United States v. Felicia Muhammad ( 2018 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUL 11 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 16-50387
Plaintiff-Appellee, D.C. No.
2:14-cr-00448-MWF-1
v.
FELICIA MUHAMMAD, MEMORANDUM*
Defendant-Appellant.
Appeal from the United States District Court
for the Central District of California
Michael W. Fitzgerald, District Judge, Presiding
Argued and Submitted June 5, 2018
Pasadena, California
Before: WARDLAW and PAEZ, Circuit Judges, and CHHABRIA,** District
Judge.
Felicia Muhammad (“Muhammad”) appeals her conviction of five counts of
making a false statement to a financial institution in violation of 18 U.S.C. § 1014.
We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Vince Chhabria, United States District Judge for the
Northern District of California, sitting by designation.
1. Muhammad argues that the jury instruction on the elements of liability for
causing an act to be done under 18 U.S.C. § 2(b) was erroneous because it omitted
an essential element of the underlying offense for loan fraud—that she knew that the
document contained the charged false statement. We review for plain error because
the parties jointly submitted the challenged jury instruction. See United States v.
Cain, 130 F.3d 381, 383–84 (9th Cir. 1997); United States v. Perez, 116 F.3d 840,
842, 845 (9th Cir. 1997) (en banc). To establish plain error, Muhammad must show
“(1) an error that is (2) plain and (3) affects substantial rights.” United States v.
Vazquez-Hernandez, 849 F.3d 1219, 1225 (9th Cir. 2017) (citation omitted).
“Where these conditions are met, we may only exercise our discretion to correct the
error if it seriously affects the fairness, integrity or public reputation of judicial
proceedings.” Id. (citation omitted).
Even if the instruction were erroneous and plainly so, it did not affect
Muhammad’s substantial rights. An error affects substantial rights “if there is ‘a
reasonable probability that the error affected the outcome of the trial.’” Id. at 1227
(quoting United States v. Marcus, 560 U.S. 258, 262 (2010)). In determining the
likelihood that an erroneous instruction affected the outcome, we review the
arguments made by the parties, id., and whether the government presented
“substantial evidence” of the missing element, United States v. Conti, 804 F.3d 977,
981–82 (9th Cir. 2015). “Moreover, where a jury instruction permits a conviction
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on either of two alternative theories, one of which is later found to be
unconstitutional, the error affects the defendant’s substantial rights if there is a
reasonable probability that the jury convicted the defendant on the invalid theory.”
Vazquez-Hernandez, 849 F.3d at 1227.
Both parties emphasized throughout the trial that the “crux of the case” was
Muhammad’s knowledge, or lack thereof, that the statements were false. As defense
counsel described to the jury during closing argument, “What you do have to figure
out is: Did she know that there was false information in there when she signed
them?” Thus, the jury was primed to focus on whether Muhammad had the requisite
knowledge for loan fraud.
In addition, the government presented “substantial evidence” that Muhammad
had the requisite knowledge: Muhammad signed, before notaries, single-page
occupancy certifications; Muhammad was a licensed real estate agent; and
Muhammad told a Long Beach police officer that she was aware that she would not
be approved for such large loans using her actual financial information, but also that
she would be paid $18,000 for her participation in what they agreed to call a “scam.”
The FBI Agent who interviewed Muhammad testified that when he asked her why
she signed the occupancy certification if she did not intend to occupy the property,
she said “she didn’t think the document mattered” and “she didn’t think anyone
particularly cared if she wasn’t going to live in the property.”
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Finally, Muhammad concedes that the instructions regarding the alternative
theories of liability—that she committed substantive loan fraud or that she aided and
abetted loan fraud—properly instructed the jury that Muhammad needed to have
known the documents contained false statements. Given the substantial evidence of
Muhammad’s knowledge, we conclude there is not a reasonable probability that the
jury convicted Muhammad on the theory of causing liability rather than substantive
loan fraud or aiding and abetting liability. See Vazquez-Hernandez, 849 F.3d at
1227.
2. Next, Muhammad argues that the district court abused its discretion by
excluding a defense witness whose proffered testimony would have focused on a
scheme similar to that alleged in the indictment in which the witness unwittingly
served as a straw buyer for the same man, Femi Olgun, as Muhammad. Defense
counsel argued that this testimony would have gone to Olgun’s pattern or method of
recruiting innocent people and keeping them in the dark about the fraudulent loan
scheme. “[A] district court abuses its discretion when it bases its decision on an
erroneous view of the law or a clearly erroneous assessment of the facts.” United
States v. Rahm, 993 F.2d 1405, 1410 (9th Cir. 1993) (citing Cooter & Gell v.
Hartmarx Corp., 496 U.S. 384, 405 (1990)).
