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United States v. Battles

United States Court of Appeals, Tenth Circuit

March 11, 2014

UNITED STATES OF AMERICA, Plaintiff - Appellee,
v.
SAFIYYAH TAHIR BATTLES, Defendant - Appellant

Petition for certiorari filed at, 04/28/2014

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Appeal from the United States District Court for the Western District of Oklahoma. (D.C. No. 5:11-CR-00354-D-1).

Bill Zuhdi, Bill Zuhdi Attorney at Law, P.C., Oklahoma City, Oklahoma, for Defendant-Appellant.

Scott E. Williams, Assistant United States Attorney (Sanford C. Coats, United States Attorney, and Steven W. Creager, Special Assistant United States Attorney, with him on the brief), Oklahoma City, Oklahoma, for Plaintiff-Appellee.

Before HARTZ, O'BRIEN, and HOLMES, Circuit Judges.

OPINION

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HOLMES, Circuit Judge.

After a jury trial, Safiyyah Tahir Battles was convicted of one count of wire fraud, in violation of 18 U.S.C. § 1343, and one count of money laundering, in violation of 18 U.S.C. § 1957(a). Ms. Battles was sentenced to thirty months in prison, followed by two years of supervised release. The district court also ordered her to make restitution to the victim of her crimes. Ms. Battles now appeals her convictions and sentence on numerous grounds. Exercising jurisdiction under 28 U.S.C. § 1291, we dismiss in part and affirm in part.

I

A

Ms. Battles is a former employee of T& T Realty, a real-estate firm owned by her mother. When she built a home in 2006 at 5404 North Lottie Avenue in Oklahoma City, Oklahoma (" the North Lottie residence" ), she acted as the project's general contractor. To finance construction of the residence, Ms. Battles obtained two loans totaling $377,400 from First Security Bank.

In 2007, Ms. Battles decided to refinance the North Lottie residence. She submitted a uniform residential loan application to Saxon Mortgage, Inc. (" Saxon" ), but Saxon's automated system rejected the application because her debt-to-income ratio (116%) was too high. Consequently, Ms. Battles reapplied for credit through Saxon's " Score Plus" program, which required her to submit twelve months' worth of bank statements, as well as information concerning her gross monthly income and assets. Among other things, Ms. Battles claimed a gross monthly income of

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$28,723.16 and a First Security Bank account containing $165,907.70. Saxon approved her application for a $500,000 loan shortly thereafter. But, as it turned out, Saxon's decision was based on a distorted picture of Ms. Battles's financial status. Ms. Battles's 2007 federal income tax return revealed that her adjusted gross annual income was $14,346--a far cry from the $344,677.92 extrapolated from the figures on her loan application. Similarly, the balance in her bank account on the loan's closing day was less than $1000. It subsequently came to light that Ms. Battles had falsified bank statements to inflate her income and improve her chances of qualifying for a loan.

Before the loan proceeds were disbursed, a closing company prepared a settlement statement which specified that a local builder named Emmitt Wisby would receive $102,630.01 and Ms. Battles would receive $2000. The closing company gave Mr. Wisby's check to Ms. Battles on May 9, 2007 with the understanding that she would deliver it to Mr. Wisby. Instead, Ms. Battles immediately deposited the funds into her First Security Bank account. The check was made payable to " Emmitt Whisby" and bore what appeared to be the respective endorsements of Mr. Wisby and Ms. Battles. However, Mr. Wisby later stated under oath that he had never seen--and had certainly never signed--the check.

Ms. Battles quickly dissipated the proceeds of the loan; between May 11 and 21, 2007, she wrote checks totaling $47,700 to family members. She made no mortgage payments on the North Lottie residence after July 31, 2007. When the property fell to foreclosure at the end of 2007, the outstanding loan balance was $499,902.34. And, though Ms. Battles eventually sold the North Lottie residence for $173,000, Saxon nonetheless sustained a significant loss from having funded the loan.

