Court Opinion

ID: 2718016
Source: CourtListenerOpinion
Date Created: 2014-08-14 15:00:42.720816+00
Date Added: 2024-06-11T12:39:19.138837
License: Public Domain

Case: 13-13440   Date Filed: 08/14/2014   Page: 1 of 12

                                                         [DO NOT PUBLISH]

             IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT
                       ________________________

                             No. 13-13440
                         Non-Argument Calendar
                       ________________________

                D.C. Docket No. 3:11-cr-00081-MMH-JBT-1

UNITED STATES OF AMERICA,

                                                               Plaintiff-Appellee,

                                  versus

KESSLER HOLZENDORF,

                                                          Defendant-Appellant.

                       ________________________

                Appeal from the United States District Court
                    for the Middle District of Florida
                      ________________________

                             (August 14, 2014)

Before ED CARNES, Chief Judge, TJOFLAT and JORDAN, Circuit Judges.

PER CURIAM:
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      After a jury trial, Kessler Holzendorf was convicted on one count of

conspiracy to commit mail and wire fraud, 15 substantive counts of mail fraud, and

15 substantive counts of wire fraud. He was sentenced to 48 months imprisonment

and ordered to pay $98,160 in restitution. The district court also entered a

$1,500,000 forfeiture judgment against Holzendorf for which he and several of his

coconspirators were jointly and severally liable. He appeals his convictions and

sentence on a number of grounds.

                                          I.

      The government presented substantial evidence at trial establishing that

Holzendorf and several coconspirators operated an extensive mortgage fraud

scheme in Florida from 2006 to 2007. As part of their scheme, Holzendorf and his

confederates recruited individuals to purchase homes and assisted those individuals

in filling out loan applications that often contained several material

misrepresentations. For example, the loan applications often embellished the

purchaser’s income and employment history, and they also stated that the

purchaser intended to use the home as a primary residence even though that was

almost always false.

      The scheme was designed to make it possible for the purchasers to get “keys

and cash” at closing. Although new homeowners typically cannot get cash back at

closing because they do not have any equity built up in the property, Holzendorf’s

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scheme circumvented that restriction by including in the purchase agreements a

purchase price that was greater than the amount that the seller was actually asking

for the property. The false price was reflected in addendums to the purchase

agreements, which directed the lender to pay Home Improvement & Repair by

Design (HIRD), a company owned by Holzendorf, between $50,000 and $250,000

for the installation of a pool or other improvements on the property. All of the

participants in Holzendorf’s scheme knew that the listed improvements would

never be made. After closing, HIRD would receive payment from the lender in the

amount listed in the purchase agreement addendum, and Holzendorf would then

kick back most of that money to the purchaser, though he kept a portion as a

convenience fee.

                                          II.

      Holzendorf raises several issues challenging his convictions and sentence.

First, he contends that his indictment was constructively amended or, in the

alternative, that there was a prejudicial variance between the facts proved at trial

and the facts alleged in the indictment. Second, he asserts that the district court

abused its discretion when it denied his motion for a bill of particulars outlining the

specific misrepresentations that were made to the victims. Third, he claims that the

district court abused its discretion when it refused to give three of his requested

jury instructions. Fourth, he contends that the district court erred in ordering

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restitution because the government failed to carry its burden of showing that the

victim seeking restitution suffered a pecuniary loss. Finally, Holzendorf asserts

that the district court erred when it entered a forfeiture order based on the gross

proceeds from the mortgage fraud scheme. 1

                                               A.

       Holzendorf makes two arguments concerning his indictment. He contends

that the government constructively amended his indictment by prosecuting him

based on a scheme “of getting the keys to a house and a bundle of cash,” even

though such a scheme “[did] not appear in the indictment.” In the alternative, he

contends that there was a material variance from his indictment because it alleged

only that Holzendorf and his coconspirators misrepresented to lenders that the

purchasers planned to use the homes as a primary residence, but the government

then relied on additional misrepresentations to bolster its evidence of fraud.

       Holzendorf did not raise those arguments before the district court, so we

review only for plain error. United States v. Madden, 733 F.3d 1314, 1321 (11th

Cir. 2013); United States v. Dennis, 237 F.3d 1295, 1300 (11th Cir. 2001). To

prevail, he must show that (1) an error occurred; (2) that error was plain; (3) it

affected his substantial rights; and (4) it seriously affected the fairness, integrity, or

public reputation of the judicial proceedings. United States v. Romano, 314 F.3d
1
       Holzendorf also challenges several of the district court’s evidentiary rulings, but his
arguments about them are not persuasive and do not merit discussion.
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1279, 1281 (11th Cir. 2002). A constructive amendment occurs “when the

essential elements of the offense contained in the indictment are altered to broaden

the possible bases for conviction beyond what is contained in the indictment.”

United States v. Keller, 916 F.2d 628, 634 (11th Cir. 1990). By contrast, a

variance occurs where “the evidence produced at trial differs from what is alleged

in the indictment.” Id. at 633.

