FILED
                                                          United States Court of Appeals
                                                                  Tenth Circuit

                                                              November 18, 2013
                                    PUBLISH                   Elisabeth A. Shumaker
                                                                  Clerk of Court
                   UNITED STATES COURT OF APPEALS

                               TENTH CIRCUIT



 UNITED STATES OF AMERICA,

       Plaintiff-Appellee,
 v.                                                     No. 12-1405
 VICKI DILLARD CROWE, a/k/a
 Vicki R. Dillard,

        Defendant-Appellant.



        APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF COLORADO
                  (D.C. No. 1:10-CR-00170-MSK-1)


K.A.D. Camara, (Michael Lee Wilson with him on the briefs), of Camara &
Sibley LLP, Houston, Texas, for Defendant-Appellant.

Robert Mark Russel, Assistant United States Attorney, (John F. Walsh, United
States Attorney, with him on the brief), Denver, Colorado, for Plaintiff-Appellee.


Before BRISCOE, Chief Judge, O’BRIEN and PHILLIPS, Circuit Judges.


BRISCOE, Chief Judge.
         Defendant Vicki Dillard Crowe was convicted by a jury of eight counts of

mail fraud, in violation of 18 U.S.C. §§ 1341 and 2, and eight counts of wire

fraud, in violation of 18 U.S.C. §§ 1343 and 2, for her participation in a mortgage

fraud scheme. The district court sentenced Crowe to a term of imprisonment of

sixty months and ordered her to make restitution in the amount of $2,408,142.37.

Crowe now appeals, arguing that the district court erred in calculating the amount

of loss associated with her crimes for purposes of U.S.S.G. § 2B1.1(b), and in

denying her motion for new trial, which alleged ineffective assistance on the part

of her trial counsel. Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we

affirm.

         Crowe’s challenge to the district court’s calculation of loss raises an issue

of first impression for our court: whether the concept of reasonable foreseeability

applies to a district court’s calculation of the “credits against loss” under §

2B1.1(b). As we discuss in greater detail below, we adopt the Second Circuit’s

reasoning in United States v. Turk, 

(2d Cir. 2010), and hold that the

concept of reasonable foreseeability applies only to a district court’s calculation

of “actual loss” under § 2B1.1(b), and not to its calculation of the “credits against

loss.”

                                            I

                                  Factual background

         In June 2004, Crowe, a resident of Denver, Colorado, sought to purchase a

                                            2
home in Denver. To do so, Crowe “applied for . . . first and second mortgage[s]

with Fieldstone Mortgage Company in the amounts of $155,550 and $27,450,

respectively.” ROA, Vol. 5 at 7 (presentence investigation report). The

applications for the mortgages, both of which were signed by Crowe, stated

falsely that Crowe was employed by King Soopers as a Front End Manager

earning $4,166.66 per month. In fact, however, Crowe was unemployed at the

time she submitted the applications. And, although Crowe had previously worked

at King Soopers, she had actually earned only $16.06 per hour.

      Between June 2004 and approximately December 2006, Crowe, with the

assistance of Thadaus Jackson, purchased eighteen additional properties in the

State of Colorado, with purchase prices ranging from $183,000 to more than

$1,380,000. The residential loan applications that Crowe signed and submitted all

“contained false job titles, inflated and fabricated employment income, inflated

rental income, and/or inflated assets of . . . Crowe or her [then-]husband[,

Jamaica Crowe].” 

of the applications stated falsely that the

properties at issue would serve as the primary residence for Crowe and her

husband. 

of the applications, [Crowe] failed to disclose all of the

properties that she had recently purchased.” 

      As part of the transactions for these property purchases, Crowe and Jackson

persuaded the property sellers to falsely inflate the sale prices so that Crowe

could receive the inflated portions of the sale prices as “up front” money at, or

                                          3
shortly after, the closing of the purchase transactions. 

Sometimes this

“up front” money was falsely characterized as a payment to the broker. Other

times, this “up front” money was falsely characterized as a payment to a

remodeling company that was supposed to perform specified remodeling work on

the subject property. The “remodeling company” that Crowe typically listed was

Ester Home Improvements, a company that Crowe set up in order to disguise the

fact that she was receiving the “up front” money. Crowe also created false Ester

Home Improvement invoices for the transactions involving Ester Home

Improvements. Crowe conceded that she never intended to spend the “up front”

money on the remodeling projects listed in the false invoices. The total “up

front” money that Crowe received at or after the closings was $943,332.70.

      Crowe also refinanced several of these eighteen properties in order to

obtain additional cash. The refinancing applications that Crowe signed and

submitted “contained false job titles, inflated and fabricated employment income,

inflated rental income, and/or inflated assets.” 

      Toward the end of 2006, one lender informed Jackson that Crowe had

reached her purchasing limit and could not buy any more properties, and that

additional property could be purchased in the name of Crowe’s husband only if he

was legally separated from Crowe. Jackson relayed this information to Crowe.

Crowe, in response, filed a petition for legal separation from her husband in the

District Court of Arapahoe County, Colorado. Shortly thereafter, Crowe

                                           4
purchased two properties in her husband’s name. Crowe then failed to appear for

the initial status conference in the separation proceeding, and that proceeding was

ultimately dismissed in January 2007 for lack of prosecution. 1

      Crowe established a company called Crowe’s Nest Funding/Household LLC

(Crowe’s Nest) to purportedly manage the properties that she and her husband

purchased. Crowe’s Nest, however, never made a profit because the rental

income that was received from the properties purchased by Crowe and her

husband was insufficient to cover the mortgage payments owed on those

properties.

