United States v. Green

In the

United States Court of Appeals

For the Seventh Circuit

Nos. 09-3098, 09-3482 & 09-3681

U NITED S TATES OF A MERICA,

Plaintiff-Appellee,

v.

JAMES G REEN, JOSEPH M ILLER, AND

A LONZO B RAZIEL,

Defendants-Appellants.

Appeals from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 1:08-cr-00107—Elaine E. Bucklo, Judge.

A RGUED M ARCH 29, 2011—D ECIDED A UGUST 9, 2011

Before R OVNER, W ILLIAMS, and H AMILTON, Circuit Judges.

H AMILTON, Circuit Judge. Appellants Alonzo Braziel,

Joseph Miller, and James Green were found guilty of

participating in a fraudulent scheme to obtain mortgage

loans by providing false information to lenders. The

scheme involved a complex web of players: Recruiters

enlisted buyers to buy properties with fraudulently

obtained mortgage funds. Financiers provided funds to

2 Nos. 09-3098, 09-3482 & 09-3681

the buyers to facilitate the transactions. Administrators

bought fake documents to enable the buyers to obtain

mortgages. Loan officers prepared fraudulent mortgage

applications and sent them to the lenders. Between 2003

and 2005, the group acquired over seventy properties

in the Chicago area for which lenders provided

$7.2 million in loans. Most of the properties went into

foreclosure when the buyers could not make the

mortgage payments, resulting in losses to the lenders

of $2.2 million.

On February 5, 2008, a grand jury indicted Braziel,

Miller, Green, and fifteen others for mail fraud and wire

fraud in violation of 18 U.S.C. §§ 1341 and 1343. Braziel

and Miller were tried with two of their co-defendants. A

jury convicted Braziel of three counts of mail fraud and

Miller of three counts of wire fraud and three counts

of mail fraud. Defendant Green was tried separately

and was found guilty of three counts of wire fraud. The

defendants now challenge various aspects of their con-

victions and sentences in these consolidated appeals.

We consider the issues for each defendant, and we

affirm all of their convictions and sentences.

I. Alonzo Braziel

Alonzo Braziel first became involved in the scheme

in 2004 as a buyer applying for mortgage loans at the

direction of others. The indictment charged that Braziel

participated in fraud surrounding the purchases of

three residential properties in the Chicago area located at

1430 Portland Avenue, 14820-22 South Hoyne Street, and

7321 South Evans Avenue.

Nos. 09-3098, 09-3482 & 09-3681 3

Braziel raises two issues on appeal. He argues that the

district court erred by admitting a statement made

by one of his co-defendants in which Braziel was impli-

cated, in violation of Bruton v. United States, 391 U.S.

123 (1968). Second, Braziel asserts that the district court

should not have applied a two-level sophisticated

means enhancement in calculating his guideline sentence.

A. The Bruton Issue

In Bruton v. United States, the Supreme Court held that

a defendant’s Sixth Amendment right to confront wit-

nesses against him is violated when the confession of a

nontestifying co-defendant implicating the defendant as

a participant in the crime is admitted in a joint trial of

both defendants. 391 U.S. at 137. A Bruton violation may

be avoided, however, by redacting the reference to the

defendant and substituting a generic reference such as

“another person” or “another member of the group.” The

issue here is whether the redaction used by the govern-

ment, substituting for Braziel’s name the words “straw

buyer,” was sufficient to solve the Confrontation Clause

problem. Braziel argues that, despite the redaction, the

“straw buyer” reference still pointed to him as a partici-

pant in the crime. Although this is a close case, we con-

clude that the use of the edited statement with the

“straw buyer” reference did not violate Bruton here.

1. The Co-Defendant’s Statement

The government sought a pretrial ruling on the admissi-

bility of statements made by Braziel’s co-defendants,

4 Nos. 09-3098, 09-3482 & 09-3681

as well as an order to limit defense counsel from eliciting

portions of these statements that would give rise to a

violation of Bruton. The motion stated that the govern-

ment would call as a witness FBI Special Agent Donald

Kaiser who would relate co-defendant Donald Thomas’

confession. Thomas, also on trial with Braziel and

Miller, would not testify and thus would not be subject

to cross-examination on the statement. The motion sum-

marized the statement that the government would

elicit from Special Agent Kaiser. It included a description

of the property transaction, but it did not mention that

Braziel was incriminated in that section, nor did it

provide any description of the redaction that the gov-

ernment intended to use.

