Court Opinion

ID: 4401050
Source: CourtListenerOpinion
Date Created: 2019-05-28 20:00:36.060706+00
Date Added: 2024-06-11T14:52:25.491845
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                            MAY 28 2019
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,                        No.   15-10526

              Plaintiff-Appellee,                D.C. No.
                                                 2:11-cr-00210-JAM-2
 v.

NADIA KUZMENKO, AKA Naida                        MEMORANDUM*
Reyes,

              Defendant-Appellant.

UNITED STATES OF AMERICA,                        Nos. 15-10527
                                                      16-10122
              Plaintiff-Appellee,
                                                 D.C. No.
 v.                                              2:11-cr-00210-JAM-5

EDWARD SHEVTSOV,

              Defendant-Appellant.

UNITED STATES OF AMERICA,                        No.   15-10528

              Plaintiff-Appellee,                D.C. No.

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
                                          1
 v.                                             2:11-cr-00210-JAM-6

PETER KUZMENKO,

             Defendant-Appellant.

UNITED STATES OF AMERICA,                       No.   15-10536

             Plaintiff-Appellee,                D.C. No.
                                                2:11-cr-00210-JAM-3
 v.

AARON NEW,

             Defendant-Appellant.

                   Appeal from the United States District Court
                       for the Eastern District of California
                    John A. Mendez, District Judge, Presiding

                     Argued and Submitted February 5, 2019
                           San Francisco, California

Before: THOMAS, Chief Judge, and PAEZ and BERZON, Circuit Judges.

      Nadia Kuzmenko, Peter Kuzmenko, Aaron New, and Edward Shevtsov

appeal their jury convictions for mail fraud, wire fraud, money laundering, and

witness tampering. We have jurisdiction pursuant to 28 U.S.C. § 1291. We affirm

the convictions, but remand to the district court for resentencing of Aaron New and

reconsideration of an order directing Edward Shevtsov to pay $191,570.05 in

                                         2
attorney’s fees. Because the parties are familiar with the facts and the procedural

history, we need not recount it here.

      We review the district court’s decision to preclude a defendant’s proffered

defense de novo. United States v. Lindsey, 850 F.3d 1009, 1014 (9th Cir. 2017).

We review the alleged introduction of false evidence and perjured testimony,

unobjected to below, for plain error. United States v. Houston, 648 F.3d 806, 813

(9th Cir. 2011). We review the allegation that the district court constructively

amended the indictment, not raised below, for plain error. United States v. Hartz,

458 F.3d 1011, 1019 (9th Cir. 2006). We review the district court’s method of loss

calculation de novo, and the factual finding on the amount of loss for clear error.

United States v. Blitz, 151 F.3d 1002, 1009 (9th Cir. 1998).

                                          I

      The district court did not err when it precluded Appellants from introducing

proffered expert testimony at trial. While “evidence of the lending standards

generally applied in the mortgage industry” remains relevant on the question of

materiality, neither individual victim lender negligence or an individual victim

lender’s intentional disregard of relevant information are defenses to wire fraud.

Lindsey, 850 F.3d at 1015-16. Appellants’ notice of expert testimony and the

supplement filed after the government moved to exclude the testimony reveals that

                                          3
Appellants’ expert intended to testify about the complicity and motives of the

particular victim lenders, not about the general practices of mortgage lenders.

Under these circumstances, the district court did not err in excluding the expert

testimony.

                                          II

      The government did not violate Appellants’ due process rights in its tender

of testimony and evidence. To demonstrate a due process violation under Napue v.

Illinois, 360 U.S. 264 (1959), Appellants must demonstrate that the testimony or

evidence presented “was actually false,” that “the prosecution knew or should have

known that the testimony [or evidence] was actually false,” and “that the false

testimony [or evidence] was material.” United States v. Houston, 648 F.3d 806,

814 (9th Cir. 2011) (citation omitted). “In assessing materiality under Napue, we

determine whether there is‘any reasonable likelihood that the false testimony could

have affected the judgment of the jury[.]” Id. (quoting Hayes v. Brown, 399 F.3d
972, 984 (9th Cir. 2005) (en banc)).

      On plain error review, the introduction of the residential loan applications

bearing challenged signatures does not offend due process. Federal Rule of

Evidence 901(b)(3) affords the jury discretion to make handwriting comparisons,

and draw conclusions from those comparisons, “either in the presence or absence

                                          4
of expert opinion.” United States v. Woodson, 526 F.2d 550, 551 (9th Cir. 1975).

The record reflects that the government repeatedly identified the signature on the

forms, but explicitly left the authenticity of the signature for the jury to determine.

United States v. Estrada, 441 F.2d 873, 877 (9th Cir. 1971) does not compel a

different conclusion. Estrada concerned whether the prosecution laid the proper

foundation for introduction of purported signatures, whereas Appellants here

stipulated to the introduction of the loan documents at trial.

      Appellants likewise have failed to demonstrate that the testimony of a

government witness was actually false. Witness credibility, including whether the

witness “lied, or erred in their perceptions or recollections” generally represent

questions properly left to the jury. United States v. Zuno-Arce, 44 F.3d 1420, 1422

(9th Cir. 1995). Additionally, it remains unlikely that the testimony could have

affected the judgment of the jury because the witness was adequately cross-

examined by the defense on the allegedly perjurious aspects of her testimony.

