United States v. John Anthony Spencer
2012 U.S. App. LEXIS 22853
| 8th Cir. | 2012Background
- Spencer was convicted of ten wire-fraud counts and three other fraud-related counts based on fraudulent mortgage transactions beginning in 2005.
- He and Minnesota One allegedly provided lenders with false information, including misrepresented primary residence status, fake employment/income/assets, and undisclosed silent second mortgages.
- To fund a scheme, Spencer inflated property prices with fraudulent appraisals, enabling down payments funded by other lenders; buyers defaulted on loans.
- Hogle, Spencer’s income-tax preparer, testified about mischaracterized fraud proceeds; the district court ruled no attorney-client privilege because Hogle acted as a CPA, not an attorney.
- Boedecker, a Bank of America risk officer, testified about mortgage underwriting standards; the court planned but did not give a cautionary instruction.
- Spencer received a 125-month sentence and $7,874,089.21 in restitution, well below the advisory range.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Attorney-client privilege for Hogle | Spencer contends an attorney-client relationship existed. | Government argues Hogle acted as CPA, not attorney. | District court properly admitted Hogle; no privilege. |
| Boedecker expert testimony admissibility | Boedecker testimony unfairly prejudicial and improper under 403. | Testimony aids understanding of underwriting and materiality of misrepresentations. | Testimony properly admitted; no plain error in instruction. |
| Sentence reasonableness under 3553(a) | Sentence was too long given no history and large loss. | Court can depart downward; factors justify sentence. | Sentence affirmed; substantial justification supported by 3553(a). |
| Restitution amount causation and scope | Market factors limited recovery; not all losses attributable to fraud. | Losses causally linked to fraudulent scheme; market factors foreseeable. | District court did not clearly err; restitution sustained as to losses caused by scheme. |
| Restitution for four properties not indicted | Losses on unindicted properties should be excluded. | Loans on those properties were part of the charged scheme. | Included losses warranted; no plain error in restitution order. |
Key Cases Cited
- United States v. Rouse, 410 F.3d 1005 (8th Cir. 2005) (standard for clearly erroneous privilege ruling)
- United States v. Horvath, 731 F.2d 557 (8th Cir. 1984) (attorney-client privilege scope)
- Canaday v. United States, 354 F.2d 849 (8th Cir. 1966) (tax-preparer as scrivener; no attorney-client relationship)
- United States v. Liner, 435 F.3d 920 (8th Cir. 2006) (expert testimony may assist, not usurp jury)
- United States v. McKanry, 628 F.3d 1010 (8th Cir. 2011) (loss causation and foreseeability in restitution)
- United States v. Chalupnik, 514 F.3d 748 (8th Cir. 2008) (victim status for MVRA de novo review)
- United States v. Sheahan, 31 F.3d 595 (8th Cir. 1994) (permissible victim losses in fraud cases)
- Gall v. United States, 552 U.S. 38 (2007) (reasonableness review of sentences; statutory factors)
- Rita v. United States, 551 U.S. 338 (2007) (importance of explanation for sentence under 3553(a))
- Spears v. United States, 555 U.S. 261 (2009) (courts may reject categorical guidelines-based sentencing)