B

On November 15, 2011, a grand jury returned a three-count indictment charging Ms. Battles with (1) making a false statement to a financial institution, in violation of 18 U.S.C. § 1014 (Count I); (2) committing wire fraud, in violation of 18 U.S.C. § 1343 (Count II); and (3) laundering money, in violation of 18 U.S.C. § 1957(a) (Count III). Ms. Battles exercised her right to a jury trial, which commenced on June 14, 2012. The jury returned a verdict of guilty on Counts II and III of the indictment on June 21, 2012, but failed to reach a verdict on Count I. As a result, the district court declared a mistrial on Count I and subsequently granted the government's unopposed motion to dismiss that count without prejudice.

Following Ms. Battles's trial, a representative of the United States Probation Office prepared a Presentence Investigation Report. See Aplt. App., Vol. I, at 103A (Presentence Investigation Report, filed Oct. 29, 2012) [hereinafter, " PSR" ].[1] The probation officer held Ms. Battles responsible for a total loss of $630,981.29 and determined that Saxon's share of that loss for the North Lottie residence was $326,902.34. The remainder of the loss was attributed to loans associated with six other Oklahoma City properties. According to the probation officer, Ms. Battles had fraudulently " obtain[ed] excessive proceeds from the closing of the homes" and " either kept the proceeds... or funneled" them through other entities--namely, M& N Remodeling (" M& N" ), a business she and her sister operated in 2005 and 2006.

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PSR, ¶ 12, at 6; see, e.g., id., ¶ 24, at 9 (" Investigators later learned that the sale price of [3128 Dentwood Terrace] was inflated in an effort to funnel the money that was to go to [M& N] for alleged repairs to [Ms.] Battles." ).

Relying on U.S.S.G. § 2B1.1, and grouping Counts II and III in accordance with U.S.S.G. § 3D1.2, the probation officer set Ms. Battles's base offense level at 7 and added fourteen levels based on the total loss amount. See U.S.S.G. § 2B1.1(b)(1)(H) (loss between $400,000 and $1,000,000). Then, because Ms. Battles was convicted of violating 18 U.S.C. § 1957, the probation officer assessed an additional offense level. See U.S.S.G. § 2S1.1(b)(2)(A). Ms. Battles received no acceptance-of-responsibility adjustment. See PSR, ¶ 41, at 12 (" [Ms. Battles] proceeded to trial and... never admitted to the illegal conduct in this case." ). The PSR thus assigned to Ms. Battles a total offense level of 22 and a criminal history category of I, computing an advisory Guidelines range of forty-one to fifty-one months.[2] Pursuant to the Mandatory Victims Restitution Act (" MVRA" ), 18 U.S.C. § 3663A, the probation officer also recommended that Ms. Battles be ordered to make restitution to " Saxon Securitization Trust 2007-3 c/o Christine Hill" in the amount of $326,902.34. PSR, ¶ 108, at 23. Ms. Battles lodged several objections to the PSR and moved for both a downward departure and a downward variance.[3]

On February 1, 2013, Ms. Battles appeared for sentencing and presented the testimony of her aunt and Federal Bureau of Investigation case agent Timothy Schmitz. She also introduced several M& N business documents in an effort to legitimize that enterprise[4] and prove that her involvement therein was not " relevant conduct" for purposes of her sentence. See generally U.S.S.G. § 1B1.3 (explicating the sentencing concept of " relevant conduct" ). After considering the foregoing evidence, the district court denied Ms. Battles's request for a departure. However, the district court did grant a downward variance, noting that such a dispensation would " at least mitigate the impact of [Ms. Battles's] incarceration on her children" and would not otherwise contravene the sentencing goals listed in 18 U.S.C. § 3553(a). Aplt. App., Vol. VI, at 1123. The district court ultimately sentenced Ms. Battles to serve thirty months in the Federal Bureau of Prisons on Counts II and III (set to run concurrently), followed by two years of supervised release. In addition, the court adopted the PSR's recommendation regarding restitution. Final judgment entered on February 1, 2013, and Ms. Battles filed her notice of appeal from this judgment on February 12, 2013.[5]

