the raw power to

set an accused free for any reason or for no reason, their duty is

to apply the law as given to them by the court.").

          In light of these precedents, it is hardly a stretch to

hold explicitly, as we now do, that a district court may instruct

a jury that it has a duty to return a guilty verdict if convinced

beyond a reasonable doubt of a defendant's guilt on a particular

charge.   See United States v. Carr, 424 F.3d 213, 219-20 (2d Cir.

2005) (affirming instruction implying that nullification was not an

option, because "[n]othing in our case law begins to suggest that

the court cannot . . . tell the jury affirmatively that it has a

duty to follow the law, even though it may in fact have the power

not to"); United States v. Pierre, 974 F.2d 1355, 1357 (D.C. Cir.

1992) (per curiam) ("[I]t was proper for the district court to

instruct the jury that it had a duty to find appellant guilty if

the government proved beyond a reasonable doubt every element of

the offense with which he was charged.").

                               -36-
G.   Lindley's Closing Argument Challenge

           During its closing argument, the government suggested

that Lindley joined the mortgage fraud scheme in order to stay in

Levine's good graces and thereby preserve for himself the lucrative

real estate practice he inherited from Levine, which the government

valued at "a quarter million dollars."   Lindley objected that the

government's valuation was unsupported by the evidence,10 and later

moved for a new trial on the same basis.       The district court

overruled the objection and denied the motion for a new trial,

explaining that the reference to Lindley's financial motive was

borne out by the record.   We review de novo whether the challenged

portion of the government's closing argument was improper and, if

so, whether it was harmful, but we review the denial of Lindley's

motion for a new trial only for manifest abuse of discretion.   See

United States v. Manor, 633 F.3d 11, 16-17 (1st Cir. 2011); United

States v. Nelson-Rodriguez, 319 F.3d 12, 38 (1st Cir. 2003).

           As a general principle, the government is permitted in

its closing argument to attribute to a defendant a motive that is

     10
        Lindley's objection was not made until the next day.
Nevertheless, because closing arguments had not yet concluded, the
district court could have taken any necessary corrective action.
As a result, and as the government concedes, the objection was
timely.   As we observed in United States v. Mandelbaum, "[a]
stricture governing the timing of objections should not be employed
woodenly, but should be applied where its application would serve
the ends for which it was designed." 803 F.2d 42, 44 n.1 (1st Cir.
1986) (internal quotation marks omitted); see also United States v.
Azubike, 504 F.3d 30, 39 n.9 (1st Cir. 2007).

                                -37-
consistent with the evidence, see United States v. Torres-Rosario,

658 F.3d 110, 113-14 (1st Cir. 2011); United States v. Meadows, 571

F.3d 131, 145 (1st Cir. 2009), particularly where the defendant

first placed in issue his or her motive or lack thereof, see United

States v. Derman, 211 F.3d 175, 180 (1st Cir. 2000).           In this case,

we   see   nothing   improper    about   the   government's    reference   to

Lindley's financial motive, which was a fair rejoinder to Lindley's

earlier exhortation to the jury to "follow the money" and his

declaration that he had no pecuniary stake in appellants' scheme.

Levine's administrative assistant testified that Levine had earned

approximately $20,000 per month, or $240,000 per year, from the

real estate practice he later transferred to Lindley.             That these

figures necessarily were estimates, and perhaps were extrapolated

from unusually busy periods in Levine's professional career, does

not negate the inference that Lindley was drawn to the scheme by

the allure of "a quarter million dollars," or thereabouts.             There

was no mistake in overruling Lindley's objection, and no manifest

abuse of discretion in the denial of his motion for a new trial.

See Manor, 633 F.3d at 19.

H.   Loss Calculation (Ernst and Levine)

            Ernst    and    Levine       challenge      the   eighteen-level

enhancements that the district court added to their sentences

pursuant    to   U.S.S.G.   §   2B1.1(b)(1)(J)    for    engendering   losses

between $2,500,000 and $7,000,000. See United States v. Innarelli,

                                     -38-
524 F.3d 286, 290 (1st Cir. 2008).          We review the district court's

loss calculation methodology de novo. See United States v. Walker,

234 F.3d 780, 783 (1st Cir. 2000) ("The appropriate method for

calculating loss amounts . . . is a prototypical question of legal

interpretation,    and   we   review   de    novo.").    The    mathematical

application of this methodology is reviewed only for clear error.

