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United States v. Luis

United States Court of Appeals, Ninth Circuit

August 28, 2014

UNITED STATES OF AMERICA, Plaintiff-Appellee,
v.
MARCO MANUEL LUIS, Defendant-Appellant

Argued and Submitted, Pasadena, California March 6, 2014.

Page 1062

Appeal from the United States District Court for the Southern District of California. D.C. No. 3:10-cr-02967-IEG-5. Irma E. Gonzalez, Senior District Judge, Presiding.

SUMMARY[*]

Criminal Law

The panel vacated in part and remanded for recalculation an order of restitution to CitiGroup, and affirmed the district court as to remaining issues, in an appeal in which the defendant, who pleaded guilty to conspiracy to engage in monetary transactions in violation of 18 U.S.C. § § 1956(h) and 1957 for his part in the purchase of two parcels of real property with fraudulently obtained loans, challenged orders of restitution to CitiGroup, a loan originator, and JP Morgan Chase, a loan purchaser.

The panel held that because the defendant's crimes infringed on Chase's and Citi's property interests, they were offenses " against property" under the Mandatory Victim Restitution Act. The panel also held that district court did not abuse its discretion in determining that Chase was a victim under the Act, because the fraudulent nature of the loans was concealed at the time Chase purchased them. The panel rejected the defendant's contention that " against property" requires physical damage to property. The panel also rejected the defendant's contention that even if actually engaging in transactions with proceeds from unlawful activity constitutes an offense against property, conspiracy to engage in such transactions does not.

Regarding Rancho Santa Fe property loans, the panel (1) held that the district court erred by calculating Chase's restitution based on the unpaid principal loan balance rather than the value of the loans when Chase purchased them; and (2) rejected as foreclosed by Robers v. United States, 134 S.Ct. 1854, 188 L.Ed.2d 885 (2014), the defendant's argument that the district court erred by offsetting the restitution amount owed to Chase by the foreclosure sale price rather than subtracting the fair market value assessment submitted by the defendant.

Regarding Citi's loss in connection with Palomar property loans, the panel likewise rejected the defendant's argument that the district court should have subtracted from the unpaid principal balance the fair market value of the property at the time Citi could have foreclosed on it instead of the sale price of the first mortgage loan. The panel rejected the defendant's contention that Citi's choice to sell the loan rather than foreclose on the property constituted an intervening cause.

Todd W. Burns, Burns and Cohan, San Diego, California, for Defendant-Appellant.

Lawrence E. Spong (argued), Assistant United States Attorney; Bruce R. Castetter, Assistant United States Attorney Chief, Appellate Section Criminal Division; Laura E. Duffy, United States Attorney, United States Attorney's Office, San Diego, California, for Plaintiff-Appellee.

Before: Richard A. Paez, N. Randy Smith, and Andrew D. Hurwitz, Circuit Judges. Opinion by N.R. Smith.

OPINION

Page 1063

N.R. SMITH, Circuit Judge:

The Mandatory Victim Restitution Act (" MVRA" ) requires a district court to order restitution when (1) a defendant commits an " offense against property," and (2) there is a " victim." See 18 U.S.C. § 3663A(a)(1), (c)(1). We affirm the district court's determination that both requirements were met in this case.

Marco Luis pleaded guilty to two counts of conspiracy to engage in monetary transactions in property in violation of 18 U.S.C. § § 1956(h) and 1957 for his part in the purchase of two parcels of real property with fraudulently obtained loans. Because Luis's crimes infringed on JP Morgan Chase's (" Chase" ) and CitiGroup's (" Citi" )[1] property interests, they were offenses against property. See United States v. Stephens, 374 F.3d 867, 871 (9th Cir. 2004). Also, the district court did not abuse its discretion in determining that Chase was a victim, because the fraudulent nature of the loans was concealed at the time Chase purchased them. See United States v. Yeung, 672 F.3d 594, 603 (9th Cir. 2012), overruled in part on other grounds by Robers v. United States,

Page 1064

134 S.Ct. 1854, 188 L.Ed.2d 885 (2014).

We affirm the calculation of restitution owed to Citi, because the district court deducted from the base restitution amount the actual amount received in mitigation of the victim's loss. See Robers, 134 S.Ct. at 1856. However, we vacate and remand for the district court to recalculate the amount owed to Chase, because the district court applied a formula ...


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