RIPPLE, Circuit Judge.
Gwendolyn Jackson and Latonja Spencer were convicted in the United States District Court for the Northern District of Illinois on charges arising out of a scheme to defraud mortgage lenders. The district court sentenced Ms. Jackson to 112 months' imprisonment and Ms. Spencer to 36 months' imprisonment. Bothnow appeal
Ms. Jackson and Ms. Spencer participated in a scheme to defraud various Chicago-area mortgage lenders from approximately August 2004 to May 2008. Bobbie Brown Jr. was the scheme's leader. Brown arranged with home builders and other sellers of newly constructed residences to receive finder's fees or commissions for locating buyers to purchase their properties at inflated prices. Using various businesses that he operated, including Chicago Global Investments, Inc. ("Chicago Global"), Brown then located nominee buyers willing to purchase the properties. To obtain financing for the purchases, the nominees were referred to loan officers, including Ms. Spencer, who fraudulently qualified the buyers for loans through false statements in loan applications and other documents submitted to lenders. Once a purchase was finalized, Brown and his coconspirators kept the surplus proceeds of the sale—that is, the inflated amount above what the seller was seeking.
As president and co-owner of Chicago Global, Ms. Jackson recruited nominee buyers to participate in the scheme. She and others also provided, and caused to be provided, funds for the real estate deals and falsely represented the nominees as the source of those funds. Ms. Jackson's participation in the scheme resulted in losses to mortgage lenders of approximately $8,515,570.
For her part, Ms. Spencer participated in the scheme through her job as a loan officer at Oxford Financial. As part of the scheme, she assisted Brown's nominee buyers in obtaining funding for twelve different fraudulent real estate transactions. Specifically, Ms. Spencer knowingly provided false information, including falsely inflated income amounts and job histories, to lenders so that the nominees would qualify for mortgages. Ms. Spencer's participation in the scheme resulted in losses to mortgage lenders of approximately $3,091,050.
On June 3, 2008, a grand jury returned a twenty-six count indictment against Ms. Jackson, Ms. Spencer, and nineteen other individuals, alleging that the defendants knowingly devised and participated in a scheme to defraud financial institutions and mortgage lenders. Ms. Jackson was charged with two counts of wire fraud, in violation of 18 U.S.C. § 1343, and one count of mail fraud, in violation of 18 U.S.C. § 1341. Ms. Spencer was charged with two counts of bank fraud, in violation of 18 U.S.C. § 1344, and two counts of mail fraud, in violation of 18 U.S.C. § 1341.
Ms. Jackson and Ms. Spencer, along with four of their codefendants, were tried together in a two-week jury trial. In the end, both defendants were convicted on all counts charged in the indictment. The district court sentenced Ms. Jackson to 112 months' imprisonment on each of her three counts, to be served concurrently, and ordered her to pay $8,515,570 in restitution. As for Ms. Spencer, the court sentenced her to 36 months' imprisonment on each of her four counts, also to be served concurrently, and ordered her to pay $3,091,050
Ms. Jackson and Ms. Spencer each challenge one aspect of the guilt phase of their trial. First, Ms. Jackson contends that the district court erred by excluding evidence of Brown's physical violence toward her. Ms. Spencer contends that the district court abused its discretion by failing to sever her trial from that of her codefendants. Both defendants also submit that the district court erred in applying a two-level obstruction-of-justice enhancement when calculating their respective sentences. We first will review the contentions from the guilt phase of the trial. Then we will review the sentencing phase.
We begin with Ms. Jackson's contention that the district court erroneously excluded evidence that Brown, with whom she had a personal relationship, abused her. We review the district court's evidentiary rulings for abuse of discretion. United States v. Khan, 771 F.3d 367, 377 (7th Cir.2014).
At trial, Ms. Jackson sought to introduce a police report from November 12, 2007, detailing a domestic battery allegation that she had filed against Brown. The point of this evidence, according to Ms. Jackson, was to rebut testimony introduced by the Government that she and Brown were in a business relationship. As defense counsel explained, the police report was probative in this regard because "business partnerships and battery are opposites."
The district court refused to admit the report. In doing so, the court rejected Ms. Jackson's contention that battery and business relationships are uncommon, stating that defense counsel "would have to have some expert witness come in and testify" to that fact.
In response, defense counsel inquired whether Ms. Jackson could introduce evidence of Brown's abuse for a different purpose, namely, to corroborate her defense that she was unaware of Brown's fraudulent activities because she was afraid to confront him. The district court responded to this request in the affirmative:
The next day, prior to Ms. Jackson's testimony, the following colloquy took place between the district court and defense counsel regarding the court's ruling excluding the November 2007 police report:
During her testimony, Ms. Jackson testified that Brown controlled her and her company and that she did not know the details of his fraudulent scheme because she was afraid to confront him. In particular, Ms. Jackson testified that Brown did not allow her to know the details of Chicago Global's business transactions and that he "would holler and scream" if she ever inquired about such information.
Following the jury's verdict, Ms. Jackson filed two separate motions for a new trial. In both motions, she asserted that the district court had erred by excluding evidence of Brown's physical abuse toward her. The district court denied the motions. In doing so, the court concluded that Ms. Jackson's proffered evidence of abuse was inadmissible because it "failed for lack of a proper foundation as to time."
On appeal, Ms. Jackson contends that the district court abused its discretion by precluding her from "presenting any evidence that [she] was the victim of physical and mental abuse at the hands of Bobbie Brown."
