UNITED STATES of America, Appellee, v. Ralph APPOLON, Defendant, Appellant.
No. 11-1627.
United States Court of Appeals, First Circuit.
April 29, 2013.
715 F.3d 362
See also 695 F.3d 44.
Ryan M. DiSantis, Assistant United States Attorney, with whom Carmen M. Ortiz, United States Attorney, was on brief, for appellee.
Before HOWARD, STAHL, and LIPEZ, Circuit Judges.
LIPEZ, Circuit Judge.
Appellant Ralph Appolon was charged with one count of conspiring to commit wire fraud in violation of
I.
A. The Mortgage Fraud Scheme
The companion case to this appeal, United States v. Appolon, 695 F.3d 44, 51-53 (1st Cir.2012) [”Daniel Appolon“], lays forth the basic facts of the mortgage fraud scheme at issue in great detail, and we assume the reader‘s familiarity with that opinion.2 As we described,
[t]he scheme itself was uncomplicated: appellants and their coconspirators arranged for straw buyers to purchase real property at the asking price, falsified mortgage loan applications for the straw buyers to obtain financing for an artificially-inflated purchase price, and pocketed the difference. The loans secured by each of the properties involved in appellants’ scheme eventually went into default, and most of the properties were forced into foreclosure at huge losses for the lenders.
Id. at 51. Twenty-one properties were sold as part of this scheme. Id. at 53. The conspiracy involved a number of individuals, including: Eric Levine, a real estate lawyer who had been suspended from the practice of law; Daniel Lindley, another real estate attorney; Latoya Haltiwanger, a residential mortgage broker; and Ernst Appolon, a realtor. Id. at 52. Ernst Appolon‘s brothers, Daniel and Ralph, also participated in the scheme. Id.
The trial record discloses the following facts, described in the light most favorable to the jury‘s verdict. See United States v. Mubayyid, 658 F.3d 35, 41 (1st Cir.2011). Ralph was a loan originator with New England Merchants, a real estate company where he worked with Ernst and Daniel. His main responsibility was to recruit and cultivate straw buyers to participate in the fraudulent property deals. These buyers typically provided their names and credit histories for the purchase in exchange for various benefits, including having mortgage payments made on their behalf or receiving remuneration for their participation. Ralph also created and processed loan applications for the property deals, which contained various representations regarding the straw buyers who were purportedly applying for the loans.
Ralph‘s wire fraud charges arose from his involvement with transactions surrounding two properties located at 586 East Third Street, South Boston, MA (“the Third Street property“) and 3231 Washington Street, Jamaica Plain, MA (“the Washington Street property“).
B. The Third Street Property
The Third Street property‘s purchase took place in June 2005. Ralph‘s coconspirators recruited him to find a purchaser, telling him that he could write the mortgage documents and would obtain a commission on the loan. When Ralph was unable to secure a purchaser, Levine and the seller, Robert Odimegwu, asked Ralph to buy the property himself, on the conditions that Ralph would receive a portion of the realtor commission as well as a hefty referral fee, and that Levine and Odimegwu would pay the mortgage for a year.
Ralph assented, but put the property in the name of his mother-in-law, Violetha Clemendore. Clemendore agreed to assist Ralph and sign loan documents at his request, believing that her participation would help Ralph and her daughter with their real estate ventures. He prepared and submitted a mortgage loan application on Clemendore‘s behalf to Long Beach Mortgage. This application contained a number of false statements concerning, inter alia, the purchase price, Clemendore‘s intent to maintain her primary residence at the property, and her monthly income. Based on the application and related paperwork, Long Beach Mortgage approved 100 percent financing for the purchase and wired loan proceeds to Lindley‘s account. The proceeds were transferred to Levine‘s account after the closing, and Levine in turn paid Ralph $60,000, as well as a loan origination commission of almost $6,000.
Ralph also participated in the September 2005 sale of the Washington Street property. A man named Peter Robinson served as the straw buyer for this purchase. Robinson testified that he spoke with Ralph at least once during the purchasing process, and on one occasion another conspirator witnessed Robinson, Ernst, and Ralph meet together at the New England Mortgage office. Robinson‘s loan application listed Ralph as the loan interviewer, and Ralph also acted as the broker representative for the purchase.
Robinson‘s purported loan application was submitted to a company called WMC Mortgage Corporation (“WMC Mortgage“). The application contained various false statements, including information about his employment at a second job, misrepresentations regarding his monthly income, and a $29,000 bank account balance he did not actually have. The closing for the Washington Street property took place in September 2005, with Robinson, Ernst, and an attorney present. Ralph was at the closing for a short period of time. After the closing, Ralph received $8,320 in excess funds from one of Levine‘s accounts, as well as a broker fee in a similar amount.
