United States v. Gilbert Isgar
739 F.3d 829
| 5th Cir. | 2014Background
- Defendants Vincent and Tori Aldridge (operators of First Southwestern Title, FSW) and Gilbert Isgar were convicted after a jury trial for a mortgage-fraud scheme involving nine new townhomes in Houston (Maxie Village).
- The Aldridges recruited straw purchasers, prepared loan paperwork falsely stating purchasers’ income and owner-occupancy to obtain 100% financing, and received undisclosed disbursements into Aldridge & Associates’ IOLTA.
- Isgar (50% owner of builder Waterford) inflated sale prices via falsified construction invoices and contract amendments; loan proceeds were wired to FSW and disbursed to Isgar, Aldridge IOLTA, and Superb Construction.
- Co-conspirators (mortgage broker Alvin Eiland and Gary Robinson) pled guilty; Robinson helped form Superb Construction, which laundered proceeds.
- Indictment: conspiracy to commit mail and wire fraud (18 U.S.C. §§ 1341, 1343, 1349), aiding and abetting wire fraud (18 U.S.C. §§ 2, 1343), conspiracy to launder money (18 U.S.C. § 1956(h)), and aiding and abetting money laundering (18 U.S.C. §§ 2, 1957). All three defendants convicted on all counts; they appealed on multiple grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of evidence (general) | Gov: evidence—witness testimony, documents, wires, and transfers—supports convictions | Defs: evidence insufficient to prove knowing participation or conspiracy | Court: viewing evidence in prosecution’s favor, a rational jury could find elements proven; convictions affirmed |
| Tori: subject-matter jurisdiction & venue | Gov: indictment tracks statutory language; district court has jurisdiction; venue preserved | Tori: state law required some wire transmissions so federal wire-fraud jurisdiction improper; venue improper in S.D. Tex. | Court: jurisdiction under 18 U.S.C. § 3231 satisfied; venue objection waived for failure to preserve |
| Admissibility of FSW records | Gov: records admissible as business records via custodian explanation; trustworthy chain of custody | Aldridges: custodian witness never employed by FSW; records inadmissible under Fed. R. Evid. 803(6) | Court: admission not an abuse of discretion; trustworthiness established; any error harmless |
| Tori: prosecutorial misconduct / constructive amendment / new trial / ineffective assistance / cumulative error | Tori: prosecution used stale/dormant guaranty file, allowed false testimony, constructive amendment to honest-services theory, untimely new-trial denial, ineffective counsel, cumulative error | Gov: evidence of conspiracy independent of disputed documents; jury instructions limited use of fiduciary evidence; new-trial motion untimely; ineffective-assistance record undeveloped | Court: no plain error on misconduct or constructive amendment; new-trial denial proper as untimely; ineffective-assistance claim deferred to collateral review; cumulative-error claim fails |
| Vincent: money-laundering mens rea & restitution | Gov: disbursements to IOLTA, Superb, and straw buyers were profits used to further new frauds; restitution may include losses from fraud transactions | Vincent: Santos requires “proceeds” = profits but transfers into IOLTA paid scheme expenses, not profits; restitution item challenged for a transaction he allegedly did not criminally participate in | Court: relying on Kennedy, jury could find transfers were profits used to further crime; restitution award within discretion per Arledge |
| Vincent: sentence reasonableness | Gov: within-Guidelines sentence presumptively reasonable | Vincent: 63 months unreasonable | Court: sentence within properly calculated Guidelines range; plain-error review fails to show error |
Key Cases Cited
- United States v. Curtis, 635 F.3d 704 (5th Cir. 2011) (circumstantial evidence and coconspirator testimony can establish conspiracy and participation)
- Santos v. United States, 553 U.S. 507 (2008) (plurality: “proceeds” in § 1956 can mean profits rather than gross receipts)
- United States v. Kennedy, 707 F.3d 558 (5th Cir. 2013) (post-closing disbursements of loan funds can be profits used to further subsequent frauds)
- United States v. Arledge, 553 F.3d 881 (5th Cir. 2008) (restitution may be awarded for losses directly resulting from fraud where defendant participated)
- United States v. Cotton, 535 U.S. 625 (2002) (defects in indictment generally go to merits, not subject-matter jurisdiction)