United States v. Lacroix

Procedural entryThis page is a short order in United States v. Lacroix. Read the opinion of the Court — 28 F.3d 223
Court of Appeals for the First Circuit·Decided June 27, 1994·No. 93-1845·Published

Opinion

USCA1 Opinion


UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

_________________________

No. 93-1845

UNITED STATES OF AMERICA,

Appellee,

v.

EVANGELIST LACROIX,

Defendant, Appellant.

_________________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW HAMPSHIRE

[Hon. Joseph A. DiClerico, Jr., U.S. District Judge]
___________________

_________________________

Before

Selya, Circuit Judge,
_____________

Bownes, Senior Circuit Judge,
____________________

and Boudin, Circuit Judge.
_____________

_________________________

William E. Brennan, with whom Timothy I. Robinson and
____________________ _____________________
Brennan, Caron, Lenehan & Iacopino were on brief, for appellant.
__________________________________
John D. Chapman, Trial Attorney, Fraud Section, U.S. Dep't
________________
of Justice, with whom Paul Gagnon, United States Attorney, was on
___________
brief, for appellee.

_________________________

June 27, 1994

_________________________

SELYA, Circuit Judge. This sentencing appeal provides
SELYA, Circuit Judge.
_____________

an opportunity to clarify the operative standards for identifying

relevant conduct under U.S.S.G. 1B1.3(a)(1)(B) (Nov. 1993).1

We seize the opportunity and, in the end, affirm the sentence

imposed below.

I. BACKGROUND
I. BACKGROUND

For many years, defendant-appellant Evangelist Lacroix

earned his livelihood as a building subcontractor in southern New

Hampshire. He became acquainted with the brothers Zsofka,

Matthew and Lazlos, who, through entities known as ZLM Realty and

101 Realty (the Zsofka entities), planned to develop a sizable

single-family residential real estate complex know as "Sunview

II." In late 1985, appellant and Matthew Zsofka (Zsofka),

together with Zsofka's construction foreman, John Lee, formed a

corporation, Alpha Construction Company, to serve as the general

contractor for Sunview II. Appellant became Alpha's president,

though by all accounts Zsofka retained ultimate control.

Construction and sales proceeded apace until the summer

of 1987, when demand began to slacken. Alpha responded to

adversity by retaining a marketing agent, Horns of New Hampshire

(HNH), a firm headed by Richard Horn. Zsofka and Horn

____________________

1Because the case sub judice involves a sentence imposed
___ ______
under the June 15, 1988 edition of the sentencing guidelines, see
___
infra Part II, all references herein are to that edition unless
_____
otherwise noted. Nonetheless, the reasoning and method of
analysis that we propose for handling accomplice attribution in
the relevant conduct context are fully applicable to the current
version of the controlling guideline, U.S.S.G. 1B1.3(a)(1)(B)
(Nov. 1993).

2

masterminded an illegal scheme that enabled their companies to

market and sell roughly 90 homes over the following two years.

The conspirators' plan was seductively simple: they

secretly gave money, secured by a late-filed second mortgage, to

any would-be homeowner who lacked the wherewithal for the minimum

down payment required by the prospective purchase-money mortgage

lender (usually the Dime Savings Bank).

Appellant personally handled 31 closings at which he

falsely represented, both orally and in writing, that no

undisclosed financing arrangements existed. Appellant knew these

statements to be apocryphal when made. The other 60-odd closings

were handled in much the same fashion by one or the other of

appellant's coconspirators. The transactions were structured in

such a way that, on paper, Alpha conveyed the houses, but not the

land, to the buyers. The company received in excess of $37,000

at every closing. These proceeds enabled Alpha, among other

things, to assist the Zsofka entities in funding the clandestine

second mortgages.

After Zsofka and Horn hatched the plot, appellant

attended weekly staff meetings at which all the closings,

including those handled by others, were discussed and approved.

At no fewer than three of these meetings Zsofka preached to those

present, appellant among them, about the importance of keeping

all secondary financing hidden from the first mortgagees. Zsofka

also gave instructions on how best to accomplish this furtive

feat.

3

During the under-three-year period when the scheme was

velivolant, appellant drew a total of approximately $385,000 in

salary from Alpha. In sum, as a part-owner and salaried officer

of Alpha, appellant participated in, or was present at the

discussion of, every transaction, profited at least indirectly

from each sale, and stood to gain more money later (when and if

the buyers repaid the second mortgages).

Over time, many of the borrowers proved unable to pay

the first mortgages, resulting in widespread foreclosures at a

net cost to the Dime Savings Bank in excess of $2,800,000.

Losses of this magnitude are seldom unremarked. In 1992, a

federal grand jury returned a 102-count indictment against the

three Alpha principals and four persons associated with HNH. The

indictment charged appellant with conspiracy to defraud a

federally insured financial institution in violation of 18 U.S.C.

371, and with various substantive offenses, including 12 counts
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