After a nine-day trial, the jury returned guilty verdicts on the conspiracy count as well as all four wire fraud counts. The district court sentenced Ralph to 60 months’ imprisonment on the conspiracy count and 70 months’ imprisonment on each wire fraud count, all to run concurrently. Ralph was also sentenced to two years of supervised release, and ordered to forfeit approximately $1.9 million that he had gained from his participation in the conspiracy. This timely appeal followed.
II.
Ralph raises various challenges to his conviction and sentence, some of which coincide with arguments raised by his coconspirators in Daniel Appolon. We begin by addressing the arguments unique to Ralph‘s appeal.
A. Sufficiency of the Evidence
Ralph moved for a judgment of acquittal on all of the charges against him under
1. The Wire Fraud Counts
The elements of a wire fraud conviction under
a. Counts Two and Three (Third Street Transaction)
Counts Two and Three arose from Ralph‘s participation in the sale of the East Third Street property to Ralph‘s mother-in-law, Clemendore. Appellant‘s challenge to these counts concerns the materiality of his misrepresentations. A material statement “has a natural tendency to influence, or [is] capable of influencing, the decision of the decisionmaking body to which it was addressed.” Neder, 527 U.S. at 16 (quoting United States v. Gaudin, 515 U.S. 506, 509 (1995)) (internal quotation marks omitted) (alteration in original). The government need not prove that the decisionmaker actually relied on the falsehood or that the falsehood led to actual damages. See id. at 24-25 (“The common-law requirements of justifiable reliance and damages ... plainly have no place in the federal fraud statutes.” (internal quotation marks omitted)).
Here, the misrepresentations at issue were contained in the mortgage application Ralph prepared and submitted to Long Beach Mortgage. Ralph observes that the government presented no evidence regarding Long Beach Mortgage‘s loan evaluation process, in contrast to the Washington Street transaction, where the government presented witness testimony from a WMC Mortgage representative who spoke about the types of factors that company used when evaluating an application. Without any information regarding the types of information that Long Beach found relevant in deciding whether to approve a loan, Ralph argues, the government could not establish that any of the misrepresentations on the application were factors in the company‘s decisionmaking.
The record defeats this contention. The Long Beach loan file for the Third Street transaction included application forms that specifically sought information regarding the purchaser‘s income, assets, and intent to reside in the property, all of which were designed to assess the borrower‘s creditworthiness. Cf. United States v. Kenrick, 221 F.3d 19, 32 (1st Cir.2000) (stating, in context of bank fraud conviction, that “misrepresentation about a borrower‘s creditworthiness can certainly be a material falsehood that supports a [] conviction“). Ralph provided responses to these requests that the trial testimony established as untrue, including a verification of Clemendore‘s rent, information regarding her employment, and an occupancy agreement that certified her intent to live at the Third Street residence. The fact that Long Beach‘s loan application explicitly sought this information from the applicant indicates that Clemendore‘s responses were capable of influencing its decision.
Moreover, the government adduced other evidence regarding the types of information material to Long Beach‘s decisionmaking process. Specifically, the government called Diane Taylor, a representative of WMC Mortgage, the lender for the Washington Street transaction, to testify about WMC Mortgage‘s practices. Although Taylor could not speak to Long Beach‘s lending protocols, she testified about a range of criteria relevant to WMC Mortgage‘s lending decisions, including information regarding income and employment, assets, and residence at the purchased property. As noted above, Long Beach‘s mortgage application requested the same information. Indeed, the trial testimony establishes that the loan file for the Third Street transaction
In light of all this evidence, it is of no moment that the government did not introduce testimony from a Long Beach representative regarding the specific types of information it found material. This challenge therefore fails.
b. Counts Six and Seven (Washington Street Transaction)
Counts Six and Seven concerned Ralph‘s engagement with the Washington Street property transaction, and he asserts two main challenges to the sufficiency of the evidence supporting these convictions. First, he argues that the government failed to present evidence that Ralph knew the representations on the loan application were false or misleading. Ralph relies heavily on the notion that Robinson, the property‘s purchaser, dealt primarily with Ernst. The government introduced other evidence demonstrating Ralph‘s interactions with Robinson, however, including Robinson‘s testimony that he spoke with Ralph regarding the transaction on at least one occasion, and that Ralph was present briefly at the closing. Additionally, another conspirator testified that Robinson came to the office multiple times looking for Ralph, and witnessed Ralph, Ernst, and Robinson meeting at the office on at least one occasion. These facts establish that Robinson had at least some interaction with Ralph regarding the loan transaction. Moreover, testimony from one of Lindley‘s employees established that Ralph acted as the broker representative on the transaction, and that he put his name on a number of fax transmissions with Lindley‘s office. Ralph also listed himself as the interviewer on the loan applications that contained the false statements, as well as other forms related to the transaction. The false verification of rent from the lender file listed Ralph as the requesting party and gave New England Merchants’ address as the location of Robinson‘s landlord.3
This compilation of evidence gives rise to the reasonable inference not only that Ralph was an active participant in the transaction, but also that he participated with the specific intent to defraud. See United States v. Alfonzo-Reyes, 592 F.3d 280, 291 (1st Cir.2010) (“Direct evidence is not required to find [a defendant] guilty, and juries are entitled to draw reasonable inferences at trial based on circumstantial evidence.“). These facts, joined with Ralph‘s “general awareness of the mechanics of appellants’ scheme,” Daniel Appolon, 695 F.3d at 59, are more than sufficient to meet the government‘s burden.
