United States v. Charise Stone
866 F.3d 219
| 4th Cir. | 2017Background
- Charise Stone was convicted after a jury trial of a multi-count fraud scheme that fraudulently obtained approval of short sales, flipped properties, and concealed proceeds from lenders and homeowners. She was unlicensed as a real estate agent.
- The PSR calculated victim loss at approximately $2,330,722 (mortgage balances less short-sale proceeds) and recommended restitution in that amount; probation and the government supported that figure.
- Stone argued at sentencing that the lenders’ actual losses were less because the proper measure should be the difference between what Stone actually received on flips and what she paid lenders, not the mortgage balances.
- The district court adopted the PSR, ordered restitution of about $2.3 million, and sentenced Stone to 60 months’ imprisonment (below the Guidelines range of 78–97 months).
- Stone moved for recusal, claiming the district judge owned stock in some victim banks; the judge denied recusal. The district court later confirmed it held some bank stock but found the interest too remote to require recusal. Stone appealed restitution, loss for sentencing, and recusal; the Fourth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper restitution measure under MVRA | Stone: restitution should be based on net gain (flip proceeds minus amounts paid to lenders), not mortgage balances | Government: restitution measures the lenders’ loss—i.e., the unpaid mortgage principal the lenders forgave when they accepted the short sales | Court: restitution validly calculated as mortgage balances less short-sale proceeds; evidence showed lenders were induced to forego full mortgage value, so mortgage balances represent victims’ loss |
| Loss amount for Sentencing Guidelines | Stone: Guidelines loss should reflect actual loss tied to market value received on flips, not mortgage balances, because short sales were premature | Government: actual loss reasonably equals mortgage balances forgone; mortgage balances were supported by record evidence | Court: district court’s actual-loss finding (mortgage balances less proceeds) was reasonable and not clearly erroneous; sentencing proper |
| Recusal under 28 U.S.C. § 455 | Stone: judge’s ownership of victim-bank stock created a disqualifying financial interest or an appearance of partiality | Government: judges’ stock in victim banks is remote; victims are not parties; disclosure record not provided by Stone | Court: affirmed denial of recusal; applied Sellers precedent holding stock in victim bank (nonparty) is too remote to require recusal; Stone failed to supply disclosure to substantiate a contrary claim |
Key Cases Cited
- Robers v. United States, 572 U.S. 639 (2014) (property in § 3663A means the money the banks lent, not the collateral)
- United States v. Sellers, 566 F.2d 884 (4th Cir. 1977) (judge owning stock in a robbed bank was too remote to require recusal)
- United States v. Seignious, 757 F.3d 155 (4th Cir. 2014) (plain-error review framework for unobjected-to restitution orders and standards for evaluating restitution evidence)
- United States v. Ritchie, 858 F.3d 201 (4th Cir. 2017) (MVRA prohibits victims’ windfalls; restitution must reflect actual losses)
- United States v. Dawkins, 202 F.3d 711 (4th Cir. 2000) (standard of review for loss determinations and distinction between legal and factual review)