United States v. Jason Springer
866 F.3d 949
| 8th Cir. | 2017Background
- Nathan Smith and Patrick Steven ran a business negotiating mortgage loan modifications and short sales for homeowners; they secretly purchased some properties via short sales and immediately resold them (flips) to profit on the spread.
- Smith and Steven concealed their role as buyers from lenders by using trusts, false listing documents, forged financing statements, and inaccurate settlement (HUD‑1) forms to induce lender approval of short sales.
- Smith and Steven pleaded guilty and cooperated; Jason Springer (attorney) and Rick Makohoniuk (real estate agent) went to trial charged with bank fraud under 18 U.S.C. § 1344(1) for participating in the scheme (e.g., completing false HUD‑1s, signing affidavits denying flip agreements).
- Lender witnesses testified they would not have approved short sales had they known of the flips; lenders had rules to prevent quick flips and required marketing, arm’s‑length buyers, proof of funds, and timing restrictions for subsequent financing.
- District court convicted Springer and Makohoniuk; they appealed raising sufficiency-of-evidence, jury‑instruction, indictment‑variance, evidentiary, severance, and waiver-to-testify challenges.
Issues
| Issue | Government's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether GMAC (and other victims) qualified as a "financial institution" under § 1344(1) | GMAC was a mortgage lending business because it made hundreds/thousands of mortgage loans across states; witnesses testified victims were FDIC‑insured or mortgage lenders | Defendants argued evidence didn't show interstate‑commerce activity or that the specific victim entities were FDIC‑insured | Court affirmed: GMAC qualifies as a mortgage lending business; testimonial evidence supported FDIC‑insured victims and sufficed (Alexander distinguished) |
| Whether evidence proved requisite intent or risk/likelihood of financial loss under § 1344(1) | No requirement to intend actual financial loss; scheme deprived banks of value and posed real risk (releasing security for less, checks drawn on insufficient funds) | Defendants argued lack of intent to cause loss and no risk of loss (post‑Shaw and otherwise) | Court held Shaw did not undermine Staples; intent to cause loss not required; evidence showed institutions suffered or risked loss |
| Materiality and jury instructions (absence of explicit "risk of loss" language) | Material misrepresentations were proven; materiality instruction (natural tendency to influence institution) sufficed to avoid convicting for trivial misstatements | Defendants argued instruction invited conviction for trivial or irrelevant misrepresentations without risk‑of‑loss element | Court held materiality instruction adequate; no reversible error |
| Variance between indictment and proof; admission of scheme evidence / 404(b); aiding and abetting instruction | Indictment tracked the statute and described the scheme; evidence of underlying scheme and multiple misrepresentations were within the charged scheme; aiding‑and‑abetting instruction appropriate | Defendants argued government proved a broader scheme than indicted and 404(b) evidence prejudiced them; aiding instruction overstated charge | Court held no material variance; admission of scheme evidence and aiding‑and‑abetting instruction proper |
| Falsity of HUD‑1s and individual culpability (Makohoniuk) | HUD‑1s falsely represented cash at closing; Makohoniuk aided/abetted scheme by signing affidavits and helping conceal flips | Makohoniuk argued he did not prepare HUD‑1s and lacked required participation/knowledge; also claimed improperly denied severance and involuntary waiver of right to testify | Court found sufficient evidence of his knowing participation; refusal to sever proper; waiver to not testify was knowing and voluntary |
Key Cases Cited
- United States v. Alexander, 679 F.3d 721 (8th Cir. 2012) (distinguishing requirement that the precise defrauded entity be shown FDIC‑insured)
- Shaw v. United States, 137 S. Ct. 462 (2016) (§ 1344(1) does not demand intent to cause financial loss or proof of ultimate unreimbursed loss)
- United States v. Staples, 435 F.3d 860 (8th Cir. 2006) (intent to cause financial loss not required for bank fraud under § 1344(1))
- Torres v. Lynch, 136 S. Ct. 1619 (2016) (distinguishing legislative jurisdictional elements from trial‑level proof of elements)
- United States v. Chatmon, 742 F.3d 350 (8th Cir. 2014) (standard of review for sufficiency of the evidence on judgment of acquittal)
- United States v. Byers, 561 F.3d 832 (8th Cir. 2009) (plain‑error review where objection not raised below)
- United States v. Binkholder, 832 F.3d 923 (8th Cir. 2016) (plain‑error framework requirements)