UNITED STATES OF AMERICA, Plaintiff–Appellee, v. GILBERT BARRY ISGAR; VINCENT WALLACE ALDRIDGE; TORI ELYSE ALDRIDGE, Defendants–Appellants.
No. 11-20516
United States Court of Appeals, Fifth Circuit
January 13, 2014
Appeals from the United States District Court for the Southern District of Texas
PRISCILLA R. OWEN, Circuit Judge:
This case arises from a mortgage fraud scheme. At the conclusion of a jury trial, Vincent Wallace Aldridge and Tori Elyse Aldridge (the Aldridges), and Gilbert Barry Isgar (collectively, Defendants) were convicted of conspiracy to commit mail and wire fraud, in violation of
I
The Defendants’ convictions arose out of the sale of nine newly constructed town homes in the Memorial Park area of Houston, Texas. The properties at issue were in a development called “Maxie Village” and were built by Waterford Custom Homes. Isgar owned 50% of Waterford.
The closings were conducted by the First Southwestern Title Company (FSW), which was operated by the Aldridges and for whom Vincent Aldridge was also a fee attorney doing business as Aldridge & Associates. The Aldridges were both authorized signers on Aldridge & Associates’ Interest Only Lawyers Trust Account (IOLTA).
The Aldridges recruited three “straw purchasers” to buy eight of the townhomes. Vincent Aldridge purchased the ninth. The straw purchasers were individuals who wanted to invest in real estate and were told that they would receive $10,000 for each property they purchased; that they would not have to pay the mortgages because tenants would be found to lease the properties; and that after approximately one year, the residences would be resold and the straw purchasers might receive additional money at that time. These straw purchasers provided the Aldridges with their respective names, social security numbers, and income information. The Aldridges then used the accurate names and social security numbers, combined with falsified information about income, assets, and intent to use the property as a primary residence, to submit fraudulent loan applications to lenders. The false representations that each purchaser would be residing in the home purchased permitted the Aldridges to obtain 100% financing.
Isgar inflated the sale price of the properties through falsified construction invoices and amendments to the sales contracts. The lenders approved loans to purchase the properties at these inflated practices. When the lenders wired the loan amounts to FSW, disbursements were made to Isgar as payment for the
The United States mail, including interstate commercial carriers, and wire communications were used to execute this scheme. Loan documents traveled across state lines by facsimile, mail and email. Loan proceeds were wire transferred from the lenders’ banks to FSW.
Also involved in the scheme were Alvin Eiland, a mortgage broker, and his employee, Gary Robinson. Robinson assisted Vincent Aldridge in forming Superb Construction, which laundered proceeds from these transactions. Both Eiland and Robinson have pled guilty to conspiracy to commit wire fraud and money laundering and are not parties to this appeal.
A federal grand jury returned a 19-count indictment charging the Aldridges with conspiracy to commit mail and wire fraud, in violation of
The Defendants appeal their convictions on multiple grounds. Each asserts that the evidence is insufficient to support a conviction. The Aldridges challenge subject matter jurisdiction and venue. They further contend that they are entitled to a new trial because certain FSW documents should not have been admitted, there was prosecutorial misconduct, and that the cumulative errors
II
Each of the Defendants has challenged the sufficiency of the evidence.
“Our review of the sufficiency of the evidence is highly deferential to the verdict.”2 “The relevant question is whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.”3 “[A]ll reasonable inferences and credibility choices [are] made in support of a conviction.”4 “Our review is thus limited to whether the jury‘s verdict was reasonable, not whether we believe it to be correct.”5 “Finally, ‘it is not necessary that the evidence exclude every reasonable hypothesis of innocence or be wholly inconsistent with every conclusion except that of guilt,’ and any conflict in the evidence must be resolved in favor of the jury‘s verdict.”6
A
Tori Aldridge argues that there was insufficient evidence that a prior conspiracy between her and Eiland or her and Robinson existed and asserts that no reasonable jury could find that a conspiracy existed after March 26, 2005. She contends that in every transaction with Eiland or Robinson, she received only the closing fees disclosed on the HUD form. She points to evidence that she suggests exonerates her. A review of the record, however, reveals ample evidence from which the jury could have reasonably concluded that Tori Aldridge acted with the intent to further the fraudulent scheme.