      At the time she purchased each of the properties, Crowe knew that the

initial lending institutions were likely to sell the loans to secondary lenders.

                               Procedural background

      After Crowe’s scheme fell apart, she was indicted by a federal grand jury

on eight counts of mail fraud, in violation of 18 U.S.C. §§ 1341 and 2, and eight

counts of wire fraud, in violation of 18 U.S.C. §§ 1343 and 2. Crowe pleaded not

guilty and the case proceeded to trial. At trial, Crowe asserted that she had acted

without the intent to defraud. At the conclusion of all the evidence, however, the

jury found Crowe guilty of all sixteen charges alleged in the indictment.

      The probation office prepared and submitted to the district court and the

      1
        The record indicates that Crowe and her husband subsequently divorced.
The precise details of when that occurred, however, are not specified in the
record.

                                          5
parties a presentence investigation report (PSR). 

at 5. In calculating

Crowe’s offense level, the PSR imposed a base offense level of 7 pursuant to

U.S.S.G. § 2B1.1(a)(1), and then imposed an 18-level increase pursuant to

U.S.S.G. § 2B1.1(b)(1)(J) because “the loss exceeded more than $2,500,000, but

[was] less than $7,000,000.” ROA, Vol. 5 at 11. After imposing two additional

adjustments (a 2-level increase for obstruction of justice, and a 2-level increase

because the offense involved more than 10 victims), the PSR arrived at a total

offense level of 29. Combined with a criminal history category of I, the PSR

calculated a “guideline range of imprisonment [of] 87 to 108 months.” 

Crowe objected to several aspects of the PSR, including “the loss amount and . . .

calculations.” 

      The district court held a sentencing hearing on September 27, 2012.

Crowe’s counsel argued “that the losses were not reasonably foreseeable to”

Crowe, 

at 2078, because “the last loan” Crowe received “was

December of ‘06, and the [housing] market didn’t really spiral downward until

‘07 and ‘08,” 

Consequently, her counsel argued, the district court

should “revert to gain as a measure of the guideline factor.” 

Crowe’s counsel argued that her gain was “over 400 [thousand

dollars] and under a million,” and that the resulting increase in her offense level




                                          6
should be “14 rather than 18.” 2 

presented two witnesses to support the proposed loss

calculations contained in the PSR. The first was Susan Hendrick, an attorney in

private practice who represented a bank in the foreclosure proceedings involving

seven of the loans at issue. Hendrick testified that Crowe, appearing pro se,

vigorously defended all of the foreclosure proceedings. According to Hendrick,

Crowe filed counterclaims in every foreclosure action and thereby greatly

increased the costs associated with the foreclosure proceedings. Hendrick opined

that Crowe knew foreclosure law better than most of the opposing attorneys

Hendrick regularly encountered. Further, Hendrick testified that, in the midst of

the foreclosure proceedings, Crowe, either personally or through someone else,

broke into each of the seven properties, rekeyed them, and rented them to

someone else.

      The government’s second witness was Edward Kljunich, an inspector

employed by the United States Postal Inspection Service. Kljunich was assigned

to investigate Crowe and her activities in May 2007. Kljunich compiled a list of

Crowe’s financial institution victims and their associated losses. Kljunich

testified that, “for a majority of the loans [at issue], [he] was able to identify the

actual unpaid principal balance for the first and . . . second [mortgages,] but on

      2
        Crowe’s counsel also objected to the PSR’s proposed 2-level increase for
obstruction of justice (based upon Crowe’s testimony at trial). The district court
ultimately chose not to impose that enhancement.

                                           7
several . . . was unable to obtain an unpaid principal amount for the second

[mortgage].” 

Consequently, he testified, for the latter group of loans

he “took the payments that [Crowe] made, that she made on the first mortgage,

and assumed she made those on the second mortgage, and came up with a

percentage figure and applied that to the second mortgage.” 

examination, Kljunich conceded that the real estate market imploded during the

time period that the loans to Crowe were outstanding. Kljunich also conceded

that he did not know whether any of the named financial institutions identified as

victims had mortgage insurance on their loans.

      Defense counsel presented no evidence, but instead argued that Crowe was

a “naive” participant in the scheme, 

who took out the loans thinking

that the properties at issue would appreciate, 

Relatedly, defense

counsel argued that there was no evidence that it was reasonably foreseeable to

Crowe that “downstream lenders would suffer losses.” 

      The district court rejected defense counsel’s arguments and suggested

method of loss calculation. In doing so, the district court first noted that “[i]n

mortgage fraud cases, such as this, the loss is the unpaid portion of the loan as

offset by the value of the collateral.” 

In turn, the district court

concluded that “the Government ha[d] presented evidence of actual loss,” and that

it was therefore bound to “use[] actual loss as the basis for [its] determination of

loss.” 

upon the evidence presented by the government, the

                                           8
district court found “that not only did [Crowe] know, but she should have

reasonably known what the potential loss was.” 

The district court

explained:

         The contracts that [Crowe] signed included a promissory note that
      specified the amount that she owed. It included deeds of trust which
      – and this is a part of the reason why I wanted to see the entirety of
      the deeds of trust – were essentially form deeds of trust that
      identified the note, the amount that was owed, the loan amount, and
      what fees and costs she would be responsible for paying in the event
      she defaulted.
         So the reasonably foreseeable pecuniary harm is capped by the
      amount reflected in the deed of trust and the promissory note for
      each loan that . . . Crowe took out. To say that she did not
      understand that defies reason, because, as she has said multiple
      times, she intended to build this business to do good, and she
      intended to refinance these loans, and she knew she had obligations
      to pay, and she tried to make payments.

court rejected the argument asserted by Crowe’s counsel “that

some of these . . . loans . . . were assigned to downstream lenders and that in

order for there to be reasonably foreseeable pecuniary harm, . . . Crowe had to

know that these loans were assigned to particular lenders.” 

