United States v. Vera Kuzmenko ( 2019 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUN 5 2019
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 16-10129
Plaintiff-Appellee, D.C. No.
2:11-cr-00210-JAM-1
v.
VERA KUZMENKO, MEMORANDUM*
Defendant-Appellant.
UNITED STATES OF AMERICA, No. 16-10419
Plaintiff-Appellee, D.C. No.
2:11-cr-00210-JAM-9
v.
RACHEL SIDERS,
Defendant-Appellant.
Appeal from the United States District Court
for the Eastern District of California
John A. Mendez, District Judge, Presiding
Argued and Submitted February 5, 2019
San Francisco, California
Before: THOMAS, Chief Judge, and PAEZ and BERZON, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Vera Kuzmenko and Rachel Siders appeal their convictions for mail and
wire fraud. Kuzmenko also appeals her conviction for money laundering and
witness tampering. Kuzmenko and Siders argue that the district court violated
their constitutional right to present a complete defense by excluding certain expert
testimony. They also argue that the district court used an improper methodology in
determining the amount of loss at sentencing. Finally, Kuzmenko argues that if her
wire fraud and mail fraud convictions are reversed, her witness tampering
conviction should also be reversed. We have jurisdiction under 28 U.S.C. § 1291
and we affirm.
1. Defendants contend that the district court erroneously excluded their expert
testimony regarding lending standards under United States v. Lindsey.1 In
Lindsey—which was filed during the course of this appeal—we addressed the
admissibility of certain evidence in criminal mortgage fraud cases. 850 F.3d 1009,
1011 (9th Cir. 2017). The court concluded that while “evidence of general lending
standards in the mortgage industry is admissible to disprove materiality,” evidence
of individual lender behavior, including evidence of lender negligence and
1
We review “for abuse of discretion the district court’s decision
whether to exclude expert testimony.” United States v. Morales, 108
F.3d 1031, 1035 (9th Cir. 1997) (citations omitted). We review de
novo “a district court’s decision to preclude a defendant’s proffered
defense.” Lindsey, 850 F.3d at 1014 (citation omitted).
2
intentional disregard of relevant information, is not admissible as a defense to
mortgage fraud. Id. at 1019.
Here, after the government filed a motion in limine to exclude irrelevant
expert testimony, Kuzmenko filed a response memorandum “solely to note a
continuing objection to exclusion of evidence of lender participation or fault in the
charged fraudulent scheme.”2 Kuzmenko proffered the expert report of Professor
Shaun P. Martin and noted that Professor Martin would provide expert testimony
in support of lender criminal liability as a defense if permitted. Nowhere did
Kuzmenko propose to offer evidence of the state of the mortgage industry so that
the jury could evaluate materiality. Under these circumstances, the district court
did not err. See Lindsey, 850 F.3d at 1011–12.
Furthermore, even if the proffer could be understood as encompassing
evidence of general lending standards to disprove materiality, any error in
excluding the expert testimony was harmless. There was overwhelming evidence
that the false statements in the loan applications were material to the lenders’
2
Kuzmenko preserved this issue for appeal because she objected to
the government’s motion to exclude expert testimony and proffered
proposed testimony. Siders did not preserve this issue for appeal as
she filed a statement of non-opposition to the government’s motion.
Because we conclude the district court did not err, we need not
address plain error review. See United States v. Tamman, 782 F.3d
543, 552 (9th Cir. 2015).
3
decision-making process.3 As part of their scheme, Defendants made extensive
misrepresentations on loan applications regarding, inter alia, income, employment,
residence, assets, and liabilities. This information was valuable to lenders as they
repeatedly asked for it throughout the application process, requested supporting
documentation, and hired underwriters to review loan packages and verify
information.
Moreover, a First Franklin employee testified to the importance of certain
aspects of the loan application including income, employment, assets, liabilities,
and primary residence. And, Defendants, who were both experienced in the real
estate industry, believed the false statements were material to the lenders’ decision-
making process. In light of the overwhelming evidence of materiality, any error
was harmless. See Neder v. United States, 527 U.S. 1, 19 (1999).
2. Defendants argue that district court used an improper methodology in
determining the amount of loss under U.S.S.G. § 2B1.1(b)(1).4 In United States v.
Hymas, we concluded that the district court correctly calculated loss by “taking the
3
Materiality is evaluated objectively; the government need not prove actual
reliance upon the misrepresentations. Lindsey, 850 F.3d at 1014
4
We review de novo a “district court’s interpretation of the
Sentencing Guidelines,” United States v. Rivera, 527 F.3d 891, 908
(9th Cir. 2008) (citation omitted), and review “the district court’s
factual findings used in sentencing, including the calculation of loss to
the victims, for clear error,” United States v. Blitz, 151 F.3d 1002,
1009 (9th Cir. 1998) (citation omitted).
4
principal amount of the loan and subtracting any credits from the subsequent sale
of the property.” 780 F.3d 1285, 1293 (9th Cir. 2015) (citing United States v.
Morris, 744 F.3d 1373, 1375 (9th Cir. 2014)). We noted that “the district court did
not err by considering the losses submitted by successor lenders who had
purchased the loans.” Id. Accordingly, here, the district court correctly used the
principal amount of the loan minus the amount of foreclosure to calculate the
asserted loss amounts.
Further, we reject Defendants’ challenge to the sufficiency of the evidence.
The record adequately supports the loss amounts determined by the district court.
See United States v. Zolp, 479 F.3d 715, 719 (9th Cir. 2007) (citations omitted)
(The district court “need not make its loss calculation with absolute precision;
rather, it need only make a reasonable estimate of the loss based on the available
information.”).
3. Kuzmenko argues that if the district court erred in excluding the expert
testimony, her entire conviction, including the witness tampering count, should be
reversed “because of the spillover effect from the other counts.” As we conclude
the district court did not err in excluding the expert testimony, we need not address
this argument.
AFFIRMED.
5