United States v. Timothy Ritchie
2017 U.S. App. LEXIS 9365
| 4th Cir. | 2017Background
- Ritchie falsified a HUD-1 settlement sheet at a 2005 closing, claiming he brought $1,153,937.23 though he did not, and Countrywide wired $2,445,102 to fund the loan. Ritchie later defaulted.
- Bank of America acquired Countrywide, foreclosed, sold the property for $1,106,000, and asserted an unpaid principal balance of $2,491,444.83; district court used the difference ($1,385,444.83) as loss.
- Ritchie pleaded guilty to making a false statement in violation of 18 U.S.C. § 1001; plea allowed restitution under MVRA, VWPA, or as supervised-release condition; Ritchie reserved right to appeal restitution.
- District court adopted the PSR (which applied the MVRA), found Bank of America directly and proximately harmed, and ordered restitution of $1,385,444.83. Ritchie appealed only the restitution order.
- On appeal, the Fourth Circuit (majority) affirmed: (1) restitution was imposed under the MVRA; (2) a § 1001 false-statement can be an “offense against property” based on the circumstances; (3) Bank of America is a victim; and (4) the restitution amount (loan principal minus foreclosure proceeds) was not an abuse of discretion.
Issues
| Issue | Plaintiff's Argument (Ritchie) | Defendant's Argument (Government / Bank of America) | Held |
|---|---|---|---|
| Basis for restitution statute | District court did not identify statutory basis; remand required | Record (PSR, plea) shows MVRA applied | MVRA was the basis; no remand required |
| Whether §1001 is an “offense against property” under MVRA | §1001 lacks a property-element; categorical approach excludes it | MVRA’s text/purpose permits circumstance-specific inquiry; §1001 can be an offense against property when facts show property loss | Categorical approach inapplicable; fact-based inquiry allows §1001 conviction here to qualify |
| Whether Bank of America is a “victim” entitled to MVRA restitution | Countrywide’s knowledge/complicity and post-default delay or neglect broke causal chain; BA may have paid a discount so award would be windfall | Ritchie’s plea and record support proximate causation; defendant bears burden to prove intervening superseding causes | Bank of America is a direct and proximate victim; district court did not err in finding causation |
| Proper restitution measure (successor lender) | Successor or downstream purchasers are limited to amount they paid for the loan (to avoid windfall) | Where acquirer (BA) purchased Countrywide as an entity and stands in the original lender’s shoes, victim’s actual loss is unpaid principal minus foreclosure proceeds | Majority: award of unpaid principal minus foreclosure proceeds to BA was not clearly erroneous; dissent would limit to amount BA paid for the loan |
Key Cases Cited
- United States v. Freeman, 741 F.3d 426 (4th Cir. 2014) (standard of review for restitution and reviewing record to determine basis)
- United States v. Leftwich, 628 F.3d 665 (4th Cir. 2010) (district court should state restitution statute applied)
- United States v. Berry, 814 F.3d 192 (4th Cir. 2016) (circumstance-specific approach may be appropriate)
- Nijhawan v. Holder, 557 U.S. 29 (2009) (when to apply the categorical approach)
- United States v. Robers, 134 S. Ct. 1854 (2014) (in fraudulent-loan context, the "property" is the money lent and restitution must account for amounts returned on sale of collateral)
- United States v. Price, 777 F.3d 700 (4th Cir. 2015) (discussion of categorical vs. circumstance-specific approaches)
- United States v. Sarihifard, 155 F.3d 301 (4th Cir. 1998) (elements of §1001 offense)
- United States v. Dawkins, 202 F.3d 711 (4th Cir. 2000) (MVRA mandates restitution for qualifying offenses)