In

support, the district court noted that “[b]y the terms of the deed[s] of trust, . . .

Crowe was advised that the promissory note[s] could be assigned to some other

lender.” 

district court noted, “regardless of whether it was the

original lender or . . . a successor holder of the note and deed of trust, the

reasonably foreseeable pecuniary harm remained the same, capped by the amount


                                            9
owed or oweable under the promissory note and deed of trust.” 

court also, in discussing the reasonable foreseeability of the

loss, “note[d] that . . . Crowe filed for bankruptcy relief in a Chapter 7 case,” and

“[i]n the schedules and statement of affairs, which she submitted pro se [and

signed under penalty of perjury], she identified her liabilities as $17,451,745.21.”

By doing so, the district court concluded, Crowe “was representing

to the Bankruptcy Court that she believed she had this sum as a debt which she

sought to have discharged.” 

district court concluded, “based upon the evidence that

[was] presented, that [it] [wa]s not necessary to quantify with exactitude the

amount of the loss.” 

district court concluded, “[i]t [wa]s

sufficient to say, based upon the evidence presented, that under Section 2B1.1 of

the guidelines, that the loss here is . . . greater than $2,500,000 and less than $7

million, resulting in an increase in offense level of 18 levels.” 

      Based upon this 18-level enhancement, the district court arrived at a total

offense level of 27. That total offense level, combined with Crowe’s criminal

history category of I, resulted in an advisory guideline range of 70 to 87 months.

The district court chose to impose a below-Guidelines sentence of 60 months’

incarceration. The district court also imposed restitution in the amount of

$2,408,142.37.

      Crowe filed a pro se motion for new trial arguing, in pertinent part, that her

                                           10
right to effective assistance of counsel was violated when her trial counsel entered

into a stipulation with the prosecution regarding the jurisdictional element of the

wire fraud counts. The district court denied Crowe’s motion.

                                            II

      Crowe asserts two issues on appeal. First, she asserts that the district court

erred in calculating the amount of loss for purposes of U.S.S.G. § 2B1.1(b).

Second, she asserts that the district court erred in denying her motion for new

trial, in which she asserted that she was deprived of the effective assistance of

counsel when her trial counsel stipulated to an element of wire fraud over her

express objection. We conclude, for the reasons outlined below, that both of

these issues lack merit.

           The district court’s calculation of loss under U.S.S.G. § 2B1.1

      Generally speaking, “sentences are reviewed under an abuse of discretion

standard for procedural and substantive reasonableness.” United States v.

Gordon, 

, 1160 (10th Cir. 2013) (internal quotation marks and

brackets omitted). “A sentence is procedurally unreasonable if,” among other

things, “the district court incorrectly calculates . . . the Guidelines sentence . . .

[or] relies on clearly erroneous facts.” 

marks omitted).

      “When a defendant challenges the procedural reasonableness of his

sentence by attacking the district court’s loss calculation, our task is to determine

whether the district court’s factual finding of loss caused by the defendant’s fraud

                                            11
is clearly erroneous.” 

(internal quotation marks and brackets omitted).

“In other words, we may disturb the district court’s loss determination—and

consequent Guidelines enhancement—only if the court’s finding is without

factual support in the record or if, after reviewing all the evidence, we are left

with a definite and firm conviction that a mistake has been made.” 

marks omitted). “However, the district court’s loss calculation

methodology is reviewed de novo.” 

case, the district court imposed a base offense level pursuant to

U.S.S.G. § 2B1.1(a) and then imposed an 18-level enhancement pursuant to

U.S.S.G. § 2B1.1(b). Section “2B1.1(b) increases a defendant’s base offense

level for fraud according to the amount of the loss.” United States v.

Washington, 

, 1184 (10th Cir. 2011). “The court is instructed to

use the greater of actual or intended loss.” 

§ 2B1.1 cmt.

n.3(A)). “If the loss is not reasonably determinable, then a court must use the

gain that resulted from the fraud as an alternative measure.” 

§ 2B1.1 cmt. n.3(B)). “The defendant’s gain may be used only as an

alternate estimate of that loss; it may not support an enhancement on its own if

there is no actual or intended loss to the victims.” 

marks

omitted).

      a) Reasonable foreseeability of the loss

      In challenging the district court’s calculation of loss, Crowe argues, in part,

                                          12
that because she, “the mortgage broker Jackson, and the lending institutions all

wanted and expected the mortgages [at issue] to work out during the mid-decade

real-estate boom, no loss was ‘reasonably foreseeable’ within the meaning of

Comment 3(A) to” § 2B1.1. Aplt. Br. at 6. “Indeed,” Crowe argues, “it was only

because everyone involved in the boom expected the mortgages to work out that

[she] was able to get them.” 

she asserts, “[l]enders, faced with

a rising market, believed that the homes they were lending on were adequate

security and consequently did not do even the minimal employment or income

verification that would have disqualified [her].” 

turn asserts that

“[i]f the lenders and the mortgage broker, professionals in the business, did not

foresee the 2008 collapse in the real-estate market, then it is not reasonable to

expect that Crowe would have foreseen that collapse in 2004, 2005, or 2006,

when she committed the alleged fraud.” 

      Crowe also argues that the district court erred “in jumping from the

conclusion that [she] should have known that the loan amount was the maximum

potential loss to the quite different conclusion that the difference between the

outstanding loan amount and the foreclosure proceeds was ‘the foreseeable

pecuniary harm to the lenders.’” 