The day before Special Agent Kaiser’s testimony at trial,

the government discussed with defense counsel and

the court how it had redacted Thomas’ statement to

conceal Braziel’s identity. The prosecutors noted that

the original statement referred to Braziel as the pur-

chaser of 14820-22 South Hoyne Avenue, but they had

replaced his name with the term “straw buyer.” Braziel’s

counsel made no objection at that time. At trial the next

day, Special Agent Kaiser offered his testimony:

Q: Did Donald Thomas tell you about getting money

for any particular properties?

A: Yes, he told me that he received $20,000 for the

sale of 14822 South Hoyne in Harvey.

Q: Did he tell you anything else about that transac-

tion?

Nos. 09-3098, 09-3482 & 09-3681 5

A: Yes. Mr. Thomas explained to me that he had

found a straw buyer, his term, for that property,

and he explained the arrangement he had with

that straw buyer. Specifically, he stated that the

agreement was the straw buyer would purchase

the property and then deed the property back to

Mr. Thomas. Mr. Thomas would, had agreed

to then purchase the property from that straw

buyer several months later, and in that time

frame Mr. Thomas was supposed to make the

mortgage payments until he was able to repur-

chase that property.

Q: Did Donald Thomas say whether he had paid the

straw buyer?

A: Yes, he indicated that he had agreed to and that

he actually did pay that straw buyer $5,000 for the

purchase of that property.

Several minutes later, Braziel’s counsel objected and

requested a mistrial, claiming that the jury could identify

Braziel as the straw buyer, so that admitting Thomas’

incriminating statement without the opportunity to cross-

examine him violated Braziel’s Confrontation Clause

rights under Bruton.1

1

The government asserts that Braziel forfeited any objection

to the use of the statement when he did not object on two

occasions before trial when it was discussed, nor did he im-

mediately object when the statement came in at trial. We defer

to the district court’s discretionary judgment, however, that

(continued...)

6 Nos. 09-3098, 09-3482 & 09-3681

Although the Thomas statement was redacted, the jury

heard other witnesses read mortgage and bank records

naming Braziel as the purchaser of 14820-22 South

Hoyne Avenue. Heather McCartney, an employee of

lender Fremont Investment & Loan, read the following

from a real estate contract in Fremont’s loan application

for the South Hoyne property as part of her testimony:

Q: Who is the buyer?

A: Alonzo Braziel.

Q: What is the street address of the property at issue?

A: 14820 and 22 South Hoyne, Harvey, Illinois 60426.

A few minutes before Special Agent Kaiser read from

Thomas’ statement, he had testified about bank records

he had reviewed as part of his investigation:

A. The first real estate transaction is 14822 Hoyne

Avenue in Harvey, and that transaction closed

or funded on 12/20/2004. The seller was the

Marquette Bank Trust 16575, and the [buyer] was

Alonzo Braziel.2

1

(...continued)

Braziel sufficiently preserved his objection by raising it shortly

after the introduction of the statement during Special Agent

Kaiser’s testimony.

2

We have inserted “[buyer]” where the trial transcript says

“lawyer.” The summary chart from which Special Agent Kaiser

was reading names Braziel as the buyer. In context it is clear

that Special Agent Kaiser must have said “buyer.”

Nos. 09-3098, 09-3482 & 09-3681 7

Putting these pieces together, the jury could have

inferred that Braziel was the straw buyer to whom

Thomas referred.

The court deferred ruling on Braziel’s mistrial motion

until later that day when it reviewed the transcript from

the conference the day before. Acknowledging some

potential confusion in their prior discussion, the court

then denied the mistrial motion. Braziel renewed his

motion at the close of the trial, and the court again

denied the motion.

2. Analysis

On appeal, Braziel maintains that the district court

erred by denying his motion for a mistrial. We review the

district court’s denial for an abuse of discretion, United

States v. Tanner, 628 F.3d 890, 898 (7th Cir. 2010), but

we begin by reviewing the court’s application of Bruton

de novo. See United States v. McGowan, 590 F.3d 446, 453

(7th Cir. 2009); United States v. Nash, 482 F.3d 1209, 1218

(10th Cir. 2007).

After the Supreme Court’s further refinement of Bruton

in Richardson v. Marsh, 481 U.S. 200 (1987), and Gray v.

