United States v. McNeil , 45 F. App'x 225 ( 2002 )


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  •                          UNPUBLISHED
    UNITED STATES COURT OF APPEALS
    FOR THE FOURTH CIRCUIT
    UNITED STATES OF AMERICA,              
    Plaintiff-Appellee,
    v.                             No. 01-4329
    MARCIA KIRVEN MCNEIL,
    Defendant-Appellant.
    
    Appeal from the United States District Court
    for the District of Maryland, at Baltimore.
    Frederic N. Smalkin, Chief District Judge.
    (CR-00-220-S)
    Argued: June 6, 2002
    Decided: August 26, 2002
    Before WIDENER and WILKINS, Circuit Judges, and
    Frederick P. STAMP, Jr., United States District Judge for the
    Northern District of West Virginia, sitting by designation.
    Affirmed by unpublished per curiam opinion.
    COUNSEL
    ARGUED: Thomas McCarthy, Sr., Annapolis, Maryland, for Appel-
    lant. Virginia B. Evans, OFFICE OF THE UNITED STATES
    ATTORNEY, Baltimore, Maryland, for Appellee. ON BRIEF:
    Thomas M. DiBiagio, United States Attorney, Robert R. Harding,
    Assistant United States Attorney, Baltimore, Maryland, for Appellee.
    2                        UNITED STATES v. MCNEIL
    Unpublished opinions are not binding precedent in this circuit. See
    Local Rule 36(c).
    OPINION
    PER CURIAM:
    Marcia Kirven McNeil was charged with mail and wire fraud in
    seven counts of an 18 count indictment stemming from a fraudulent
    real estate flipping scheme in Baltimore. A jury convicted her of five
    counts. She appeals her convictions alleging, inter alia, that the evi-
    dence of the existence of a scheme to defraud was insufficient to con-
    vict her. We affirm.
    Mrs. McNeil’s sole assignment of error is that "[t]he denial by the
    trial court of Appellant’s Motion for Judgment of Acquittal at the
    conclusion of the Government’s Case, is error." (Br. p.i; see also Br.
    p.1.) This assignment of error is approached in various ways with
    more or less precision throughout the brief. In such a case, however,
    we review the whole record. United States v. Heller, 
    527 F.2d 1173
    (4th Cir. 1975); United States v. Stradley, 
    295 F.2d 33
    , 35 (4th Cir.
    1961).
    Marcia McNeil, Carl Schulz, Thomas Mayer, and Angus Finney,
    among others, instigated a scheme to flip properties in economically
    depressed areas of Baltimore.1 The essence of the scheme was to buy
    large numbers of very inexpensive properties and resell them at
    greatly inflated prices, sometimes using the mortgage secured for the
    second purchase to finance the initial purchase. The fraud occurred
    through various efforts of Mrs. McNeil and her partners to convince
    mortgage companies and third-party purchaser/borrowers into buying
    1
    A general description of what is called a criminal flipping scheme
    includes a buyer acquiring title or right to title to a property and then sell-
    ing it to a second buyer at an increased price without disclosing on
    record the first buyer’s true interest in the property. The illegality in the
    transaction comes from false representations as to value, or use, or ten-
    ancy, or condition, or like things which affect value or credit worthiness.
    UNITED STATES v. MCNEIL                         3
    the properties. Mrs. McNeil and her cohorts would serve as mortgage
    brokers aiding interested third-parties in securing financing for the
    properties. Often, the third-party purchaser/borrowers would not have
    sufficient income, cash, or credit history to secure mortgages for the
    properties they wished to purchase. Mrs. McNeil would create loan
    documents containing misrepresentations of the applicant’s income,
    down payment, and the presence of seller second mortgages inducing
    lenders into furnishing the necessary funds for the second purchase of
    the properties. Third-party purchaser/borrowers were induced into the
    transactions through misrepresentations of the condition of the prop-
    erties, potential for generation of rental income, and presence of rent
    paying tenants. For some transactions, McNeil used her company,
    Atlantic Investment Group, to contract for the purchase of groups of
    properties and then prepared and submitted loan applications on
    behalf of herself, which resulted in the issuance of mortgage loans
    covering both AIG’s purchase and her own. However, since Mrs.
