Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. No. 05 CR 247-Ruben Castillo, Judge.
The opinion of the court was delivered by: Tinder, Circuit Judge.
Before RIPPLE, ROVNER, and TINDER, Circuit Judges.
Defendants Angela Hubbard, Ieanis Shaw, Eddie Jackson, Pamela Young, and Bruce Jones were charged in a three-count indictment with bank fraud in violation of 18 U.S.C. §§ 1344 and 2. The government alleged that Ms. Shaw and Ms. Hubbard generated false mortgage loan documents in order to wire transfer mortgage loan proceeds to the personal bank accounts of friends and family. One count was dismissed against Ms. Shaw, and a superseding indictment was returned, adding money laundering charges under 18 U.S.C. § 1957 against all defendants except Mr. Jones.
Defendants Shaw, Jackson, and Young were tried by a jury and convicted on all counts. After denying motions for a new trial, the district court sentenced the defendants to terms of imprisonment and ordered them to pay restitution. Defendants Shaw, Jackson, and Young appealed. Their appeals were consolidated.
The defendants raise three issues on appeal. They first challenge the district court's decision to exclude hearsay evidence that Ms. Hubbard lied to the government about Ms. Shaw's role in one of the wire transfers involved in the bank fraud scheme. They also challenge the sufficiency of the evidence of their guilt at trial. Lastly, they contend that in rebuttal argument government counsel improperly commented on their decisions not to testify in violation of their Fifth Amendment right to remain silent. For the following reasons, we affirm.
Washington Mutual Bank ("Washington Mutual" or the "bank") is the nation's largest savings and loans. Its deposits are insured by the Federal Deposit Insurance Corporation. Washington Mutual provides mortgages to its customers who are buying or refinancing homes. In 2003 its mortgage loans were processed at three sites, including Downers Grove, Illinois.
The mortgage loan processing was compartmentalized into discrete job functions similar to an assembly line. First, the loans were solicited by mailings to existing Washington Mutual customers. If a customer completed certain paperwork and returned it, employees at the Downers Grove facility put the customer's personal information into a loan processing computer system called "Pronto." The mortgage loan application then went to "openers," employees who were responsible for compiling required forms and documents for a particular loan and sending the loan on to the next stage of the process. The loan file next moved on to the underwriting department, where underwriters decided whether to approve, decline, or suspend the loan based on credit information in the loan file. If a loan was approved, then the loan file moved on to the processing department. Employees in that department were responsible for gathering any additional information needed to complete the mortgage loan process. Once all these steps were completed, the file moved to the closing department where employees called "closers" worked with title agents and attorneys to reconcile loan fees and balance and fund the mortgage loan. Closers were responsible for preparing all legal documents for loan closing, many of which were prepared using the Pronto system. Openers and closers had no business reason to interact in order to complete their respective job functions.
One type of document that the closers were responsible for preparing was the "wire transfer worksheet." These worksheets were used to initiate the actual transfer of funds from the bank to the specific closing location in order to fund a mortgage loan. The wire transfer worksheets contained information such as the loan applicant's name, the loan number, the amount of the loan, and the location where the funds were to be sent. In 2002 and 2003, after the closer prepared the wire transfer worksheet, Washington Mutual's procedures required that two persons sign the worksheet before it moved on to the wire room for funding. The first person was the closer who had finalized the loan paperwork; the second was a manager at the Downers Grove facility. In 2002 and 2003, at the height of the mortgage refinancing boom, Washington Mutual employed full-time closers, who were regular employees, and contract closers, who were brought in on a part-time basis to assist with the increased volume of loan applications. Full-time closers were authorized to sign wire transfer worksheets; con-tract closers were not. Once the wire transfer worksheet had the required signatures, it was faxed from the Downers Grove facility to the Washington Mutual wire room in New York. Employees in the wire room reviewed the worksheet for approvals and authorizing signatures and generated the actual disbursement or wire of bank funds to the settlement agent, usually a title company or attorney. Wire transfers of bank funds for mortgage loans were almost never sent to the bank account of an individual borrower.
The Pronto system also maintained an accounting of loans that had been approved and of bank funds that had been dispersed to fund those loans. Pronto allowed wire transfer requests to be "reversed." This could be necessary where a loan funding document was not executed properly or where a home sales transaction fell through at the last minute. The process of reversing a wire transfer was easy and only required a "couple clicks of a button." The process could also be used to conceal a fraud. In this case, the defendants reversed wire transfers in Pronto before the system completed its daily accounting, which allowed them to conceal their fraud for some time. But the process of reversing wire transfers left forensic evidence. One could determine which Washington Mutual employee reversed a wire transfer in Pronto by examining the funding screen for that wire reversal and matching up the user identification number associated with the reversal with the master list of identification numbers for bank employees. Every employee who reversed a wire transfer in Pronto left a digital fingerprint of that activity.
In early May 2003, TCF Bank notified the loss prevention team at the Downers Grove facility of a large wire transfer of mortgage loan funds from Washington Mutual into the personal bank account of TCF Bank customer Yvette Hulet. The May 8, 2003 wire transfer to Ms. Hulet's account was in the amount of $345,943.80. The wiring of such a large sum of mortgage money into a personal bank account immediately raised red flags. The loss prevention team began an investigation into the wire transfer and determined that no one with the name Yvette Hulet had a pending mortgage loan application with Washington Mutual. The team then found the wire transfer worksheet used to generate the Hulet wire. Examination of the worksheet revealed that it had been printed on the then-pending mortgage loan application of a person named Percy Williams. In other words, the worksheet had Mr. Williams's name and loan number on it, but Ms. Hulet's name was listed as the beneficiary of the wire and her TCF Bank account was the account to be credited.
