Friday, February 17, 2017

Conspiracy connections need only be slight

US v. Chittenden:  In this appeal, the Fourth Circuit affirmed the bank fraud and conspiracy to commit bank fraud and mail fraud convictions of a former loan officer for drafting and submitting fraudulent mortgage loan applications, mostly for first-time Hispanic home buyers.  Chittenden, the government alleged, submitted loan applications with false income, asset, and employment information, and she undertook this fraud in concert with multiple realtors.

Chittenden went to trial and subsequently was convicted, and the district court entered judgment against her.  It did not, however, enter a forfeiture penalty, and it directed counsel to schedule an evidentiary hearing on the issue of forfeiture.  Chittenden objected that because the judgment was entered against her, the district court lacked jurisdiction to impose a forfeiture any longer.  Over her objection, the parties litigated forfeiture for the next year.  Ultimately, the Fourth Circuit determined that a court’s failure to enter a forfeiture order at sentencing did not deprive it of jurisdiction to impose such an order after sentencing.  Here, the court entered the forfeiture order against Chittenden just over a year after sentencing, for over $1.5 million, the amount of conspiracy proceeds reasonably foreseeable to Chittenden.  She appealed.

Prior to trial, the government froze Chittenden’s assets.  She argued on appeal that this asset forfeiture violated her Sixth Amendment right to counsel.  Chittenden had hired attorneys of her choice to conduct a pre-indictment investigation, and she retained the same counsel for trial and throughout sentencing.  She amassed considerable debt to pay her attorneys, borrowing money from relatives to foot her legal bills.  The Fourth Circuit found, however, that her right to counsel of choice was not implicated here, as she was not forced to change counsel or rely on appointed counsel.

Additionally, Chittenden argued a lack of evidence to support her convictions.  The Fourth Circuit disagreed, finding that the co-conspirator testimony as well as borrower testimony provided a link between Chittenden and the conspiracy, namely her preparation of applications that contained false information.  The Fourth Circuit held that Chittenden’s connection to the conspiracy needed only to be slight, and the other realtors and borrowers provided more than sufficient evidence of her guilt.

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