    McNeil’s purchases were not recorded until after settlement, the lend-
    ers did not know they were financing two separate purchases of the
    properties and further that the original purchase price was a fraction
    of the second price.
    Mrs. McNeil was convicted by jury on five counts of seven in
    which she was charged in the eighteen-count indictment. Because the
    district court granted the motion of judgment of acquittal of the
    appraisers, she contends that there was no scheme to defraud as
    required by the mail and wire fraud statutes, thus her convictions must
    be overturned. She maintains that even if a scheme to defraud was
    present, the government did not prove that there was a victim of the
    scheme. Finally, she argues that there is insufficient evidence to sup-
    port her convictions as to the knowledge elements of wire fraud.
    Mrs. McNeil’s first contention is that the acquittal of the appraisers
    removed the object of the scheme to defraud, that of generating profit
    for the participants through the use of fraudulent appraisals. She
    argues that she could not be guilty of mail or wire fraud because the
    dismissal of the charges against the appraisers removed the pall of
    illegality from the appraisals she used in the loan documents. We
    think this contention is not well taken.
    Mrs. McNeil’s argument here is based on Paragraphs 15 and 28 of
    the indictment, which read as follows:
    4                           UNITED STATES v. MCNEIL
    15. It was further part of the scheme and artifice to
    defraud that, in order to make a profit, SCHULZ AND
    McNEIL had to obtain mortgage funds in excess of their
    own costs in acquiring and selling the properties. They also
    had to adjust their contract sales prices because the mort-
    gage lenders would typically finance only a percentage (60
    to 90%) of the contract sales price. In order to justify profit-
    able contract sale prices to the mortgage lenders, SCHULZ
    AND McNEIL arranged for appraisals that were close to the
    contract sales prices. The appraisals were often prepared by
    defendant GUY SHANEYBROOK through Allied
    Appraisal Associates, Inc., and NARADE PRAMUAN
    through DP Appraisal, Inc. The appraisals of SHANEY-
    BROOK and PRAMUAN contained a variety of false, mis-
    leading and fraudulent statements and representations. . . .
    SHANEYBROOK and PRAMUAN prepared these false
    and fraudulent appraisals knowing that they would be sup-
    plied to: a) purchaser/borrowers, b) lenders to convince
    them to provide mortgage financing so the sales to the pur-
    chaser/borrowers would be consummated, and c) to the loan
    purchasers to convince them to purchase the mortgage
    loans.
    28. It was also part of the scheme and artifice to defraud
    that at settlement, the settlement agent would distribute the
    mortgage funds so that SCHULZ, McNEIL, SHANEY-
    BROOK, and PRAMUAN . . . would receive fees, pay-
    ments, and proceeds for their respective roles in the property
    transaction.
    The elements of mail fraud are 1) the existence of a scheme to
    defraud, 2) the use of the mails for the purpose of executing the
    scheme, and 3) materiality of any misrepresentations.2 See 18 U.S.C.
    2
    The relevant portion of the mail fraud statute provides as follows:
    Whoever, having devised or intending to devise any scheme or
    artifice to defraud, or for obtaining money or property by means
    of false or fraudulent pretenses, representations, or promises, . . .
    for the purpose of executing such scheme or artifice or attempt-
    UNITED STATES v. MCNEIL                            5
    § 1341; Neder v. United States, 
    527 U.S. 1
    , 23-25 (1999); United
    States v. Goodwin, 
    272 F.3d 659
    , 666 (4th Cir. 2001). The elements
    for wire fraud differ only in the method of executing the scheme
    through a wire communication rather than the mails.3 
    18 U.S.C. § 1343
    . In order to establish the scheme to defraud, the government
    must prove that Mrs. McNeil acted with the specific intent to defraud.
    Goodwin, 
    272 F.3d at 666
    .
    In granting Shaneybrook and Pramuan’s motions for judgments of
    acquittal, the district court accepted Schulz’s testimony that he did not
    push the appraisers to attach a specific dollar figure to the subject
    property. Rather, the court found as follows:
    "[t]hey said, here’s what we would like to get. . . . And the
    appraisers went and looked. . . . Now if they’re at the outer
    fringe of [their professional judgment], maybe that’s some-
    thing they should be . . . called to account for in terms of
    their licensure . . . but it doesn’t make them a participant
    with the requisite degree of criminal knowledge in the
    scheme that’s charged in the indictment."