Maryland, 523 U.S. 185 (1998), it is clear that a redacted

confession of a nontestifying co-defendant may be ad-

mitted as long as the redaction does not “obviously”

refer to the defendant. This determination, focusing on

the minutiae of the substituted word or phrase and sur-

rounding context, is not always easy to make. See Gray,

523 U.S. at 195-96. A district court’s evaluation be-

8 Nos. 09-3098, 09-3482 & 09-3681

comes especially difficult when the defendant’s identity

can be established through other evidence offered at trial,

as here. Statements that “despite redaction, obviously

refer directly to someone, often obviously the defendant,

and which involve inferences that a jury ordinarily

could make immediately” are prohibited under Bruton.

Id. at 196; see also United States v. Brooks, 125 F.3d 484,

501 (7th Cir. 1997) (describing the Richardson Court’s

distinction between “specific testimony” identifying

the defendant and an “inferential incrimination”). This

case falls close to that subtle line.

We have navigated these murky waters in several of

our prior cases. In United States v. Stockheimer, 157 F.3d

1082, 1086-87 (7th Cir. 1998), we found no Bruton viola-

tion where the altered statement did not incriminate

the nontestifying defendants by itself. In that case, the

government used an open-ended reference (“inner cir-

cle”) that avoided a one-to-one correspondence be-

tween the statement and the defendant, even if other

evidence at trial incriminated the defendants as those

members of the inner circle. See also United States v.

Souffront, 338 F.3d 809, 829 (7th Cir. 2003) (finding

no Bruton violation where there was no one-to-one cor-

respondence between the redacted statement and the

defendant). In contrast, a more obvious one-to-one cor-

respondence such as an alias or pseudonym is too trans-

parent to pass muster. For example, in United States

v. Hoover, 246 F.3d 1054, 1059 (7th Cir. 2001), we con-

cluded that substituting “incarcerated leader” and

“unincarcerated leader” for the names of the two defen-

dants did not solve the Bruton problems because

Nos. 09-3098, 09-3482 & 09-3681 9

those were “obvious stand-ins” for the names of the

defendants. The jury in that case heard that one of the

two leaders of the gang operated the gang’s activities

from state prison, while another served as acting leader

on the outside. The Hoover court found that “incarcerated

leader” and “unincarcerated leader” functioned the

same way “deleted” or another similarly obvious indica-

tion of alteration would. 246 F.3d at 1059. Those terms “so

closely resemble Bruton’s unredacted statements that . . .

the law must require the same result.” Id., quoting Gray,

523 U.S. at 192. As a general matter, we have recognized

that such a delicate determination requires case-by-case

consideration rather than a brightline rule. See id. (noting

that “little evidence is incriminating when viewed in

isolation” and that to adopt a “four-corners rule” would

defeat the point of Bruton).

Here, we do not find the use of “straw buyer” in the

Thomas confession to be so obvious a reference to

Braziel as to violate Bruton. First, unlike an alias or a

pseudonym used to disguise a single individual, “straw

buyer” is more similar to an anonymous reference such

as “another person” or “an individual.” We agree with

Braziel that “straw buyer” is not neutral insofar as it

connotes some illicit activity, but the substituted word

or phrase need not be neutral. In context, the Thomas

statement was describing a transaction with a straw

buyer, so using the phrase was not much different from

using “the buyer” or “the person.” The statement was

highly incriminating to Thomas, but his statement was

not used to show that Braziel was the buyer. Most im-

portant for our analysis, the use of “straw buyer” did not

10 Nos. 09-3098, 09-3482 & 09-3681

facially incriminate Braziel as clearly as the terms “incar-

cerated leader” and “unincarcerated leader” did in Hoo-

ver. The “straw buyer” term could refer to anyone. Taken

alone, nothing in Thomas’ statement as told by Special

Agent Kaiser suggests that Braziel was the straw buyer.

Second, although a reasonable jury member could have

concluded that Braziel was the straw buyer to which

Thomas referred by comparing other evidence pre-

sented at trial, the evidence required to make that con-

nection was farther removed from the redacted state-

ment than the clear correspondences present in Gray

and Hoover. The Supreme Court has distinguished this

type of acceptable indirect inference from an unac-

ceptable immediate inference. See Gray, 523 U.S. at 195-96;

Richardson, 481 U.S. at 208 (reiterating that only those

statements that “expressly implicate” the defendant or

are “powerfully incriminating” trigger Bruton). Though

the case came very close to the Bruton line, the dis-

trict court did not run afoul of Bruton by admitting

the statement and did not abuse its discretion by

denying a mistrial.

