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United States of America v. Leslie Love and Bobbie Brown

May 24, 2012

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,
v.
LESLIE LOVE AND BOBBIE BROWN, JR., DEFENDANTS-APPELLANTS.



Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. Nos. 08 CR 453 and 08 CR 452--Wayne R. Andersen and Virginia M. Kendall, Judges.

The opinion of the court was delivered by: Manion, Circuit Judge.

ARGUED JANUARY 18, 2012

Before BAUER, MANION, and WOOD, Circuit Judges.

This case involves the criminal appeals of two defendants: Bobbie Brown, Jr., the mastermind of a large mortgage fraud scheme, and one of his accomplices, Leslie Love. Brown's scheme occurred in two different real estate markets, Las Vegas and Chicago, and involved recruiting many lawyers, accountants, loan officers, bank employees, realtors, home builders, and home buyers to further a plan where residential properties were purchased at inflated sales prices by insincere buyers with fraudulent loan applications. The money accumulated by Brown through his scheme generally consisted of the dif- ference between the inflated sales price and the actual value of the property. Later, when the properties were resold at lower prices or went into default, the financial institutions that made the mortgage loans suffered combined losses of at least $32 million.

Brown, Love, and 31 other accomplices were appre- hended and charged with a host of fraud counts. Brown and Love both pleaded guilty to fraud; Brown was sen- tenced to 260 months' imprisonment, and Love to 66 months' imprisonment. Their cases have now been consolidated on appeal, and Brown and Love challenge different aspects of their respective sentences. Love contests the number of victims used to calculate his sentencing guidelines; his position has merit, and so we vacate his sentence and remand for resentencing. Brown contests the loss calculation used for his guide- lines range and argues that his sentence is unreasonable; his argument is unpersuasive, and we thus affirm his sentence.

I. Background

Between August 2004 and May 2008, Brown ran an elaborate scheme to defraud mortgage lenders by duping those lenders into issuing approximately 150 fraudulent mortgage loans. Brown used several businesses that he owned in order to conduct his scheme, and he operated in two real estate markets, Chicago and Las Vegas. Brown was the mastermind behind the plan, and he recruited or directed dozens of individuals to further the scheme: lawyers, accountants, loan officers, bank employees, realtors, home builders, and nominee buyers. Of his accomplices, 32 people were apprehended and criminally charged.

To operate his scheme, Brown first recruited indi- viduals to be the nominee buyers of new or newly reno- vated residential properties. Brown told the nominees that they would not have to put any money down for the purchase, that they would not have to make any mortgage payments, and that their names would be removed from the mortgage and title within 12

months--the properties would either be sold within that period, or Brown himself would personally purchase the properties from the nominees. Brown paid each nominee approximately $15,000 to $50,000 for every property the nominee purchased.

Brown also colluded with the home builders and the sellers of these residential properties, prompting them to sell their properties to Brown's nominees at inflated prices. In particular, Brown convinced the builders and sellers to appraise their properties at a value at least 10% higher than the actual value of the property.

Brown then recruited loan officers to prepare and submit fraudulent loan packages to the lending financial institutions. The loan applications contained false state- ments and omissions; they inflated the nominees' income and assets; they understated the nominees' liabilities; and they failed to disclose the nominees' intentions about not residing at the property, their relationships with Brown, and the fact that the nominees had purchased other residences and had obtained other mortgages. The loan officers who prepared the fraudulent loan applications received kickbacks from Brown for their services, and as with the nominees, the relation- ships between these loan officers and Brown were not disclosed to the lenders.

In addition to all of this, Brown recruited bank em- ployees to create false verifications of deposit in order to support the false claims made in the nominees' loan applications regarding their financial statuses. He recruited employees from his companies to create false verifications of employment and false verifications of rent and leases for the nominees. He recruited accoun- tants to create false letters alleging that the accountants had prepared tax returns for the nominees. Finally, he recruited attorneys privy to the scheme to represent the nominees at real estate closings and to ensure that the closings went smoothly.

Through the Chicago scheme, Brown obtained approximately 150 fraudulent mortgage loans, totaling more than $95 million in loan proceeds from the victim lenders. The Las Vegas scheme resulted in approximately 33 fraudulent loans totaling about $16 million.

In June 2008, in two separate indictments--one for the Las Vegas scheme and one for the Chicago scheme--Brown was charged with multiple counts of wire fraud, bank fraud, mail fraud, and identity theft. In January 2010, he entered a plea of guilty in the Las Vegas case without a written plea agreement with the government; in April 2010, he entered a guilty plea in the Chicago case through a plea agreement. The two cases were consolidated for sentencing purposes. In March 2011, the district court conducted a sentencing hearing: Brown was sentenced to 216 months' impris- onment for the Las Vegas scheme and 240 months' im- prisonment for the Chicago scheme, to run concurrently. The ...


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