Court Reverses Mortgage Fraud Conviction for Insufficient Proof of Venue

US v. Mosby: Mosby, the former State’s Attorney for Baltimore, was preparing for retirement and looking to purchase homes in Florida. As part of that she made two pre-retirement withdrawals under a CARES Act provision (to avoid tax penalties) based on the claim she had “experiences adverse financial consequences” as a result of COVID-19 and used the proceeds to cover downpayments and closing costs on two properties. For the second, she also executed a “gift letter” stating that her husband would pay a $5000 shortfall on the second property, after which Mosby provided him with the money to pay her. As a result, Mosby was charged in Maryland with two counts of perjury (for the two CARES Act withdrawals) and two counts of mortgage fraud (one for each property). She had two trials, the first on the perjury counts, the second on the mortgage fraud counts; she was convicted on both perjury counts, but acquitted on the mortgage fraud count related to the first property and convicted on the count related to the second.

On appeal, a divided Fourth Circuit affirmed Mosby’s perjury convictions, but reversed her mortgage fraud conviction. On the perjury convictions, the court rejected Mosby’s argument that the questions on the CARES Act withdrawal forms related to her basis for the withdrawals was too ambiguous to support perjury charges, concluding that in context the questions were sufficiently clear. The court also affirmed the district court’s decision to allow the Government to present evidence as to how Mosby used the withdrawn funds as probative of whether she was in the condition required for the CARES Act benefits. However, on the mortgage fraud conviction, the court found that the proper venue for that offense was in Florida, where the actual transaction occurred, not Maryland, for preparations for the transaction took place and the jury was not instructed properly. As a result, there was insufficient evidence of that element to support a conviction.

Judge Niemeyer dissented on the mortgage fraud issue, arguing that the jury instruction was proper and there was evidence supporting venue in Maryland.