United States v. Erik Green
698 F. App'x 879
| 9th Cir. | 2017Background
- Defendant Erik Green convicted of five counts of wire fraud for a mortgage lending scheme; appeal to Ninth Circuit.
- Central element at trial: whether Green’s false statements on loan documents were "material" to lenders' decisions to fund loans.
- Green sought to admit expert testimony about mortgage-industry lending standards and practices in the mid-2000s (e.g., lax underwriting, exceptions to stated criteria) to show lack of materiality.
- District court excluded that expert testimony; Green argued exclusion deprived him of a complete defense.
- Ninth Circuit found the exclusion partly improper and vacated the conviction, remanding for further proceedings (potentially a new trial).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admissibility of expert testimony on industry standards | Govt: materiality is objective; lender-specific conduct not a defense | Green: needed expert on general industry standards to prove lenders routinely ignored borrower qualifications | Court: exclusion of lender-specific evidence proper, but excluding testimony on general industry lending standards was an abuse of discretion; Green entitled to such evidence under Lindsey |
| Effect of excluding expert on right to present defense | Govt: not argued harmless | Green: exclusion denied meaningful opportunity to present complete defense | Court: error was not shown harmless and thus warrants vacatur and remand |
| Jury instruction on material omission theory | Govt: conviction permissible under omission theory | Green: jury must be instructed that a duty to disclose exists before convicting on omission theory | Court: if convicted on omission theory, jury must be instructed that duty to disclose is required (Shields) |
| Remaining issues raised on appeal | Govt: various other challenges | Green: conceded one instructional challenge in light of Lindsey | Court: did not reach other issues because judgment vacated (per Haischer) |
Key Cases Cited
- United States v. Haischer, 780 F.3d 1277 (9th Cir. 2015) (vacatur/remand precedent discussed)
- United States v. Lindsey, 850 F.3d 1009 (9th Cir. 2017) (expert testimony on industry standards admissible for materiality defense)
- Universal Health Servs., Inc. v. U.S. ex rel. Escobar, 136 S. Ct. 1989 (2016) (materiality standard discussion)
- United States v. Murguia-Rodriguez, 815 F.3d 566 (9th Cir. 2016) (harmless-error waiver principles)
- United States v. Shields, 844 F.3d 819 (9th Cir. 2016) (duty to disclose required for omission-based fraud conviction)