A recent appellate reversal of serious financial consequences in a federal
white-collar criminal case considered a factor presented by many
fraud cases. The defendants in
U.S. v. Singletary, two brothers, had been ordered to pay $1 million in restitution after
they were convicted in the District Court for the Middle District of Florida
of conspiracy to defraud mortgage lenders and the federal government.
The defendants had purchased older homes in Jacksonville neighborhoods
through a jointly-owned investment company, renovated them under an investment
company owned by one brother, and then financed many sales through three
mortgage businesses owned by the other brother. Brokers at those companies
had helped buyers obtain mortgages that were insured by the Federal Housing
A multi-count indictment alleged that the brothers and other conspirators
made false representations to the United States Department of Housing
and Urban Development (HUD), defrauded a federally insured bank, defrauded
purchasers of residential property, and induced them to make false statements.
The brothers pleaded guilty to the first criminal fraud count, which detailed
the scheme to defraud mortgage lenders and the FHA.
One brother received a prison sentence of 18 months and the other was sentenced
to one year. The federal judge also imposed an order requiring that each
pay $500,000 in restitution to the collections agency of HUD. They both
appealed their sentences, challenging the district court's calculation
of the sentence duration and its issuance of the restitution orders, which
included forfeiture provisions.
Success on Appeal Based on the District Court's Abuse of Discretion
The Eleventh Circuit Court of Appeals vacated the Florida federal trial
court's imposition of restitution, ordered removal of all forfeiture
provisions and remanded the case for the court to carry out the judgment.
The appellate court affirmed the district court's application of the
United States Sentencing Guidelines.
The government had conceded that the forfeiture provision was in error,
and the opinion focused on the legal basis for imposition of a restitution
order under the Mandatory Victim Restitution Act (MVRA). In order to be
eligible for an award, federal prosecutors had to prove that each individual
mortgage for which it sought restitution was the product of a fraudulent
Based on its lengthy review of the trial record, the Eleventh Circuit panel
concluded that the facts presented by the prosecution were inadequate.
The trial court's resulting factual findings only indicated that "restitution
of at least $1,000,000" had been established by the government, but
it did not identify the individual mortgages that had caused losses due
the fact that they were fraudulently obtained.
Because specific factual findings are required to enable meaningful review
on appeal, the court held that entry of restitution orders was an abuse
of discretion on the part of the trial court judge. In closing, the appellate
judges emphasized that its decision did not entitle the prosecution to
"another bite of the apple" by allowing an opportunity for further
presentation of evidence on remand.
Strategic Legal Action in Defense Against Criminal and Civil Liability
In complex financial fraud cases, a suspect or defendant can face both
significant time in prison as well as orders of forfeiture and restitution,
serious fines, and other collateral consequences. Allegations of
health care fraud, embezzlement and other fraud crimes present a range of legal challenges,
and criminal defense lawyers who handle
financial crimes cases must protect their clients on multiple fronts.
Because these cases often involve multiple transactions, varied co-conspirators,
a range of relevant federal and state charges, and evidence of communications
and other indicators of intent, a fraud crimes attorney must closely scrutinize
the state's case to uncover potential shortcomings toward the prosecution's
burden of proof. This is the same whether a defendant needs to oppose
excessive charges before trial, limit the evidence introduced at trial,
or contest a conviction and sentence on appeal.
Criminal defense lawyers must also be equipped with legal strategies that
take into account the latest legal developments in federal and Florida
courts. The journey to justice and the best legal outcome under given
circumstances requires trial experience, exhaustive research and the diligence
to take a case to the next level after a client has been held accountable
without due process or based on legal errors.