United States v. Nathan Wolf
860 F.3d 175
| 4th Cir. | 2017Background
- Nathan Wolf, a North Carolina licensed real-estate broker, was convicted by a jury of: RICO conspiracy (18 U.S.C. § 1962(d)), bank fraud (18 U.S.C. § 1344), and money‑laundering conspiracy (18 U.S.C. § 1956(h)) based on a 2005–2007 mortgage‑fraud scheme.
- Scheme: Wolf listed properties at inflated “gross” prices to lenders while buyers actually paid a lower “strike” price; the price difference was routed as kickbacks to buyers’ shell companies and concealed on HUD‑1 and loan paperwork.
- Government proof relied heavily on co‑conspirator testimony, closing documents, HUD‑1 forms, compensation agreements, and an expert on mortgage practices (Dr. Sherrill) explaining materiality to lenders.
- Wolf asserted an advice‑of‑counsel defense (naming closing attorney Dale Fussell) and contested expert testimony and various sentencing enhancements. Fussell testified he did not draft or advise on the kickback structure.
- Post‑trial Wolf sought multiple new trials asserting newly discovered Brady/Giglio/impeachment material (documents and later grand‑jury discoveries about Fussell); the district court denied relief as cumulative/immaterial or not newly discovered.
- At sentencing the court applied enhancements for loss ($7.1M), number of victims, sophisticated means, manager/supervisor role, and abuse of a position of trust; district court granted a downward variance and imposed 84 months.
Issues
| Issue | Wolf's Argument | Government's Argument | Held |
|---|---|---|---|
| New trial based on compensation agreement signed by rebuttal witness (Fussell) | Evidence was newly discovered and impeaches Fussell; would have supported advice‑of‑counsel defense | Wolf had the document before trial; evidence is at most impeachment and not material to produce acquittal | Denied — not newly discovered, cumulative/impeaching, and would not probably produce acquittal |
| New trial based on post‑trial short‑sale investigation materials & other Fussell conduct | Files show Fussell engaged in comparable fraud and undermine his credibility; Brady/Giglio violation | Government lacked the files during trial; disclosed post‑trial; materials concern different frauds and are cumulative | Denied — evidence immaterial/cumulative; no reasonable probability of different outcome |
| Exclusion of expert Dr. Sherrill (materiality testimony) | Sherrill lacked lender‑specific experience and offered improper legal conclusions | Materiality is an objective question; expert may explain industry practices to jurors | Denied — expert testimony admissible to explain mortgage/lender practices and objective materiality |
| Sufficiency of evidence as to materiality for bank/wire fraud and RICO predicates | Materiality not proven for a reasonable lender; convictions not supported | False representations on HUD‑1, contracts, down payments, and expert testimony establish objective materiality | Affirmed — ample evidence that misrepresentations would have mattered to a reasonable lender |
| Sentencing: loss amount, role, sophisticated means, abuse of trust | Loss and enhancements overstated; alternate loss (intended) is lower; Wolf not a manager; no abuse of trust or sophisticated means | District court’s estimates and findings reasonable based on foreclosure recoveries, role evidence, concealment mechanisms, and broker duties | Affirmed — factual findings not clearly erroneous; enhancements properly applied |
Key Cases Cited
- United States v. Wilson, 624 F.3d 640 (4th Cir. 2010) (standard for reviewing new‑trial/Brady claims)
- United States v. Bartko, 728 F.3d 327 (4th Cir. 2013) (abuse‑of‑discretion review and Brady legal error principle)
- United States v. Singh, 54 F.3d 1182 (4th Cir. 1995) (newly discovered evidence test elements)
- United States v. Irvin, 682 F.3d 1254 (10th Cir. 2012) (materiality in bank fraud is an objective inquiry)
- United States v. Spencer, 700 F.3d 317 (8th Cir. 2012) (expert testimony admissible to explain mortgage underwriting to jurors)
- United States v. Lighty, 616 F.3d 321 (4th Cir. 2010) (assessing whether new evidence would likely change verdict)
- United States v. Keita, 742 F.3d 184 (4th Cir. 2014) (loss estimation standard at sentencing)
- United States v. Farano, 749 F.3d 658 (7th Cir. 2014) (measuring loss in real‑estate loan fraud as original loan minus foreclosure recovery)
- United States v. Jinwright, 683 F.3d 471 (4th Cir. 2012) (sophisticated‑means enhancement requires concealment beyond ordinary fraud)
- United States v. Brack, 651 F.3d 388 (4th Cir. 2011) (abuse‑of‑trust enhancement applies where position facilitates concealment of crime)