See Vázquez-Botet, 532 F.3d at 65; United States v. Cacho-Bonilla,

404 F.3d 84, 92 (1st Cir. 2005).

           U.S.S.G. § 2B1.1 increases a defendant's base offense

level for fraud according to the amount of pecuniary loss caused by

the defendant.    As a general rule, this amount is "the greater of

actual loss or intended loss."         U.S.S.G. § 2B1.1 cmt. n.3(A); see

also Innarelli, 524 F.3d at 290.        As the term implies, actual loss

is the reasonably foreseeable loss that actually resulted from an

offense.   See U.S.S.G. § 2B1.1 cmt. n.3(A)(i).                The extent of

actual loss may depend on fortuities that minimize or exacerbate

the effects of the defendant's fraudulent conduct.             Intended loss

is the loss that the defendant could have reasonably expected to

occur at the time he or she perpetrated the fraud.         See Innarelli,

524 F.3d at 290; see also United States v. McCoy, 508 F.3d 74, 79

(1st Cir. 2007).    In that respect, intended loss is frequently a

better measure of culpability than actual loss.            See McCoy, 508

F.3d at 79.

                                   -39-
              In cases where a defendant has pledged collateral to

secure a fraudulent loan, actual loss usually can be calculated by

"subtracting the value of the collateral -- or, if the lender has

foreclosed on and sold the collateral, the amount of the sales

price -- from the amount of the outstanding balance on the loan."

United States v. James, 592 F.3d 1109, 1114 (10th Cir. 2010); see

also United States v. Parish, 565 F.3d 528, 535 (8th Cir. 2009);

McCoy, 508 F.3d at 79.        "[T]he damage wrought by fraud is sometimes

difficult to calculate," however.            United States v. Agboola, 417

F.3d   860,    870    (8th   Cir.   2005).        If   actual    loss    cannot    be

determined, a district court may safely use intended loss in its

computations,        and   vice   versa.     Of    course,      if    both   can   be

determined,     the Guidelines require the use of the larger amount.

If neither actual loss nor intended loss can be gauged, a district

court may use, as a last resort, "the gain that resulted from the

offense as an alternative measure of loss."              U.S.S.G. § 2B1.1 cmt.

n.3(B).

              The application of these principles in mortgage fraud

cases must account for the fact that the original mortgage lender

frequently is not the lender who forecloses on a property and

receives the proceeds from the foreclosure sale.                     See James, 592

F.3d at 1115.        Even if the original lender sells the mortgage to a

successor lender, though, and there are subsequent transactions of

the same kind, actual loss is always the difference between the

                                      -40-
original loan amount and the final foreclosure price (less any

principal repayments).        The commentary to U.S.S.G. § 2B1.1 "does

not direct us to focus on harm to any particular victim; rather, it

mandates that we focus on the total loss resulting from the

commission of fraud to the extent the total loss is reasonably

foreseeable."      Id.   at   1117   (Lucero,   J.,    concurring)   (citing

U.S.S.G. § 2B1.1 cmt. n.3(A)(i)); see also United States v. Snow,

468 F. App'x 830, 840 (10th Cir. 2012).          Thus, provided that the

total actual loss is reasonably foreseeable, its apportionment as

between the original lender and a successor lender (or other

downstream purchaser) does not matter.                The same is true of

intended loss.     The focus is not on any particular lender to the

exclusion of others, but rather on the total degree of loss that

the defendant could have reasonably expected to occur.          See United

States v. Bonanno, 146 F.3d 502, 509-10 (7th Cir. 1998) ("[T]he

relevant inquiry is . . . 'How many dollars did the culprits'

scheme put at risk?'").

          With these principles in mind, we turn our attention to

the case at bar.    Most of the mortgages at issue here were sold by

the original lenders to successor lenders (and, in some instances,

resold by the successor lenders to other downstream purchasers)

prior to the commencement of foreclosure proceedings. The district

court assumed that it was precluded from making an actual loss

determination due to its inability to ascertain which entities had

                                     -41-
suffered losses, and in what amounts, for any given property.

Instead, the court relied on intended loss, arriving at a loss

amount in excess of $2,500,000.11

            The court was wrong to assume that it was incapable of

making an actual loss determination merely because it could not

tell which entities had lost what amounts of money.    The relevant

metric is total actual loss, not loss to any particular victim.

