NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
__________
Nos. 15-1505
__________
UNITED STATES OF AMERICA
v.
CYNTHIA EVETTE BROWN,
Appellant
__________
Nos. 15-1531
__________
UNITED STATES OF AMERICA
v.
WALTER ALSTON BROWN, JR.,
Appellant
__________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(Crim. Nos. 2-13-cr-00176-004 and 2-13-cr-00176-005)
District Judge: Hon. Berle M. Schiller
Submitted Under Third Circuit LAR 34.1(a)
July 14, 2016
BEFORE: FUENTES,** SHWARTZ, and BARRY, Circuit Judges
(Opinion Filed: August 16, 2016)
__________
OPINION*
__________
FUENTES, Circuit Judge
Cynthia and Walter Brown appeal their criminal sentences stemming from their
involvement in a mortgage fraud scheme. For the reasons that follow, we will affirm in
part and vacate in part.
I. BACKGROUND
Walter and Cynthia Brown were heavily involved in a group that used a
multifaceted scheme to lie to banks, obtain mortgage loans as a result of their
misrepresentations, and squander the loan money.
The mortgage fraud scheme was complex and elaborate, and we address only the
salient details. Between May 2004 and December 2009, Walter and Cynthia participated
in a conspiracy to obtain fraudulent mortgage loans using straw borrowers and false
personal information. The scheme also included co-conspirators who were mortgage
brokers, home developers, settlement agents, appraisers, and accountants. The members
of the conspiracy would receive loans that far exceeded the price of the properties, the
majority of which were distressed and located in West Philadelphia. The co-conspirators
would then either purchase the properties and take a profit based on the difference
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
** Honorable Julio M. Fuentes assumed Senior Status on July 18, 2016.
2
between the loan and the property value or simply pocket the money from the loan
altogether.
As the conspiracy grew, the co-conspirators formed their own title agency called
KREW Settlement Services (an acronym for the first names of the company’s owners).
This company was involved in many of the conspiracy’s fraudulent mortgage loans. In
all, the scheme caused lenders to sustain actual losses of more than $7 million.
Walter and Cynthia each played distinct roles based upon their experience and
knowledge in the mortgage industry. Walter was a mortgage broker who was based in
Virginia, and a co-owner of KREW. He used his position as a mortgage broker to
process fraudulent loans for properties, which were identified by members of the
conspiracy and purchased using straw borrowers. Walter’s role in the scheme was
heavily based on preparing the mortgage applications and providing the necessary
income statements and appraisals, all of which were false. As payment for his role in the
conspiracy, he received cash from his cousin and co-conspirator, which he failed to report
on his tax returns.
Cynthia also played an essential role in this conspiracy. She was employed as an
administrative assistant in the Human Resources Department at Unicco Service
Company. By no coincidence, the place of employment listed on many of the straw
buyers’ applications was Unicco. On many occasions the banks would call Cynthia to
confirm that a straw buyer did, in fact, work at Unicco and that the reports regarding their
income were accurate. In response to their questions, Cynthia would confirm the false
3
information on the loan applications. These false confirmations were essential for the co-
conspirators in receiving fraudulent loans.
Following an investigation by the FBI into the scheme, on April 11, 2013, a
federal grand jury in Philadelphia returned a 34-count indictment charging the co-
conspirators variously with conspiracy to commit loan and wire fraud, in violation of 18
U.S.C. § 371; false statements in connection with an FHA loan, in violation of 18 U.S.C.
§ 1010; loan fraud, in violation of 18 U.S.C. § 1014; aggravated identity theft, in
violation of 18 U.S.C. § 1028A(a)(1); wire fraud, in violation of 18 U.S.C. §§ 1343,
1349; filing false tax returns, in violation of 26 U.S.C. § 7206(1); tax evasion, in violation
of 26 U.S.C. § 7201; and aiding and abetting certain of these crimes, in violation of 18
U.S.C. § 2. In total, Walter faced 10 criminal charges and Cynthia faced 8.
Following a jury trial, Defendants were convicted of all of the counts with which
they were charged and sentenced to 180 months’ imprisonment. In addition, Cynthia was
ordered to pay $7,488,608 in restitution, while Walter was ordered to pay $7,213,123 in
restitution and an additional $31,903 to the IRS. The court also imposed a “money
judgment” forfeiture against Cynthia in the amount of $7,418,303, representing the
proceeds of the offenses of conviction.
This appeal followed.
II. DISCUSSION1
1
The District Court had jurisdiction over the case pursuant to 18 U.S.C. § 3231. We
have jurisdiction over this matter under 28 U.S.C. § 1291 and 18 U.S.C. § 3742.