(quoting ROA, Vol. 3, at 2208). More

specifically, Crowe argues that “[t]he district court was correct to conclude that

[she] knew what the maximum potential loss was, but wrong to conclude that this

means that the actual loss was reasonably foreseeable by [her] when she applied

                                          13
for the mortgages in 2004, 2005, and 2006.” 

And, Crowe argues,

“[b]ecause the district court used the wrong legal standard — maximum potential

loss instead of reasonably foreseeable loss — this Court should remand for

resentencing and instruct the district court to make a finding about what loss, if

any, [she] could reasonably have foreseen.” 

however, that Crowe’s arguments are contrary to the clear

language of U.S.S.G. § 2B1.1 and its accompanying commentary. Section

2B1.1(b)(1) states that a district court shall enhance a defendant’s base offense

level “[i]f the loss exceeded $5,000.” Depending upon the specific amount of the

loss, this enhancement can range from 2 to 30 levels. U.S.S.G. § 2B1.1(b)(1)(A)-

(P). Application Note 3 to § 2B1.1 fleshes out how the district court is to

calculate “loss.” See generally Stinson v. United States, 

, 38 (1993)

(holding “that commentary in the Guidelines Manual that interprets or explains a

guideline is authoritative unless it violates the Constitution or a federal statute, or

is inconsistent with, or a plainly erroneous reading of, that guideline”). To begin

with, Application Note 3 provides that, as a general rule, “loss is the greater of

actual loss or intended loss.” 3 U.S.S.G. § 2B1.1 cmt. n.3(A). In turn, Application

Note 3 proceeds to define the phrase “actual loss.” “‘Actual loss,’” it explains,

“means the reasonably foreseeable pecuniary harm that resulted from the


      3
       Because this appeal concerns only the issue of actual loss, it is
unnecessary to review how the determination of intended loss is made.

                                           14
offense.” 

“‘Pecuniary harm’ means harm that is monetary or

that otherwise is readily measurable in money.” 

And

“‘reasonably foreseeable pecuniary harm’ means pecuniary harm that the

defendant knew or, under the circumstances, reasonably should have known, was

a potential result of the offense.” 

Notably, Application Note 3

treats amounts recovered by a fraud victim, such as the proceeds from a

foreclosure sale, as “Credits Against Loss,” rather than part of the initial “actual

loss” calculation. More specifically, Application Note 3 provides that “[l]oss

shall be reduced . . . [i]n a case involving collateral pledged or otherwise

provided by the defendant, [by] the amount the victim has recovered at the time

of sentencing from disposition of the collateral, or if the collateral has not been

disposed of by that time, the fair market value of the collateral at the time of

sentencing.” 

Thus, if we were to state the method for

determining “loss” for purposes of § 2B1.1(b)(1) as a mathematical equation, it

would be as follows: loss equals actual loss (or intended loss) minus credits

against loss.

      Importantly, for purposes of this appeal, the plain language of Application

Note 3 makes clear that the concept of reasonable foreseeability applies only to a

district court’s calculation of “actual loss,” and not to its calculation of the

“credits against loss.” Consequently, it is irrelevant in this case whether or not

Crowe, at the time she negotiated the various mortgages at issue, reasonably

                                           15
anticipated a precipitous decline in the real estate market that might result in the

original lender or successor lenders being unable to recoup their losses from the

sale of pledged collateral should she default. Instead, the only foreseeability

issue in this case, and the one that the district court correctly focused on, is the

amount of the potential pecuniary harm that might result from Crowe’s offenses,

i.e., the reasonable foreseeability of the “actual loss” (rather than the “loss”) that

occurred in this case.

      We are not the first circuit to expressly adopt this interpretation of

Application Note 3 to § 2B1.1. Rather, as the government notes in its appellate

response brief, this interpretation was first adopted by the Second Circuit in Turk,

following the lead of the district court in United States v. Mallory, 

(E.D. Va. 2010). Notably, the defendants in both Mallory and Turk raised

arguments similar to the ones asserted by Crowe in this appeal.

      The defendant in Mallory, Lloyd Mallory, was convicted by a jury “of

conspiring to defraud lenders into issuing mortgage loans to unqualified

homebuyers, many of whom subsequently defaulted on those home 

. “At sentencing, the principal contested issue was the

calculation of actual loss pursuant to § 2B1.1.” 

Lloyd “argu[ed] that

the ‘credit against loss’ calculation should be based not on the actual amount

recovered through foreclosure sales, but rather on the amount that [he], at the

time of the fraudulent acts, reasonably could have expected to be recovered from

                                           16
later foreclosure sales.” 

fraudulent conduct occurred

between 2006 and 2008, while the housing market was showing significant signs

of weakness, but before the more dramatic collapse in housing prices in late 2008

and early 2009, [Lloyd] argued that he could not have foreseen that the defrauded

banks would have recovered as little as they did from the foreclosure sales.” 