See Snow, 468 F. App'x at 840; James, 592 F.3d at 1117 (Lucero, J.,

concurring).12    Thus, for each property, the court should have

calculated actual loss by subtracting from the outstanding balance

on the mortgage loan either the sum recouped via foreclosure or, if

there was no foreclosure, the property's fair market value at the

time of sentencing.    See James, 592 F.3d at 1114; Parish, 565 F.3d

at 535.     Nevertheless, this error did not have any prejudicial

     11
          The court did not pinpoint an exact amount of loss.
     12
        Ernst and Levine cite James for the proposition that only
actual losses incurred by the original mortgage lenders, and not
the successor lenders, should be counted. They contend that the
district court's inability to determine the extent of the original
lenders' losses thus precluded an actual loss determination. This
argument is wrong. James involved a scheme identical to the one in
this case. See 592 F.3d at 1111. However, the sole reason that
only the original lenders' actual losses were tallied in James was
that the district court had made an uncontested factual finding
that the successor lenders were not reasonably foreseeable victims,
see id. at 1112, as the concurrence explained, see id. at 1118
(Lucero, J., concurring), and subsequent cases have reiterated, see
Snow, 468 F. App'x at 840; United States v. Washington, 634 F.3d
1180, 1184-85 (10th Cir. 2011). There was no such finding in this
case and, hence, no cause for assessing only losses to the original
lenders and not the successor lenders. See Snow, 468 F. App'x at
840.

                                 -42-
effect and, hence, does not require resentencing.         See United

States v. Roman-Portalatin, No. 11-1542, 2012 WL 1418504, at *2

(1st Cir. Apr. 25, 2012) ("Prejudice is ordinarily a necessary

condition for any order for resentencing . . . ."); United States

v. Larios, 593 F.3d 82, 89 (1st Cir. 2010).     If actual loss was

lower than intended loss, it was correct for the court to rely on

intended loss.   See U.S.S.G. § 2B1.1 cmt. n.3(A).   If intended loss

was lower, the court's error benefitted Levine and Ernst.

          In fact, however, the intended loss formula employed by

the court was substantially similar to the actual loss formula

described above: the court subtracted from the original mortgage

loan amount for each property either the foreclosure sales price

or, if there was no foreclosure, an estimate of the property's

assessed value at the time of sentencing.13

          Ernst argues that this formula overstates his culpability

because the substantial disparity between the original loan amounts

and the properties' final values was the result of a real estate

market collapse that he could not reasonably have expected:

     13
       The only difference between this formula and the actual loss
formula is the use of the original mortgage loan amount rather than
the outstanding loan balance as the baseline figure. See Snow, 468
F. App'x at 839 n.6. Because it is unclear from the record whether
any principal repayments were made on the loans, we cannot say with
certainty whether these figures differ in this case and, if so, to
what extent. However, given the relatively short lifespan of the
loans and the fact that appellants' scheme was based on allowing
the loans to default, any difference between the original loan
amounts and the outstanding balances is probably not significant.

                                -43-
                  The collapse of the sub-prime market --
           indeed, even the conventional credit market --
           had a devastating effect on real estate values
           in precisely the time frame these properties
           were being resold or auctioned. The extent of
           the decline was not one that was reasonably
           foreseeable and it is unfair and unreasonable
           to hold Ernst accountable for those declines
           in the length of his sentence.

           . . . .

                  This   issue   poses  a    philosophical
           concern larger than the immediate effect on
           Ernst's sentencing.       If extreme market
           fluctuations   are   allowed   to   dictate   a
           defendant's sentence in a case of this nature,
           then the corollary will also be true. In a
           case of an identical nature, with an identical
           modus operandi and intended result, where the
           market remains nearly static, then the
           offenders will be punished significantly less
           because the values of the properties did not
           decline.   It makes no penological sense to
           impose   disparate   punishment    on   similar
           situated defendants who engage in identical
           behavior with the same intended gain.

Thus, without a fair way to assess loss, Ernst contends that the

court should have used the gain that appellants derived from their

scheme as an alternative measure.       See U.S.S.G. § 2B1.1 cmt.

n.3(B). The formula that he proposes for calculating gain is based

on the difference between the purchase prices negotiated with the

properties' sellers and the artificially-inflated prices reported

to the original mortgage lenders.       Levine advocates the same

formula.   This approach would yield a sum of $1,770,000, which in

turn would entitle Ernst and Levine to a two-level reduction in

their total offense levels.   See id. § 2B1.1(b)(1)(I).

