Court Opinion

ID: 1023397
Source: CourtListenerOpinion
Date Created: 2013-07-04 23:37:10.881082+00
Date Added: 2024-06-11T15:26:30.302828
License: Public Domain

ON REHEARING

                              UNPUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT

                              No. 05-4519

UNITED STATES OF AMERICA,

                                                Plaintiff - Appellee,

          versus

FREDERICK SIMON LUTZ,

                                               Defendant - Appellant.

Appeal from the United States District Court for the Middle
District of North Carolina, at Durham. Frank W. Bullock, Jr.,
District Judge. (CR-04-9)

Submitted:   April 27, 2007                  Decided:   August 7, 2007

Before TRAXLER, KING, and GREGORY, Circuit Judges.

Affirmed in part, vacated in part, and remanded by unpublished per
curiam opinion.

Frederick Simon Lutz, Appellant Pro Se. Anna Mills Wagoner, United
States Attorney, Sandra Jane Hairston, Assistant United States
Attorney, Lawrence Patrick Auld, OFFICE OF THE UNITED STATES
ATTORNEY, Greensboro, North Carolina, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

              Frederick Simon Lutz appeals his conviction by jury and

sentence on all charges in a nine-count superseding indictment that

included various counts of mail and wire fraud, in violation of 18

U.S.C. §§ 1341, 1343 (2000); money laundering in violation of 18

U.S.C. § 1956(a)(1)(A)(i) (2000); and making a false material

statement      to   a    federal    agent,        in   violation       of   18   U.S.C.

§ 1001(a)(2) (2000).        The district court sentenced Lutz to a term

of imprisonment of twelve months and one day, a term of supervised

release of three years, and ordered payment of restitution in the

amount   of    $124,106.72     as    well    as    payment   of    a    $900     special

assessment.         On   appeal,    Lutz    contends     that   the     evidence    was

insufficient to establish the existence of a scheme to defraud,

that Lutz acted with intent to defraud, and that Lutz made a

material false statement to a federal agent.                       In addition, he

asserts error in the district court’s submission of a willful

blindness instruction to the jury.                 Finally, Lutz challenges the

district court’s inclusion of losses arising from an uncharged

offense in its restitution order.

              We have reviewed Lutz’s sufficiency of the evidence

claims based on the record before us,1 and conclude that the claims

are without merit.        In evaluating the sufficiency of the evidence

     1
      The entire trial transcript has not been made part of the
record on appeal.

                                       - 2 -
supporting a criminal conviction on direct review, “[t]he verdict

of a jury must be sustained if there is substantial evidence,

taking the view most favorable to the Government, to support it.”

Glasser v. United States, 315 U.S. 60, 80 (1942).                     Substantial

evidence is evidence “that a reasonable finder of fact could accept

as adequate and sufficient to support a conclusion of a defendant’s

guilt beyond a reasonable doubt.” United States v. Burgos, 94 F.3d

849, 862 (4th Cir. 1996) (en banc). We consider circumstantial and

direct evidence, and allow the Government the benefit of all

reasonable inferences from the facts proven to those sought to be

established.    United States v. Tresvant, 677 F.2d 1018, 1021 (4th

Cir. 1982). In resolving issues of substantial evidence, we do not

weigh evidence or review witness credibility.               United States v.

Lomax, 293 F.3d 701, 705 (4th Cir. 2002); see also Burgos, 94 F.3d

at   863.     Rather,   it   is   the   role   of   the   jury   to    judge   the

credibility of witnesses, resolve conflicts in testimony, and weigh

the evidence.     United States v. Manbeck, 744 F.2d 360, 392 (4th

Cir. 1984).

            Evidence was presented at trial in this case to support

the jury’s findings that Lutz was involved with, and had the

requisite criminal intent to act with others to perpetrate, a real

estate scheme involving property-flipping through the use of straw-

buyers in whose names loans were obtained through providing false

information to lenders.       Mortgage brokers presented or caused the

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presentation     of     loan    applications     and    verification      materials

containing such false information to lenders.                  Mortgage payments

were not made and the properties went into foreclosure. Settlement

statements prepared in connection with and provided to the lenders

in order to finalize the transactions also contained material false

statements about the receipt and disbursement of funds, such as

cash brought to closing by straw-buyers and the recipients of

closing proceeds.        The evidence demonstrated that Lutz assisted in

perpetrating the scheme, inter alia, by concealing the “flip”

nature   of    the     transactions      from    the    lenders   (including      by

falsifying     documentation        regarding     the    disbursement      of    loan

proceeds) and the fact that the same straw-buyer was purchasing

multiple properties in rapid succession all as primary residences.