B. Sophisticated Means

At sentencing, Braziel objected to the two-level upward

adjustment for sophisticated means recommended

by the presentence investigation report. See U.S.S.G.

§ 2B1.1(b)(9)(C). The district court rejected Braziel’s

arguments, applied the adjustment, and imposed a within-

guidelines sentence of 40 months in prison on each of

Nos. 09-3098, 09-3482 & 09-3681 11

his three counts of mail fraud. The court stated that it

was applying the sophisticated means enhancement to

Braziel, as it had to every other defendant involved in

the scheme, because “the whole scheme was sophisti-

cated.” We review the district court’s finding for clear

error. United States v. Wayland, 549 F.3d 526, 528 (7th Cir.

2008).

Braziel argues on appeal that the district court erred by

applying the enhancement to him on the basis of the

sophistication of the general scheme rather than his

activities in particular. This argument is not consistent

with the guidelines definition of relevant conduct. See

U.S.S.G. § 1B1.3(a)(1)(B). Under the guideline rule for

“relevant conduct,” Braziel is responsible for “all rea-

sonably foreseeable acts and omissions of others in fur-

therance of the jointly undertaken criminal activity,” even

if not charged as a conspiracy. Id. Therefore, a sophisti-

cated means enhancement could be applied to Braziel so

long as the use of sophisticated means by other crim-

inal associates was reasonably foreseeable to him. See

United States v. Cosgrove, 637 F.3d 646, 666 (6th Cir. 2011)

(affirming use of enhancement based on activities of

others); United States v. Jenkins-Watts, 574 F.3d 950, 965

(5th Cir. 2009) (same).

The district court did not err by finding this whole

scheme to be sophisticated. The application note

defines “sophisticated means” as “especially complex or

especially intricate offense conduct pertaining to the

execution or concealment of an offense.” U.S.S.G. § 2B1.1,

note 8(B). We have upheld the use of the enhancement

12 Nos. 09-3098, 09-3482 & 09-3681

“when the conduct shows a greater level of planning or

concealment than a typical fraud of its kind.” United States

v. Landwer, 640 F.3d 769, 771 (7th Cir. 2011), quoting United

States v. Knox, 624 F.3d 865, 871 (7th Cir. 2010). The com-

mentary provides several examples of such conduct,

illustrating the wide variety of criminal behavior cov-

ered by the theft and fraud guideline. See also Wayland,

549 F.3d at 528 (elaborating on the meaning of the com-

mentary). Here, the defendants’ overall scheme lasted

three years and involved numerous complex fraudulent

transactions, the creation of fake documents, and the

participation of nearly twenty individuals. The district

court did not err in deeming it sophisticated.

Nor did the district court err by applying the enhance-

ment on the basis of its finding that the whole scheme

was sophisticated. The evidence showed that Braziel

spoke with his co-defendants about several aspects of

the general scheme — from the falsifications of rent and

employment records to the concealment of financial

transfers among the participants. On the basis of this

evidence, the conspiracy’s sophisticated criminal conduct

was reasonably foreseeable to him. We affirm Braziel’s

sentence.

II. Joseph Miller

The government charged Joseph Miller with three

counts of wire fraud and three counts of mail fraud, each

related to a separate property transaction for which he

acted as the loan officer. From 2001 to 2006, Miller

served as a loan officer for the mortgage broker Integrity

Nos. 09-3098, 09-3482 & 09-3681 13

Home Mortgage, a name that seems a little ironic under

the circumstances. In that position, he was responsible

for compiling loan documentation on behalf of borrowers

and submitting those materials to lenders. According

to testimony at trial, Miller served as the loan officer

for multiple home purchases arranged by co-defendants

Jonathon Marchetti, Alfredo Hilado, and Larry Skrobot.

In each of these transactions, Marchetti set up the sale

by recruiting Hilado to serve as the buyer and sending

him to Miller to obtain a loan. Skrobot provided the

necessary financing for Hilado to make the purchase

while Miller prepared the documentation and secured

the mortgage for Hilado.

Miller makes two arguments on appeal. First, he con-

tends that the evidence against him was not sufficient to

prove his guilt beyond a reasonable doubt because testi-

mony offered by two of his co-defendants was unreli-

able. Second, Miller claims that the district court erred

by finding that he was involved in a single conspiracy.

We disagree on both issues and affirm Miller’s conviction.

A. Sufficient Evidence

A defendant challenging the sufficiency of the evi-

dence against him must show “that no reasonable jury

could have found his guilt beyond a reasonable doubt.”