The district court rejected Lloyd’s arguments, stating, in pertinent

part, as follows:

         [Section] 2B1.1 treats the sale-of-collateral calculation as a
      separate and distinct analysis from the calculation of the reasonably
      foreseeable loss amount. It follows that this “credit against loss”
      provision does not require the amount of this credit to be reasonably
      foreseeable. To the contrary, the credit against loss provision
      emphasizes that the loss may be reduced only by the amount actually
      recovered or by the amount that is recoverable at the time of
      sentencing, whether or not the defendant had any idea what the
      collateral’s value would be by that time. (citation omitted)

          Taken together, these provisions teach a two-step approach for
      calculating the loss attributable to a defendant in home loan fraud
      cases such as this one. The first step is to calculate the reasonably
      foreseeable pecuniary harm resulting from the fraud. This amount
      will almost invariably include the full amount of unpaid principal on
      the fraudulently obtained loan, as an unqualified borrower’s default
      is clearly a reasonably foreseeable “potential result of the offense”
      within the meaning of Application Note 3(A)(iv). After all, the
      entire purpose of loan qualification criteria is to reduce the risk to
      banks that debtors will default on their loans. Fraudulent
      misrepresentations concerning borrowers’ qualifications cause banks
      to assume a risk of default and, as discussed below, a risk that the
      value of the collateral will decrease. Neither of these risks would
      have been assumed by the lender in the absence of fraud.
      Accordingly, the loss of the unpaid principal is an eminently
      foreseeable consequence of the fraudulent conduct. FN3 Partial
      recovery of this loss through seizure and sale of collateral may

                                         17
reduce the net loss amount through operation of the “credits against
loss” provision, but it does not diminish the foreseeability of the
financial institutions’ loss of the unpaid principal amounts in the first
instance.

      FN3 .This analysis—that the loss of the full amount of
      unpaid principal was reasonably foreseeable because
      defendant’s fraudulent conduct caused the lenders to
      assume the risk of a market downturn and the resulting
      decrease in the value of collateral—is consistent with
      the tort law proximate causation analysis. Specifically,
      it has long been that “[w]here the . . . conduct of the
      actor creates or increases the foreseeable risk of harm
      through the intervention of another force, and is a
      substantial factor in causing the harm, such intervention
      is not a superseding harm.” Restatement (Second) of
      Torts § 442A (citing cases).

    The second step in calculating the loss amount requires
application of the “credits against loss” provision. In applying this
provision, courts must deduct from the calculated loss the amount
actually recovered or actually recoverable by the creditor from sale
of the collateral. This calculation is made as of the time of
sentencing and without regard for whether this amount was
reasonably foreseeable by the defendant. Where the financial
institutions have sold the collateral, courts should credit the amount
actually recovered in the sale. Where the collateral is held by the
institution at the time of sentencing, then the fair market value of the
collateral at the time of sentencing is properly credited instead. By
operation of Application Note 3(E)(ii), it is irrelevant whether the
diminished value of the credit against loss was reasonably
foreseeable to defendant, as the loss of the entire amount of unpaid
principal was a reasonably foreseeable potential consequence of
defendant's conduct. Accordingly, defendant is only entitled to a
credit against loss in the amount actually recovered by the banks
from sale of the subject properties.

    This approach—requiring foreseeability of the loss of the unpaid
principal, but not requiring foreseeability with respect to the future
value of the collateral—is not merely the best reading of § 2B1.1; it
is also necessary to ensure that defendants who fraudulently induce

                                   18
      financial institutions to assume the risk of lending to an unqualified
      borrower are responsible for the natural consequences of their
      fraudulent conduct. This is so because among the risks that a bank
      assumes in agreeing to issue a home loan is the risk that in the event
      of default, the foreclosure sale value of the home will be insufficient
      to allow recovery of the principal value due to market downturns or
      other events. In the lending institution’s judgment, this risk is
      warranted only if the borrower satisfies certain employment, income,
      and asset requirements that render the likelihood of foreclosure
      sufficiently remote. Thus, by fraudulently misstating these factors,
      defendant and his coconspirators induced banks to assume the risk of
      a market downturn when the banks otherwise would not have
      assumed this risk with respect to the subject properties. Accordingly,
      irrespective of whether defendant could have predicted the
      foreclosure sale value of the subject properties at the time of
      sentencing, he should be held to account for the banks’ actual losses
      as he fraudulently induced them to assume the risk that the value of
      the homes would decrease—a risk that was ultimately realized. Put
      another way, a defendant may not reasonably count on the expected
      sale value of collateral to save himself from the foreseeable
      consequences of his fraudulent conduct.

      The defendant in Turk, Ivy Woolf Turk, “pleaded guilty to a single count of

conspiracy to commit mail and wire fraud in violation of 18 U.S.C. §§ 1341,

1343, 1349,” and was sentenced to “60 months’ imprisonment and ordered . . . to

pay $29,660,192.36 in restitution to the victims of the mortgage fraud she

perpetrated.” 

On appeal, Turk’s “main argument [wa]s that the

district court . . . erred in calculating the amount of loss that [her] fraud caused.”

Turk argued “that the loss amount should have been treated

as zero because the properties in which her victims thought they were investing

arguably had some market value at the time her fraud was discovered.” 

748. The Second Circuit concluded that Turk’s “argument fail[ed] because of its

faulty premise, namely, that the victims’ ‘loss’ [wa]s the decline in value of what

was promised as collateral (i.e., the buildings).” 

Second Circuit

concluded, “their loss [wa]s the principal value of the loans they made to . . .

Turk which were never repaid and which the buildings were supposed to have

collateralized but never did.” 

words, the Second Circuit held, “the

victims’ loss was the unpaid principal, and . . . the decline in value in any

purported collateral need not have been foreseeable to . . . Turk in order for her to

be held accountable for that entire loss.” 

(italics in original).

      In reaching these conclusions, the Second Circuit cited with approval, and

ultimately adopted, the interpretation of § 2B1.1 and Application Note 3 outlined

in Mallory. 

And, the Second Circuit emphasized, “[t]o accept . . .

