[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
___________________________ ELEVENTH CIRCUIT
DEC 19, 2008
No. 08-16753 THOMAS K. KAHN
___________________________ CLERK
IN RE: JANIS W. STEWART AND
OTHER BORROWER-CRIME VICTIMS
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On Petition for Writ of Mandamus to the United States
District Court for the Middle District of Florida
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Before: TJOFLAT, MARCUS and WILSON, Circuit Judges.
PER CURIAM:
The Crime Victims’ Rights Act (“CVRA”), 18 U.S.C. § 3771, provides that
victims of a federal crime may appear and be heard during some phases of the
prosecution of the person charged with the crime.1 The CVRA requires the
1
18 U.S.C. § 3771 states in relevant part as follows:
(a) Rights of crime victims.--A crime victim has the following rights: . . .
(2) The right to reasonable, accurate, and timely notice of any public court proceeding, or any
parole proceeding, involving the crime or of any release or escape of the accused.
(3) The right not to be excluded from any such public court proceeding, unless the court, after
receiving clear and convincing evidence, determines that testimony by the victim would be
materially altered if the victim heard other testimony at that proceeding.
(4) The right to be reasonably heard at any public proceeding in the district court involving
release [on bail], plea, sentencing, or any parole proceeding.
(5) The reasonable right to confer with the attorney for the Government in the case.
Government to “make [its] best efforts to see” that the court (in which the
prosecution is pending) permits the victim to appear and be heard.2 If the court
refuses to allow the victim to appear, the victim may move the United States Court
of Appeals for a writ of mandamus.3
Several persons claiming to be victims of the crime charged in United States
v. Coon, No. 08-CR-441-T-17MAP (M.D. Fla.), moved the magistrate judge – as
he was entertaining, and conditionally accepting, the defendant Phillip Coon’s
(6) The right to full and timely restitution as provided in law. . . .
(8) The right to be treated with fairness and with respect for the victim's dignity and privacy.
(b) Rights afforded.--
(1) In general.--In any court proceeding involving an offense against a crime victim, the court
shall ensure that the crime victim is afforded the rights described in subsection (a). Before
making a determination described in subsection (a)(3), the court shall make every effort to
permitt the fullest attendance possible by the victim and shall consider reasonable alternatives to
the exclusion of the victim from the criminal proceeding. The reasons for any decision denying
relief under this chapter shall be clearly stated on the record.
2
§ 3771 states:
(c) Best efforts to accord rights.--
(1) Government.--Officers and employees of the Department of Justice and other departments
and agencies of the United States engaged in the detection, investigation, or prosecution of crime
shall make their best efforts to see that crime victims are notified of, and accorded, the rights
described in subsection (a).
3
§ 3771 states in pertinent part:
(d)(3) Motion for relief and writ of mandamus.--The rights described in subsection (a) shall be
asserted in the district court in which a defendant is being prosecuted for the crime or, if no
prosecution is underway, in the district court in the district in which the crime occurred. The
district court shall take up and decide any motion asserting a victim's right forthwith. If the
district court denies the relief sought, the movant may petition the court of appeals for a writ of
mandamus. . . . If the court of appeals denies the relief sought, the reasons for the denial shall be
clearly stated on the record in a written opinion.
2
guilty plea pursuant to an information and a plea agreement – for leave to appear
in the case and to be heard. The magistrate judge refused to recognize the
movants as victims, and denied their motion. The district court subsequently
adhered to the magistrate judge’s ruling. The movants (“petitioners”) now petition
this court for a writ of mandamus. We grant the writ.
I.
Petitioners are individuals who purchased houses from various real estate
developers.4 Petitioners entered into contracts with Coast Bank of Florida (“the
Bank”) to obtain funding to purchase the houses. The defendant, Philip Coon, was
an Executive Vice President of the Bank’s mortgage lending department and
remotely supervised the closing of the mortgage loans. Petitioners5 were referred
to the Bank by American Mortgage Link (“AML”), the “mortgage origination
firm.” AML charged the Bank the bank a one percent mortgage brokerage fee for
the mortgage loans the Bank closed. Petitioners, and others, paid the fee at
closing.
4
The facts recited in part I. are taken from the information and plea agreement filed in
United States v. Coon and the Fed. R. of Crim. P. 11 plea hearing conducted by the magistrate
judge. The petitioners number well over 100 individuals. Hundreds more are similarly situated,
but have not attempted to exercise their CRVA rights.
5
In referring to petitioners, we refer only to the borrowers that attempted to intervene in
this case pursuant to the CVRA.