United States v. Tavarez, 626 F.3d 902, 906 (7th Cir. 2010).

Under this already high standard, we consider the evi-

dence in the light most favorable to the government.

United States v. Huddleston, 593 F.3d 596, 601 (7th Cir.

2010). If any rational trier of fact could have found the

14 Nos. 09-3098, 09-3482 & 09-3681

essential elements of the crime beyond a reasonable

doubt, we will uphold the conviction. United States v.

Durham, ___ F.3d ___, ___, 2011 WL 2535801, at *5 (7th Cir.

June 28, 2011).

As a preliminary matter, we note that while Miller

makes general claims about the insufficiency of the evi-

dence against him, he discusses only the evidence re-

garding his participation in wire fraud. By not developing

any argument regarding the sufficiency of evidence to

support his mail fraud conviction, he waives that argu-

ment on appeal. See United States v. Collins, 604 F.3d 481,

487 n.2 (7th Cir. 2010). We address only Miller’s wire

fraud convictions and conclude that the jury could rea-

sonably have reached its guilty verdict on the evidence

presented. To establish wire fraud, the government

must prove (1) that the defendant participated in a

scheme to defraud; (2) with the intent to defraud; (3) and

used interstate wire communications in furtherance of

the fraud. See United States v. Howard, 619 F.3d 723, 727

(7th Cir. 2010). Miller concedes that the two primary

witnesses against him — Marchetti and Hilado — testified

that he directed them to submit false documents to

him that he then forwarded to the lenders. Marchetti

testified that he began working with Miller in 2004. He

regularly used Miller as a loan officer in his Chicago-area

property transactions, three of which were the subject

of the wire fraud charges against Miller: 1920 Circle

Court; 24 East 23rd Street; and 594 Andover Drive.

Marchetti stated that Miller filled out false “seller sec-

ond” mortgage forms for the properties at 24 East 23rd

Nos. 09-3098, 09-3482 & 09-3681 15

Street and 594 Andover Drive and that the two discussed

creating false construction receipts for the Andover Drive

property, as well.3

Hilado also testified that Miller was the loan officer

for eleven properties he managed. The jury heard that

Miller told Hilado to come up with names of people

who would lease from Hilado at both the East 23rd Street

property and the Circle Court property, even though

Miller knew that he did not plan to have any tenants,

to make the loans look more secure. These false lease

forms as well as the false seller second forms were ad-

mitted into evidence. The government also provided

evidence that Miller’s income from commissions on

loans he administered rose from $38,500 in 2002 to

$49,000 in 2004, to $82,000 in 2005.

The gist of Miller’s contention is that Marchetti’s

and Hilado’s testimony cannot support proof of his guilt

beyond a reasonable doubt because they were unreliable

as witnesses. This argument invites us to disregard

the standard of review and to substitute our judgment

for that of the jury. We do not weigh the evidence on

review or second-guess the jury’s credibility determina-

tions. See id. at 726; Tavarez, 626 F.3d at 906; United

States v. Anderson, 580 F.3d 639, 646 (7th Cir. 2009) (ac-

knowledging that this court has repeatedly refused to

question the credibility of witnesses when reviewing

challenges to sufficiency of the evidence). We overturn

3

“Seller second” mortgages are junior mortgage loans, sub-

ordinate to a first mortgage on a property, taken by the buyer

from the seller. See Black’s Law Dictionary 1103 (9th ed. 2009).

16 Nos. 09-3098, 09-3482 & 09-3681

a conviction based on a credibility determination only

if the witnesses’ testimony was incredible as a matter of

law, see United States v. Carraway, 612 F.3d 642, 645 (7th

Cir. 2010), a high standard not met by the testimony

here. The jury, aware of Marchetti’s and Hilado’s status

as cooperating co-defendants and properly instructed to

consider their testimony with great care, nevertheless

credited the testimony they offered. We see no reason

to disturb that determination.

Though the evidence against Miller was not over-

whelming, his conviction is supported by witness testi-

mony, the documentary evidence, and the reasonable

inferences drawn from all of that evidence. His insuffi-

ciency of the evidence argument fails.

B. Single Conspiracy Determination

Miller also argues that the district court mistook several

distinct conspiracies for a single conspiracy. Although

Miller was not charged with a conspiracy, the court

allowed the government to introduce statements made

by co-conspirators based on a single conspiracy theory.

We review the district court’s single conspiracy deter-

mination for clear error, viewing the evidence in the

light most favorable to the government. See United States

v. Ceballos, 302 F.3d 679, 688 (7th Cir. 2002).

