United States v. Jason Moreno

809 F.3d 766, 2016 U.S. App. LEXIS 31, 2016 WL 53796
CourtCourt of Appeals for the Third Circuit
DecidedJanuary 5, 2016
Docket14-1568
StatusPublished
Cited by32 cases

This text of 809 F.3d 766 (United States v. Jason Moreno) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third 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. Jason Moreno, 809 F.3d 766, 2016 U.S. App. LEXIS 31, 2016 WL 53796 (3d Cir. 2016).

Opinion

OPINION OF THE COURT

FISHER, Circuit Judge.

Jason Moreno was involved in a mortgage-fraud scheme as an appraiser who supplied inflated appraisals to other members of the scheme in exchange for money. He was also more directly involved — as broker, buyer, or seller, for instance — in other fraudulent transactions. At trial, Moreno was found guilty of five counts of wire fraud and two counts of conspiracy to commit wire fraud. After receiving his sentence of 96 months’ imprisonment, Moreno appealed.

Three issues are presented in this appeal. First, at trial, a cooperating witness *769 read statements of- -a non-testifying U.S. Secret Service Special Agent into the record, which Moreno claims violated both the Confrontation Clause and the rule against hearsay.' Second, at sentencing, the District Court concluded that there were more than 50 victims- in the case and thus applied a four-level' enhancement under the Sentencing Guidelines on that basis. Moreno contends that the record does not support such a finding and that the District Court’s application of the enhancement was plain error. Third, during Moreno’s sentencing allocution, the prosecutor, without leave of court, engaged in a vigorous cross-examination of Moreno. On appeal, Moreno says that the District Court plainly erred in permitting this cross-examination. We will affirm Moreno’s conviction and the District Court’s application of the sentencing enhancement, but we will vacate Moreno’s sentence and remand for resentencing based on the violation of Moreno’s right of allocution.

I.

A.

This case arose out of mortgage-fraud schemes that were perpetrated in "the Pittsburgh area from July 2005 to November 2007, and centers on the involvement of Jason Moreno, an appraiser. Moreno and his business partner, Joel Reck, started an appraisal company called Platinum Appraisal Services. Reck was a licensed appraiser, but Moreno was not. Early in Platinum Appraisal Services’s existence, Reck became ill and, for the most part, stopped working. To fill the void left by Reck, Moreno began performing the appraisal work himself, frequently signing Reek’s name electronically to appraisals without Reek’s knowledge. Many of these appraisals violated professional norms and assigned inflated values to properties. Moreno provided these appraisals to two different companies engaged in mortgage-fraud schemes: Pittsburgh Home Loans, which was owned by a mortgage broker named Robert Arakelian; and Easy Realty Solutions, which was owned and operated by James Platts.

The Pittsburgh Home Loans scheme worked by helping home-buyers with bad credit and limited assets' get lender financing. To accomplish this in a given transaction, Arakelian of Pittsburgh Home Loans would provide a false settlement statement at closing, which would contain an inflated sales price. Based on the inflated sales price, a bank would lend more than the actual sales price of a property, and the extra money would cover the cost a down payment, closing costs, and a payment to Arakelian. As a result, banks often gave loans in amounts that were 120-300% of the actual purchase price. Because a lender would receive paperwork representing the inflated purchase price, the lender would believe the loan met its underwriting guidelines (typically an 80-95% loan-to-value ratio). At closing, however, loan proceeds would be distributed according to the true nature of the transaction: the seller would receive less than the reported purchase price, Arakelian would receive an undisclosed payment, and loan funds would be used to make the down-payment and cover closing costs. A number of people were essential to the successful operation of the scheme, 1 including Moreno, whose *770 appraisals matched the fraudulent sales prices provided by Arakelian.

The Easy Realty Solutions scheme was similar. Platts of Easy Realty Solutions located distressed houses and buyers to whom they could be sold, and then acted as a secret intermediary to the transactions. Platts would purchase a house and then resell it to a buyer at a higher price using a mortgage transaction. Buyers paid nothing out of pocket. Easy Realty Solutions’s involvement as an intermediary was concealed from lenders so that, in a given transaction, it appeared that the original seller sold the house directly to the eventual buyer. Platts would pocket the difference between the sales prices. Platts made numerous misrepresentations to lenders: he concealed his role as conduit; he misrepresented buyers’ assets; he falsified settlement statements to show that buyers were making down payments that Platts had actually made and that buyers had received permissible seller financing that was actually a sham. 2 For this scheme, Moreno provided inflated appraisals to support the higher values needed.

At trial, the government offered documentary evidence of 110 mortgage transactions — which were financed by 24 different lenders — that were affected by one scheme or the other. Testimonial evidence was provided for some of those transactions; the government called 15 buyers as witnesses, each of whom testified that the house he or she purchased was in poor condition and had been purchased with no down payment. Most buyers who testified stated that they went into foreclosure shortly after closing.

Moreno gave inflated values for houses he appraised. Pittsburgh Home Loans used Moreno specifically because he was willing to provide the necessary inflated appraisals, and, in exchange, Pittsburgh Home Loans would pay Moreno an extra fee ranging from $300 to $800. Moreno did not offer objective opinions of value but instead started with the predetermined value requested by Pittsburgh Home Loans and worked backwards, manipulating the selection of comparable houses and misrepresenting condition reports for properties. The government introduced testimony from buyers and sellers who said that the houses in these transactions were in far worse condition than reported; the government also introduced an expert-witness appraiser who evaluated twelve Platinum Appraisal Services appraisals and concluded that each substantially overstated the actual value of the house. In some instances, Moreno received extra payments from buyers for whom he was providing inflated appraisals. For example, Earl Rodgers, a buyer who worked with Arakelian, paid Moreno an extra $500 because the comparable houses would not substantiate the necessary value. Once paid, Moreno drew up an appraisal with the requested value.

Moreno provided similarly inflated appraisals for Easy Realty Solutions. For example, in one transaction, Easy Realty Solutions purchased a property for $95,000 and sold it almost immediately to a buyer with bad credit and no money for $130,000. Platinum Appraisal Services valued the property at $145,000, citing numerous improvements that had never actually been done. Easy Realty Solutions took approximately $26,000 of the loan proceeds.

*771 Moreno’s involvement in the Pittsburgh Home Loans and Easy Realty Solutions schemes was not limited to providing inflated appraisals. The government introduced evidence that in seven instances Moreno co-brokered deals or arranged to purchase properties. By so doing, he received significant payments from the loan proceeds.

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Cite This Page — Counsel Stack

Bluebook (online)
809 F.3d 766, 2016 U.S. App. LEXIS 31, 2016 WL 53796, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-jason-moreno-ca3-2016.