United States v. Carnagie

533 F.3d 1231, 2008 U.S. App. LEXIS 18218, 2008 WL 2807466
CourtCourt of Appeals for the Tenth Circuit
DecidedJuly 22, 2008
Docket07-1148
StatusPublished
Cited by50 cases

This text of 533 F.3d 1231 (United States v. Carnagie) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Carnagie, 533 F.3d 1231, 2008 U.S. App. LEXIS 18218, 2008 WL 2807466 (10th Cir. 2008).

Opinions

[1234]*1234TACHA, Circuit Judge.

Following a jury trial, Defendants-Ap-pellees Linda Carnagie and Stafford Hi-laire were found guilty of conspiracy to defraud the United States, see 18 U.S.C. § 371, and conspiracy to commit money laundering, see 18 U.S.C. § 1956(a)(l)(A)(i), (h). The district court granted the defendants’ motion for judgment of acquittal, holding that the evidence adduced at trial failed to prove the conspiracies as charged and, instead, proved a number of smaller, separate conspiracies. The government appeals. We exercise jurisdiction under 28 U.S.C. § 1291 and REVERSE and REMAND.

I. BACKGROUND

A. Factual History

In reciting the facts of this case, we view the evidence in the light most favorable to the jury’s verdict. See United States v. Ortiz, 427 F.3d 1278, 1281 (10th Cir.2005). In 1997, Roderick Wesson and Warren Williams registered a sham company, W & W Enterprises, with the State of Colorado in order to use the company’s name to generate false financial documents-mainly, W-2s and pay stubs. For a fee, Mr. Wesson and Mr. Williams would provide that false documentation, along with fake social security numbers, to persons with bad or no credit to help them purchase a home.1 The goal was to help unqualified borrowers obtain home loans insured by the Federal Housing Administration (“FHA”) by using the false financial information and documents.

By way of background, the FHA is a branch of the Department of Housing and Urban Development (“HUD”) that insures certain loans for single-family homes. If a loan applicant qualifies for FHA insurance, HUD insures the lender against any loss it may incur in the event of foreclosure. FHA-insured loans also require a lower down payment and a less stringent debt-to-income ratio than non-FHA-insured loans. HUD must approve a lender before it can offer FHA-insured loans. When processing a particular loan to determine whether the FHA will insure it, an approved lender requests an FHA case number by entering the lender’s institutional ID and password on an FHA website. The lender also enters various information pertaining to the home buyer’s credit history and ability to make payment. The loan officer is responsible for collecting supporting documentation from the borrower and verifying the accuracy of this information through third parties.

Mr. Williams and Mr. Wesson found it more efficient and profitable, because they could charge kickbacks, to work with cooperating real estate agents and loan officers when completing these fraudulent loan applications. The details of their scheme can be summarized as follows. Document makers (typically Mr. Williams or Mr. Wesson) or real estate agents would find clients and provide them with false income documents and social security numbers. The loan officer would help the client obtain an FHA-insured loan based on this false information, and the real estate agent and loan officer would each give twenty percent of their earnings on the sale of the property and the loan closing to the document maker. Mr. Williams and Mr. Wesson completed fraudulent loan transactions together from 1997 until 2000. In 2000, Mr. Wesson and Mr. Williams parted ways and began competing for prospective home buyers. Mr. Wesson and Mr. Williams often worked on different transactions with different loan officers and real estate [1235]*1235agents, many of whom did not know the identity of the other real estate agents and loan officers involved in their scheme.

1. Transactions Involving Ms. Cama-gie

In October 1999, Ms. Carnagie paid Mr. Wesson $500 for a false social security number and false income and employment documents so she could obtain an FHA-insured loan to purchase her own home. For this transaction, Nina Cameron was the loan officer and Toni Myles was the real estate agent.

After using the false documents to obtain her own home loan, Ms. Carnagie, employed as a loan officer at Highlands Mortgage, began to work with Mr. Wesson and others to fraudulently obtain FHA loans for home buyers. For the fraudulent transactions in which Ms. Carnagie was involved, Mr. Wesson was typically the document maker and either Ms. Myles or Odie Webster was the real estate agent. Ms. Carnagie would advise Mr. Wesson of the amount of false income that should be reported to reach the requisite debt-to-income ratio. In addition, because she was using fake social security numbers that often had no credit history, Ms. Carnagie would occasionally have to create false credit letters to obtain an FHA loan. Once the false financial documents were created and the buyer selected a home, Ms. Carnagie would provide the information to someone at Highlands Mortgage who would enter it into the FHA system. After the FHA approved the loan and Ms. Carnagie closed on the home, she would pay Mr. Wesson twenty percent of the commission she received from the sale.

Between February and September 2000, Ms. Carnagie helped procure approximately sixteen loans that were insured by the FHA based on fraudulent information. Later the same year, Highland Mortgage discovered the fraudulent nature of many of her loan transactions and took steps that prevented her from submitting any further loan applications through Highland Mortgage. Ms. Carnagie did not complete any of these transactions with Mr. Hilaire (her codefendant), or even know him prior to these proceedings, and nothing in the record indicates she knew or had any dealings with Mr. Williams.2

2. Transactions Involving Trenson Byrd

For his part, Mr. Williams had been working with (among others) Linda Edwards, a real estate agent with Affable Realty. After completing several fraudulent transactions with her, Mr. Williams expressed his interest in obtaining a position as a loan officer and thus expanding his role beyond that of a document maker. She set up an appointment for him with Trenson Byrd, the owner of Mid America Mortgage and the third charged coconspir-ator that proceeded to trial with the defendants. Around September 1999, Mr. Byrd, at Ms. Edwards’s recommendation, hired Mr. Williams as a loan officer at Mid America Mortgage. While at Mid America, Mr. Williams created false income documents and social security numbers for buyers and worked with Ms. Edwards to submit them to HUD.

In November 1999, Mr. Byrd noticed an abnormally high number of loan applicants with supporting documentation that listed the same employer, an entity called Neigh-borstat, which was one of Mr. Williams’s and Mr. Wesson’s fictitious companies. [1236]*1236Mr. Byrd reported his finding to HUD and instructed his staff that Mid America would no longer process loans for Neigh-borstat employees. Mr. Williams subsequently left Mid America after just a couple months and worked at several other mortgage companies before acquiring a position at Catalina Century Mortgage. Mr. Byrd claimed he did not work with or know Mr. Hilaire or Ms. Carnagie prior to being charged in this case and had never heard of Mr. Wesson.

3.

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Cite This Page — Counsel Stack

Bluebook (online)
533 F.3d 1231, 2008 U.S. App. LEXIS 18218, 2008 WL 2807466, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-carnagie-ca10-2008.