Argued November 18, 2014
Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 08 CR 1023-2 -- Ronald A. Guzmá n, Judge.
For United States of America, Plaintiff - Appellee: Jason A. Yonan, Attorney, Office of The United States Attorney, Chicago, IL.
For Frederic Haywood, Defendant - Appellant: Joshua Sachs, Attorney, Law Office of Joshua Sachs & Associates, Evanston, IL.
Before BAUER, MANION, and WILLIAMS, Circuit Judges.
Manion, Circuit Judge.
Fred Haywood, with help from others, processed bogus applications for mortgage loans and caused $1.4 million in losses to the lenders. He pleaded guilty to wire fraud, 18 U.S.C. § 1343, and was sentenced to 151 months' imprisonment. On appeal Haywood argues that part of the loss should have been excluded in calculating his offense level under the sentencing guidelines. Haywood explains that he disclosed part of his fraud during proffer sessions protected by U.S.S.G. § 1B1.8. He also contends that the district court improperly applied a 4-level, aggravating-role adjustment under U.S.S.G. § 3B1.1(a). We affirm the judgment.
Haywood worked for several mortgage brokers between July 2001 and June 2007, and during that time he and at least 10 others (including his 5 codefendants) defrauded financial institutions that made loans to the brokerages' clients. As a " loan officer" or " loan processor" for his employers, Haywood was tasked with preparing loan applications and assembling supporting documents on behalf of home buyers needing financing. But many applications that Haywood prepared were chock-full of lies. He corroborated them with phony or altered documents, including property appraisals, cashier's checks (altered to make it appear that the buyers had made down payments), W-2 forms, pay stubs, and statements from landlords or property-management companies verifying that buyers who didn't already own a home were paying rent. Sometimes Haywood inflated the purchase price, causing the buyer to borrow more than necessary and allowing him to divert the excess to himself at closing. Sometimes the " buyers" themselves participated in the frauds, since they never intended to occupy the homes or repay the loans. Instead, they were being paid by Haywood to lend their names (and good credit) to secure fraudulent loans. Overall, Haywood admitted arranging 65 fraudulent loans.
Many of the phony rent verifications came from " New Christian Property Management," one of several shell companies incorporated by Haywood. (He used that company also to funnel loan proceeds to himself.) Codefendant Steve Young, a fellow loan officer at one of the brokerages, created a variety of sham documents to meet Haywood's specifications. Codefendant Sumira Persuad supplied many of the inflated appraisals. Codefendant DeAngelo McMahan, another loan officer, helped gather documents for Haywood's loan applications. Haywood also paid at least five
unindicted " bird dogs" to find " buyers" who would willingly apply for fraudulent loans.
In July 2007, before federal authorities had filed charges, an FBI special agent and three other federal agents interviewed Haywood (with his lawyer and a federal prosecutor present). Haywood admitted that at least 20 times from 2003 through 2005 he had given lenders false information about loan applicants' income, employment, and assets. But, as evidenced by the FBI agent's report of that interview, Haywood falsely denied much of his illegal activity, and apparently he did not share details about specific fraudulent loans. It was nearly 18 months later, in December 2008, that federal authorities charged Haywood. He executed a plea agreement and pleaded guilty to a single count of wire fraud in April 2012.
An FBI special agent discussed the case with the probation officer who prepared Haywood's presentence investigation report. That report reflects that the agent told the probation officer that Haywood had given truthful information during " two proffer interviews" conducted before he signed the plea agreement. In their plea agreement the parties stipulated that Haywood was responsible for 65 fraudulent loans (each one listed in " Attachment A" to the plea agreement) with a combined loss of $1,447,270. The plea agreement also states, in a section titled " Offense Level Calculation," that a 16-level increase would apply under U.S.S.G. § 2B1.1(b)(1)(I) " because the loss amount of $1,447,270 exceeds $1,000,000 but ...