Contrary to Lutz’s contention, the evidence in fact demonstrated

how   the     scheme    to     defraud    worked,      the   identities    of     its

participants, how those participants were to have acted, and the

goal of the scheme.            Such evidence sufficiently establishes the

existence of the charged scheme to defraud.                    See, e.g., United

States v. Colton, 231 F.3d 890, 901 (4th Cir. 2000).               The fact that

the other participants to the scheme did not testify is of no

moment to the jury’s determination that the evidence presented by

the   Government       sufficiently      established     the   existence    of    the

scheme, as well as the fact that Lutz acted with the intent to

defraud the lenders.           In addition, we find sufficient evidence to

                                         - 4 -
support the jury’s verdict that Lutz made material false statements

to a federal agent.

          We review for abuse of discretion the district court’s

decision to submit a willful blindness instruction to the jury.

Nelson v. Green Ford, Inc., 788 F.2d 205, 208 (4th Cir. 1986).

Here, Lutz expressly denied knowledge that the transactions he was

closing were fraudulent.    The Government introduced evidence that

many signs of fraudulent activity existed, including suspicious and

unusual circumstances associated with the manner in which the real

estate deals were conducted and closed, which, when coupled with

Lutz’s stated denial of knowledge of the fraud, fully support the

district court’s decision to give a willful blindness jury charge.

          Finally, we turn to Lutz’s challenge to the district

court’s inclusion of $32,738.43 in its restitution order which

represents   the   loss   attributable    to   a   real   estate   deal,

specifically, the “Rivermeade” property, which was not part of the

offense on which Lutz was indicted and convicted.         Specifically,

Lutz asserts that the evidence of his criminal conduct as to the

Rivermeade property was insufficient, that if his conduct was

criminal, the lender was not directly harmed by such conduct, and

that his conduct was not part of the scheme on which he was

convicted.   Lutz objected below to the inclusion of the Rivermeade

property in his restitution order.       There is no dispute that the

Rivermeade property was not included in the properties on which

                                - 5 -
Lutz was indicted and convicted.     The Government asserts that the

restitution order is proper because the Rivermeade property loss

arose “in the course of the scheme” on which Lutz was convicted.

We review criminal restitution orders for abuse of discretion.

United States v. Henoud, 81 F.3d 484, 487 (4th Cir. 1996).

           Contrary   to   the   Government’s   position,   while   the

Mandatory Victims Restitution Act of 1996 requires that a court

enter an order of full restitution when the loss is caused by a

property offense, the order must be limited to the losses to the

victim(s) that actually are “caused by the offense.” United States

v. Newsome, 322 F.3d 328, 341 (4th Cir. 2003). Stated differently,

“it is the ‘offense of conviction,’ not the ‘relevant conduct,’

that must be the cause of losses attributable as restitutionary

liability.” Id. (citing Hughey v. United States, 495 U.S. 411, 418

(1990)).   Hence, we find that restitution in this case properly is

tied only to the losses caused by the offense of conviction, and

that in ordering restitution that included the $32,738.43 loss on

the Rivermeade property, the district court erred.2

    2
      Lutz’s base offense level at sentencing was adjusted upwards
four levels under the Sentencing Guidelines based on judicially-
determined facts, in violation of his Sixth Amendment rights as
recognized in the subsequent decision of United States v. Booker,
543 U.S. 200 (2005). However, Lutz has made clear in his petition
for rehearing that we granted in this case, that he does not wish
to pursue the Sixth Amendment error on appeal. We therefore leave
the district court’s sentencing order intact, with the exception of
the restitution portion of the order.

                                 - 6 -
          Accordingly,   we   affirm   Lutz’s   conviction   and   his

sentence, except for the restitution portion of the sentencing

order. We vacate the restitution order and remand for resentencing

consistent with this opinion.     We dispense with oral argument

because the facts and legal contentions are adequately presented in

the materials before the court and argument would not aid the

decisional process.

                                                   AFFIRMED IN PART,
                                                    VACATED IN PART,
                                                        AND REMANDED

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