A single conspiracy exists if “the co-conspirators

joined to effectuate a common design or purpose,” id.,

with the focus of the court’s inquiry on that common

purpose. The government must demonstrate that the

Nos. 09-3098, 09-3482 & 09-3681 17

defendant joined the agreement alleged, not just the

group. See United States v. Longstreet, 567 F.3d 911, 919 (7th

Cir. 2009). So long as the co-conspirators embraced a

common criminal objective, a single conspiracy existed

even if a participant did not know all of his co-conspirators

and did not participate in every aspect of the scheme.

United States v. Mojica, 185 F.3d 780, 786-87 (7th Cir. 1999).

The evidence here was consistent with a single conspir-

acy theory. It showed an agreement to carry out a plan

designed to generate income to the individuals involved

by means of fraud. Over three years and the dozens of

sales they completed, the schemers embraced this

common goal, carrying out their different roles and

responsibilities. Evidence of frequent and repeated trans-

actions can support a single conspiracy theory. Cf. United

States v. Blanding, 53 F.3d 773, 780 (7th Cir. 1995). The

cohorts’ cooperation and coordination also indicate the

same. See United States v. Handlin, 366 F.3d 584, 590 (7th

Cir. 2004) (trust, cooperation, and delineation of duties

among participants in a common scheme “overcomes

any doubt that this was anything other than a single,

broad conspiracy”). Miller was a key player in at

least six transactions, each of which furthered the

broader scheme. Because the district court did not err in

its single-conspiracy determination, this challenge to

Miller’s conviction also fails.

III. James Green

The government charged defendant James Green

with four counts of wire fraud. Like Braziel, Green was

18 Nos. 09-3098, 09-3482 & 09-3681

a buyer. His cousin, co-defendant Joseph Green, recruited

Green to purchase properties in exchange for cash.4

Throughout the trial, Green argued that he was a victim

of the fraudulent scheme, left holding the bag as the

purchaser of properties that were supposed to be rehab-

ilitated but were not. Green now raises five issues re-

garding his conviction. He also argues that the district

court erred by sentencing him based on an improper

loss calculation. We address each issue in turn.

A. Admissibility of Business Records

Green appeals the district court’s admission of certain

loan documents under Federal Rule of Evidence 902(11).

Rule 902(11) streamlines the admission of certain inher-

ently reliable documents by allowing a party to intro-

duce a record of regularly conducted activity without

live testimony from a records custodian so long as the

record is accompanied by a proper written certifica-

tion from a custodian or otherwise qualified person. See

Fed. R. Evid. 902(11). The Rule requires that the record

be admissible under Rule 803(6), which creates a

hearsay exception for business records and reports

“unless the source of information or the method or cir-

cumstances of preparation indicate lack of trustworthi-

ness.” Fed. R. Evid. 803(6).

In advance of trial, the government filed notice of its

intent to offer evidence pursuant to Rule 902(11). Green

4

We refer to defendant James Green as Green and when

necessary refer to his cousin as Joseph Green.

Nos. 09-3098, 09-3482 & 09-3681 19

and his co-defendants objected, claiming that the rec-

ords did not meet the Rule’s requirements. Relevant to

this appeal, they objected to the introduction of records

certified by Charlene Batalla, a former employee of

Equity Express mortgage brokerage firm, who was also

a defendant in the scheme. They argued that Batalla, as

a co-defendant, was not trustworthy as a custodian. In

2008, Batalla pled guilty to falsifying documents in the

defendants’ conspiracy. In 2009, Batalla certified as

records made in the regular course of business the

Equity Express loan files for five Chicago-area properties:

8544 South Givins Court, 1418 Portland Avenue, 155

East 153rd Street, 6851 South Prairie Avenue, and

1436 Parnell Avenue. Defendant Green was charged for

his involvement in the purchases of the first four of

those properties.

At a pretrial conference, the district court reviewed

the certificates and overruled the objection, finding the

certificates to be sufficient under Rule 902(11). After

severance, Green renewed his trustworthiness objection

to the Batalla certification. At a second pretrial con-

ference, Green’s counsel further argued that he had a

right to cross-examine Batalla about “the fact that

James Green didn’t put any of this information on these

papers.” The government replied that if Batalla were to

testify, she would answer only three questions — “Were

these documents created in the ordinary course, were

they maintained, and were they created at or near

the time of the documents?” — and that anything else

regarding the documents would be outside the scope

of her testimony. The district court again overruled the

20 Nos. 09-3098, 09-3482 & 09-3681

objection and admitted the documents and certification.

