Eleventh Circuit Court of Appeals - Published Opinions

Thursday, October 01, 2015

Martin: Evidence Sufficient to support mortgage fraud

In U.S. v. Martin, No. 14-11019 (Sept. 30, 2015), the Court affirmed convictions for fraud arising out of fraudulently obtained mortgage loans, affirmed the sentence but reversed the restitution award. The Court rejected Martin’s challenge to the sufficiency of the evidence, noting her participation in a scheme involving her father’s submission of fraudulent income statements to lending institutions. The scheme “affected” a financial institution, even if a lender suffered no loss (by selling the loan to another institution), because the fraudulent statements resulted in “an increased risk of loss through default.” Turning to sentencing, the Court rejected Martin’s challenge to the denial of a minor role sentence reduction. The Court noted Martin recruited her father to participate in the scheme. With regard to restitution, the Court held that a “successor lender” can qualify as a “victim” for restitution purposes. The successor lender purchased the loan without an awareness of its true value, due to the fraud. The Court, however, recognized that the district court did not consider the actual purchase price that the successor lender paid for the loans. If this purchase price was less than the price at which the successor lender sold the loan, the successor lender would actually make a profit. The Court therefore remanded the case for recalculation of the restitution to be awarded, if any.