Further examination of the worksheet revealed additional evidence of fraud. One of the authorizing signatures on the worksheet was Stan Zotas, who was no longer employed by Washington Mutual at the time of the "loan." The Washington Mutual investigators determined that whoever generated the fraudulent wire transfer had cut and pasted the authorization signatures from a legitimate wire transfer worksheet onto the same section of the fraudulent Hulet worksheet and then sent it to the wire room for funding. The investigators concluded that the fraud was an inside job because the hard copies of legitimate wire transfer worksheets were only accessible to any current Washington Mutual employee. The investigators also discovered that six wire transfers in Hulet's name had been printed through Pronto in early May 2003, though only one wire transfer worksheet had been faxed to the wire room in New York. In addition, these six wire transfers had been printed using Ms. Hulet's personal and bank information and a pending loan application, and the wires had been reversed in Pronto.
Washington Mutual attempted to determine whether any other similar fraudulent wire transfers had occurred from the Downers Grove facility. An investigation disclosed that wire transfers of mortgage loan funds had been made from Washington Mutual to the personal bank accounts of Pamela Young, Eddie Jackson, and Bruce Jones. First, on January 28, 2003, a wire transfer of $194,471.70 was made into Ms. Young's personal checking account at Bank One. The wire transfer sheet contained Ms. Young's name, the name of her bank and her bank account number. The Young wire transfer sheet had been printed on the pending loan application of Washington Mutual customer Beverly Emon, also a Washington Mutual employee. Next, on April 1, 2003, a wire transfer of $250,641.40 was made into Mr. Jackson's personal bank account at TCF Bank. The wire transfer had been printed on the pending loan application of Washington Mutual customer Frank Knoll. Then on April 29, 2003, a wire transfer of $187,134 was made into Mr. Jones's personal bank account at Bank One. This wire transfer had been printed on the pending loan application of Washington Mutual customer Mark Corvo. Four other wires were printed with Mr. Jones's name, but were not sent to the wire room for funding and were reversed before a wire transfer took place. The Washington Mutual investigators also discovered five wires in Pronto that had been printed in April 2003 in the name of George Davis, Defendant Shaw's husband, for amounts ranging from $90,000 to a bit over $100,000. None of the Davis wires were sent to the wire room for funding.
The Washington Mutual investigators took steps to determine whether the Young, Jackson, and Jones wires were legitimate and found similar evidence of fraud in each of them. Neither Young, Jackson, nor Jones was a Washington Mutual mortgage loan customer in the winter or spring of 2003, and the authorization signatures on each wire had been cut and pasted from legitimate worksheets. Washington Mutual's investigation led to Angela Hubbard and Ieanis Shaw. Ms. Hubbard had been a contract closer at the Downers Grove facility from September 2002 until April 28, 2003, her last day of employment. Ms. Shaw was hired as a contract opener at the Downers Grove facility in late August 2002 and then made a full-time employee in March 2003. Her last day of employment with Washington Mutual was May 20, 2003.
Before the January 28 wire transfer of $194,471.70 into Ms. Young's personal bank account, Ms. Young's checking account had maintained very low or negative balances. Her bank records show that the day after the transfer, January 29, 2003, she opened a new savings account at Bank One in Texas and transferred $94,243.58 from her checking account into her new savings account. Bank records further show that on January 30, 2003, $45,207.12 was withdrawn from this new savings account. Also on January 29, Ms. Young wrote a personal check to Bank One to obtain a cashier's check made payable to Angela Hubbard in the amount of $97,000. The cashier's check later was endorsed by Ms. Hubbard. Bank Calumet records reflect that on February 3, 2003, Ms. Hubbard deposited $46,000 into her checking account, used $50,000 to open a new savings account, and received $1,000 cash.
Ms. Young and Ms. Hubbard are sisters. Telephone records revealed that from January 1 through January 24, 2003, they spoke on the phone only three times for a total of forty-two minutes. But during the ten days from January 25 through February 3, 2003, the period surrounding the wire transfer, they spoke on the phone thirty-six times for a total of 228 minutes. In the remainder of February 2003, they spoke eleven times for a total of 108 minutes.
On April 1, 2003, $250,641.40 was wired from Washington Mutual to a personal checking account at TCF Bank opened by Mr. Jackson on March 23, 2003. The account had very low or negative balances before the transfer. The same day as the wire transfer, Mr. Jackson wrote a personal check on the account in the amount of $125,000 payable to Angela Hubbard. On April 3, 2003, that check was deposited into Ms. Hubbard's personal checking account at Bank Calumet and Ms. Hubbard wrote a personal check on her account payable to Ms. Shaw for $10,000. This check was later deposited into Ms. Shaw's bank account. A week later Ms. Hubbard wrote another personal check for $10,000 payable to Ms. Shaw. This check also was deposited into Ms. Shaw's account. Mr. Jackson ran through the money he retained rather quickly on cash withdrawals, furniture, vehicles, and gifts to family and friends. On June 23, 2003, less than three months after the wire transfer, his account balance was near $0.
Telephone records of calls between Mr. Jackson and Ms. Hubbard reveal a spike in activity in the time period surrounding the April 1 wire transfer. In January and February 2003, Mr. Jackson and Ms. Hubbard spoke nine and seven times, respectively, for a total of fifty-three minutes each month. From March 1 through March 25, 2003, they had sixteen telephone conversations for a total of sixty-six minutes. However, during the ten days from March 26 through April 4, 2003, they had seventy-three telephone conversations for a total of 222 minutes.
In April 2003, Ms. Shaw purchased two wedding rings from the Jewelry Exchange, valued at $3,225.64 and $2,312.21, respectively. That same month Ms. Shaw and her husband went on a honeymoon to Jamaica at the cost of $3,306. Then on May 8, 2003, Ms. Shaw ...