                                -44-
          There is no need to resort to gain here.                 The district

court's   intended      loss   formula   was    a   reasonable      proxy   for

culpability in the circumstances of this case. See McCoy, 508 F.3d

at 79 ("Intended loss was therefore the value of the loans less the

expected value     of   the    properties.").       Levine   and    Ernst   were

veterans of the real estate industry.          They knew that the mortgage

loans on the properties involved in their scheme would enter

default and that most, if not all, of the properties would be

forced into foreclosure.        They could reasonably have anticipated

that the properties would be grossly devalued as a result.              Even if

the deterioration of the Boston real estate market during the

recent recession also played some macroeconomic role in that

outcome, Levine and Ernst could reasonably have expected that they

were contributing to the emergence of those poor market conditions.

See Parish, 565 F.3d at 535 (in measuring actual loss, explaining

that defendants could have reasonably foreseen the depressing

impact their mortgage fraud scheme would have on local markets and

property values); United States v. Shattuck, 961 F.2d 1012, 1016-17

(1st Cir. 1992).

          However, the intended loss formula used by the court will

not work where the real estate market outperforms a defendant's

expectation that a property will be devalued.            In that scenario,

subtracting the property's final value from the original mortgage

loan amount will not accurately reflect the defendant's culpability

                                    -45-
and, hence, will be an unreliable gauge of intended loss.               A

different intended loss formula will be necessary to punish the

defendant for the full amount of loss he or she could reasonably

have expected to occur rather than the more modest loss that

actually occurs.     See Innarelli, 524 F.3d at 291 ("Where, as here,

the defendant reasonably should have expected that loss would

result, he can and generally should be punished more severely to

account for his greater level of moral culpability, even where the

victim has managed to make money in spite of the fraud.").

          We do not share Ernst's "philosophical concern" with this

problem because the Sentencing Guidelines anticipate it.            If a

reliable intended loss formula cannot be devised, total actual loss

must be used.   If the resulting actual loss amount "substantially

understates the seriousness of the offense, . . . an upward

departure may be warranted."    U.S.S.G. § 2B1.1 cmt. n.19(A).       With

the availability of an upward departure, the fortuities of the

market that might make actual loss a poor proxy for culpability can

be addressed.

          In summary, there was no error in the district court's

loss   calculation    methodology    and   none   in   its   mathematical

application of this methodology, which produced an intended loss

amount within the range contemplated by U.S.S.G. § 2B1.1(b)(1)(J).

                                    -46-
I.   Levine's Role-in-the-Offense Challenge

            Levine argues that the district court should not have

incorporated into his sentence a four-level enhancement pursuant to

U.S.S.G. § 3B1.1(a) for his role as an organizer or leader of

appellants' scheme.           We review the imposition of this particular

sentencing enhancement, and any predicate factual findings, for

clear error. See United States v. Alfonzo-Reyes, 592 F.3d 280, 295

(1st Cir.      2010)    ("A    court's    decision to     impose   a   sentencing

enhancement for a leadership role based on the facts is reviewed

for clear error."); United States v. Martínez-Medina, 279 F.3d 105,

123 (1st Cir. 2002) ("We review role-in-the-offense determinations,

steeped in the facts of the case, for clear error."); United States

v.   Wright,    873    F.2d    437,    443-44   (1st   Cir.   1989)    (explaining

rationale for applying clear error review).

            "In order to invoke § 3B1.1(a), a district court must

make a finding as to scope -- that the criminal activity involved

five or more participants or was otherwise extensive -- and a

finding as to status -- that the defendant acted as an organizer

[or] leader of the criminal activity."                 United States v. Arbour,

559 F.3d 50, 53 (1st Cir. 2009); see also United States v. Tejada-

Beltran, 50 F.3d 105, 111 (1st Cir. 1995).               Levine challenges only

the district court's status finding, protesting that he was merely

an ancillary participant in appellants' scheme and that others were

equally or more culpable.             There is no merit to this challenge.