Despite all this attention to the certification and attached

loan files, they were hardly used at trial. The govern-

ment moved the files into evidence at the start of trial

but never referred to them.

Rule 902(11) is a powerful and efficient short-cut, but

it includes important built-in safeguards that cannot be

taken lightly. Those safeguards include providing op-

posing counsel with advance notice of any Rule 902(11)

certifications to give that party “a fair opportunity to

challenge” the certifications, which could involve

calling the certificate’s signer to testify as Green de-

manded here. See Fed. R. Evid. 902(11); see also United

States v. Adefehinti, 510 F.3d 319, 327-28 (D.C. Cir. 2008)

(amended opinion). We have noted that in some circum-

stances a Rule 902(11) certification will not implicate

a defendant’s Confrontation Clause rights because the

certificate itself is not testimonial. See United States

v. Ellis, 460 F.3d 920, 927 (7th Cir. 2006). But the Rule

does not give a party license to dump business records

into evidence without giving an adverse party an oppor-

tunity to question the certificate’s signer where such

questioning may be warranted. See Adefehinti, 510 F.3d

at 328 (commenting that “[i]n an appropriate case,” the

Rule’s “opportunity to challenge” may include cross-

examination, while also noting that the Rule 902(11)

certificate does not fall within the guarantee provided by

the Confrontation Clause). The government was treading

on dangerous ground by using Rule 902(11) here to

introduce not just these but hundreds of other records

to prove the truth of the matters asserted without re-

Nos. 09-3098, 09-3482 & 09-3681 21

gard to the many layers of hearsay and the Confrontation

Clause rights that those records may have implicated.5

In any event, we need not decide whether the district

court erred by admitting evidence based on the Batalla

certification because any such error would have been

harmless. At oral argument, we asked the government

to file a supplemental memorandum identifying the

portions of the record that addressed counsel’s objec-

tions to the Batalla certification, as well as the portions of

the record that corroborate or support the contents of

the Equity Express documents admitted based on her

certification. The parties’ supplemental materials show

that many of the documents within each file were dupli-

cates of business records maintained by other lenders

that were also admitted without objection. The most

relevant loan application materials (the applications

purportedly signed by Green containing false informa-

tion) were also included in other exhibits that came

in through trustworthy certifications to which Green

did not object. Given this overlap and the limited use of

the files, Green has not shown that he was prejudiced

by the Equity Express records certified by Batalla. In

the absence of prejudice, we need not reach Green’s

arguments that Batalla’s certificate of authenticity failed

5

Our caution does not apply when records, especially of

fraudulent activity, are introduced not to prove the truth of the

matters asserted in the records but to show the course of the

transaction or scheme, such as the communication of false

information. Such uses are outside the scope of the definition

of hearsay. Fed. R. Evid. 801(c).

22 Nos. 09-3098, 09-3482 & 09-3681

to meet the requirements of Rules 803(6) and 902(11) or

that its use violated his Sixth Amendment right.

B. Sworn Statements in Loan Applications

Green also contends that certain testimony offered

by witnesses for the government prejudiced him by

misleading the jury about the charges against him. The

jury heard three government witnesses read slight varia-

tions of the following passage from loan applica-

tion materials submitted in connection with Green’s

loans: “Borrower understands that it is a federal crime

punishable by fine or imprisonment or both to knowingly

make any false statement concerning any of the above

facts, as applicable under the provisions of Title 18 USC,

Section 1014. I declare that the foregoing agreement is

true and correct . . . .” At its first mention, defense

counsel requested a limiting instruction directing the

jury that Green had not been charged with violating

Section 1014. After the government responded that it

was offering the evidence to show Green’s knowledge,

the court asked both counsel to review the issue

overnight and raised the possibility of striking the refer-

ence or giving a limiting instruction the following day.

The next morning, prosecutors and defense counsel

agreed on an instruction that the court gave the jury. The

court told the jury that it had “heard some evidence

regarding statements in loan documents about that it’s

unlawful to violate particular statutes. That evidence,

the particular statute actually isn’t at issue here other

than it’s — the government is offering it with respect to

Nos. 09-3098, 09-3482 & 09-3681 23

knowledge and intent.” Similar passages referencing

18 U.S.C. § 1014 were read and referenced again by

two witnesses and by the government during closing

argument.

