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United States v. Chittenden

United States Court of Appeals, Fourth Circuit

January 31, 2017

UNITED STATES OF AMERICA, Plaintiff - Appellee,
v.
LORENE CHITTENDEN, Defendant-Appellant. UNITED STATES OF AMERICA, Plaintiff - Appellee,
v.
LORENE CHITTENDEN, Defendant-Appellant. UNITED STATES OF AMERICA, Plaintiff - Appellee,
v.
LORENE CHITTENDEN, Defendant-Appellant. UNITED STATES OF AMERICA, Plaintiff - Appellee,
v.
LORENE CHITTENDEN, Defendant-Appellant.

          Argued: October 28, 2016

         Appeals from the United States District Court for the Eastern District of Virginia, at Alexandria. Liam O'Grady, District Judge. (1:12-cr-00394-LO-4)

         ARGUED:

          Joseph Ray Pope, WILLIAMS MULLEN, Richmond, Virginia, for Appellant.

          Christopher John Catizone, OFFICE OF THE UNITED STATES ATTORNEY, Alexandria, Virginia, for Appellee.

         ON BRIEF:

          John S. Davis, WILLIAMS MULLEN, Richmond, Virginia, for Appellant.

          Dana J. Boente, United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Alexandria, Virginia, for Appellee.

          Before GREGORY, Chief Judge, and KEENAN and FLOYD, Circuit Judges.

         Affirmed by published opinion. Chief Judge Gregory wrote the opinion, in which Judge Keenan and Judge Floyd joined.

          GREGORY, Chief Judge:

         On May 7, 2014, a jury found Appellant Lorene Chittenden guilty of one count of conspiracy to commit bank fraud and mail fraud and ten counts of bank fraud for her role in originating and submitting fraudulent mortgage loan applications. Chittenden appeals on several grounds, including that the government's pretrial seizure of her assets violated her Sixth Amendment right to counsel, that the government failed to present sufficient evidence on the conspiracy and bank fraud counts, and that the district court lacked jurisdiction to enter the post-trial forfeiture orders. Finding no error, we affirm.

         I.

         Chittenden worked as a loan officer at George Mason Mortgage ("GMM") in Fairfax, Virginia from June 1999 to April 2008. The superseding indictment alleged that in this role Chittenden joined a conspiracy to submit mortgage loan applications with false information, and that in doing so she defrauded Cardinal Bank, a federally insured institution. Count 1 charged that between 2002 and 2007 Chittenden conspired with four codefendants, five named coconspirators, and other conspirators known and unknown to commit bank fraud and mail fraud in violation of 18 U.S.C. § 1349. The government also charged Chittenden with twenty-two individual counts of bank fraud in violation of 18 U.S.C. § 1344.

         Contemporaneous with the superseding indictment, the government moved ex parte for a restraining order to preserve Chittenden's property for potential forfeiture. The district court granted the motion, finding that "[a]ll assets of the defendants, including substitute assets" were subject to pretrial restraint. J.A. 80. The district court made one exception, however-it denied the government's request to recover $40, 000 that Chittenden had already paid to her attorneys from the law firm Williams Mullen, the same attorneys who defended her in the trial court and represent her in this appeal.

         Chittenden ultimately proceeded to a seven-day trial that centered on her role in preparing loan applications for first-time, Hispanic homebuyers. Beginning in 2005, Chittenden worked on applications for "stated loans" (commonly referred to as "liar loans"), see J.A. 1074, which borrowers generally obtained by listing their income and asset figures without any independent verification by lenders. The government argued at trial that, among other things, Chittenden submitted stated loan applications replete with false income, asset, and employment information, and that she undertook these acts in concert with multiple realtors.

         The central figure in the charged conspiracy was Rosita Vilchez, the head of Vilchez & Associates, a residential real estate company. As Chittenden recognizes, the testimony at trial showed that Vilchez and her company were "steeped in fraud." Appellant's Br. 13. Vilchez, for instance, would direct her employees to give money to the company's clients so the clients had the minimum amount of funds needed to qualify for certain loans (and then later ordered employees to reclaim the money). J.A. 154-55. For the same purpose, Vilchez directed employees to add borrowers to their own personal bank accounts. J.A. 153. Vilchez and her associates also obtained fraudulent "CPA letters" from tax preparation companies to support borrowers' loan applications; these letters falsely stated that the borrowers were self-employed and that the companies had prepared tax returns on their behalf. See J.A. 155, 470-71, 646-48.

         Over the course of the trial, the government presented testimony from twenty-seven witnesses, including more than a dozen borrowers and several realtors who had worked with Chittenden on those borrowers' loan applications. The defense called eight witnesses, including Chittenden. Chittenden moved for a judgment of acquittal, but the trial court denied the motion and submitted the case to the jury. The jury convicted Chittenden on the conspiracy count and on ten counts of bank fraud, and acquitted her on four other bank fraud counts.[1]

         On the evening before Chittenden's October 3, 2014 sentencing hearing, the government filed a motion for a preliminary order of forfeiture, seeking a money judgment against Chittenden. At the hearing, Chittenden argued that the government's motion was untimely under Federal Rule of Criminal Procedure 32.2(b)(2)(B), which provides that "[u]nless doing so is impractical, the court must enter the preliminary order sufficiently in advance of sentencing to allow the parties to suggest revisions or modifications before the order becomes final as to the defendant under Rule 32.2(b)(4)."