At trial, Robinson testified that Tori Aldridge prepared the falsified paperwork concerning a straw purchaser‘s income and intent to use the property as a primary residence. He explained that he received and returned the paperwork to her. One of the straw purchasers, Shawn Stevens, testified that in the documents he signed in purchasing two of the Maxie Village town homes less than one month apart, Tori Aldridge attested that each would be used as his primary residence when in fact, neither would be or actually was used as a residence by him. Tori Aldridge notarized documents that stated Stevens had face-to-face meetings with her when that was false, and she attested that signatures and initials on loan documentation were those of Stevens, though Stevens testified that those signatures and initials were forgeries. One witness stated that Tori Aldridge had expressly directed her to draft a statement lying about her income. Tori Aldridge‘s signature was on this falsified paperwork. A witness from one of the lenders also verified that Tori Aldridge had signed the closing paperwork, attesting to the accuracy of the information provided therein. There was sufficient evidence from which a jury could conclude that Tori Aldridge was an active participant in the fraudulent scheme.
B
Isgar argues that the Government failed to present sufficient evidence that he was a knowing participant in the fraud. He cites United States v. Curtis7 for the proposition that the Government was required to present proof that the actual sale prices of the properties were inflated in the form of either an appraisal report or appraiser testimony and contends that in the absence of such proof, this court must reverse. Isgar also contends that his own damaging statement that the values of these properties were slightly inflated is insufficient to meet the Government‘s burden.
Isgar is mistaken that Curtis requires proof of an appraisal to support a conviction for conspiracy to commit mail and wire fraud.8 In fact, in Curtis, we emphasized that “circumstantial evidence may establish the existence of a conspiracy, as well as an individual‘s voluntary participation in it.”9 We also noted that a “defendant‘s knowing and voluntary participation in the conspiracy can even be established solely on the basis of the testimony of a coconspirator . . . so long as that testimony is not incredible as a matter of law.”10
Here, there was circumstantial evidence supporting Isgar‘s knowing participation in the fraud. Robinson testified that Isgar‘s role in the scheme required that Isgar “be okay with inflating the price.” FBI Agent Robert McCallum also testified that Isgar handled the day-to-day business affairs of
Isgar admitted to FBI agents that with regard to the town home Isgar sold to Vincent Aldridge, Isgar made a disbursement to Aldridge the day after the sale closed, and Isgar said that he knew that he should not have done so. Isgar also participated in disbursements to Superb Construction Company, the entity formed by Vincent Aldridge but opened under Robinson‘s name. No legitimate purpose for the disbursements to Superb Construction Company was evident.
Isgar was also a licensed real estate agent. Though he knew that the value of the units was inflated, he always received his full asking price and no negotiation with buyers was necessary. His company, Waterford, made approximately $30,000 to $60,000 in profit on each sale.
Isgar‘s contention that this statement was insufficient to demonstrate his knowing participation goes to the weight of the evidence, and “[t]he jury retains the sole authority to weigh any conflicting evidence.”11 The jury here could have reasonably concluded from Isgar‘s acknowledgment of the inflated prices as well as from the other circumstantial evidence that Isgar knowingly participated in the scheme.
C
Vincent Aldridge challenges the sufficiency of the evidence underlying his convictions for conspiracy to commit money laundering under
Vincent Aldridge relies on United States v. Santos.12 In Santos, a plurality of the Supreme Court held that the term “proceeds” under
In the present case, the Government presented evidence that Isgar inflated the sales prices of the properties through fraudulent construction invoices and amendments to the sales contracts such that the subsequent disbursement of the amounts in excess of the actual price constituted only profits. Second, the Government also demonstrated that the $10,000 payments to straw purchasers were given at least in part to encourage them to invest again, and that the disbursements to both the Aldridges‘s IOLTA and Superb Construction were unsupported by consideration but were instead direct payments of profits from the fraudulent scheme. Accordingly, just as in Kennedy, there was sufficient evidence from which a jury could have reasonably found that the transferred funds were profits, and thereby formed the basis for Vincent Aldridge‘s money laundering convictions.
III
A
Tori Aldridge contends that the district court lacked subject matter jurisdiction over the wire fraud counts. She argues that, because state law required the wire transmissions at issue in this case, the transmissions could not have been unlawful. She asserts, “federal jurisdiction is improper as a matter of law.” We disagree.
