United States v. Courtney
2016 U.S. App. LEXIS 4578
| 10th Cir. | 2016Background
- Defendant Keith Courtney, owner of a construction company, obtained construction loans for luxury homes, used straw buyers to obtain mortgages, and caused $1,601,825.84 in fraudulent mortgage wire transfers; actual loss to lenders was $772,265.17.
- Courtney was convicted by jury of three counts of wire fraud under 18 U.S.C. § 1343, sentenced to 24 months’ imprisonment, ordered to forfeit $1,601,825.84, and to pay $493,230.88 in restitution.
- The indictment gave notice the government would seek forfeiture under 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461; the district court applied the definition of “proceeds” from § 981(a)(2)(A) and ordered forfeiture of the full fraudulent wire-transfer amount.
- On appeal, the parties diverged: the government asked the court to treat 21 U.S.C. § 853’s definition of proceeds as applicable; Courtney argued § 981(a)(2)(C) (loan-fraud subsection) limits forfeiture to net proceeds (allowing deductions for repayments or satisfaction of debt).
- The Tenth Circuit applied plain-error review, held the district court plainly erred by not applying § 981(a)(2)(C), and reversed the forfeiture order (remanding for a forfeiture consistent with § 981(a)(2)(C)).
- The court affirmed the district court’s exclusion of jury-nullification and sentencing-info instructions, reiterating that a defendant cannot instruct the jury it may acquit contrary to the law or consider sentencing when the jury has no sentencing function.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper statutory definition of “proceeds” for forfeiture after wire-fraud conviction | Gov: § 2461(c) incorporates 21 U.S.C. § 853 (including § 853’s proceeds definition) | Courtney: § 981(a)(2)(C) governs loan-fraud cases and allows deduction for loan repayment/satisfaction | Court: Apply § 981(a)(2)(C); district court plainly erred by using § 981(a)(2)(A) or § 853’s substantive definition; remand to adjust forfeiture |
| Applicability of § 853 via § 2461(c) to define “proceeds” | Gov: § 2461(c) makes § 853’s definition applicable | Courtney: § 853 supplies procedures only; substantive definitions inapplicable; § 981 controls | Court: § 2461(c) applies § 853 procedurally only; substantive definition of proceeds must come from § 981(a)(2), so § 981(a)(2)(C) applies |
| Whether forfeiture must be reduced by amounts lenders recovered (mortgage payments/sales) | Courtney: Forfeiture should be reduced to reflect loan repayments and property sale proceeds (net loss) | Gov: Forfeiture of gross wire-transfer amount is appropriate | Court: Forfeiture must allow deductions under § 981(a)(2)(C); reverse and remand for recalculation |
| Right to inform jury about sentencing/jury nullification | Courtney: Entitled to inform jury it may acquit for perceived unfairness and to inform them of possible sentence | Gov: Such instructions are improper | Court: Affirmed exclusion; no right to instruct jury on nullification or sentencing when jury has no sentencing role |
Key Cases Cited
- Olano v. United States, 507 U.S. 725 (plain-error standard in criminal appeals)
- Puckett v. United States, 556 U.S. 129 (definition of plain or obvious error)
- United States v. Nacchio, 573 F.3d 1062 (10th Cir.) (statutory reading of § 981 and limits on applying gross-receipts definition)
- United States v. Rith, 164 F.3d 1323 (10th Cir. 1999) (rejecting instruction that jury may nullify law)
- Rogers v. United States, 422 U.S. 35 (jury should decide guilt without regard to potential sentence)