         In large part due to the government's delay, the district court neither made any forfeiture findings at the sentencing hearing nor entered any forfeiture orders. The district court instead proceeded to other aspects of Chittenden's sentence, imposing a term of forty-two months' imprisonment. The parties did, however, discuss the forfeiture issue at the hearing, and the court referenced forfeiture near the close of the hearing: "I will not impose a fine and costs in light of the restitution and the forfeiture order that may take assets that you presently possess." Sentencing Transcript, October 3, 2014 ("Sent'g Tr.") 42.[2] The written judgment entered later that day also included the following notation: "FORFEITURE - TO BE DETERMINED." J.A. 1757.

         Because the district court had sentenced Chittenden without imposing the forfeiture penalty, the government filed a motion to amend or correct sentence pursuant to Federal Rule of Criminal Procedure 35(a). The government suggested that the court remedy this omission by entering a forfeiture order within the fourteen days allowed under Rule 35(a). The district court did not follow this suggestion. Instead, it directed counsel to schedule an evidentiary hearing on the government's forfeiture motion. The district court also stated in a written order that its earlier judgment "is amended to clarify that it was only a partial judgment order-as it did not include the mandatory forfeiture order-and therefore is not yet final." J.A. 1829.

         Over Chittenden's objection that the district court lacked jurisdiction to amend her sentence, the parties litigated the forfeiture issue for the next year. The district court issued an order in March 2015 granting in part and denying in part the government's motion for a preliminary order of forfeiture. The district court subsequently entered a money judgment against Chittenden for $1, 513, 378.82, the amount of the conspiracy proceeds that it deemed was reasonably foreseeable to Chittenden. The government eventually obtained a forfeiture order for Chittenden's substitute property up to the amount of $1, 032, 378.82. The government filed a motion for reconsideration, which the district court denied on October 13, 2015, just over a year after Chittenden's sentencing hearing.

         Chittenden timely appealed the district court's order of October 13, 2015.

         II.

         Chittenden first claims that the government's pretrial seizure of her assets violated her Sixth Amendment right to counsel. Because Chittenden failed to raise this argument below, it is subject to plain error review. Chittenden must therefore demonstrate that an error was made, the error was plain, the error affected her substantial rights, and the court should exercise its discretion to correct the error because it seriously affected the fairness, integrity, or public reputation of judicial proceedings. United States v. Hare, 820 F.3d 93, 104-05 (4th Cir. 2016). We need not proceed past the first step of the plain error analysis here as Chittenden has failed to establish any Sixth Amendment error.

         As noted, the district court allowed the government to restrain Chittenden's assets, tainted or untainted. Prior to this restraint, Chittenden had hired attorneys from Williams Mullen to conduct a preindictment investigation, whom she retained during trial and throughout the sentencing proceedings. Chittenden states that due to the pretrial restraint she had to borrow money from family members to pay her legal fees, and because she could not pay her attorneys throughout the lengthy post-trial proceedings, she amassed a considerable debt. In the wake of the Supreme Court's decision in Luis v. United States, 136 S.Ct. 1083 (2016) (plurality opinion), Chittenden contends that the government violated her right to counsel, requiring reversal of the judgment below.

         In Luis, a four-member plurality held that the government's "pretrial restraint of legitimate, untainted assets needed to retain counsel of choice violates the Sixth Amendment." Id. at 1088. It was undisputed that the district court's order there barred the defendant from using her untainted funds-that is, funds unconnected to the alleged crime-to "hire counsel to defend her in her criminal case." Id. Consistent with this denial, the Supreme Court repeatedly spoke of the Sixth Amendment right in terms of the right to choose one's counsel. See, e.g., id. at 1093 (stating that "[a]s far as Luis' Sixth Amendment right to counsel of choice is concerned"). The Court reaffirmed that deprivation of the right to counsel of choice is a structural error. Id. at 1089 (citing United States v. Gonzalez-Lopez, 548 U.S. 140, 148 (2006)).

         Chittenden's right to counsel of choice is simply not implicated here. Chittenden retained at trial multiple attorneys from Williams Mullen-the same firm she chose to conduct a preindictment investigation. Chittenden was not forced to change her privately retained attorneys or to rely on appointed counsel. As Chittenden's (chosen) counsel conceded at oral argument, nothing in the record indicates that she wanted different attorneys. Given that the pretrial seizure of funds did not prevent Chittenden from "being represented by the lawyer[s] [s]he want[ed], " Gonzalez-Lopez, 548 U.S. at 148, we reject her claim that the government violated her Sixth Amendment right to counsel of choice.[3]See also United States v. Gordon, 657 F.App'x 773, 778 (10th Cir. 2016) (denying defendant's Sixth Amendment claim under Luis where "he, in fact, had retained counsel of his choice") (citing United States v. Gordon, 710 F.3d 1124, 1139 (10th Cir. 2013)).

         In sum, we find no ...


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