Turk’s argument would be to encourage would-be fraudsters to roll the dice on

the chips of others, assuming all of the upside benefit and little of the downside

risk.” 

with and adopt the reasoning expressed by the courts in Mallory

and Turk. And, applying that reasoning in this case, conclude that the reasonably

foreseeable pecuniary harm resulting from Crowe’s fraud includes “the full

amount of unpaid principal on the fraudulently obtained loan[s].” 

. That is because Crowe, by fraudulently misrepresenting key

information, including her job and income, “cause[d] [the] banks [at issue] to

                                           20
assume a risk of default,” and “the loss of the unpaid principal [on each loan]

[wa]s an eminently foreseeable consequence of [her] fraudulent conduct.” 

final matter, we pause briefly to address two of our prior cases that

involved loss calculations under § 2B1.1. In the first of those cases, United

States v. Mullins, 

, 1291 (10th Cir. 2010), the district court

“calculated the financial loss attributable to [the defendant’s] fraud” for purposes

of § 2B1.1 by taking “the outstanding balances due on sixteen defaulted loans [the

defendant] assisted in procuring and subtracted from each the foreclosure sale

price when [the United States Department of Housing and Urban Development

(HUD)] liquidated the mortgaged property.” On appeal, the defendant challenged

this method of loss calculation, arguing in part “that the proceeds HUD took in

from liquidation sales . . . were unreasonably low and thus d[id]n’t reflect the

‘reasonably foreseeable pecuniary harm’ attributable to her fraud.” 

In support, the defendant noted that the appraisals conducted by HUD in apparent

preparation for the liquidation sales were “significantly lower” than the appraisals

that were first conducted when the defendant’s clients purchased the properties.

rejected this argument on the merits, concluding that “the district

court’s finding . . . that HUD’s sale prices reflected the reasonably foreseeable

pecuniary harm caused by [the defendant’s] fraud” was not clearly erroneous. 

      Clearly, our conclusion in Mullins rests on the implicit assumption that the

                                         21
concept of reasonable foreseeability applies to a district court’s calculation of the

credits against loss under § 2B1.1. But that threshold issue was neither placed

directly at issue by the parties in Mullins nor explicitly decided by the panel. As

a result, Mullins does not represent “binding precedent on this issue.” 4 United

States v. Garcia-Caraveo, 

, 1234 (10th Cir. 2009); see United Food

& Commercial Workers Union, Local 1564 v. Albertson’s, Inc., 

,

1199-1200 (10th Cir. 2000) (refusing to grant precedential weight to a

jurisdictional question assumed, but not explicitly decided, by a prior panel). In

other words, “under our rule of deference to prior panel decisions, there is no

holding on” the threshold issue “to which we must defer.” United 

.

      The concept of reasonable foreseeability was also mentioned briefly in

United States v. Washington, 

(10th Cir. 2011). There, the

defendant argued, in part, “that the loss realized in the sale of the[] properties [at

issue] [wa]s not attributable to his fraud and, therefore, not properly included in

the loss calculation.” 

We rejected that argument, holding that “in a

mortgage fraud scheme such as this, the loss is not the decline in value of the

collateral; the loss is the unpaid portion of the loan as offset by the value of the

collateral.” 

that “[a]lthough the victims of such a scheme may


      4
       As the government correctly observes, Mullins was issued prior to both
Mallory and Turk.

                                          22
be able to recoup some of their loss by selling the collateral, the initial

transactions would not have occurred let alone in the amount they did, but for

perpetration of the fraud.” 

our holding in Washington is entirely

consistent with the interpretation of § 2B1.1 that we explicitly adopt in this

opinion. Indeed, in Washington we quoted with approval the Second Circuit’s

statement in Turk “that ‘a loan is merely the exchange of money for a promise to

repay, with no assumption of upside benefit. At any given time, the buildings in

this case were nothing more than insulation against loss.’” 

626

F.3d at 751).

      To be sure, we also quoted in Washington the following statement from the

Eighth Circuit’s decision in United States v. Parish, 

(8th Cir. 2009):

“‘[t]he appropriate test is not whether market factors impacted the amount of loss,

but whether the market factors and the resulting loss were reasonably

(quoting 

). And Parish

itself effectively held that the concept of reasonable foreseeability applies to a

district court’s calculation of the credits against loss under § 2B1.1. 5 

. But we do not read Washington’s quotation of Parish as an adoption

of the Eighth Circuit’s view of foreseeability as it relates to credits against loss.

      5
        Notably, the Second Circuit in Turk openly criticized the Eighth Circuit’s
ruling in Parish and expressly declined to follow it on the grounds that its
“statement of the law is wrong because it conflates the initial calculation of loss
(where foreseeability is a consideration) with the credits against loss available at
sentencing (where it is not).” 

.

                                           23
To the contrary, the other relevant statements in Washington clearly suggest

otherwise. And, in any event, like Mullins, that precise issue was neither placed

directly at issue by the parties nor explicitly decided by the panel in Washington.

      In conclusion, we hold that, in calculating the amount of “loss” for

purposes of U.S.S.G. § 2B1.1(b), the concept of reasonable foreseeability applies

only to a district court’s calculation of “actual loss,” and not to its calculation of

the “credits against loss.” Consequently, we reject Crowe’s assertion that her

sentence was procedurally unreasonable because the district court did not

determine whether the proceeds ultimately realized from the foreclosures were

reasonably foreseeable to her.

      b) Amounts paid by successor lenders to the original lenders

      Crowe also argues that “[t]he district court’s calculation of loss [wa]s . . .

incorrect under United States v. James, 

(10th Cir. 2010).” Aplt.