3
John Miller, AML’s president, and Coon agreed that petitioners would pay
two percent, instead of the one percent that AML and the Bank had agreed on, and
that Miller and Coon would keep for themselves, and split, the extra one percent
following the closing. Miller and Coon engaged in this fee-splitting arrangement
– unbeknownst to the Bank (other than to Coon) and AML (other than to Miller) –
from late 2004 and January 2007. They laundered the fee-splitting proceeds
through a sham corporation, Solutions Processing, Inc., before utilizing their ill-
gotten gains.
II.
On October 15, 2008, the United States filed a one-count information6
against Coon alleging that he and Miller conspired to deprive the Bank of honest
services in violation of the wire fraud statute7 and to commit money laundering.8
The information contained a forfeiture count providing that Coon should forfeit to
6
Coon waived his right to a grand jury indictment and elected to proceed by information.
7
The wire fraud statute, 18 U.S.C. § 1343, proscribes “devis[ing] or intending to devise
any scheme or artifice to defraud, or for obtaining money or property by means of false or
fraudulent pretenses, representations, or promises [and transmitting] or caus[ing] to be
transmitted by means of wire, radio, or television communication in interstate or foreign
commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such
scheme or artifice.”
8
The money laundering statute, 18 U.S.C. § 1956, proscribes “conduct[ing] or
attempt[ing] to conduct . . . a financial transaction which in fact involves the proceeds of
specified unlawful activity with the intent to promote the carrying on of specified unlawful
activity.”
4
the United States the approximately $1,500,000 petitioners and others paid him
(and Miller) via the excess mortgage brokerage fee. On November 5, Coon and
the Government entered into a plea agreement, and later in the day he appeared
before a magistrate judge and, pursuant to that agreement, tendered a plea of
guilty. The plea agreement called for Coon, in addition to forfeiting the proceeds
of the crime, to make restitution to the victims of the crime.
Petitioners appeared before the magistrate judge on November 5 and asked
to be heard. The Assistant United States Attorney prosecuting the case opposed
petitioner’s request, claiming that petitioners were not victims of the offense
charged in the information. The magistrate judge agreed and denied petitioners
the right be heard. On November 11, petitioners followed up with a written
motion to the district court memorializing the request they had made to the
magistrate judge. The court denied their motion on November 14.
On December 2, petitioners petitioned this court for a writ of mandamus,
asking us to declare them CRVA victims and to direct the district court to act
accordingly. The United States, Coon, and the district court (collectively,
“respondents”) filed separate responses to the petition, contending that petitioners
do not qualify as victims under the CVRA.
III.
5
A.
The mandamus proceeding before us is a free standing cause of action,
brought by persons claiming to be CRVA victims against the district judge who
denied them the right to appear and be heard. That is, the proceeding is not an
appeal of a district court judgment, nor is it an interlocutory appeal of an
intermediate order. The question the petition presents is whether petitioners are
victims of the criminal conduct as described in the information pending in the
district court. The question is a mixed question of law and fact. The facts are not
in dispute: petitioners paid the mortgage brokerage fee, one percent of which went
to the Bank, one percent of which lined Coon and Miller’s pockets. What remains
is the question of whether petitioners are victims of the crime charged in the
information.
The information alleges that Coon and Miller conspired to deprive the Bank
of honest services and to commit money laundering. Petitioners do not contend
that they are victims of the money laundering conspiracy, and we agree. Their
contention is that they are victims of the conspiracy to deprive the Bank of honest
services. Respondents disagree. They assert that the Bank is the victim and that
it, alone, has the rights conferred by the CVRA.
The CVRA defines crime victim as any “person directly and proximately
6
harmed as a result of the commission of a Federal offense.” 18 U.S.C. § 3771(e).
To determine a crime victim, then, first, we identify the behavior constituting
“commission of a Federal offense.” Second, we identify the direct and proximate
effects of that behavior on parties other than the United States.9 If the criminal
behavior causes a party direct and proximate harmful effects, the party is a victim
under the CVRA.
B.
The relevant criminal behavior in this case is Coon and Miller’s execution
of a scheme to pocket one percent of the mortgage brokerage fee petitioners paid
at closing. On the face of it, petitioners were victims. The agreement between
petitioners and the Bank in this case provided that “[t]he borrower shall pay, or
provide payment for all costs of the closing of the loan and all expenses incurred
by the Bank with respect thereto.” These closing costs included the mortgage
brokerage fee. As a consequence of the increase in the mortgage brokerage fee,
therefore, petitioners became liable under their contract with the Bank for an extra
one percent of their total loan, suffering direct and proximate harm.
Respondents contend that petitioners were not harmed because they did not
pay the mortgage brokerage fee. Respondents point to the agreement between
9
The word “parties” includes persons and other legal entities.
