United States v. Cean ( 2019 )

18-215-cr
United States v. Cean
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a summary order filed
on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate
Procedure 32.1 and this Court’s Local Rule 32.1.1. When citing a summary order in a
document filed with this Court, a party must cite either the Federal Appendix or an
electronic database (with the notation “summary order”). A party citing a summary order
must serve a copy of it on any party not represented by counsel.
At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 24th day of June, two thousand nineteen.
PRESENT: RALPH K. WINTER,
JOSÉ A. CABRANES,
REENA RAGGI,
Circuit Judges.
UNITED STATES OF AMERICA,
Appellee, 18-215-cr
v.
CASSANDRA CEAN,
Defendant-Appellant,
SHANE BROWNE, BIBI OMAR, A/K/A ZAMEENA
OMAR, KIM RAMLOCHAN A/K/A KIM CUPELES AKA
KIM YOHAY,
Defendants.
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FOR APPELLEE: Emily Berger, Maria Cruz Melendez, and
Margaret Gandy, Assistant United States
Attorneys, for Richard P. Donoghue,
United States Attorney, Eastern District
of New York, Brooklyn, NY.
FOR DEFENDANT-APPELLANT: Cassandra Cean, pro se, Danbury, CT.
Appeal from a judgment of the United States District Court for the Eastern District of New
York (Sterling Johnson, Jr., Judge).
UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the January 16, 2018 order of the District Court be and
hereby is AFFIRMED.
Defendant-Appellant Cassandra Cean (“Cean”), an attorney proceeding pro se, appeals from
the District Court’s January 16, 2018 order requiring that she and her co-defendants pay $243,148.51
in restitution to Impac Funding Corporation (“Impac Funding”) as master servicer for Impac
Secured Asset Series 2007-2 Trust (“Impac Trust”). In 2014, Cean was convicted of wire fraud, in
violation of 18 U.S.C. § 1343, and conspiracy to commit wire fraud, in violation of 18 U.S.C.
§§ 1343, 1349, in connection with her involvement in a mortgage fraud scheme. We affirmed Cean’s
conviction and sentence but remanded for entry of a revised restitution order. See United States v.
Browne, 621 F. App’x 44 (2d Cir. 2015). That revised order, entered pursuant to the Mandatory
Victims Restitution Act (“MVRA”), 18 U.S.C. § 3663A, after proceedings before Magistrate Judge
Ramon E. Reyes, Jr., is the subject of this appeal. We assume the parties’ familiarity with the
underlying facts, the procedural history of the case, and the issues on appeal.
We review MVRA restitution orders “deferentially, . . . revers[ing] only for abuse of
discretion.” United States v. Boccagna, 450 F.3d 107, 113 (2d Cir. 2006) (internal quotation marks
omitted). A district court abuses its discretion when “a challenged ruling rests on an error of law, a
clearly erroneous finding of fact, or otherwise cannot be located within the range of permissible
decisions.” Id. (internal quotation marks omitted).
Cean principally attacks the District Court’s conclusion that Impac Trust is a “victim” for
the purpose of the MVRA.1 As relevant here, the MVRA defines a “victim” as “a person directly and
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Cean also challenges the District Court’s decision to accord victim status to Santander National
Bank (“Santander”). Consistent with Magistrate Judge Reyes’s recommendation, the District Court
declined to order restitution in Santander’s favor because it suffered no loss. Ordinarily, this alone
would not be dispositive, since victims can “petition the court for an amended restitution order”
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proximately harmed as a result of the commission of an offense.” 18 U.S.C. § 3663(a)(2). This
definition requires a showing that the defendant’s criminal conduct was the direct—or “but for”—
and proximate cause of the claimed loss. See Robers v. United States, 572 U.S. 639, 645 (2014)
(interpreting word “proximate[ ]” in § 3663A(a)(2) as requiring that defendant’s conduct be
proximate cause of loss); United States v. Marino, 654 F.3d 310, 322–23 (2d Cir. 2011) (interpreting
word “direct[ ]” in § 3663A(a)(2) as requiring that defendant’s conduct be the “but for” cause or
“cause in fact” of loss). As to proximate cause, “[t]he basic question . . . is whether the harm alleged
has a sufficiently close connection to the conduct at issue”—i.e., whether it is “foreseeable.” Robers,
572 U.S. at 645 (internal quotation marks omitted). In addition, the MVRA requires the
Government to establish that the victim suffered an “actual loss,” which we have held it can do by
proffering “a reasonable approximation of losses supported by a sound methodology.” United States
v. Gushlak, 728 F.3d 184, 196 (2d Cir. 2013).