       Holzendorf has not met his burden under plain error review because he has

failed to show that an error even occurred. The government did not constructively

amend his indictment by characterizing the fraudulent scheme to the jury as one in

which a buyer got “keys and [some] cash” when purchasing a home. Instead, the

references to “keys and [some] cash” simply served as shorthand to describe the

scheme, which was alleged with specificity in the indictment. Holzendorf has also

failed to show that there was a variance between the evidence produced at trial and

the scheme alleged in the indictment. The indictment alleged that the loan

documents in question included “material misrepresentations [that] included, but

were not limited to, that the property would be used by the buyer/borrower as

his/her primary residence when, in fact, the property was not going to be used as

the buyer’s/borrower’s primary residence,” (emphasis added). Contrary to

Holzendorf’s assertion, the indictment did not limit the type of misrepresentations

that the government sought to prove and the government’s evidence did not prove

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a crime different from the one alleged in the indictment. There was no

constructive amendment or variance. See Keller, 916 F.2d at 633–34.

                                              B.

       Holzendorf’s next contention is that the district court erred by denying his

request for a bill of particulars. We review the district court’s denial of that

request for a clear abuse of discretion. United States v. Warren, 772 F.2d 827, 837

(11th Cir. 1985). The purpose of a bill of particulars is to “inform[] a defendant of

the nature of the charges against him so that he will have sufficient detail to

prepare for [his] defense, to avoid or minimize the danger of surprise at trial, and to

enable him to plead double jeopardy” in a later prosecution for the same offense.

United States v. Perez, 489 F.2d 51, 70–71 (5th Cir. 1973).2 A defendant may not

request a bill of particulars “to obtain a detailed disclosure of the government’s

evidence prior to trial,” id. at 71, or to acquire “information which is already

available through other sources,” United States v. Martell, 906 F.2d 555, 558 (11th

Cir. 1990) (quotation marks omitted). To show an abuse of discretion, a defendant

must establish that he was actually surprised at trial and that the denial of the

request for a bill of particulars prejudiced his substantial rights. United States v.

Colson, 662 F.2d 1389, 1391 (11th Cir. 1981).

       2
        In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), we
adopted as binding precedent all decisions of the former Fifth Circuit handed down before
October 1, 1981.
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      In this case, the district court did not abuse its discretion by denying

Holzendorf’s motion. Holzendorf sought a bill of particulars detailing every single

material misrepresentation the government intended to show at trial. That request

was nothing more than a thinly veiled attempt to have the government make a

detailed disclosure of the evidence that it planned to present at trial. That is not an

appropriate basis for seeking a bill of particulars. See Perez, 489 F.2d at 71.

Regardless, Holzendorf cannot show that he was actually surprised at trial because

his indictment described the nature of the fraudulent scheme and the government

included in its response in opposition to his motion a list of nine types of

misrepresentations that it intended to prove at trial. See Colson, 662 F.2d at 1391.

Not only that, but the information that Holzendorf sought was already available

from other sources. See Martell, 906 F.2d at 558. He could have acquired that

information by reviewing his coconspirators’ trial transcripts and plea agreements,

which included several specific examples of misrepresentations made in the

transactions that were at issue in Holzendorf’s trial. See id. The district court did

not abuse its discretion.

                                          C.

      Holzendorf also contests the district court’s refusal to give three of his

requested jury instructions. First, he asked that the jury be instructed on a good

faith defense to allegations of fraud. Second, he sought to have the court give the

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jury an instruction on corporate knowledge because part of his defense was that the

victim lenders were knowing participants in his alleged fraud scheme. Third, he

requested that the court instruct the jury on his theory of defense. We review the

district court’s actions for an abuse of discretion. United States v. McQueen, 727
F.3d 1144, 1154 (11th Cir. 2013). We will find reversible error only if (1) the

requested instruction was a correct statement of the law, (2) its subject matter was

not substantially covered by other instructions, and (3) the failure to give it

seriously impaired the defendant’s ability to defend himself. United States v.

Martinelli, 454 F.3d 1300, 1309 (11th Cir. 2006).

      The district court did not abuse its discretion when it refused to instruct the

jury as Holzendorf requested. First, with respect to the good faith defense, that

instruction was substantially covered by the district court’s jury instructions on

intent, which stated that the jury could not convict Holzendorf without finding that

he acted with intent to defraud. Second, the corporate knowledge instruction

would not have assisted the jury in resolving an issue presented to it because the

jury was tasked with determining whether Holzendorf acted with intent to defraud,

not whether the lenders knew about the fraud. See United States v. Chirinos, 112
F.3d 1089, 1101 (11th Cir. 1997) (“The district court, however, is not required to

give the requested jury instruction if it would not have assisted the jury in

resolving the issues presented to it.”). And in any event, the jury could have

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convicted Holzendorf even if it found that the lenders had not been deceived by his

fraud. See Pelletier v. Zweifel, 921 F.2d 1465, 1498 (11th Cir. 1991) (“[T]he

government can convict a person for mail or wire fraud even if his targeted victim

never encountered the deception — or, if he encountered it, was not deceived.”),

abrogated on other grounds by Bridge v. Phoenix Bond & Indem. Co., 553 U.S.
639, 128 S. Ct. 2131 (2008). Finally, with regard to the jury instruction on

Holzendorf’s theory of defense, nothing prevented him from arguing his defense

theory to the jury during closing arguments, and the district court’s refusal to give

a specific instruction concerning his theory did not seriously impair his defense.

