United States v. Turk
2010 U.S. App. LEXIS 24427
| 2d Cir. | 2010Background
- Turk and her partner owned Kingsland Group, a real estate development company, and defrauded ~70 investors of about $27 million by securing loans with the misrepresented claim of first mortgages as collateral.
- No mortgages were recorded for individual investors; investors were unsecured creditors while banks held recorded liens.
- Turk forged documents (e.g., ACRIS recording sheet) and made false statements to investors about collateral, despite knowing mortgages were not recorded.
- Civil lis pendens exposed the scheme; after litigation and investigations, Kingsland entered involuntary bankruptcy and liquidated assets to about $67.4 million, with unsecured creditors receiving little.
- District court calculated loss under Guidelines based on >$20 million but ≤$50 million and 50+ victims, but Turk argued loss should be zero because collateral had market value before the crash; court rejected this and imposed a below-Guidelines sentence with restitution of $29,660,192.36.
- On appeal, Turk challenged loss calculation, number of victims, §3553(a) considerations, and the substantive reasonableness of the sentence; the Second Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper loss calculation under § 2B1.1 | Turk argues loss equals collateral value decline, not unpaid principal. | Turk contends collateral value should reduce loss; loss should reflect market factors. | Loss equals unpaid principal; collateral decline not required for loss calculation. |
| Whether there were 50+ victims for guideline enhancement | Turk disputes number of victims. | Turk's conduct involved many unsecured creditors; 50+ victims supported. | The record supports a 50+ victims finding. |
| Reasonableness of constraints under § 3553(a) | Turk argues individualized consideration was lacking. | District court adequately considered § 3553(a) through statements and victims' impact. | Court properly considered § 3553(a); no failure identified. |
| Substantive reasonableness of the sentence | Turk argues below-Guidelines sentence was unreasonable given circumstances. | Court weighed seriousness, victims’ impact, and mitigating factors; within range considerations. | Sentence deemed substantively reasonable and within range. |
Key Cases Cited
- United States v. Mallory, 709 F. Supp. 2d 455 (E.D. Va. 2010) (foreseeability approach to loss with collateral credits at sentencing)
- United States v. Parish, 565 F.3d 528 (8th Cir. 2009) (loss definition and collateral credit disputes in mortgage cases)
- United States v. Rutkoske, 506 F.3d 170 (2d Cir. 2007) (loss causation in securities fraud; factors affecting loss vs. market factors)
- United States v. Ebbers, 458 F.3d 110 (2d Cir. 2006) (loss causation and analysis of economic impact of fraud)
- Cavera v. Attorney General, 550 F.3d 180 (2d Cir. 2008) (en banc framework for reasonableness of sentences)