We have little difficulty in concluding that the Government satisfied these requirements with
respect to Impac Trust. First, Cean’s criminal conduct directly and proximately caused Impac Trust’s
injury. As to direct cause, but for Cean’s participation in the fraudulent scheme, the mortgage that
Impac Trust acquired to its detriment would not have existed. And although Impac Trust’s status as
a “successor lender” marginally complicates the proximate cause inquiry, its purchase of the
fraudulently obtained mortgage was foreseeable in light of the common industry practice of selling
loans on the secondary market. In other words, it was foreseeable both that the mortgage originator
would rely on the fraudulent mortgage application, and that a mortgage issued on the basis of such
applications could be sold to a “successor lender” unaware of the fraud.2
within 60 days of discovering “further losses.” 18 U.S.C. § 3664(d)(5). Here, however, Judge Reyes
concluded that Santander’s unreasonable delay in liquidating the subject property after foreclosing
on it in 2010 has functionally severed the causal chain between Cean’s fraudulent conduct and
Santander’s claimed loss. Because additional delay will only serve to further undercut any argument
Santander might have concerning restitution, it seems to us highly unlikely that it will ever be able to
avail itself of its right under § 3664(d)(5). For the avoidance of doubt, however, we affirm the
District Court’s conclusion that Santander is a victim for substantially the same reasons as those
stated below.
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Magistrate Judge Reyes also required the Government to show that Impac Trust relied to some
extent on the misrepresentations in the mortgage applications. Our cases on this issue are not
entirely consistent. Compare Marino, 654 F.3d at 322 (concluding that, in securities fraud context, an
“investor may meet the causation requirement of the statutory definition of ‘victim’ without showing
individual reliance” because “[t]he very nature of the crime—concealment—indicates the harm
deemed to result from public ignorance”), with United States v. Reifler, 446 F.3d 65, 125, 135–36 (2d
Cir. 2006) (vacating restitution order where certain claimed victims purchased stock after fraud was
revealed and could not have relied on misstatements, and the Government failed to show that
certain other claimed victims in fact relied on misstatements). We need not resolve whether a
showing of reliance is required because, even if it is, we agree with Judge Reyes that one might
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Second, the Government established that Impac Trust suffered an “actual loss.” The evidence
at trial showed that Impac Trust purchased the mortgage from Impac Funding for $427,500, its face
value. After the property was liquidated in a short sale, Impac Trust received $184,351.49, a
difference of $243,148.51. This is, in our view, “a reasonable approximation of losses supported by a
sound methodology.” Id.
Cean’s attempts to undermine these commonsense conclusions fall flat. She argues, for
instance, that alleged underwriting improprieties and breaches of duty by Impac Funding sever the
causal chain between her criminal conduct and Impac Trust’s loss. At trial, an expert called by the
defendants opined that Impac Funding’s underwriting process was insufficient. But, as Magistrate
Judge Reyes found, improvements in Impac Funding’s underwriting practices would not have
necessarily revealed the defendants’ fraud. The record concerning Impac Funding’s alleged breach of
its contractual obligations to Impac Funding is, at a minimum, open to some dispute. To the extent
the District Court credited the Government’s version of events, we see no error in its decision. In
any event, we agree with Judge Reyes that the claimed deficiencies in Impac Funding’s practices are
insufficient to sever the causal chain between Cean’s fraud and Impac Trust’s loss.
Cean’s remaining contentions are similarly unavailing. She argues that the District Court
erred by conferring victim status on Impac Funding. But the District Court did no such thing. The
victim here is Impac Trust. The District Court’s direction that restitution be paid to Impac Funding,
as opposed to Impac Trust, reflects Impac Funding’s status as master servicer for Impac Trust; it
does not render Impac Funding a victim. Cean also contends that the subject property was
liquidated for an inadequate price. All available evidence suggests, however, that the short sale
Impac Funding undertook was entirely proper. And the possibility that Impac Trust might recover
less than it paid for the mortgage was certainly a foreseeable consequence of the fraudulent scheme
in which Cean engaged. See Robers, 572 U.S. at 645–46 (“[L]osses in part incurred through a decline
in the value of collateral sold are directly related to an offender’s having obtained collateralized
property through fraud.”).
In sum, we see no abuse of discretion here. We have reviewed all of the arguments raised by
Cean on appeal and find them to be without merit. For the foregoing reasons, we AFFIRM the
January 16, 2018 order of the District Court.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court
reasonably infer that Impac Trust relied on Impac Funding’s underwriting process, which depended
on the veracity of information in the mortgage applications.
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