    The district court’s decision was based on the fact that the appraisers
    ing so to do, places in any post office or authorized depository
    for mail matter, any matter or thing whatever to be sent or deliv-
    ered by the Postal Service, . . . shall be fined . . . or imprisoned
    . . . , or both.
    
    18 U.S.C. § 1341
    .
    3
    The wire fraud statute provides, in relevant part
    Whoever, having devised or intending to devise any scheme or
    artifice to defraud, or for obtaining money or property by means
    of false or fraudulent pretenses, representations, or promises,
    transmits or causes to be transmitted by means of wire, radio, or
    television communication in interstate or foreign commerce, any
    writings, signs, signals, pictures, or sounds for the purpose of
    executing such scheme or artifice, shall be fined under this title
    or imprisoned not more than five years, or both.
    
    18 U.S.C. § 1343
    .
    6                      UNITED STATES v. MCNEIL
    did not have specific knowledge of Schulz and Mrs. McNeil’s plan
    to use the appraisals to commit fraud in the sale of the subject proper-
    ties, thus they did not have the specific intent required for conviction.
    The ruling was not based on some notion that the appraisals were cor-
    rect, much less that a scheme to defraud did not exist. This exposes
    the central flaw in Mrs. McNeil’s argument: the existence of a scheme
    to defraud in this case does not require that the actual production of
    the appraisals was in some way criminal. Cf. United States v. Klein,
    
    515 F.2d 751
    , 754 (3rd Cir. 1975) (reversing conviction where public
    fire insurance adjuster had knowledge of arson, but government
    presented no evidence as to his knowledge that proof of loss forms
    would be used to defraud insurance companies). The government
    must prove a scheme to defraud, but is not required to prove every
    act charged in the indictment in the scheme to defraud, providing that
    one or more of them be proven. United States v. Briscoe, 
    65 F.3d 576
    ,
    585 (7th Cir. 1995). A false, misleading, or, fraudulent appraisal is
    but one tool that Mrs. McNeil could have used to induce innocent
    purchasers or lenders into the transactions, and in fact, many more
    misrepresentations unconnected to the appraisals were alleged in the
    indictment and proven, as we have set out above. Therefore, we are
    of opinion that the acquittal of the appraisers does not entitle Mrs.
    McNeil to reversal of her convictions because the scheme to defraud
    and her role in it did not necessarily depend on whether or not of the
    appraisers knew of her illegal plan.
    Mrs. McNeil next challenges the sufficiency of the evidence sup-
    porting her convictions. The first aspect of her sufficiency challenge
    relates to the government’s proof regarding intended victims of the
    wire fraud, while the second relates to the government’s proof regard-
    ing intent to further the scheme to defraud through the use of the
    wires. A jury verdict must be sustained if there is substantial evidence
    supporting it. Glasser v. United States, 
    315 U.S. 60
    , 80 (1942). Upon
    a review for sufficiency of the evidence "if the record reflects that the
    Government presented substantial evidence from which a reasonable
    jury could convict, we must uphold the verdict." United States v.
    Godwin, 
    272 F.3d 654
    , 666 (4th Cir. 2001). We will discuss each of
    McNeil’s contentions in turn and find both to be without merit.
    The argument goes that her conviction on Counts 8, 9, 12, 14 and
    16 "cannot be sustained because the Government has failed to identify
    UNITED STATES v. MCNEIL                        7
    an intended victim of the alleged fraud." While it may be true that the
    government called only one of the lenders connected with Counts 8
    and 9, to say that his company had been defrauded, it was not neces-
    sary to prove success of the schemes in each case to sustain a convic-
    tion. This is not even to suggest that the facts surrounding the charge
    in each of those counts were above board, far from it as the record
    reveals. The crux of mail or wire fraud is the execution of a scheme
    to defraud, and the scheme need not be successful in order to consti-
    tute a crime, see United States v Bryan, 
    58 F.3d 933
    , 943 (4th Cir.
    1995) (citations omitted), and the government’s proof regarding Mrs.