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On March 22, 2013, during the pendency of this appeal, Ms. Battles moved for a new trial[6] pursuant to Federal Rule of Criminal Procedure 33. In her motion, Ms. Battles alleged that she learned from post-trial discussions with her mother " that evidence existed [that] she was not provided." Id., Vol. II, at 148 (Def.'s Am. Mot. for New Trial, filed Mar. 22, 2013). More specifically, she referenced approximately 200 pages of documentary evidence subpoenaed from Stephen Jones, her mother's attorney[7]: these documents consisted of (1) receipts from M& N; and (2) reports from interviews of customers of Lending Leaders, her sister's brokerage firm. Ms. Battles first came into physical possession of these documents at some point after July 12, 2012 (i.e., three weeks after trial) by reviewing files at Mr. Jones's office. See United States v. Battles, Dist. Ct. No. 5:11-CR-00354-D-1, Doc. 177-2, at 1 (Ex. 2 to Def.'s Am. Mot. for New Trial, dated July 12, 2012) (email from Mr. Jones's office authorizing file review); see also id., Doc. 177-3, at 1 (Ex. 3 to Def.'s Am. Mot. for New Trial, dated July 18, 2012) (email from Ms. Battles's trial counsel claiming " no recollection of receiving any receipts of anything pertaining to [M& N] from the government" ). Ms. Battles argued that the documents constituted Brady material[8] and that the government's failure to furnish them prior to trial infringed upon her constitutional rights.

As further justification for a new trial, Ms. Battles asserted that she did not discover the identity of her victim until she examined the PSR. She noted that while " [t]he jury was told the victim was Saxon Mortgage..., the [PSR] identified a different victim" --Saxon Securitization Trust. Aplt. App., Vol. II, at 160. And, though she conceded that this purported new evidence was not Brady material, she insisted that her constitutional rights had been violated because she did not have " the opportunity to cross-examine at trial Saxon Securit[i]zation." Id.

In an order filed October 15, 2013, the district court rejected both of Ms. Battles's asserted grounds for relief and declined to hold an evidentiary hearing because " [her] allegations, accepted as true, [were] insufficient to warrant a new trial." Aplee. Supp. to Supp. App. at 5 (Order Den. Def.'s Am. Mot. for New Trial, filed Oct. 15, 2013). In reaching this conclusion, the court determined that the victim-identity evidence " would not have produced an acquittal of any charge," id., and that none of Ms. Battles's averments regarding the M& N receipts or interview reports demonstrated

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the suppression of favorable, material evidence. The district court's order denying Ms. Battles's motion for a new trial is the final docket entry on the court's record.

II

On appeal, Ms. Battles raises seven claims: (1) the government suppressed evidence that was favorable and material to her defense; (2) the district court erred by admitting testimony of a witness who intimated that Ms. Battles had destroyed documents; (3) there was insufficient evidence produced at trial to support her convictions; (4) she received ineffective assistance of trial counsel; (5) the district court erred by failing to grant a two-level sentence reduction for acceptance of responsibility; (6) the district court imposed a legally infirm restitution order; and (7) cumulative error deprived her of a fair trial and a reliable sentence. We address each of these arguments in turn, and for the reasons explicated below, dismiss in part and affirm in part.

A

We first turn to Ms. Battles's contention that the government committed two discrete Brady violations. As noted supra, Ms. Battles offered an array of M& N receipts and invoices at her sentencing hearing in order to prove that her conduct--at least insofar as it related to M& N--was not fraudulent. Ms. Battles now claims that the government suppressed the M& N documents and that the information contained therein would have been favorable and material to her trial defense. In addition, she alleges that the government suppressed an IRS interview report in which Daphne Dukes, a former Lending Leaders customer, alluded to fraud taking place at that firm. Ms. Battles argues that this report " would have been critical" to her defense, for if she had known of its existence, she would have called Ms. Dukes as a witness at trial or used the report to impeach other witness testimony. Aplt. Opening Br. at 36.

The government urges us to review Ms. Battles's Brady claim for plain error and takes the position that Ms. Battles has forfeited this claim.[9] Specifically, the government contends that plain-error review is appropriate because

[Ms. Battles] was aware of the facts supporting her Brady contentions in mid-2012 but chose not to bring them to the attention of the district court until more than a month after filing a notice of appeal. At that point, the district court had lost jurisdiction to grant her motion for [a] new trial. Her tardy filing deprived this Court of the district ...

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