4
The parties present several arguments, which we will address in turn. The 2013
indictment in Walter’s case charged the submission of fraudulent loan applications to
FDIC-insured lenders under 18 U.S.C. § 1014. The version of § 1014 in effect in March
2008 prohibited knowingly making “any false statement or report, or willfully
overvalu[ing] any land, property or security, for the purpose of influencing in any way
the action of . . . any institution the accounts of which are insured by the Federal Deposit
Insurance Corporation . . . .”2 The statute did not cover false statements made to non-
FDIC-insured mortgage lending businesses. In 2009, the statute was amended to include
non-FDIC-insured mortgage lending businesses.3
Walter first claims his conviction under this statute constitutes an ex post facto
violation because the fraudulent acts for which he was convicted ended in 2008 and
involved both FDIC and non-FIDC-insured banks. Walter never raised this argument at
trial, so we review for plain error.4
We reject Walter’s argument. The 2008 version of the statute explicitly prohibited
knowingly making false statements to institutions insured by the FDIC. The institutions
Walter was charged with defrauding were all insured by the FDIC. Thus, Walter was
properly charged and convicted under either version of the statute.5
2
18 U.S.C. § 1014 (2008 ed.).
3
Pub. L. 111-21 § 2(c), 123 Stat. 1617.
4
United States v. Boone, 279 F.3d 163, 174 n.6 (3d Cir. 2002).
5
Walter further claims that the 2008 version of the statute was vague and ambiguous.
This claim is equally baseless. There was nothing vague about the fact that it was illegal
to make false statements to FDIC-insured institutions.
5
Next, Walter claims that the evidence did not sufficiently prove he knowingly
participated in the loan fraud scheme. We also review sufficiency of evidence claims not
raised at trial for plain error.6 Here, Walter argues that his contribution was “ministerial”
in nature and that he was only inputting and forwarding data to banks without being
aware of the consequences of the scheme. Again, we find Walter’s argument to be
unavailing. The evidence at trial firmly established Walters’ central role in the scheme.
Numerous witnesses testified as to Walter’s knowing participation in the fraud. He was a
part owner of the shell company used to facilitate crime. He even submitted his own
resume as part of the fraudulent loan application packages. In short, the evidence proving
his guilt beyond a reasonable doubt was more than sufficient.
In addition, both Defendants claim that the indictment was constructively
amended as a result of certain statements made during the government’s closing
arguments and the District Court’s jury instructions. Specifically, they claim that the jury
was not instructed or told which false statements related to which counts. Among other
things, the District Court allowed the government to provide the jury with a chart
containing various alleged false statements made in connection with loan applications for
each property. However, the statements on the chart were not in every case described in
the indictment. And, the court did not give the jury the original indictment for their
deliberation when they asked for it. Therefore, Defendants claim that the bases on which
6
United States v. Gordon, 290 F.3d 539, 547 (3d Cir. 2002).
6
the jury could have convicted them were improperly broadened beyond the allegations
asserted in the indictment and that their convictions and sentences should be vacated.
If the charges in the indictment were constructively amended, there is a
presumption that the constructive amendment violated a substantial right of the
defendants.7 However, the government can rebut this presumption by showing that the
constructive amendment did not affect a defendant’s substantial rights.8
We have reviewed the record thoroughly and find that the government’s chart did
not improperly broaden the basis upon which the jury could have found Walter or
Cynthia guilty of the mortgage fraud counts of which they were convicted, nor did the
government’s closing argument or the jury instructions. We believe that, here, the
evidence and arguments at trial “concerned the same elaborate scheme to defraud”
described in the indictment.9 This suggests to us that any discrepancy between the
challenged counts and what the jury saw and heard at trial represented a variance rather
than a constructive amendment.10 We believe, further, that any such variance did not
prejudice the defense.11 Accordingly, we will affirm the counts of conviction.12
7
United States v. Syme, 276 F.3d 131, 154-55 (3d Cir. 2002).
8
Id.
9
See United States v. Dupre, 462 F.3d 131, 140-41 (2d Cir. 2006).
10
Id.
11
See United States v. Daraio, 445 F.3d 253, 262 (3d Cir. 2006) (“Unlike a constructive
amendment, a variance can result in a reversible error only if it is likely to have surprised
or otherwise has prejudiced the defense.”).
12
We acknowledge that the government conceded error with respect to Cynthia’s Count 5
conviction. However, we are not bound to accept the government’s concession and
decline to do so here. See United States v. Ginyard, 444 F.3d 648, 649 (D.C. Cir. 2006)
(“Although the United States has conceded error, the court is not bound by that
7
The government concedes that it included $69,776 in losses for an entity that was
not covered under the criminal restitution statute when it calculated the restitution order
against Cynthia. After careful consideration, we agree that this amount was improperly
included in the total restitution calculation and should therefore be vacated. We therefore
find that the $69,776 should be deducted from Cynthia’s overall restitution penalty. We
decline to remand to the District Court for any recalculation or resentencing.13
III. CONCLUSION
For the foregoing reasons, we will vacate the restitution order issued against
Cynthia in the amount of $69,776 and otherwise affirm the sentences imposed by the
District Court.
concession on a question of law.”); United States v. Miller, 822 F.2d 828, 832 (9th Cir.
1987) (“Even if a concession is made by the government, we are not bound by the
government’s erroneous view of the law.”) (citation and internal quotation marks
omitted).
13
We have carefully reviewed all of Defendants’ remaining arguments, including those
regarding the applicable statute of limitations, prejudicial spillover, and the alleged
multiplicitous indictment. In short, we find them to be without merit.
8