NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with
Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Argued September 16, 2010
Decided November 29, 2010
Before
RICHARD D. CUDAHY, Circuit Judge
ILANA DIAMOND ROVNER, Circuit Judge
TERENCE T. EVANS, Circuit Judge
No. 10‐1349
UNITED STATES OF AMERICA, Appeal from the United States District
Plaintiff‐Appellee, Court for the Eastern District of Wisconsin.
v. No. 1:07‐cr‐00204
MICHAEL LOCK, J.P. Stadtmueller,
Defendant‐Appellant. Judge.
O R D E R
Michael Lock and nine other individuals devised and executed a scheme to obtain
money from mortgage lending institutions by submitting fraudulent loan applications to these
companies. Lock and his co‐conspirators identified distressed properties that they could
purchase cheaply and obtained appraisals that misrepresented the actual condition of the
properties, inflating their value well beyond their market worth. Lock would then prepare
applications for loans to purchase these properties, paying individuals to serve as straw buyers
and falsifying their employment records, rent histories and other documents. Once a lending
institution had approved a loan in the amount of the inflated price, Lock and the co‐
conspirators would purchase the properties at market value and divvy the excess funds among
themselves. Lock paid the mortgages on some of these properties for just enough time to
prevent the lenders from being able to rescind the loans, eventually allowing all of the loans
No. 10‐1349 Page 2
to go into default. Lock and his peers used this scheme to purchase at least 24 different
properties, which resulted in Lock’s benefitting to the tune of approximately $250,000 and
causing nearly 1.5 million dollars in losses for the lenders.
Eventually, the police caught on to the mortgage fraud scheme and arrested Lock and
his co‐conspirators for committing acts of wire fraud in violation of
18 U.S.C. §§ 1342‐43. While
all of Lock’s co‐defendants entered into plea agreements, the charges against Lock proceeded
to a jury trial on December 1, 2008. Seven days later, the jury found Lock guilty of all nine
counts of wire fraud that had been submitted for a verdict. On February 5, 2010, the district
court sentenced Lock to 160 months of imprisonment for each count of his conviction, with each
sentence to be served concurrent to the others. The court further ordered that 60 months of this
term would be served concurrently to time Lock was serving for unrelated state convictions,
with the remaining 100 months to be served consecutively. Finally, the court ordered that Lock
serve 3 years of supervised release, pay $900 in special assessments and$1,458,823.47 in
restitution.
Lock appeals from his conviction and sentence, asserting that the trial court committed
numerous errors during his jury trial and his sentencing hearing. First, he alleges that the
district court improperly admitted various lending documents as self‐authenticating business
records. Second, he claims that the district court erred by reading the majority of the 24‐
paragraph indictment to the jury during its final instructions. Third, Lock argues that it was
improper for the district court to find that he was an organizer or leader of a criminal activity
involving five or more participants and to enhance his sentence in accordance with U.S.S.G. §
3B1.1. Fourth, Lock contends that the district court failed to adequately consider the 18 §
3553(a) factors when deciding his sentence.
We reject Lock’s contention that the district court erred by admitting the contents of the
lending institutions’ loan files pursuant to Fed. R. Evid. 902(11). We review a district court’s
ruling on the admissibility of documents as business records under an abuse of discretion
standard. United States v. Franco,
874 F.2d 1136, 1138 (7th Cir. 1989). The documents at issue
included residential loan applications, appraisals, offers to purchase, verifications of rent and
employment and other documents related to the mortgage loan applications that Lock
submitted to the lending institutions. The United States provided written declarations by
qualified custodians stating that the records met the foundational requirements set forth in Rule
902(11). Additionally, the record shows that the United States complied with 902(11)’s
provisions concerning notice and making the documents available for inspection prior to trial.
Lock’s main argument against admitting the records consists of several conclusory
allegations–that the lenders were complicit in the scheme and that the records lacked the
required level of trustworthiness. Given the lack of factual support for these claims, the district
court did not abuse its discretion in rejecting them. The district court was also correct in
finding that Lock’s only other argument–that the records should not have been admitted
because the lending institutions did not create them–was faulty, as it was based on an
interpretation of Rule 902(11) that this court has rejected. See, e.g., United States v. Keplinger, 776
No. 10‐1349 Page
3
F.2d 678, 694 (7th Cir. 1985) (stating that parties seeking to admit a document under Rule
902(11) do not have to be responsible for the creation of a document). Whether a party
submitting a document as a business record is also the creator of the document is particularly
irrelevant in situations such as this one, where the records are not being introduced to prove
the truth of the information set forth in them, but merely to prove that a party received
documents that contained certain representations.
Lock’s second argument also fails. Even if it were erroneous for the district court to read
a 24‐paragraph long recitation of the factual allegations contained in the indictment to the jury,
it is unlikely that this inclusion had a prejudicial effect because the district court specifically
warned the jurors that “the indictment in this case is the formal method of accusing the
defendant of a crime . . . [i]t is not evidence against the defendant and does not create any
inference of guilt.” A warning of this type was sufficient to ameliorate any possible prejudice.
See, e.g., United States v. Hephner,
410 F.2d 930, 934 (7th Cir. 1969) (holding that a similar
warning cured prejudice caused by providing a copy of the indictment to the jury during
deliberation). Second, Lock’s allegations of prejudice are entirely generic and lack evidentiary
substantiation. Such allegations are insufficient to establish that Lock suffered actual prejudice,
which is a prerequisite for reversal of the district court’s decision. United States v. Smith,
131
F.3d 685, 688‐89 (7th Cir. 1997).
Lock’s objections to his sentence fare no better than his challenges concerning his trial.
We review a district court’s factual finding that a defendant was an organizer or leader for clear
error, United States v. Mijangos,
240 F.3d 601, 604 (7th Cir. 2001), and will overturn the district
court’s finding “only if, after reviewing the entire evidence, [this court is] left with the definite
and firm conviction that a mistake has been committed.” United States v. Carrera,
259 F.3d 818,
826 (7th Cir. 2001). The record establishes that the district court was presented with evidence
establishing that Lock possessed all of the organizer/leader qualities listed in the Guidelines
and that Lock failed to adequately rebut this evidence. Hence, the trial court did not commit
a clear error when it determined that this sentence enhancement applied to Lock’s criminal
activities.
Finally, we reject Lock’s claim that the sentence imposed by the trial court was
unreasonable. First, because the sentence imposed by the judge was within the range set forth
in the Guidelines, it is entitled to a presumption of reasonableness. United States v. Panaigua‐
Verdugo,
537 F.3d 722, 727 (7th Cir. 2008). Second, a review of the sentencing hearing transcript
shows that the sentencing judge properly considered the facts of Lock’s case and all of the §
3553(a) standards when making his sentencing decision. Lock’s various claims about how his
sentence does not adequately take into account the sentences he is already serving for wholly
unrelated crimes and fails to acknowledge other parties’ roles in the mortgage fraud scheme
do not provide us with sufficient grounds to find the district court’s sentence unreasonable.
AFFIRMED