We agree with Muhammad that the district court abused its discretion by
excluding the defense witness under Federal Rule of Evidence 404(b). In its ruling,
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the district court explained that because the government would not be allowed to
offer testimony that another straw buyer working with Olgun had known that the
loan documents contained false information, it would not allow Muhammad to offer
the inverse as a matter of symmetry. This was an error of law. We have repeatedly
emphasized that “the standard of admissibility when a criminal defendant offers
similar acts evidence as a shield need not be as restrictive as when a prosecutor uses
such evidence as a sword.” United States v. Espinoza, 880 F.3d 506, 516 (9th Cir.
2018) (citation omitted).
However, “[e]ven though evidence is admissible under 404(b), it may
nonetheless be excluded under Rule 403’s balancing test, which weighs the
‘probative value’ of the evidence against the ‘danger of unfair prejudice.’” United
States v. Cruz-Garcia, 344 F.3d 951, 956 (9th Cir. 2003). Here, the district court
concluded that even if the witness’s testimony was admissible under Rule 404(b), it
should be excluded under Rule 403’s balancing test because there was “just too much
risk . . . that the jury would use it for an improper purpose implying that the implicit
state of mind of this other person should be imputed to this defendant.” In light of
the “considerable deference” we give to district court decisions to exclude evidence
under Rule 403, United States v. Hankey, 203 F.3d 1160, 1167 (9th Cir. 2000)
(citation omitted), we conclude that this was not an abuse of discretion.
3. Finally, Muhammad contends that the district court abused its discretion
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by admitting evidence regarding Muhammad’s Section 8 housing and related
testimony. The government introduced Muhammad’s annual Section 8 housing
certifications, in which she certified that she lived in subsidized housing in Long
Beach, and a Notice of Intended Action sent to Muhammad after the Long Beach
Housing Authority discovered the loans in Muhammad’s name. After receiving the
Notice, Muhammad filed a police report with the Long Beach police, claiming that
her identity had been used without her permission to purchase the homes. When
Muhammad called to follow up on the police report, she connected with Officer
Sanchez, to whom she ultimately admitted to participating in a “scam” related to the
loans. When Officer Sanchez asked whether Olgun had used her information for
other purposes, Muhammad explained that she had signed a lease for a BMW for
Olgun as well. At the January 2010 administrative hearing regarding the termination
of her housing benefits, Muhammad discussed the loans in question and explained
that although she signed the loan applications, she did not live at those properties.
She also admitted to signing a lease for a BMW on behalf of Olgun.
The district court did not abuse its discretion by concluding that the Section 8
housing certifications were direct evidence that Muhammad made false statements:
she indicated in the loan documents that she would occupy the properties but
certified to the Housing Authority that she lived elsewhere. The government was
permitted to introduce these certifications through the housing coordinator for the
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Long Beach Housing Authority to provide appropriate context. See United States v.
Daly, 974 F.2d 1215, 1217 (9th Cir. 1992).
Nor did the district court abuse its discretion by concluding that the Notice of
Intended Action and identity theft report were “inextricably intertwined” with the
underlying offense of loan fraud because that information was “necessary [to admit]
in order to permit the prosecutor to offer a coherent and comprehensible story
regarding the commission of the crime.” United States v. Wells, 879 F.3d 900, 928
(9th Cir. 2018) (alterations in original) (citation omitted). Appropriate context
includes “the circumstances under which particular evidence was obtained.” United
States v. Vizcarra-Martinez, 66 F.3d 1006, 1012–13 (9th Cir. 1995). Accordingly,
the government was permitted to introduce evidence that would help the jury
understand the context in which Muhammad met the Long Beach police officer and
allegedly confessed to signing the documents.
Finally, the district court did not abuse its discretion by admitting testimony
regarding the BMW lease application. This testimony was admissible as non-
character evidence under Rule 404(b) going to Muhammad’s knowledge that the
loan applications contained false information. When offered by the government
against a defendant, evidence of prior bad acts is admissible under Rule 404(b) if it
“(1) tends to prove a material point; (2) is not too remote in time; (3) is based upon
sufficient evidence; and, (4) in some cases, is similar to the offense charged.” United
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States v. Banks, 514 F.3d 959, 976 (9th Cir. 2008) (citation omitted). The district
court correctly concluded that all four requirements were satisfied with respect to
this evidence. First, participating in four, high-value straw-buyer schemes—the
three home loans and the BMW lease—in under two months coupled with
Muhammad’s comments that she did not believe her loan applications would be
approved based on her actual financial information suggests that Muhammad knew
about the loan-fraud operation. Second, the BMW lease application was submitted
within one month of the charged conduct. Third, the government cited sufficient
evidence regarding the BMW lease application, including Muhammad’s testimony
at the termination hearing as well as her statement to Officer Sanchez. And fourth,
the alleged straw-buyer scheme evidenced by the car lease application is very similar
to that alleged in the charged home loan applications.
AFFIRMED.
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