United States v. Lacey, Henry
699 F.3d 710
| 2d Cir. | 2012Background
- Lacey and Henry were convicted in SDNY for involvement in a fraudulent mortgage scheme run by MTC Real Estate, Inc.
- MTC CEO Lavette Bills supplied radio ads that generated straw buyers and distressed-property leads for the scheme.
- Defendants controlled short-sale purchases and assisted straw buyers in obtaining fraudulent mortgage loans.
- Advertisements promised up to $50,000 to straw buyers; some straw buyers were allegedly harmed (credit impact, foreclosures).
- District court applied a two-level mass-marketing enhancement and used a loss calculation resulting in substantial guideline figures; restitution was based on losses to lenders.
- On appeal, the court vacated sentences and restitution orders and remanded for further proceedings consistent with its opinion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether mass-marketing enhancement applies here | Lacey argues no enhancement since victims were banks, not audience targets. | Lacey contends mass-marketing must target victims to apply the enhancement. | Remand to determine if mass-marketing was used and whether victims were harmed. |
| Loss amount used for sentencing | The government seeks loss as total short-sale difference (losses to lenders). | Defendants urge collateral value reductions (appraisals) and possibly gain-based measures. | Loss calculation upheld; no reversible error found. |
| Restitution calculation correctness | Restitution should reflect actual bank losses, not collateral value. | Collateral value should offset restitution calculation. | Restitution vacated; remand for recalculation reflecting actual loss. |
Key Cases Cited
- United States v. Miller, 588 F.3d 560 (8th Cir. 2009) (mass-marketing target must be victims for enhancement not automatic)
- United States v. Mauskar, 557 F.3d 219 (5th Cir. 2009) (mass-marketing applies when recruiters’ conduct is relevant to the offense)
- United States v. Isiwele, 635 F.3d 196 (5th Cir. 2011) (affirms Mauskar approach to mass-marketing in health care fraud)
- Goss v. United States, 549 F.3d 1013 (5th Cir. 2008) (deduction of collateral value from loss; actual vs. intended loss context)
- United States v. Turk, 626 F.3d 743 (2d Cir. 2010) (loss definitions and intended vs. actual loss in mortgage fraud context)
- United States v. McCoy, 508 F.3d 74 (1st Cir. 2007) (intended loss can reflect reasonable expectations; objective evidence example)