Criminal – Sentencing – Mortgage fraud

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Where a defendant was sentenced to a term reflecting a guidelines range based on a loss determination by the district court that included calculations deriving from dismissed counts, the sentencing decision must be upheld because of the defendant’s failure to raise the claims of error prior to the appeal and to show that the error, if any, affected his substantial rights sufficient to satisfy plain error review.

Background

“… [I]n a series of loan applications, [defendant Alejandro Mayendia-Blanco] claimed to have received down payments on the sale of three properties, when those down payments had actually been reimbursed to purchasing family members…. [He was indicted] for making and conspiring to make false statements on a mortgage loan application.

“… [Count One alleged he] sold real property to … his mother…. Part of the mortgage application process involved the completion of a … [f]orm which itemizes all closing costs imposed on both parties in the real estate transaction and which gets submitted to the bank along with the mortgage loan application. On that form Mayendía and his mother listed that she had given him $314,267.27 as a down payment. However, after the application was made, and without telling the bank, Mayendía gave the down payment money back to his [mother].

“… [In Counts Two and Three, Mayenda alleged he] sold real property to … his father. Mayendía and his father stated on the HUD Settlement Statement Forms that Mayendía had received a down payment on the first sale of $46,481.60 and on the other, $48,381.10. However post application loan submissions, Mayendía returned the money to his [father].

“In 2016 Mayendía pled guilty to Count Two of the indictment and, as part of a plea agreement, Counts One and Three were dismissed. … After Counts One and Three were dismissed, the parties agreed that Mayendía’s total offense level under the Guidelines should be thirteen, considering only the loan Mayendía’s father received from Count Two as the “loss” amount.

“Probation and Pretrial Services filed a pre-sentence report (“PSR”), followed by two amended PSRs, each of which, in contrast to the parties’ calculations, recommended a total offense level of sixteen based on a loss of $409,129.97 because ‘[a]ccording to the Indictment the total amount of loss as to Counts One, Two and Three’ equaled that amount. The PSR’s recommendations result in a guidelines range of 21-27 months to serve, in contrast to the recommendation from Mayendía’s plea agreement which was 12-18 months incarceration.

“Mayendía made three claims of error to probation’s loss recommendation. First, he argued that the PSR should not have recommended a loss figure higher than what Mayendía bargained for with the government in his plea agreement, which was a loss of no more than $140,000. Second, Mayendía objected to the PSR’s use of the down payments from the two dismissed counts, because he argued they should not be bundled together with his offense of conviction, Count Two, as “relevant conduct.” See U.S.S.G. section 1B1.3. Third, Mayendía argued that the substantive amounts of money related to Counts One and Three should not be considered because Mayendía had not pleaded guilty to them, and therefore, the amounts were not supported by any factual findings or evidence.

“… [T]he district court sentenced Mayendía to twenty-one months in prison, the lower end of the guidelines range for a total offense level of 16. The district court … explained that the loss was $409,129.97, based on the actual loss incurred as a result of the down payments from all three counts in the indictment, as recommended by the PSR.

Appeal

“… [On appeal, Mayendia] In] advanced two specific arguments. First, he resurrected the relevant conduct argument, raised below at his sentencing hearing but omitted from his opening brief …;  and second he hammered again the subtraction-of-collateral argument, which he had discussed in his opening brief.

“Mayendía says the district court erred in considering Counts One and Three in its actual loss calculation because the conduct from these counts was not supported by a preponderance of the evidence. … We find that Mayendía waived his argument due to his failure to raise the preponderance of evidence argument in his opening brief.

“… [L]acking any notable exceptional circumstance and given Mayendía’s clear awareness that the issue of loss calculation from Counts One and Three was a significant issue both below at sentencing and on appeal, we deem Mayendía’s argument concerning consideration of Counts One and Three as relevant conduct to be waived.

“…[T]he Supreme Court has made clear the importance of the particularity of the showing a defendant must make under the substantial-rights prong of plain-error review…. In this case, where the relevant error affecting the guideline range was the failure to subtract the fair market value of the collateral as a part of the loss calculation, Mayendía must point to facts that, had the court considered them below or were the court to consider them on remand, would allow the court to reach a specific lower (and correct) guidelines range. Mayendía has not done that. … Mayendía must, and cannot, identify an applicable, correct, and lower actual loss calculation absent the clear or obvious error in his case.

Dissent

Kayatta, J. “Mayendía was correct in arguing below and on appeal that the evidence in this record provides no basis other than the stipulation for calculating any loss arising out of the three transactions considered by the district court. Hence, the district court’s unsupportable use of the down payments to generate a higher loss amount was error (plain or otherwise).

United States v. Mayendia-Blanco (Lawyers Weekly No. 01-204-18) (29 pages) (Thompson, J.) (Kayatta, J., dissenting) Appealed from the U.S. District Court of Puerto Rico. Ignacio Fernandez de Lahongrais for the defendant-appellant; Mainon Shwartz, with whom Rosa Emilia Rodriguez-Velez and Mariana E. Bauza-Almonte were on brief, for the United States (Docket  No. 17-1404) (Sept. 25, 2018).

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