United States v. Viktor Domnenko
2014 U.S. App. LEXIS 15859
| 7th Cir. | 2014Background
- Two separate sales of the same Wheaton, Illinois house involve Viktor and Lilya Domnenko and JVS; Viktor controlled the transaction while Lilya’s name was on paperwork.
- Lilya obtained two WAMU loans for the first sale using false income and asset information; documents concealed Viktor’s role and an arm’s-length nature, with purported upgrade fees funneling to Viktor.
- The parties inflated the first sale price from $750,000 to about $1,000,000, with roughly $260,000 paid to Viktor and not disclosed to the lender.
- For the second sale, a fake buyer (“Robert Valle”) obtained a large loan; closing documents concealed kickbacks to the buyer’s side and to others, while Lilya signed unchecked HUD-1 forms.
- Countrywide eventually foreclosed after Valle defaulted; the loss to Countrywide was $603,073.06, motivating a 14-point sentencing enhancement; the district court failed to explain why the loss was reasonably foreseeable, prompting remand.
- Convictions were affirmed on sufficiency grounds, but the 14-point enhancement is remanded for a proper foreseeability analysis.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of evidence for wire fraud | Domnenkos lacked a scheme to defraud and did not intend. | Evidence showed joint intent and fraudulent closings. | Convictions affirmed; evidence supports scheme and intent. |
| Two transactions constitute a single scheme | Two fraudulent transactions show a continuing scheme. | Even if first sale fraudulent, no single scheme. | Two fraudulent transactions constitute a scheme; convictions upheld. |
| Disclosure of kickbacks in second sale | Kickbacks were undisclosed; fraud established. | Proceeds were repayment of a loan, not kickbacks. | Undisclosed kickbacks supported fraud findings. |
| Reasonableness of loss foreseeing for sentencing enhancement | Loss was reasonably foreseeable to Domnenkos. | No evidence they knew Valle was fictitious; foreseeability uncertain. | Remanded for district court to explain why $600,000 loss was reasonably foreseeable. |
Key Cases Cited
- United States v. Sheneman, 682 F.3d 623 (7th Cir. 2012) (intent to defraud may be inferred from the scheme and circumstantial evidence)
- United States v. White, 737 F.3d 1121 (7th Cir. 2013) (false HUD-1 and doctored documents support fraud)
- United States v. Jaffe, 387 F.3d 677 (7th Cir. 2004) (signing untruthful, doctored settlement papers constitutes fraud)
- United States v. Leiskunas, 656 F.3d 732 (7th Cir. 2011) (remand for explanation of loss attribution under sentencing guidelines)
- United States v. Torres-Chavez, 744 F.3d 988 (7th Cir. 2014) (standard for sufficiency of evidence on appeal)
- United States v. Whiting, 471 F.3d 792 (7th Cir. 2006) (requires both but-for and legal causation for loss enhancements)