United States v. Mbaye
2016 U.S. App. LEXIS 11771
7th Cir.2016Background
- Mbaye and three co-defendants were charged with a mortgage-fraud scheme that allegedly generated about $600,000; Mbaye admitted participating in the transactions but claimed he lacked criminal intent and was duped.
- The scheme used inflated purchase prices, straw buyers, and kickbacks to fraudulently obtain bank loans; Mbaye formed Veracity Enterprises, opened a corporate account, deposited proceeds, and paid out funds with memos like “administrative duties.”
- At trial Mbaye testified and denied knowledge of the fraud, claiming he was helping a friend and was paid $80,000 as a favor; the jury rejected his testimony and convicted him of bank fraud and mail fraud.
- Two co-defendants testified that Mbaye knowingly participated; additional circumstantial evidence included his role as purported CEO, his phone number on loan documents, failure to report income, and false statements to investigators.
- At sentencing the district court applied a two-level obstruction-of-justice enhancement under U.S.S.G. § 3C1.1 for willful false testimony, raising the Guidelines range to 70–87 months but imposed a below-guidelines sentence of 35 months.
- Mbaye appealed, arguing insufficiency of evidence as to intent, error in the obstruction enhancement, and substantive unreasonableness of the sentence; the Seventh Circuit affirmed.
Issues
| Issue | Plaintiff's Argument (Mbaye) | Defendant's Argument (Government) | Held |
|---|---|---|---|
| Sufficiency of evidence of intent to commit fraud | Mbaye: he lacked the requisite guilty mind; he was duped and only helped a friend | Government: testimony of two co-defendants plus circumstantial evidence (Veracity account, checks, phone on docs, unreported income, false statements) supports knowing participation | Affirmed — evidence sufficient; credibility/resolution of implausible testimony for jury to decide |
| Obstruction-of-justice enhancement (U.S.S.G. § 3C1.1) | Mbaye: his trial testimony was truthful; judge failed to make adequate willfulness findings | Government: district court properly found testimony was willfully false (not mistake/confusion) and material to issues | Affirmed — district court made adequate willfulness finding; materiality supported by record |
| Materiality of false testimony | Mbaye: (not argued on appeal) implied challenge to enhancement | Government: testimony about memo lines/CEO status was material because believing it would affect core disputed issue | Affirmed — record clearly supports materiality |
| Substantive reasonableness of 35‑month sentence | Mbaye: sentence too long; should consider community contributions and charging choices | Government: court considered mitigation; below-guidelines sentence imposed; defendant has no right to be charged only with lesser offense | Affirmed — procedural soundness and presumption of reasonableness for below-guidelines sentence |
Key Cases Cited
- United States v. Morales, 655 F.3d 608 (7th Cir. 2011) (standard for reviewing sufficiency of evidence)
- United States v. Dunnigan, 507 U.S. 87 (1993) (perjury elements and requirement for district-court findings under U.S.S.G. § 3C1.1)
- United States v. Chychula, 757 F.3d 615 (7th Cir. 2014) (requirements for district court findings on obstruction enhancement)
- United States v. Riney, 742 F.3d 785 (7th Cir. 2014) (materiality definition under § 3C1.1)
- United States v. Warner, 792 F.3d 847 (7th Cir. 2015) (two-step review of sentencing procedures and substantive reasonableness)
- Gall v. United States, 552 U.S. 38 (2007) (standard of review for sentences and reasonableness)