Court Opinion

ID: 2655881
Source: CourtListenerOpinion
Date Created: 2014-03-07 16:15:22.852755+00
Date Added: 2024-06-11T09:12:18.751985
License: Public Domain

United States Court of Appeals
         For the Eighth Circuit
     ___________________________

             No. 13-1355
     ___________________________

          United States of America

     lllllllllllllllllllll Plaintiff - Appellee

                        v.

              Troy Allen Huston

   lllllllllllllllllllll Defendant - Appellant
      ___________________________

             No. 13-1372
     ___________________________

          United States of America

     lllllllllllllllllllll Plaintiff - Appellee

                        v.

            Chad Arthur Anderson

   lllllllllllllllllllll Defendant - Appellant
                   ____________

  Appeal from United States District Court
 for the District of Minnesota - Minneapolis
                ____________
                           Submitted: October 25, 2013
                              Filed: March 7, 2014
                                 ____________

Before LOKEN, GRUENDER, and SHEPHERD, Circuit Judges.
                          ____________

LOKEN, Circuit Judge.

      Charged with conspiracy to commit mortgage fraud by means of interstate wire
communication in violation of 18 U.S.C. §§ 371 and 1343, Troy Allen Huston and
Chad Arthur Anderson pleaded guilty. The district court1 sentenced Huston to 57
months in prison, the bottom of his advisory guidelines range, and Anderson, whose
range was higher, to the statutory maximum of 60 months. Huston and Anderson
appeal their sentences. Each argues that the district court procedurally erred by
imposing a two-level enhancement for use of sophisticated means, and that his
sentence is substantively unreasonable. We consolidated the appeals and now affirm.

       The plea agreements and Presentence Investigation Reports described the fraud
conspiracy. Huston was a branch manager and Anderson a loan officer at Prestige
Mortgage in White Bear Lake, Minnesota. Huston, Anderson, and conspirator Robert
Keelin recruited straw buyers to purchase homes in the Twin Cities area at inflated
prices, using corrupt appraisals to secure mortgage loans. One entity controlled by
the conspirators fraudulently invoiced title companies for property management
services and distributed loan proceeds to the conspirators and kickbacks to the straw
buyers without the knowledge or consent of the mortgage lenders. Another entity
owned by Huston falsely received closing disbursements which it distributed to
Huston and his family. Inflated loans totaling nearly $10 million went into default,
causing lender losses totaling $4,889,421.

      1
      The Honorable Joan N. Ericksen, United States District Judge for the District
of Minnesota, presided in both cases.

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       1. The Sophisticated Means Enhancement. In lengthy pre-sentencing
memoranda and at separate sentencing hearings, Huston and Anderson objected to
recommended two-level enhancements because the fraud “involved sophisticated
means.” U.S.S.G. § 2B1.1(b)(10)(C). No party submitted evidence on this issue at
either sentencing hearing. After hearing arguments, the district court overruled the
objections. On appeal, Huston and Anderson argue, as they did to the district court,
that it was procedural error to impose this enhancement because their conspiracy
involved only a “garden variety” mortgage fraud. As Anderson’s Brief summarized
the contention, their offense “consisted of the bare minimum requirements for
mortgage fraud to occur: straw buyers, false mortgage applications, improper
payments, and a means to collect the ill-gotten proceeds.”

      The guidelines define “sophisticated means” as “especially complex or
especially intricate offense conduct pertaining to the execution or concealment of an
offense.” U.S.S.G. § 2B1.1, comment. (n.9(B)). “Even if any single step is not
complicated, repetitive and coordinated conduct can amount to a sophisticated
scheme.” United States v. Fiorito, 640 F.3d 338, 351 (8th Cir. 2011) (quotation
omitted), cert. denied, 132 S. Ct. 1713 (2012). “We review the factual finding of
whether a . . . scheme qualifies as ‘sophisticated’ for clear error.” United States v.
Brooks, 174 F.3d 950, 958 (8th Cir. 1999), citing United States v. Hunt, 25 F.3d
1092, 1097 (D.C. Cir. 1994).2

      2
        We noted in United States v. Jenkins, 578 F.3d 745, 751 (8th Cir. 2009), cert.
denied, 559 U.S. 956 (2010), that an intracircuit split had developed over whether our
standard of review is for clear error or de novo. Compare, e.g., United States v.
Anderson, 349 F.3d 568, 570 (8th Cir. 2003) (clear error), with United States v. Hart,
324 F.3d 575, 579 (8th Cir. 2003) (whether “facts constitute sophisticated means” is
reviewed de novo). In Mader v. United States, 654 F.3d 794, 800 (8th Cir. 2011), the
en banc court held “that when faced with conflicting panel opinions, the earliest
opinion must be followed.” After Mader, we must follow Brooks, the earliest opinion
on this issue.