Br. at 8. James, Crowe argues, “holds that the loss of successor lenders is

measured by ‘the difference between what they paid the original lenders for the

loans (less principal repayments by borrowers, if any) and what they received for

the properties at the foreclosure sales, plus reasonably foreseeable expenses

relating to the foreclosure proceedings.’” 

(quoting 

). “Because the Government [in this case] did not present evidence about

what the successor lenders paid for the mortgages,” Crowe argues, “this Court

should remand with instructions to use a loss amount of zero for purposes of

                                           24
[U.S.S.G. §] 2B1.1.” 

government notes in its appellate response brief, however, Crowe

did not raise this argument before the district court. Instead, Crowe argued only

that the successor lenders were not reasonably foreseeable victims.

Consequently, Crowe’s argument is subject to review only for plain error. See

United States v. Romero, 

, 1177-78 (10th Cir. 2007) (discussing the

requirement of raising procedural objections in front of the sentencing court).

“We find plain error only when there is (1) error, (2) that is plain, (3) which

affects substantial rights, and (4) which seriously affects the fairness, integrity, or

public reputation of judicial proceedings.” 

“The plain error standard

presents a heavy burden for an appellant, one which is not often satisfied.” 

for two reasons, that no error, let alone plain error, occurred

in this case. First, the holding in James is inapplicable to Crowe’s appeal because

of a key factual difference in the two cases: in James, the district court “refused

to consider the successor lenders as victims” based on its factual finding that the

decision to resell the original loans was not foreseeable to the defendant (a

finding, we note, that was not challenged by the government on appeal); in

Crowe’s case, the district court made no such finding. Second, and relatedly,

both James and our more recent decision in United States v. Smith, 

(10th Cir. 2013), support the proposition that “where losses to both original and

successor lenders is foreseeable,” a district court can calculate loss simply by

                                           25
subtracting the foreclosure sales price from the amount of the outstanding balance

on the 

. In other words, “the number of lenders involved

and the amount of profit made by the original lender or any intermediate lenders

is mathematically irrelevant to the calculation of” loss under § 2B1.1. 

marks omitted).

             The district court’s denial of Crowe’s motion for new trial

      In her second issue on appeal, Crowe argues that the district court erred in

denying her motion for new trial, in which she alleged that she received

ineffective assistance because her trial counsel stipulated, over her express

objection, to the jurisdictional element of the wire fraud counts.

      a) Background facts relevant to this claim

      On the first day of Crowe’s trial, the government began its presentation of

evidence by “offer[ing] a stipulation between the parties, . . . Exhibit 28.” ROA,

Vol. 3 at 133. Exhibit 28 stated, in pertinent part, that the parties stipulated to the

following facts regarding the eight interstate wire transfers that formed the basis

of Counts 9 through 16 of the indictment (i.e., the wire fraud counts):

      1.     On February 9, 2006, $766,465.89 was wired interstate, via the
             Federal Reserve’s Fedwire system, from Aegis Mortagage’s [sp]
             JPMorgan Chase account to Lawyer’s Title’s account at Vectra Bank
             in Denver, CO in order to fund the 1st Mortgage on 1321 Colt Circle,
             Castle Rock, CO;

      2.     On April 20, 2006, $944,525.55 was wired interstate, via the Federal
             Reserve’s Fedwire system, from Lending 1st Funding’s account at
             Wachovia Bank North America to Security Title Guaranty

                                           26
            Company’s account at Centennial Bank in Colorado in order to fund
            the 1st Mortgage on 7818 S. Zeno Street, CO;

      3.    On April 20, 2006, $310,713.91 was wired interstate, via the Federal
            Reserve’s Fedwire system, from Lending 1st Funding’s account at
            Wachovia Bank North America to Security Title Guaranty
            Company’s account at Centennial Bank in Colorado in order to fund
            the 2nd Mortgage on 7818 S. Zeno Street, CO;

      4.    On May 18, 2006, $31,180 was wired interstate, via the Federal
            Reserve’s Fedwire system, from Stewart Title of Denver’s account at
            Guaranty Bank and Trust in Denver, Colorado to Colorado Choice
            Properties, Inc.’s account at Bank of the West;

      5.    On July 25, 2006, $349,646.64 was wired interstate, via the Federal
            Reserve’s Fedwire system, from Lehman Brothers Bank’s account at
            JPMorgan Chase to Land Title, LLC’s account at First Bank in
            Colorado in order to fund the 1st Mortgage on the refinance of 6183
            S. Ventura, Denver, CO;

      6.    On July 25, 2006, $87,435.99 was wired interstate, via the Federal
            Reserve’s Fedwire system, from Lehman Brothers Bank’s account at
            JP Morgan Chase to Land Title, LLC’s account at First Bank in
            Colorado in order to fund the 2nd Mortgage on the refinance of 6183
            S. Ventura Court, Denver, CO;

      7.    On November 13, 2006, $691,150.94 was wired interstate, via the
            Federal Reserve’s Fedwire system, from Fieldstone Mortgage’s
            account at City Bank to First American Heritage Title Company’s
            account at Centennial Bank in Englewood, CO in order to fund the
            1st Mortgage on 948 Logan Street, Denver, CO; and

      8.    On November 13, 2006, $170,712.01 was wired interstate, via the
            Federal Reserve’s Fedwire system, from Fieldstone Investment
            Mortgage’s account at City Bank to First American Heritage Title’s
            account at Centennial Bank in Englewood, CO in order to fund the
            2nd Mortgage on 948 Logan Street, Denver, CO.

Aplee. Br., Attachment C at 1-3.

      The district court admitted Exhibit 28 without any objection from defense

                                       27
counsel. On the second day of trial, the prosecutor published Exhibit 28 to the

jury. Crowe’s trial counsel again asserted no objection to the exhibit.