Ralph‘s second contention is similarly unavailing. He posits that New England Merchants’ offices permitted any employee to use the computer system to generate and transmit forms, thus making it possible that his brother Ernst or some other employee forged Ralph‘s signature and engaged in the inculpatory wire communications. But Ralph‘s ability3
For these reasons, Ralph‘s conviction on Counts Six and Seven must stand.
2. The Conspiracy Count
To sustain a conviction of conspiracy, the government must prove that “1) the defendant agreed to commit an unlawful act, 2) the defendant voluntarily participated in the scheme, and 3) one of the conspirators took an affirmative step toward achieving the conspiracy‘s purpose.” Cassiere, 4 F.3d at 1015. The defendant must have both intended to make the agreement as well as intended to commit the substantive offense. See United States v. Gonzalez, 570 F.3d 16, 24 (1st Cir.2009). Where the indictment alleges a conspiracy to commit multiple offenses, “the charge may be sustained by sufficient evidence of conspiracy to commit any one of the offenses.” United States v. Muñoz-Franco, 487 F.3d 25, 46 (1st Cir.2007).
Ralph claims that the government failed to prove the existence of an agreement among the conspirators. An agreement is not proven by demonstrating “mere knowledge of an illegal activity ... let alone [] mere association with other conspirators or mere presence at the scene of the conspiratorial deeds.” United States v. Dellosantos, 649 F.3d 109, 115 (1st Cir.2011) (quoting United States v. Zafiro, 945 F.2d 881, 888 (7th Cir.1991)). Rather, the government must prove the existence of an “agreement or understanding as to each defendant.” Id. (quoting United States v. Rivera-Santiago, 872 F.2d 1073, 1079 (1st Cir.1989)) (internal quotation marks omitted). “[C]onspiratorial agreement need not be express so long as its existence can plausibly be inferred from the defendants’ words and actions and the interdependence of activities and persons involved.” United States v. Boylan, 898 F.2d 230, 241-42 (1st Cir.1990); see also Muñoz-Franco, 487 F.3d at 45-46.
As the discussion regarding the substantive wire fraud counts shows, the record is replete with evidence evincing Ralph‘s agreement to commit unlawful acts. He made numerous admissions to an FBI special agent regarding the Third Street transaction, including that he agreed to purchase the property in his mother-in-law‘s name and that he prepared loan applications that he submitted to the mortgage company. These admissions are supported by volumes of documentary evidence and testimony establishing the falsity of the statements contained in the applications that Ralph prepared.
Ralph‘s engagement with the scheme rose far beyond “simple association with the conspirators.” United States v. Pérez-González, 445 F.3d 39, 49 (1st Cir.2006). His conduct demonstrates both his intent to engage in a common scheme and specific acts in furtherance of that scheme. Thus, there is no reason to disturb the jury‘s verdict.4
B. The Admission of the Lindley Files
Ralph contends that the district court erred in admitting the files of Lindley, who served as the closing attorney on the real estate transactions. Although Ralph frames this contention under the heading of “due process,” his brief neither explains why his due process rights were violated by the documents’ admission, nor identifies with any precision the particular documents to which this argument is addressed. Ralph‘s vague allusion to due process notwithstanding, his argument primarily addresses the documents’ admissibility under the Federal Rules of Evidence and we therefore treat it as such.
When the defendant has preserved his objections, the district court‘s evidentiary rulings are reviewed for abuse of discretion. United States v. Jiménez, 419 F.3d 34, 43 (1st Cir.2005). The government contends that Ralph forfeited this claim below, thereby rendering it subject to plain error review. See United States v. Chaney, 647 F.3d 401, 406 n. 6 (1st Cir.2011) (observing that “failure to raise an argument or right due to inattention or neglect constitutes forfeiture” and issue is reviewed for plain error). We need not resolve this question, however, since the district court‘s admission of these documents was not an abuse of discretion.