Our review of subject matter jurisdiction is de novo.19 “Subject matter jurisdiction . . . is straightforward in the criminal context.”20 Under
Tori Aldridge also contends that venue was improper in the Southern District of Texas for the wire fraud charges. However, she has waived any objection to venue. Although a defendant may challenge venue in a motion for judgment for acquittal pursuant to Federal Rule of Criminal Procedure 29,26 the Aldridges’ motion failed to raise any venue issue. Therefore, this issue was not properly preserved for appellate review.27
B
Each of the Aldridges asserts that the district court abused its discretion in admitting FSW documents concerning the real estate transactions at issue.28 The Aldridges maintain that these documents were not admissible under the business records exception, which permits “the admission of ‘records of regularly conducted activity‘” so long as certain conditions are met,29 because the witness offering the records had never been employed at FSW and could not testify as to its business practices.
The witness presenting the foundation for the admission of a record need
C
Tori Aldridge argues that the prosecutor engaged in misconduct that requires reversal but recognizes that because there was no contemporaneous
The documents at issue were used by the prosecution in connection with evidence of the purchase of town homes by Shawn Stevens, one of the straw purchasers. Tori Aldridge also contends that the prosecutor failed to correct Stevens‘s misstatement on direct examination as to the amount of money disbursed to Tori Aldridge in connection with Stevens‘s purchase of these properties, and contends that the prosecutor “doubled down on the uncorrected, false testimony.” When asked by the district court as to the accuracy of Stevens‘s statements about proceeds disbursements, the prosecutor said, “I think it is [accurate], Your Honor. I will double check on that for you.”
We hold there is no plain error. First, with regard to the documents at issue, there was considerable evidence regarding a conspiracy in which Tori Aldridge participated, including testimony from Stevens in which he confirmed that he was a purchaser of properties in Maxie Village and the facts surrounding his involvement. We are not persuaded that there is a reasonable probability
D
Tori Aldridge asserts that the district court erred by constructively amending her indictment. Because she failed to contemporaneously object to the alleged constructive amendment of her indictment, we review her objection for plain error.36 “The Fifth Amendment guarantees that a criminal defendant will be tried only on charges alleged in a grand jury indictment.”37 “A jury instruction constructively amends an indictment if it permits the jury to convict the defendant upon a factual basis that effectively modifies an essential element of the crime charged.”38
Specifically, Aldridge alleges that the district court impermissibly allowed
E
We reject Tori Aldridge‘s assertion that the district court abused its discretion by denying her motion for new trial and request for an evidentiary hearing.40 Because her motion was not based on newly discovered evidence, Aldridge had to file her motion within 14 days after the jury reached its verdict.41 However, she filed her motion on October 28, 2011—over nine months after the jury reached a verdict. Because Aldridge does not argue that her failure to act stemmed from excusable neglect,42 the district court did not abuse its discretion in finding that her motion was untimely.43
F
We do not consider the merits of Tori‘s ineffective assistance of counsel claim. “Sixth Amendment claims of ineffective assistance of counsel should not
G
Tori Aldridge argues that cumulative error denied her a fair trial. She cites to all the alleged errors discussed above to support this theory, as well as to her arguments concerning the sufficiency of the evidence. “The cumulative error doctrine provides for reversal when an aggregation of non-reversible errors, i.e., plain and harmless errors that do not individually warrant reversal, cumulatively deny a defendant‘s constitutional right to a fair trial.”48 This doctrine is only to be used in “rare instances,” and “[r]eversal is justified ‘only when errors so fatally infect the trial that they violated the trial‘s fundamental fairness.‘”49 As discussed above, none of Tori Aldridge‘s allegations amount to error. Accordingly, there is no justification for reversal under the cumulative
IV
Vincent Aldridge raises two issues regarding his sentence. He first asserts that 63 months of imprisonment, which was within the properly-calculated Guidelines range of 63 to 78 months, was unreasonable. Because Aldridge failed to object in the district court on this basis, we review for plain error.51 “A discretionary sentence imposed within a properly calculated guidelines range is presumptively reasonable.”52 “A defendant‘s disagreement with the propriety of the sentence imposed does not suffice to rebut the presumption of reasonableness that attaches to a within-guidelines sentence.”53 Because Aldridge‘s claim that the nature and circumstances of his offense warrant a lower sentence under
Aldridge argues that the district court abused its discretion in calculating the amount of restitution owed pursuant to the Mandatory Victims Restitution Act.55 A district court may generally “award restitution to victims of the offense, but the restitution award can encompass only those losses that resulted directly
* * *
For the foregoing reasons, we AFFIRM the Defendants’ convictions and Vincent Aldridge‘s sentence in all respects.
