United States v. Alphonso I. Waters, Jr.
937 F.3d 1344
11th Cir.2019Background:
- Alphonso Waters Jr., CEO of Family Practice of Atlanta, sought a $6M transitional loan in 2013 for Sondial Properties to repay existing Chase construction loans and finish construction.
- Waters and his wife failed to disclose about $466,795 in outstanding federal tax liens on personal financial statements; Colony Capital learned of the liens during due diligence and treated them as a "gating issue."
- Waters provided a fabricated IRS letter (dated Dec. 16, 2013) purporting to approve a partial-payment installment agreement, then emailed affirming the letter’s authenticity.
- Colony concluded the IRS letter was bogus and withdrew; Waters was later indicted on two counts of wire fraud for transmitting the fake letter and the confirming email, tried, and convicted.
- Waters requested a Takhalov-based jury instruction distinguishing deceit from defraud; the district court refused and gave the standard pattern instruction. He was sentenced to six months after a post-trial concession by the government about collateral valuation reduced the Guidelines range.
- On appeal Waters challenged (1) the refusal to give his proposed instruction, (2) sufficiency of evidence as to intent to defraud, (3) failure to conduct an on-the-record inquiry about his decision not to testify, and (4) an asserted factual misstatement at sentencing.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether district court erred by refusing Takhalov-based instruction distinguishing deceit from defraud | Waters: Court should have instructed jury that deception without intent to harm is not fraud per Takhalov | Government: Proposed instruction was incomplete/misleading; unnecessary because pattern instruction and a clarified instruction about when lies affect the bargain would suffice | No abuse of discretion; Waters' proposed instruction was incomplete/confusing and did not materially impair his defenses |
| Sufficiency of evidence that Waters intended to defraud (materiality / affected bargain) | Waters: Lies about tax liens were peripheral to bargain; collateral appraisal showed over-collateralization so no intended loss or harm to lender | Government: Tax liens were a gating issue affecting creditworthiness and value of transaction; appraisal post-dated trial and wasn’t before jury | Affirmed: ample evidence the lies were material and intended to affect lender’s decision; post-trial appraisal irrelevant to jury sufficiency review |
| Whether court erred by not conducting on-the-record waiver inquiry about right to testify | Waters: Court should have asked on record because he was uniquely positioned to refute prosecution | Government: No per se requirement; represented defendant presumed to knowingly waive right; counsel was effective | No reversible error; presumption of knowing waiver applies and no showing of involuntary waiver |
| Whether judge made a clearly erroneous factual finding at sentencing that affected outcome | Waters: Judge misstated that loan had been repaid, suggesting lack of leniency | Government: Comment was a stray remark; PSR and adopted facts showed no loan; no plain error or effect on sentence | No plain error; comment was not a decisive factual finding and sentence was supported by stated reasons |
Key Cases Cited
- United States v. Takhalov, 827 F.3d 1307 (11th Cir. 2016) (distinguishes mere deception from a scheme to defraud; instructs focus on whether misrepresentation affected the nature of the bargain)
- United States v. Bradley, 644 F.3d 1213 (11th Cir. 2011) (framework for what constitutes a scheme to defraud under § 1343)
- United States v. Dohan, 508 F.3d 989 (11th Cir. 2007) (abuse-of-discretion standard for reviewing jury-instruction decisions)
- United States v. Eckhardt, 466 F.3d 938 (11th Cir. 2006) (standards for reversible error when requested instruction is denied)
- United States v. Fries, 725 F.3d 1286 (11th Cir. 2013) (standard for reviewing sufficiency of the evidence)
- United States v. Appolon, 715 F.3d 362 (1st Cir. 2013) (misrepresentations affecting borrower creditworthiness are material to lender’s decision)
- United States v. Rossomando, 144 F.3d 197 (2d Cir. 1998) (false loan-application statements can constitute fraud even if defendant intended to repay)
- United States v. DeSimone, 660 F.2d 532 (5th Cir. 1981) (sufficiency review is limited to evidence presented to the jury)