Joseph H. Gay, Jr., Assistant U.S. Attorney, U.S. Attorney's Office, San Antonio, TX, for Plaintiff-Appellee.
Alexander Lee Calhoun, Austin, TX, Margaret Mary Embry, Assistant U.S. Attorney, U.S. Attorney's Office, San Antonio, TX, for Defendant-Appellant.
Appeal fro the United States District Court for the Western District of Texas.
Before OWEN, SOUTHWICK, and GRAVES, Circuit Judges.
JAMES E. GRAVES, JR., Circuit Judge:
Rickey Benns appeals his sentence and restitution order following his conviction for making false statements relating to a credit application. Because we agree that the district court erred in calculating the loss amount attributable to him under the Sentencing Guidelines and in awarding restitution based on relevant conduct, we VACATE Benns' sentence and restitution order and REMAND the case to the district court for resentencing.
On March 14, 2012, Rickey Benns was named in a one-count indictment charging him with making false statements relating to a credit application, in violation of 18 U.S.C. § 1014. The indictment alleged
that Benns " knowingly made a material false statement for the purpose of influencing the action of Countrywide Bank, a bank then insured by the Federal Deposit Insurance Corporation, in connection with an application for loan modification." Specifically, the indictment alleged that Benns " forged the signatures of borrowers on an application for modification to a loan related to a property located at 1301 Red Deer Way, Arlington, Texas, and created and submitted a false pay stub in order to deceive Countrywide Bank into believing that the borrowers were more credit-worthy than was actually the case."
Benns pleaded guilty to the charge in the indictment without a plea agreement. In entering his plea, Benns accepted the accuracy of a factual resume prepared by the government. The resume stated that Benns acquired an interest in a property located at 1301 Red Deer Way from B.A. and M.A., although B.A. and M.A. continued to hold the mortgage loan; that Benns forged the signatures of B.A. and M.A. on an application to modify the mortgage loan; and that Benns created and submitted a fake pay stub to support the application. The factual resume also recited the penalties that could be imposed by the court for a violation of 18 U.S.C. § 1014, including: " restitution to victims or to the community, which may be mandatory under the law, and which Defendant agrees may include restitution arising from all relevant conduct, not limited to that arising from the offense of conviction alone."
The presentence report (" PSR" ) described an ongoing scheme by Benns to target distressed properties ( i.e. properties with little or no equity in them) that had been on the market for at least ninety days. Benns would invite the homeowner to deed the property to him without receiving any payment, and would agree to take over the mortgage payments for the property and attempt to sell it. Benns would then purport to sell the homes to rent-to-own buyers, collecting down payments and monthly mortgage payments from the buyers. However, Benns frequently collected money from the buyers but did not use it to make the monthly mortgage payments. The PSR listed ten properties acquired by Benns that ultimately were foreclosed after mortgage payments were not made.  According to Benns' statements in an interview with law enforcement officers, " he did not intend for this to happen. He stated he was trying to keep up with too many properties and did not have a good tracking system."
The property located at 1301 Red Deer Way, for which Benns submitted the fraudulent loan modification application, was one of the properties acquired by Benns. Benns admitted that he submitted the fraudulent application in an attempt to save the home from foreclosure. Nevertheless, the property was eventually foreclosed, resulting in a loss of $54,906.59 to the Department of Housing and Urban Development (" HUD" ). The other nine
foreclosures resulted in total losses of $489,695.83 to the mortgage holders and/or guarantors of the properties. As the PSR explained, " [t]he loss amount from the mortgage companies is the outstanding principal balance at the time of foreclosure, plus any out-of-pocket costs related to the foreclosure, minus the resell value of the property."
Based on these losses, the PSR held Benns accountable for a total loss amount of $544,602.42. The base level for Benns' offense of conviction is 7. U.S.S.G. § 2B1.1(a)(1). With his criminal history category of I, this produces an advisory guidelines range of zero to six months of imprisonment. However, the loss amount of $544,602.42 increases the offense level fourteen points, to twenty-one. U.S.S.G. ...