May 20, 2019

Tenth Circuit: Convictions for Wire Fraud and Money Laundering Affirmed

The Tenth Circuit Court of Appeals published its opinion in United States v. Battles on Tuesday, March 11, 2014.

To finance construction of her residence, Safiyyah Tahir Battles obtained two loans totaling $377,400 from First Security Bank. In 2007, she decided to refinance her residence. She submitted a uniform residential loan application to Saxon Mortgage, Inc. (“Saxon”), but Saxon’s automated system rejected the application because her debt-to-income ratio was too high. Consequently, Ms. Battles reapplied for credit through Saxon’s “Score Plus” program, which required her to submit twelve months’ worth of bank statements, as well as information concerning her gross monthly income and assets. Among other things, Ms. Battles claimed a gross monthly income of $28,723.16 and a First Security Bank account containing $165,907.70. Saxon approved her application for a $500,000 loan shortly thereafter.

But, as it turned out, Saxon’s decision was based on a distorted picture of Ms. Battles’s financial status. Ms. Battles’s 2007 federal income tax return revealed that her adjusted gross annual income was $14,346—a far cry from the $344,677.92 extrapolated from the figures on her loan application. Similarly, the balance in her bank account on the loan’s closing day was less than $1,000. It subsequently came to light that Ms. Battles had falsified bank statements to inflate her income and improve her chances of qualifying for a loan.

A closing company prepared a settlement statement that specified that a local builder named Emmitt Wisby would receive $102,630.01 and Ms. Battles would receive $2,000. The closing company gave Mr. Wisby’s check to Ms. Battles with the understanding that she would deliver it to Mr. Wisby. Instead, Ms. Battles deposited the funds into her bank account. Ms. Battles dissipated the proceeds of the loan; she wrote checks totaling $47,700 to family members. She made no mortgage payments on the residence after July 31, 2007. When the property fell into foreclosure, Saxon sustained a significant loss from having funded the loan.

After a grand jury indictment and jury trial, Ms. Battles was convicted of one count of wire fraud and one count of money laundering. Ms. Battles was sentenced to thirty months in prison, followed by two years of supervised release. The district court also ordered her to make restitution to the victim of her crimes. Ms. Battles appealed on several grounds.

On appeal, Ms. Battles raised seven claims: (1) the government suppressed evidence that was favorable and material to her defense; (2) the district court erred by admitting testimony of a witness who intimated that Ms. Battles had destroyed documents; (3) there was insufficient evidence produced at trial to support her convictions; (4) she received ineffective assistance of trial counsel; (5) the district court erred by failing to grant a two-level sentence reduction for acceptance of responsibility; (6) the district court imposed a legally infirm restitution order; and (7) cumulative error deprived her of a fair trial and a reliable sentence.

First, the court held it did not have jurisdiction to address Ms. Battles’s Brady claim in the context of this appeal. The sole district court order that adjudicated Ms. Battles’s Brady claim was the order denying Ms. Battles’s motion for a new trial. This order was issued after the district court’s final judgment was entered and after Ms. Battles filed her formal notice of appeal challenging that judgment. The court could find no evidence in the record that, after the district court issued its motion-for-new-trial order, Ms. Battles sought within the fourteen-day period prescribed by the federal rules to file a new notice of appeal to challenge that order. Therefore, the court dismissed this aspect of the appeal for lack of jurisdiction.

Second, Ms. Battles argued that certain “other-crimes” testimony was offered not for any of Rule 404(b)’s recognized purposes,  but, rather, to incite the jury’s passions against her. The court concluded Ms. Battles did not demonstrated that any error in admitting the evidence affected her substantial rights, i.e., that the error disturbed the outcome of the proceedings.

Third, Ms. Battles contended there was insufficient evidence produced at trial to support her convictions. However, the court held there was ample evidence to support the jury’s convictions. The court was satisfied that a substantial quantum of evidence supported Ms. Battles’s wire-fraud conviction. Accordingly, under its deferential standard of review, the court would not second-guess the jury’s decision finding Ms. Battles guilty of wire fraud.

Fourth, Ms. Battles argued she received ineffective assistance of trial counsel. The Tenth Circuit concluded that the record before the district court was not sufficiently developed to address this issue. Precedent militated in favor of dismissing this claim without prejudice so that the district court could address it in collateral proceedings in the first instance.

Fifth, Ms. Battles argued the district court erred by failing to grant a two-level sentence reduction for acceptance of responsibility. The court stated it would have great difficulty viewing Ms. Battles’s statements as not reflecting in pronounced fashion her denial of fraudulent intent in connection with the Saxon loan. And this denial continued throughout her trial and sentencing. Ms. Battles failed to demonstrate that the district court abused its discretion in denying her an acceptance-of-responsibility downward sentence adjustment.

Sixth, Defendant contended the district court imposed a legally infirm restitution order. Ms. Battles asserted her view that she was unfairly surprised at sentencing when the district court named a different victim in the restitution order than that identified at trial. The district court reviewed this document at sentencing and found it clear that Deutsche Bank was taking an assignment as a trustee and custodian for Saxon and that there was no issue with respect to the identification of the victim. The court discerned no error, and certainly no clear error, in this factual finding.

Finally, Ms. Battles claimed cumulative error deprived her of a fair trial and a reliable sentence. However, Ms. Battles failed to name more than one error. A defendant who has failed to establish the existence of multiple non-reversible errors cannot benefit from the cumulative error doctrine.

The Tenth Circuit upheld the judgment of the district court and AFFIRMED Ms. Battles’s convictions and sentence. The court DISMISSED the portion of Ms. Battles’s appeal pertaining to her Brady claim for lack of jurisdiction.

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