7
petitioners and their real estate developers, in which the developer promised that it
would pay all closing costs.10 Respondents fail to recognize, however, that the
agreement did not affect petitioners’ promise to the Bank. Petitioners remained
liable to the Bank for the closing costs, notwithstanding the developers’ obligation
to assume those costs.
The developers’ promise to pay closing costs functioned to provide
petitioners with a source of funding that they could use to offset their obligation to
the Bank. Petitioners could have obtained such funding from any of a number of
sources, including, for example, another lending institution. That petitioners
obtained funding for the closing costs from the developers does not mean that they
were not liable to the Bank for such costs.
Respondents’ argument also fails for the independent reason that any
rational developer would have passed the increased closing cost, i.e., half of the
mortgage brokerage fee, on to petitioners by inflating the purchase price of the
house. Assume, for example, a situation in which a developer negotiates a
10
The agreements between petitioners and their developers:
Closing Costs. Buyer agrees to pay the purchase price. Builder agrees to pay
closing costs (including but not limited to, appraisal fees, credit reports, Bank
inspection fees, doc prep fees, recording fees, and city, county, and state tax
stamps and stamps on the mortgage and deed), loan origination and/or discount
points.
8
$190,000 price for a house on the assumption that the buyer will be responsible for
$10,000 in closing costs. That developer will subsequently accept an obligation to
pay the closing costs only if the buyer agrees to pay $200,000 instead of $190,000
for the house. A rational developer would be indifferent between receiving a
$200,000 purchase price and paying $10,000 in closing costs and receiving a
$190,000 purchase price and paying zero in closing costs; either way, it walks
away with $190,000. Similarly, a rational buyer would be indifferent between
paying a $190,000 purchase price and $10,000 in closing costs and paying a
$200,000 purchase price and zero in closing costs, as he pays a net total of
$200,000 in either situation. The result is that it does not matter whether the buyer
or developer agrees to pay the costs of closing.
C.
The United States presents a separate objection that petitioners are not
victims because the Bank is mentioned as a victim in the information and
petitioners are not. This argument implicitly and mistakenly assumes that any
CVRA victim must be mentioned in the indictment or information. Put
differently, it assumes that the identity of any CVRA victim must be an element of
the offense itself.
The CVRA, however, does not limit the class of crime victims to those
9
whose identity constitutes an element of the offense or who happen to be
identified in the charging document. The statute, rather, instructs the district court
to look at the offense itself only to determine the harmful effects the offense has
on parties. Under the plain language of the statute, a party may qualify as a
victim, even though it may not have been the target of the crime, as long as it
suffers harm as a result of the crime’s commission.
Here, therefore, petitioners are not automatically disqualified as victims
merely because they are not mentioned in the information. Because the criminal
activity directly and proximately harmed petitioners, they are victims and enjoy
the rights the CVRA creates.
IV.
For the foregoing reasons, the petition for a writ of mandamus is
GRANTED. The district court is ordered to recognize petitioners as victims and
afford them the rights of victims under the CVRA. See, e.g., 18 U.S.C. §
3771(d)(5). Although the petition does not seek relief against the Assistant United
States Attorney prosecuting the case, we expect that attorney to be mindful of the
obligations imposed by section 3771(c) of the statute.
SO ORDERED.
10
WILSON, Circuit Judge, dissenting:
A writ of mandamus “is a drastic and extraordinary remedy reserved for
really extraordinary causes” and should issue here only if the lower court
committed a “clear abuse of discretion.” Cheney v. U.S. Dist. Court for the Dist.
of Columbia, 542 U.S. 367, 380, 124 S. Ct. 2576, 2586-87, 159 L.Ed.2d 459
(2004) (internal quotation marks and citations omitted). I do not believe that this
case meets that standard. Before a Circuit Court of Appeals may issue a writ of
mandamus, a petitioner must show that his or her right to the issuance of the writ
is “clear and indisputable.” Id. at 381, 124 S. Ct. at 2587. Irrespective of whether
the indictment in this case named Petitioners as “victims,” reasonable jurists can
disagree (and have disagreed) as to whether Petitioners are “crime victims” under
the Crime Victims’ Rights Act. See 18 U.S.C. § 3771(e) (defining a crime victim
as any “person directly and proximately harmed as a result of the commission of a
Federal offense”). Therefore, I see no clear abuse of discretion by the district
court, and tried notions of judicial restraint dictate that a writ of mandamus not
issue in this case. See Cheney, 542 U.S. at 381, 124 S. Ct. at 2587 (citations
omitted) (“[T]he issuing court, in the exercise of its discretion, must be satisfied
that the writ is appropriate under the circumstances.”). I respectfully dissent.
11