United States v. Dean Rossi
20-3182
| 3rd Cir. | Sep 22, 2021Background
- Rossi controlled multiple holding companies (R&S Real Estate, St. Charles Place, HB Holding) and sought three bank loans totaling roughly $4.15 million by submitting false or misleading documents.
- R&S/Nova: Rossi provided an initial R&S operating agreement omitting co‑owner Serrano to obtain a ~$1.65M loan; funds were diverted contrary to HUD‑1 statements and Nova sustained a net loss of about $1.307M after mitigations.
- St. Charles/First Cornerstone: Rossi supplied allegedly false tax returns and a fraudulent HUD‑1; loan proceeds were redirected (including large checks to Rossi and title agent), and net loss to the receiver was about $616,717.10.
- HB Holding/Leesport‑VIST: a HUD‑1 misrepresented settlement contributions and use of proceeds for mortgages; loans were not used to pay off encumbrances, insurance and foreclosures reduced but did not eliminate losses (insured and bank losses counted differently).
- Title agents Otis Johnson and Frank Dowd testified that they prepared and disbursed funds contrary to HUD‑1 instructions at Rossi's direction; both were central witnesses.
- Procedural posture: Rossi was convicted by jury on seven counts (conspiracy, mail fraud, and bank fraud), sentenced to 60 months imprisonment and $2,850,913.40 restitution; he appealed challenging counsel withdrawal/disqualification, a HUD‑1 jury instruction, sufficiency of the evidence, and the loss calculation for sentencing.
Issues
| Issue | Rossi's Argument | Government's Argument | Held |
|---|---|---|---|
| Counsel withdrawal/disqualification (Sixth Amendment) | Withdrawal of Cedrone and disqualification of Brooks cumulatively violated Rossi's right to counsel of choice | Court had discretion to permit withdrawal (fee nonpayment) and to disqualify Brooks because he was a potential witness and created a serious conflict | Affirmed: District Court acted within discretion; conflict was serious and rulings were reasoned |
| HUD‑1 jury instruction | Court should have given Rossi’s full instruction explaining HUD‑1s disclose fees to buyer/seller and are prepared by title agents, limiting their probative value on intent | HUD‑1s, when falsified and submitted to lenders, can be evidence of intent; Rossi’s proposed instruction misstated law and could mislead jury | Affirmed: Court correctly limited instruction; RESPA does not immunize fraudulent HUD‑1s from probative use |
| Sufficiency of evidence (conspiracy, mail/bank fraud counts) | Government failed to prove a scheme or that Rossi knowingly intended to divert funds/avoid encumbrances and deprive lenders | Testimony, fraudulent documents, checks issued contrary to HUD‑1s, broker and bank testimony showed scheme and intent | Affirmed: Viewing evidence in Government’s favor, a rational jury could convict under Jackson standard |
| Loss calculation for sentencing (Guidelines) | Only Leesport/VIST’s post‑insurance loss ($224,201.56) should count; other losses double‑counted or should be reduced by payments | District Court properly accounted for payments, insurer recoveries, and victims (FDIC/receivers) and included insured losses where appropriate | Affirmed: Court’s loss findings were not clearly erroneous; total loss used ($2,850,913.40) supported the 16‑level enhancement |
Key Cases Cited
- Wheat v. United States, 486 U.S. 153 (recognizes presumption in favor of counsel of choice but allows denial when serious conflict exists)
- United States v. Voigt, 89 F.3d 1050 (disqualification not arbitrary if reasoned determination on full record)
- United States v. Merlino, 349 F.3d 144 (lawyer likely to be witness is a source of potential conflict supporting disqualification)
- In re Grand Jury Subpoena, 745 F.3d 681 (crime‑fraud exception can make attorney communications admissible)
- United States v. Lacerda, 958 F.3d 196 (two‑stage review for disqualification decisions)
- United States v. Bellille, 962 F.3d 731 (district court discretion in attorney withdrawal decisions)
- United States v. McGill, 964 F.2d 222 (standards for reviewing jury instructions)
- Link v. Mercedes‑Benz of N. Am., Inc., 788 F.2d 918 (instruction review: charge must fairly submit issues and not mislead jury)
- United States v. Caraballo‑Rodriguez, 726 F.3d 418 (elements and proof standards for conspiracy and related fraud convictions)
- Jackson v. Virginia, 443 U.S. 307 (sufficiency of the evidence standard: view evidence in light most favorable to verdict)
- United States v. Napier, 273 F.3d 276 (plenary review of Guidelines loss interpretation; factual findings reviewed for clear error)
- United States v. Jimenez, 513 F.3d 62 (interest payments not included in loss calculation under Guidelines)