We agree with the Government's assessment of the district court's order. The only evidence of Brown's physical abuse ever proffered by Ms. Jackson was the instance described in the November 2007 police report. The district court excluded that report as irrelevant to Ms. Jackson's mental state at the time of the offense. Aside from the report, the district court did not exclude any other evidence of Brown's physical abuse. Although the
Ms. Spencer contends that the district court erred by failing to sever her trial from that of her codefendants. We review a district court's denial of a defendant's request for severance for an abuse of discretion. United States v. Del Valle, 674 F.3d 696, 704 (7th Cir.2012). Where, however, a defendant fails to renew a motion for severance at the close of evidence, we consider the issue waived. See United States v. Plato, 629 F.3d 646, 650 (7th Cir.2010).
Severance under Federal Rule of Criminal Procedure 14 is required "only if there is a serious risk that a joint trial would compromise a specific trial right of one of the defendants, or prevent the jury from making a reliable judgment about guilt or innocence." Zafiro v. United States, 506 U.S. 534, 539, 113 S.Ct. 933, 122 L.Ed.2d 317 (1993). "[B]lame-shifting among codefendants, without more, does not mandate severance." Plato, 629 F.3d at 650.
Ms. Spencer submits that the district court abused its discretion by failing to sever her trial from that of her codefendant, Edgardo Hernal. More precisely, Ms. Spencer contends that severance was warranted because her trial strategies and defenses were in direct conflict with Hernal's. The Government responds that Ms. Spencer waived this objection by failing to request severance in the district court and that, in any event, the district court's denial of severance was not an abuse of discretion.
We agree with the Government. First, there is no indication in the record that Ms. Spencer ever moved for severance in the district court. Although her
In any event, waiver aside, it is clear that the district court did not abuse its discretion by denying severance. On appeal, Ms. Spencer only offers one reason for requiring severance: because her defense strategy was "mutually exclusive" with that of Edgardo Hernal.
Both defendants contend that the district court erred in applying an obstruction-of-justice enhancement when calculating their respective sentences. When reviewing an obstruction-of-justice enhancement, we review the district court's factual findings for clear error and its conclusion that those findings support the enhancement de novo. United States v. Cheek, 740 F.3d 440, 453 (7th Cir.2014).
The Sentencing Guidelines permit a two-level enhancement for obstruction of justice
U.S.S.G. § 3C1.1. A finding that the defendant committed perjury is sufficient to justify the enhancement. See United States v. Riney, 742 F.3d 785, 790 (7th Cir.2014). "A defendant commits perjury if, while testifying under oath, she gives false testimony concerning a material matter with the willful intent to provide false testimony, rather than as a result of confusion, mistake, or faulty memory." United States v. Chychula, 757 F.3d 615, 619 (7th Cir.2014) (alterations omitted) (internal quotation marks omitted). "To apply the enhancement based on perjury, the district court should make a finding as to all the factual predicates necessary for a finding of perjury: false testimony, materiality, and willful intent." Riney, 742 F.3d at 790 (internal quotation marks omitted).
With these principles in mind, we turn first to Ms. Jackson's contention. The Presentence Investigation Report ("PSR") for Ms. Jackson recommended a two-level enhancement to her sentencing calculation for obstruction of justice pursuant to U.S.S.G. § 3C1.1. In particular, the PSR asserted that Ms. Jackson had obstructed justice by knowingly providing false testimony at trial.
When addressing this issue at sentencing, the district court determined, contrary to the PSR, that Ms. Jackson had not "deliberately or knowingly lied" while testifying:
Following these remarks, defense counsel pointed out that the offense level the court was using to calculate Ms. Jackson's guidelines range still included an enhancement for obstruction of justice. In response, the district court stated, "If by raising the obstruction issue in light of what I have said about her lying to herself, I do not think lying to yourself excuses obstruction of justice."
Ms. Jackson contends that the district court erroneously applied the obstruction enhancement in light of its finding that she did not "deliberately or knowingly lie[] at trial."
We agree with the parties' conclusion on this issue. The district court's finding that Ms. Jackson did not knowingly and deliberately lie during her testimony directly refutes one of the key elements required for perjury, namely, willful intent. The Government offers no other basis in the record warranting this enhancement. Accordingly, we conclude that Ms. Jackson's sentence should be vacated and her case remanded for resentencing.
Ms. Spencer's PSR recommended a two-level obstruction enhancement based on the ground that she too had knowingly provided false testimony. In response, Ms. Spencer filed an objection to the PSR in which she asserted that just because the jury did not believe her testimony does not mean that she committed perjury.
At sentencing, the district court determined that Ms. Spencer's conduct warranted the enhancement. In particular, the court agreed with the Government that Ms. Spencer had lied when testifying that she did not knowingly provide false information to lenders. Although the court recognized that her testimony was "not a brilliant" or "particularly effective obstruction of justice," the court nonetheless determined "that she had, at the very minimum, shaded the truth" and "knew she was doing it."
On appeal, Ms. Spencer's challenge to the district court's obstruction enhancement consists entirely of one sentence: "In consolidation, Ms. Spencer believes this argument [referring to Ms. Jackson's argument] pertains to the imposition of the obstruction enhancement for the same reasons and therefore adopts this argument."
For the foregoing reasons, we vacate Ms. Jackson's sentence and remand for resentencing. In all other respects, we affirm the judgments of the district court.
AFFIRMED IN PART, VACATED AND REMANDED IN PART