                                         -47-
           A defendant acts as a leader if he or she exercises some

degree of dominance or power in a criminal hierarchy and has the

authority to ensure that others will follow orders.            See United

States v. Aguasvivas-Castillo, 668 F.3d 7, 15 (1st Cir. 2012);

Arbour, 559 F.3d at 55.      A defendant qualifies as an organizer if

he or she "coordinates others so as to facilitate the commission of

criminal activity."      Tejada-Beltran, 50 F.3d at 111.      Factors that

are relevant to determining the supervisory nature of a defendant's

role include: (1) the exercise of decision-making authority; (2)

the nature of the participation in the commission of the offense;

(3) the recruitment of accomplices; (4) the claimed right to a

larger share of the fruits of the crime; (5) the degree of

participation in planning or organizing the offense; (6) the nature

and scope of the illegal activity; and (7) the degree of control

and authority exercised over others.         See U.S.S.G. § 3B1.1 cmt.

n.4; Aguasvivas-Castillo; 668 F.3d at 15. Of course, "[t]here need

not be proof of each and every factor before a defendant can be

termed an organizer or leader."       Tejada-Beltran, 50 F.3d at 111.

           The evidence clearly establishes that Levine masterminded

appellants' scheme.      Levine inducted Lindley into the scheme and

largely   guided   his   actions.     See   United   States   v.   Carrero-

Hernández, 643 F.3d 344, 352 (1st Cir. 2011); cf. Arbour, 559 F.3d

at 56 ("[A] defendant needs only to have led or organized one

criminal participant, besides himself of course, to qualify as a

                                    -48-
leader or organizer under § 3B1.1(a).").       Levine also directed the

flow   of   the   scheme's   proceeds   from   Lindley's   IOLTA   to   the

conspirators, usually via his own bank accounts, see Aguasvivas-

Castillo, 668 F.3d at 15 (holding that defendant qualified as an

organizer or leader in part because of his financial control over

fraudulent scheme), and he dictated who was authorized to discuss

the scheme with whom.        As a result, even if others, too, had

supervisory roles, the district court did not clearly err in

determining that Levine was an organizer or leader and sentencing

him accordingly.     See U.S.S.G. § 3B1.1 cmt. n.4; ("There can, of

course, be more than one person who qualifies as a leader or

organizer of a criminal association or conspiracy."); see also

United States v. Casas, 356 F.3d 104, 109 (1st Cir. 2004) ("The

mere fact that [the defendant] was subordinate to [a coconspirator]

does not establish, without more, that [the defendant] was not an

organizer or leader of the conspiracy.").

J.   Levine's Motion for an Evidentiary Hearing or Discovery

            Levine argues that the district court erred in denying

his post-trial motion for an evidentiary hearing or discovery. Our

review is for abuse of discretion. See United States v. Cartagena,

593 F.3d 104, 112 (1st Cir. 2010); United States v. Theodore, 354

F.3d 1, 7 (1st Cir. 2003).

            During the trial, Levine's counsel, Isaac Borenstein,

began to suspect that a paralegal on Levine's defense team, Melanie

                                  -49-
Abbruzzese, was romantically involved with a postal inspector on

the government's prosecution team, Joseph McGonagle.                    Although

Borenstein warned Abbruzzese that it would be inappropriate for her

to   have   a    romantic     relationship     with   McGonagle,   he   did   not

initially       take    any   further   action   or   inform   Levine    of   his

suspicions.

            Two weeks later, Abbruzzese disclosed to Borenstein that

she and McGonagle had spoken briefly about this case.                   The next

day, Borenstein alerted both Levine and the district court to what

Abbruzzese had told him.         The court promptly held a closed hearing

at which Abbruzzese and McGonagle denied under oath that they were

romantically linked and swore that their relationship was strictly

professional.          They also swore that they had not exchanged any

confidential information.           On the basis of this testimony, the

court permitted the trial to proceed.

            After Levine's conviction, but before his sentencing,

Borenstein informed the government that Abbruzzese and McGonagle

had lied at the closed hearing concerning the nature of their

relationship.14         Borenstein's law firm, Denner Pellegrino, then

      14
       The government subsequently charged Abbruzzese and McGonagle
with obstruction of justice, in violation of 18 U.S.C. § 1503, and
perjury, in violation of 18 U.S.C. § 1623.      Abbruzzese pleaded
guilty on November 30, 2011, and was sentenced on March 14, 2012.
McGonagle pleaded guilty on January 26, 2012, and was sentenced on
May 3, 2012. They were each sentenced to a prison term of one year
and a day, to be followed by a two-year period of supervised
release.