Houston, 648 F.3d at 814.

                                           III

      The district court did not constructively amend the indictment when it

offered our pattern jury instructions on mail fraud and wire fraud. Actual reliance

is not an element of mail fraud or wire fraud. United States v Blixt, 548 F.3d 882,

                                            5
889 (9th Cir. 2008). “‘We have repeatedly held that language that describes

elements beyond what is required under the statute is surplusage and need not be

proved at trial.’” United States v. Renzi, 769 F.3d 731, 756 (9th Cir. 2014)

(quoting Bargas v. Burns, 179 F.3d 1207, 1216 n.6 (9th Cir. 1999)). Therefore, the

Grand Jury’s singular inclusion of “reliance” in the indictment constituted

surplusage, and the court did not err in providing model instructions that did not

require the jury to find reliance to convict Appellants of mail fraud and wire fraud.

                                          IV

      The district court did not employ an erroneous method to calculate loss for

purposes of calculating the Sentencing Guidelines. In mortgage fraud cases, loss is

calculated by deducting “any amount recovered or recoverable by the creditor from

the sale of the collateral” from “the greater of actual or intended loss, where actual

loss is the reasonably foreseeable pecuniary harm from the fraud.” United States v.

Morris, 744 F.3d 1373, 1375 (9th Cir. 2014). This approach “ensure[s] that

defendants who fraudulently induce financial institutions to assume the risk of

lending to an unqualified borrower are responsible for the natural consequences of

their fraudulent conduct.” Id. (quoting United States v. Mallory, 709 F. Supp. 2d
455, 459 (E.D. Va. 2010)). “The court need only make a reasonable estimate of

the loss. . . based on available information[.]” U.S.S.G. § 2B1.1 cmt. n.3(C). The

                                           6
district court’s calculation subtracted the amounts recovered in foreclosure sales

from the amounts originally borrowed. This calculation reflects a reasonable

estimate of the natural consequences of Appellants’ fraudulent conduct.

                                         V

      Because we affirm the district court on the issues above, we need not reach

the issue of prejudicial spillover with regard to Nadia Kuzmenko’s witness

tampering conviction.

                                         VI

      The government concedes error where the district court assessed Edward

Shevtsov $191,570.05 in legal fees without a contemporaneous finding on

Shevtsov’s ability to pay. We vacate the order and remand to the district court for

consideration of Shevtsov’s current ability to pay.

      The government also concedes error where the district court used Aaron

New’s testimony against him to impose a two-level obstruction of justice

enhancement based on perjury, without finding that each of the elements of perjury

were met. We vacate New’s sentence and remand to the district court for

resentencing.

      AFFIRMED in part, VACATED in part, and REMANDED.

                                          7
                                                                        FILED
                                                                         MAY 28 2019
United States v. Kuzmenko, No. 15-10526+
                                                                     MOLLY C. DWYER, CLERK
                                                                      U.S. COURT OF APPEALS
BERZON, Circuit Judge, concurring in part, and concurring in judgment:

      I concur in the memorandum disposition except with regard to one issue: In

my view, appellants should have been able to introduce their proffered expert at

trial. Denying them the opportunity to do so was, however, harmless error.

      United States v. Lindsey holds that the materiality of false statements should

be proved or disproved using “evidence of the lending standards generally applied

in the mortgage industry” at the time of the alleged wire fraud, not the practices of

the specific lenders named as the victims of the alleged scheme. 850 F.3d 1009,

1016 (9th Cir. 2017); see also id. at 1017. Although appellants’ proffer indicated

that their expert would have opined in large part on the practices of First Franklin

Financial, the specific lender in the named indictment, the proffer also indicates

that their expert would to a degree have opined on “the lending standards generally

applied in the mortgage industry.” Id. at 1016.

      I nonetheless agree with the majority that the judgment should be affirmed,

but for a different reason—the exclusion of the defendants’ expert was harmless.

There was overwhelming evidence that the defendants made material

misrepresentations when they sought to obtain mortgages from First Franklin. The

defendants lied about almost everything on their mortgage applications, including

the core information in a mortgage application: the borrower’s assets, income, and
intent to occupy the mortgaged property as a primary residence. They also

attached forged and doctored documents in support of their applications.

      The proffered expert testimony would do nothing to negate the impact of

this evidence on the materiality issue. The defendants clearly understood that to

get the loans they needed to misrepresent the core mortgage information and

submit false documents. And, although the defendant’s expert could have testified

that mortgage lenders did not care whether the information in loan applications

was accurate, nothing in the proffer suggests that he would have testified that

mortgage lenders were not influenced by the inclusion of the core mortgage

statements, accurate or false, in a loan application and attached documents.

      Take, as one example, the testimony elicited by the government that First

Franklin would only issue a loan for 100 percent of the value of the property if a

borrower represented that she would live in that property. The defendants’ expert

may have testified that First Franklin and other lenders did not care whether a

borrower’s representation that she would live in the property was truthful. But

nothing in the proffer suggests that he would have testified that First Franklin

would issue a loan for 100 percent of the property’s value if the borrower did not

represent that she would live at the property.

      Thus, even if the proffered testimony had been admitted, no jury could

reasonably have found that the defendants did not make material

                                          2
misrepresentations as part of their scheme to defraud. See Neder v. United States,

527 U.S. 1, 16 (1999).

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