Ralph‘s first challenge goes to the authenticity of the Lindley files. To introduce a piece of evidence, the proponent must demonstrate “that the item is what the proponent claims it is.”
The record shows that the government laid a sufficient foundation for the admission of the Lindley files. On the second day of trial, before testimony began, the parties had a colloquy with the district court regarding the files. When the government sought to have them admitted
MacPhee later gave the promised testimony. She stated that she was responsible for the filing system at Lindley‘s office, and kept files for “real estate matters.” She also discussed her role in updating and maintaining the records, and identified the files when they were presented to her. After the government moved to admit the files into evidence, the court concluded during a brief sidebar that “there‘s an adequate foundation for the admission,” but clarified that the files would not be admitted for the truth of their contents.5 As someone who maintained, reviewed and worked with the files, MacPhee was well-positioned to recognize and verify the documents in question. Her testimony was more than sufficient to establish a reasonable probability that the Lindley files were what they purported to be.
Ralph also suggests that the Lindley files are inadmissible hearsay because, despite the court‘s statement to the contrary, they were admitted for their truth and do not fall under any exception to the hearsay rule.
For these reasons, the district court did not err in admitting the Lindley files into evidence.
C. Evidence of Uncharged Conduct
Ralph argues that the district court, applying
The evidence at issue concerned Ralph‘s participation in the purchase of two properties located at 99 Wayland Street and 25 Nelson Street. The Wayland Street and Nelson Street transactions were markedly similar to those that formed the basis of the indictment, in terms of both how the transactions were conducted and the roles of the assorted players. The transactions both involved the use of two different purchase prices, falsified information on loan applications, Ralph‘s involvement as the loan originator, Levine or Lindley‘s involvement in the real estate closing, and Ralph‘s receipt of commissions after the closing. This evidence is highly probative for multiple reasons, including to show Ralph‘s intent to engage in the conspiracy, to demonstrate his knowledge of the conspiracy‘s mechanics, and to eradicate any doubt that his partic6
ipation was somehow unintentional. See United States v. Gonzalez-Sanchez, 825 F.2d 572, 581 (1st Cir.1987) (holding that “evidence of [defendant‘s] involvement with the same people in past arson and fraud schemes is especially probative of [] whether he was an innocent ‘tool’ of others or a knowing participant in the conspiracy“). The uncharged transactions also took place within the same general timeframe as the charged ones, further supporting the notion that they were part and parcel of the same scheme. Any minimal variation in certain aspects of the transactions’ execution does not render the uncharged conduct irrelevant. See Wyatt, 561 F.3d at 53 (holding that even though evidence of other transaction was not identical to allegedly criminal transaction at issue, the transactions “bore enough indicia of similarity” to support admissibility); United States v. Landrau-López, 444 F.3d 19, 24 (1st Cir.2006) (“The other bad act need not be identical to the crime charged so long as it is sufficiently similar to allow a juror to draw a reasonable inference probative of knowledge or intent.“). Consequently, the district court did not err in deciding that this evidence was relevant conduct for the purposes for
The evidence survives
We acknowledge that the similarity of the uncharged conduct at issue simultaneously establishes its relevance and heightens the possibility that the jury will draw an unfair inference of propensity. See United States v. Varoudakis, 233 F.3d 113, 123 (1st Cir.2000). But given the facts of this case and the notable similarity between the uncharged conduct and the basis of Ralph‘s indictment, we are assured that the district court properly evaluated the “risk of an improper criminal propensity inference ... in light of the totality of the circumstances.” Id. at 122.
For these reasons, we affirm the district court‘s ruling as to the uncharged conduct.
D. Summary Evidence
Ralph‘s remaining arguments are largely foreclosed by our opinion in Daniel Appolon. He contends that the district court erred in admitting the testimony of a witness, Thomas Zappala, who summarized voluminous documentary evidence, as well as certain charts used during Zappala‘s testimony.7 Ralph objects that Zappala‘s summary testimony addressed evidence not admitted at trial, but
E. The Sentence
Ralph‘s sentencing arguments rehearse those his coconspirators raised in the companion case. Like his fellows, Ralph contends that the district court should have used the gain to him, rather than loss to the victims, as the appropriate measure of loss at sentencing. We declined to accept this contention in Daniel Appolon and find it similarly unpersuasive here. 695 F.3d at 66-70 (discussing why “[t]here is no need to resort to gain” in calculating loss amount at sentencing). His sentence must therefore remain undisturbed.
III.
We detect no error in the district court‘s rulings. Accordingly, Appolon‘s convictions and sentence are affirmed.
So ordered.