United States v. Crowe
2013 U.S. App. LEXIS 23190
10th Cir.2013Background
- Crowe was convicted by a jury on 8 mail-fraud and 8 wire-fraud counts for a mortgage-fraud scheme in Colorado.
- The district court imposed a 60-month sentence and restitution of $2,408,142.37.
- The PSR calculated loss under § 2B1.1(b) with an 18-level increase for loss over $2.5M but under $7M.
- Crowe challenged the loss calculation and claimed ineffective assistance for trial counsel’s stipulation on a wire-fraud element.
- The district court relied on actual loss and credits against loss, and rejected foreseeability-based arguments for loss.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether loss under § 2B1.1(b) is computed with foreseeability for actual loss but not credits. | Crowe argues foreseeability governs both actual loss and credits against loss. | Crowe contends the court used incorrect standard and that credits should be foreseen. | Foreseeability applies only to actual loss, not credits against loss. |
| Whether the district court properly treated unpaid principal as reasonably foreseeable loss. | Crowe contends the maximum potential loss was foreseen, not the actual loss. | Crowe asserts the district court erred by not using foreseeability of loss instead of maximum potential loss. | The court correctly treated unpaid principal as the reasonably foreseeable loss. |
| Whether credits against loss should be based on actual recoveries at foreclosure or fair market value. | Crowe maintains the credit rule was misapplied or undervalued. | Crowe argues the district court misapplied credits against loss under § 2B1.1(cmt. n.3(E)(ii)). | Credits against loss are the actual recoveries, not speculative future collateral values. |
| Whether successor-lender losses were miscalculated under James. | Crowe asserts James requires calculating loss via difference paid by successor lenders. | Crowe argues the district court failed to apply James directly due to lack of evidence on successor payments. | James is inapplicable; loss can be calculated by outstanding balance minus foreclosure proceeds where foreseeable. |
| Whether trial counsel’s stipulation on jurisdictional element deprived Crowe of effective assistance. | Crowe contends the stipulation over objections violated her Sixth Amendment right to effective counsel. | Counsel acted vigorously on other elements; prejudice prong not shown; no per se error. | No reversible error; no prejudice shown; decision to deny new trial affirmed. |
Key Cases Cited
- U.S. v. Mallory, 709 F.Supp.2d 455 (E.D. Va. 2010) (establishes loss as unpaid principal with credits against loss for collateral)
- U.S. v. Turk, 626 F.3d 743 (2d Cir. 2010) (foreseeability limits actual loss, not credits against loss)
- U.S. v. Mullins, 613 F.3d 1273 (10th Cir. 2010) (early treatment of loss calculation under § 2B1.1; foreseeability discussion)
- U.S. v. Washington, 634 F.3d 1180 (10th Cir. 2011) (loss equals unpaid principal offset by collateral value)
- U.S. v. Parish, 565 F.3d 528 (8th Cir. 2009) (foreseeability in credits against loss discussion)
- U.S. v. James, 592 F.3d 1109 (10th Cir. 2010) (loss calculation when considering successor lenders)
- U.S. v. Smith, 705 F.3d 1268 (10th Cir. 2013) (foreseeability and loss calculation; affects 2B1.1 interpretation)