                                         -3-
       Here, the conspirators recruited straw buyers, obtained inflated appraisals, and
created two entities to submit fraudulent billings and disburse loan proceeds to
themselves and kickbacks to the buyers without arousing lender suspicion.
Application note 9(B) expressly provides that “hiding . . . transactions . . . through the
use of fictitious entities [or] corporate shells . . . ordinarily indicates sophisticated
means.” United States v. Septon, 557 F.3d 934, 937 (8th Cir. 2009). As in Septon,
Fiorito, and United States v. Calhoun, 721 F.3d 596, 605 (8th Cir. 2013), we conclude
the district court did not clearly err in imposing two-level enhancements when
determining the advisory guidelines ranges for Huston and Anderson.

       2. The Amount of Loss Determination. Huston raises a second claim of
procedural error, challenging the district court finding that the amount of loss was
$4.89 million, which resulted in an 18-offense-level increase. See U.S.S.G.
§ 2B1.1(b)(1)(J). This contention is without merit. After Huston reserved the right
to contest the amount of loss in the plea agreement and objected to the PSR
recommendation, the government advised the court that he was withdrawing his
objection to the amount of loss for guidelines purposes and instead would argue for
a downward variance because this increase overstated his criminal responsibility. At
sentencing, when the court inquired, Huston confirmed that he was not contesting
“either the factual assertions [in the PSR] or the calculations contained therein”
regarding the amount of loss. Accordingly, Huston waived his right to argue this
issue on appeal. United States v. White, 447 F.3d 1029, 1032 (8th Cir. 2006).

        3. Substantive Reasonableness Issues. The district court determined that
Huston’s advisory guidelines range was 57-60 months, the statutory maximum. The
court imposed a sentence of 57 months, the bottom of that range, rejecting Huston’s
argument that he should be sentenced to no more than one year. Based on Anderson’s
prior convictions for worthless checks, theft by trick, and theft by check, the court
determined that his advisory range was 63-78 months, which became 60 months due
to the statutory maximum. At sentencing, Anderson urged a 46-month sentence. The

                                           -4-
court sentenced him to 60 months, noting that he had a history of fraudulent behavior
and that the statutory maximum was “certainly not too low for a person who racks up
the kind of losses that you managed to do here.”

       On appeal, Huston and Anderson argue their sentences are substantively
unreasonable because the district court failed to give sufficient weight to mitigating
§ 3553(a) factors. Huston argues that the three-month difference in their sentences
does not reflect differences in their criminal histories and therefore does not comport
with the mandate that a district court consider “the need to avoid unwarranted
sentence disparities among defendants with similar records who have been found
guilty of similar conduct.” 18 U.S.C. § 3553(a)(6). Anderson argues the district
court failed to consider several mitigating factors -- he participated in only a limited
number of fraudulent transactions, profited modestly, worked to avoid foreclosures,
and could pay more restitution if given a shorter sentence.

       “We review the reasonableness of a sentence under the deferential
abuse-of-discretion standard. A within-range sentence is presumptively reasonable.”
United States v. Cromwell, 645 F.3d 1020, 1022 (8th Cir. 2011) (citations omitted).
Here, the sentencing records confirm that the district court expressly considered
Huston’s lack of criminal history and the mitigating circumstances urged by
Anderson. As we have repeatedly held, “[t]he district court has wide latitude to
weigh the § 3553(a) factors in each case and assign some factors greater weight than
others in determining an appropriate sentence.” United States v. Bridges, 569 F.3d
374, 379 (8th Cir. 2009). After careful review of the sentencing records, we conclude
that the within-range sentences were not an abuse of the district court’s substantial
sentencing discretion and did not result in substantively unreasonable sentences.

      The judgments of the district court are affirmed.
                     ______________________________

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