The district court did not abuse its discretion. Martinelli, 454 F.3d at 1309.

                                          D.

      Holzendorf challenges the district court’s restitution order, contending that

the government failed to prove by a preponderance of the evidence that one of the

victim lenders — CitiMortgage, Inc. — suffered a $98,160 pecuniary loss that

would entitle it to restitution. “We review de novo the legality of an order of

restitution, but review for abuse of discretion the determination of the restitution

value of lost or destroyed property. We review for clear error factual findings

underlying a restitution order.” United States v. Valladares, 544 F.3d 1257, 1269

(11th Cir. 2008) (quotation marks omitted). “The government bears the burden of

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demonstrating the amount of the victim’s loss by a preponderance of the

evidence.” United States v. Futrell, 209 F.3d 1286, 1290 (11th Cir. 2000).

      In this case, the district court did not err in ordering Holzendorf to pay

$98,160 in restitution to CitiMortgage. In support of the restitution order, the

government presented an affidavit from a CitiMortgage representative who

testified that CitiMortgage held a second mortgage on one of the properties

involved in Holzendorf’s scheme. The affidavit stated that CitiMortgage had

suffered a complete loss of $98,160 on that second mortgage after a foreclosure on

a first mortgage on the property that was fraudulently obtained through the scheme.

In opposition, Holzendorf presented evidence showing only that CitiMortgage was

not the holder of the first mortgage that was foreclosed. He did not present any

evidence calling into question CitiMortgage’s assertion that because of the fraud it

suffered a complete loss on the second mortgage taken out on the property.

Because the government presented unrefuted evidence that CitiMortgage was

harmed by Holzendorf’s fraud, the district court did not clearly err in concluding

that CitiMortgage was a victim entitled to restitution under the Mandatory Victims

Restitution Act of 1996. See 18 U.S.C. § 3663A(a)(2) (defining “victim” under the

statute). In addition, the government did not clearly err by relying on the

CitiMortgage affidavit to find that the loss amount was $98,160.

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                                               E.

       Holzendorf’s final challenge relates to the district court’s forfeiture

judgment, which held him and several of his coconspirators jointly and severally

liable for a forfeiture amount of $1,500,000. He contends that the district court

erred by determining the forfeiture amount based on the gross proceeds from his

fraudulent scheme. 3 He asserts that the district court instead should have reduced

the $1,500,000 figure to reflect that some of the fraudulent loans had been paid off

or otherwise satisfied without financial loss to the victims.

       The criminal forfeiture statute, 18 U.S.C. § 982, governs the forfeiture of

property involved in or traceable to the commission of certain enumerated

offenses. Holzendorf’s crimes are not among those enumerated offenses.

Nevertheless, the government could still seek a forfeiture order in this case because

28 U.S.C. § 2461(c) provides that, in criminal cases, courts shall order forfeiture

through the civil forfeiture statute, 18 U.S.C. § 981, when no specific provision of

the criminal forfeiture statute applies. When that approach is taken, the district

court is required to follow the criminal forfeiture procedures set out in 21 U.S.C.

§ 853, with the exception of those procedures in § 853(d). See 28 U.S.C.

§ 2461(c).

       3
       There is no dispute concerning the district court’s calculation of the gross proceeds from
Holzendorf’s scheme.
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      The district court did not err by entering a forfeiture judgment in the amount

of the gross proceeds because that is just what § 853 requires. See United States v.

Keeling, 235 F.3d 533, 537 (10th Cir. 2000) (“[F]or purposes of § 853, ‘proceeds’

contemplates gross proceeds . . . .”); United States v. McHan, 101 F.3d 1027, 1042

(4th Cir. 1996) (same); cf. United States v. Browne, 505 F.3d 1229, 1281 (11th

Cir. 2007). Holzendorf’s argument relies on the procedure for determining

“proceeds” under § 981 — the civil forfeiture statute. See 18 U.S.C.

§ 981(a)(2)(C) (“In cases involving fraud in the process of obtaining a loan or

extension of credit, the court shall allow the claimant a deduction from the

forfeiture to the extent that the loan was repaid, or the debt was satisfied, without

any financial loss to the victim.”). However, as we have just noted, § 2461(c)

requires a district court ordering forfeiture under that provision to follow the

procedures provided for in § 853, not the procedures laid out in § 981.

Holzendorf’s challenge fails.

      AFFIRMED.

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