United States v. Vincent Bazemore, 608 F. App'x 207

Background

Bazemore, an insurance agent, recruited low‑net‑worth seniors to obtain large life policies and misrepresented their net worth and intentions to keep policies, intending to finance premiums short‑term and sell policies (STOLI) to investors after the contestability period.
He received large commissions when insurers issued policies; he did not misrepresent applicants’ age or health.
Indicted and convicted on four counts of mail fraud for inducing insurers to issue policies and obtain commissions.
District court applied a 24‑level Guidelines enhancement based on an $81 million intended‑loss (sum of policy face amounts), producing a 292‑month sentence; it ordered $4,014,627.13 restitution (commissions and some financed notes).
On appeal, Bazemore challenged sufficiency (commissions as property), McCarran‑Ferguson preemption, prosecutorial closing remarks, the intended‑loss calculation, and the restitution award. The Fifth Circuit affirmed the conviction but vacated sentence and restitution and remanded.

Issues

Issue	Bazemore’s Argument	Government’s / Other Argument	Held
Whether commission payments are “money or property” under the mail‑fraud statute	Commissions were not a deprivation because insurers received premiums that covered commissions; thus no property loss	Commissions are property of insurers paid for the sale of the policy and constitute money/property taken by fraud	Commissions are money/property; conviction affirmed
Whether McCarran‑Ferguson Act bars federal mail‑fraud prosecution of life‑insurance procurement	Federal prosecution reverse‑preempts Texas insurance law because materiality and remedies differ, and restitution could evade state incontestability rules	Federal mail‑fraud does not invalidate or impair state insurance law here; prosecution does not frustrate state regime	McCarran‑Ferguson does not bar prosecution; claim rejected
Prosecutor’s closing remarks — did they invite conviction on impermissible theories?	Prosecutor’s statements suggested alternate theories of insurer harm (e.g., refunded premiums, issuance of large policy) inconsistent with jury instruction	Statements related to the charged scheme; any comments did not cast doubt on verdict	No plain error; conviction stands
Proper measure of intended loss for Guidelines enhancement	Intended loss should not be the face value of policies; commissions/premiums retained should control	Government asserted intended loss equals policy face amounts (dollar amount placed at risk) analogous to loans	Vacated enhancement: court held face amounts inappropriate; government must prove by preponderance that policies posed added pecuniary risk beyond what insurers expected to justify intended‑loss enhancement; remand for resentencing
Restitution under MVRA — amount and calculation	PSR awarded ~$4.01M (commissions minus some excluded items); Bazemore disputed amounts; government previously questioned PSR figures	Government argued defendant failed to rebut PSR, but had earlier disputed some PSR loss items	Restitution vacated. Proper restitution is commissions paid less any premiums insurers retained; remand to recalculate with reliable proof

Key Cases Cited

United States v. Lucas, 516 F.3d 316 (5th Cir.) (defines mail‑fraud elements and materiality standard)
United States v. Ratcliff, 488 F.3d 639 (5th Cir.) (indictment sufficiency review standard)
United States v. Loney, 959 F.2d 1332 (5th Cir.) (intent to defraud need not result in actual harm)
United States v. Harms, 442 F.3d 367 (5th Cir.) (materiality requirement for fraud)
United States v. Stewart, 872 F.2d 957 (10th Cir.) (fraud to obtain discounted sales falls within §1341)
United States v. Ali, 620 F.3d 1062 (9th Cir.) (lost revenue from discounted sales is property under mail‑fraud statute)
Am. Bankers Ins. Co. of Fla. v. Inman, 436 F.3d 490 (5th Cir.) (McCarran‑Ferguson reverse‑preemption framework)
Humana Inc. v. Forsyth, 525 U.S. 299 (Supreme Court) (federal law application where it does not frustrate state policy)
United States v. Harris, 597 F.3d 242 (5th Cir.) (when dollar amount placed at risk may measure intended loss)
United States v. Oates, 122 F.3d 222 (5th Cir.) (discussing dollar amount placed at risk approach)
United States v. Morrow, 177 F.3d 272 (5th Cir.) (loans analogy where full loan amount used for intended loss if reckless)
United States v. Jenkins, 578 F.3d 745 (8th Cir.) (intended loss = face value minus intended premiums in certain insurance‑fraud contexts)
United States v. Sanders, 343 F.3d 511 (5th Cir.) (government must prove intended loss by preponderance)
United States v. Richardson, 676 F.3d 491 (5th Cir.) (harmless‑error standard for Guidelines calculation)