      After trial, Crowe filed a pro se motion arguing, in pertinent part, that she

was entitled to a new trial pursuant to Fed. R. Crim. P. 33 because she “did not

authorize [her trial counsel] to sign the Stipulation,” and in fact “adamantly

objected to it.” ROA, Vol. 2 at 131. Crowe argued that “[t]his constitute[d] a

very blatant violation of her Sixth Amendment right to effective counsel” and

“fundamentally denied [her] the right to a fair trial.” 6 

10, 2012, approximately two weeks after sentencing, the

district court issued an opinion and order denying Crowe’s pro se motion. At the

outset of its opinion, the district court concluded that “[n]one of the concerns . . .

that might caution against pre-appeal consideration of” allegations of ineffective

assistance of trial counsel were present in this case, and thus it proceeded to

“entertain[] the motion” on the merits. 

With respect to the merits, the

district court first concluded that the “concession of a minor element of the

offense” by trial counsel, over a defendant’s objection, “is not the functional

equivalent of a guilty plea where, as indisputably happened here, trial counsel

vigorously contested the more significant elements of the offense.” 

(internal quotation marks omitted). Relatedly, the district court concluded “that


      6
       Crowe’s motion asserted other claims of ineffective assistance of trial
counsel, but none of those are at issue in this appeal.

                                           28
there [wa]s no clear authority establishing that a trial counsel’s decision to

stipulate to a jurisdictional element like the use of interstate wires, over the

defendant’s objection, constitutes per se ineffective assistance.” 

“[I]ndeed,” the district court concluded, “the most on-point authority appears to

suggest just the opposite.” 

the district court concluded that, even

assuming Crowe could establish her trial counsel performed deficiently by

entering into the stipulation, she could not establish that she was prejudiced by

that deficient performance. In support, the district court noted that Crowe “ha[d]

not come forward with any evidence” establishing that the mortgage transactions

at issue did not involve the use of interstate wires. 

Further, the

district court noted that, “notwithstanding the stipulation, the Government here

presented some evidence of wire transactions relating to [Crowe’s] scheme: the

Government introduced Exhibit 278, a wire transfer confirmation that is the

subject of paragraph 2 of the stipulation, demonstrating the wiring of funds from

New York to the closing agent; and Exhibit 279, a wire transfer confirmation

relating to the property at issue in paragraph 3 of the stipulation, reflecting the

transfer of funds from New York to the closing agent.” 

      b) Analysis of the district court’s decision

      We review the district court’s denial of a motion for a new trial for abuse

of discretion. United States v. McKeighan, 

, 973 (10th Cir. 2012).

A district court abuses its discretion if its adjudication of a claim is based upon an

                                           29
error of law or a clearly erroneous finding of fact. United States v. Lujan, 

, 861 (10th Cir. 2010).

         Generally, claims of ineffective assistance of trial counsel should be

brought on collateral review “so that a factual record enabling effective appellate

review may be developed in the district court.” United States v. Hamilton, 

, 1213 (10th Cir. 2007). We have recognized a narrow exception to this

general rule, however, “where the record before us allows for a fair evaluation of

the merits of the claim.” United States v. Sands, 

, 1066 (10th Cir.

1992).

         In this case, the district court rejected Crowe’s ineffective assistance claim

on the merits without conducting an evidentiary hearing. In doing so, the district

court effectively concluded that the claim, including the prejudice prong of

Strickland v. Washington, 

(1984), could be resolved on the basis of

the trial record alone. Based upon our review of the record on appeal, we agree

with the district court’s conclusion and in turn conclude that we may properly

review Crowe’s claim of ineffective assistance on direct appeal.

         Applying the standards outlined in Strickland to the facts before us, we

conclude that there is no need to assess in detail Crowe’s arguments and

allegations regarding Strickland’s performance prong. Even if we were to assume

that Crowe’s trial counsel performed deficiently by entering into the stipulation

over Crowe’s objection, the critical question is whether, under Strickland’s

                                            30
prejudice prong, Crowe can demonstrate a reasonable probability that, but for her

trial counsel’s allegedly deficient performance, the result of the trial would have

been different.

      As we have noted, the district court concluded that Crowe could not

demonstrate prejudice for two related reasons: because there was no evidence

remotely suggesting that the transactions that formed the basis of Counts 9

through 16 of the indictment did not involve the use of interstate wires, and

because the government’s evidence at trial, aside from the stipulation, effectively

established the wire transactions at issue. Notably, Crowe does not dispute either

of these conclusions. Instead, she argues that her trial counsel’s stipulation was

per se prejudicial “because it left [her] entirely without counsel in contesting the

element of the wire-fraud offenses to which trial counsel stipulated.” Aplt. Br. at

13. But a review of the record on appeal clearly establishes that Crowe’s trial

counsel did not “entirely fail[] to subject the prosecution’s case to meaningful

adversarial testing,” as would be necessary for us to properly dispense with the

necessity of Crowe making a “specific showing of prejudice” under Strickland.

United States v. Cronic, 

, 659 (1984). Indeed, aside from the

stipulated jurisdictional element, the record establishes that Crowe’s trial counsel

vigorously represented Crowe in challenging the government’s evidence on the

wire fraud counts, particularly the key question of whether Crowe acted with

specific intent to defraud or to obtain money or property by means of false

                                          31
pretenses, representations or promises.

      Consequently, we conclude that Crowe has failed to establish that she is

entitled to a new trial on the basis of her ineffective assistance of counsel claim.

                                          III

      The judgment of the district court is AFFIRMED.




                                          32