    McNeil’s involvement in a scheme to defraud was ample. Indeed, her
    partners, Schulz and Finney, testified against her at her trial on the
    specifics of the fraudulent scheme. They detailed McNeil’s prepara-
    tion of loan documents containing numerous misrepresentations con-
    cerning the purchaser’s income, credit history, and existence of seller
    second mortgages. In addition to her partner’s testimony, lenders with
    respect to Counts 14 and 16 testified that they relied on her misrepre-
    sentations in making lending decisions, either as the original lender
    or as a purchaser on the secondary market. Three third-party purchas-
    ers testified to misrepresentations Mrs. McNeil made, including those
    regarding purchaser’s income, rental income, and condition of the
    subject properties.
    For example, among the many misrepresentations to which Mrs.
    McNeil was a party, there is evidence which tends to show the fol-
    lowing: Count 8, 924 North Chester Street, Baltimore, Maryland: a
    deposit was reported on a contract signed by Mrs. McNeil, but the
    deposit did not exist; Count 9, 1340 Division Street, Baltimore, Mary-
    land: A false lease between Mrs. McNeil and one Dubin was reported
    to show income to Mrs. McNeil; Count 12, 2357 Annapolis Road,
    Baltimore, Maryland (March 27, 1998): Mrs. McNeil represented she
    was Vice President of a company called Financial Solutions when, in
    fact, she was not. Count 14, 2239 Sidney Avenue, Baltimore, Mary-
    land: A false statement of the purchaser’s income was submitted on
    a paper, apparently a W-2 form, at Mrs. McNeil’s request; Count 16,
    2357 Annapolis Road, Baltimore, Maryland (December 2, 1998): The
    contract of sale reported a $2,500 down payment which was not
    made.
    So the evidence against Mrs. McNeil in this respect was abundant.
    8                     UNITED STATES v. MCNEIL
    Mrs. McNeil challenges the government’s proof with respect to the
    use of wire communication. She argues that the government has not
    proven that she knew of the specific wire transfers that occurred, and
    that none of the wire transfers were on her behalf or knowingly
    caused by her, rather they were on behalf of or caused by lenders and
    banks involved in the transactions. Her argument fails because the
    government need only prove that the use of a wire communication or
    the mails was reasonably foreseeable. See United States v. Edwards,
    
    188 F.3d 230
    , 233-4 (4th Cir. 1999). Here, the jury was correctly
    instructed in accordance with the law as follows:
    "It is not necessary for the defendant to be directly or per-
    sonally involved in the delivery by interstate carrier or wire
    communication, as long as such delivery or communication
    was reasonably foreseeable in the execution of the alleged
    scheme to defraud in which the defendant is accused of par-
    ticipating. . . .
    This does not mean that the defendant must have specifi-
    cally authorized others to make the delivery or transmission.
    When one does an act with knowledge that the use of the
    wires can reasonably be foreseen, even though not actually
    intended, then he causes the mails or wires to be used."
    There was sufficient evidence for a reasonable jury to conclude in
    accordance with the above quoted instructions that someone in Mrs.
    McNeil’s business of real estate purchase and sale could reasonably
    foresee that banks involved in a given transaction would transfer
    monies using the wires. There was evidence that wire transfers were
    a normal method for lenders to transfer money at the time of settle-
    ment. Mrs. McNeil was in the real estate business herself long before
    the facts underpinning the fraud involved here took place, which sup-
    ports the conclusion that a reasonable jury could find that the use of
    wire communication was reasonably foreseeable.
    Accordingly, Mrs. McNeil’s convictions for mail and wire fraud
    are
    UNITED STATES v. MCNEIL                          9
    AFFIRMED.4
    4
    On the mail fraud conviction, Count 16, McNeil states that the mort-
    gage company sent the check for the purchase of the subject property via
    common carrier, and "the check does not appear to have crossed state
    lines." Appellant’s Br. at 20. Assuming that this is a claim of error, we
    need only note that the mail fraud statute makes all mailings in further-
    ance of a scheme to defraud criminal, whether or not they cross state
    lines. See United States v. Photogrammetric Services, Inc., 
    259 F.3d 229
    ,
    247 (4th Cir. 2001). In any event, the jury was correctly charged on mail
    fraud, in the same vein as it was charged on wire fraud as set out in this
    opinion, to which there was no objection. The evidence fully supports a
    verdict of guilty.