                                        -50-
withdrew   from    Levine's     representation.        Levine's    replacement

counsel moved for an evidentiary hearing or discovery to determine

whether to pursue a new trial, or any other remedy, on the ground

that Levine's defense had been compromised and his constitutional

right to conflict-free counsel infringed. See Wood v. Georgia, 450

U.S. 261, 271 (1981) ("Where a constitutional right to counsel

exists . . . there is a correlative right to representation that is

free from conflicts of interest.").            The motion asserted that an

evidentiary hearing or discovery was necessary for Levine "to

obtain   evidence    from   sources     currently    unavailable    to     him   -

including Abbruzzese, McGonagle, other members of the prosecution

team, and documents that have been requested from, but withheld by,

the [government]."      Attached to the motion were excerpts from the

depositions of two Denner Pellegrino employees describing the

romantic relationship between Abbruzzese and McGonagle.

           At an initial status conference on Levine's motion, the

court surmised that Abbruzzese and McGonagle would invoke their

constitutional      privilege    against     self-incrimination,     see    U.S.

Const. amend. V, and refuse to testify at an evidentiary hearing.

The court also reminded the government of its continuing obligation

under Brady v. Maryland, 373 U.S. 83 (1963), to disclose any

material evidence favorable to Levine, and ordered the government

to   submit    affidavits     stating      whether   McGonagle     had    shared

confidential      information    derived     from    his   relationship     with

                                      -51-
Abbruzzese with any other member of the prosecution team.                The

government responded with seven affidavits from prosecution team

members making clear that no such information had been received.

              At a second status conference, the court emphasized that

it was not requiring Levine "to actually demonstrate prejudice" and

was,    instead,    merely   looking   for    a   threshold   showing   that

confidential information from Abbruzzese was conveyed by McGonagle

to the rest of the prosecution team.         The court then explained that

the government's affidavits, which it accepted as true, established

that the prosecution team had not knowingly received any such

information, and that the only other possibility was that "in some

way unknown to the prosecution team they were fed information that

worked to Mr. Levine's detriment."           The court concluded, however,

that the evidence against Levine was "so overwhelming" that it was

"virtually impossible" that any information the prosecution team

received unknowingly could have influenced the outcome of this

case.       As a result, the court found that further inquiry was not

warranted and denied Levine's motion.15

              We recognize the seriousness of the misconduct at issue

here.       However, Levine has not shown how either an evidentiary

       15
       After filing his direct appeal in this case, Levine filed
a petition for post-conviction relief under 28 U.S.C. § 2255. The
district court denied Levine's petition without prejudice to its
renewal upon resolution of this appeal.    On April 13, 2012, we
denied Levine's request for a certificate of appealability from
that order. See Levine v. United States, No. 11-1940.

                                   -52-
hearing or discovery would have been likely to produce any evidence

previously unavailable to him and, thus, help him establish a claim

for relief.     The seven affidavits submitted by the government

assert that McGonagle did not share confidential information from

Abbruzzese with the rest of the prosecution team.           The only people

who were in a position to contradict that assertion were McGonagle

and, to a lesser extent, Abbruzzese.        However, we have no reason to

second guess the district court's assumption that McGonagle and

Abbruzzese would not have testified at an evidentiary hearing in

light   of    their     potential    criminal    liability.       In   these

circumstances, the incremental value of further inquiry is dubious

at best, and we cannot say that the court abused its discretion in

denying Levine's motion.        See United States v. Vigneau, 337 F.3d

62, 70 (1st Cir. 2003) (affirming denial of motion for evidentiary

hearing where defendant's "motion and brief spoke only in general

terms about the new evidence available to him"); United States v.

Rodriguez,    162     F.3d   135,   148   (1st   Cir.   1998)   ("Conclusory

allegations and pure speculation, without more, do not merit an

evidentiary hearing."); Shattuck, 961 F.2d at 1015 ("At no time did

appellant identify any evidence which would be presented at a

hearing, so as to enable the district court to evaluate the

usefulness of an evidentiary hearing.").

                                     -53-
                               III.

          As we discern no error by the district court, appellants'

convictions and sentences are affirmed.

          So ordered.

                               -54-