On appeal, Green argues that the government’s re-

peated references to section 1014 confused the jury.

He contends that, as a result of this testimony, the jury

convicted Green based on statutory violations not

charged. But Green forfeited this argument by not ob-

jecting to the admissibility of the statements when they

were offered. Rather, upon their introduction, Green’s

counsel requested, and the court gave, a limiting instruc-

tion to avoid the very confusion Green claims still perme-

ated his trial.

In light of Green’s forfeiture, we review the introduc-

tion of the testimony for plain error only. United States

v. Jaimes-Jaimes, 406 F.3d 845, 847 (7th Cir. 2005). We

find none. Although the references to another provision

of law perhaps posed some risk of confusing the jury,

the court’s limiting instruction alleviated that risk. The

references were not so prejudicial so as to render the

instruction ineffectual. See United States v. Curry, 538

F.3d 718, 728 (7th Cir. 2008) (noting that we assume a

jury follows an instruction unless the evidence is so

“powerfully incriminating that they cannot reasonably

be expected to put it out of their minds”). Even if Green

had not forfeited his objection, we would have little

trouble agreeing with the district court that the passages

were admissible to help prove that Green knew he was

required to provide true information and knew it was

wrong to provide false information, and finding that

24 Nos. 09-3098, 09-3482 & 09-3681

the limiting instruction was sufficient to protect against

any potential prejudice.

C. Ostrich Instruction

Green next contests the “ostrich” instruction given by

the court at the government’s request. The instruction

explained to the jury members that in their considera-

tion of Green’s knowledge about the fraud, the

legal definition of knowledge includes the deliberate

avoidance of knowledge — “a combination of suspicion

and indifference to the truth.” We review a decision to

give an ostrich instruction for abuse of discretion,

viewing all evidence in the light most favorable to the

government. United States v. Severson, 569 F.3d 683, 689

(7th Cir. 2009).

A district court may give an ostrich instruction “where

(1) a defendant claims to lack guilty knowledge, i.e.,

knowledge of her conduct’s illegality, and (2) the gov-

ernment presents evidence from which a jury could

conclude that the defendant deliberately avoided the

truth.” United States v. Garcia, 580 F.3d 528, 537 (7th Cir.

2009). The purpose of an ostrich instruction is to inform

the jury “that a person may not escape criminal liability

by pleading ignorance if he knows or strongly suspects

he is involved in criminal dealings but deliberately

avoids learning more exact information about the nature

or extent of those dealings.” United States v. Carani, 492

F.3d 867, 873 (7th Cir. 2007), quoting United States v.

Carrillo, 435 F.3d 767, 780 (7th Cir. 2006). In Garcia, we

explained that a case in which a defendant admits his

Nos. 09-3098, 09-3482 & 09-3681 25

association with a group but denies knowledge of its

illegal activity despite circumstantial evidence to the

contrary is a “paradigm case” for use of the instruction.

580 F.3d at 537.

The evidence presented at Green’s trial could be inter-

preted to show exactly that: Green deliberately avoided

determining conclusively that he was engaged in

criminal activity. Green was aware that his co-defendants

had offered to obtain false documents for him and that

they had done so for others in the past. In fact, Green

testified that he questioned his co-defendants about the

legality of what they were doing on several occasions.

This evidence alone, demonstrating knowledge of his

cohorts’ involvement in suspicious activities, warranted

an ostrich instruction. See United States v. Ramirez, 574

F.3d 869, 877 (7th Cir. 2009). Green did more. He also

signed blank loan applications and accompanied his co-

defendants to banks where they would withdraw money

and obtain cashier’s checks in an effort to make it

appear as though Green was presenting his own money

for the properties. He did not inspect the properties

before he bought them, and he never met some of the

individuals who he represented on his loan materials

would be renting the properties. On the basis of this

ample evidence, the district court acted well within its

discretion to provide an ostrich instruction.

D. Cumulative Error

Green asserts that the cumulative effect of the errors

made by the district court deprived him of a fair trial.

26 Nos. 09-3098, 09-3482 & 09-3681

Since we find no error on the part of the district court,

the cumulative error doctrine does not apply.

E. Sufficiency of Evidence

The jury convicted Green of fraud in connection with

the property transactions at 8544 South Givins Court,

1418 Portland Avenue, and 155 East 153rd Street,

and acquitted him of the charge in connection with

6851 South Prairie Avenue. He argues that the govern-

ment failed to prove that he had the intent to defraud

any lender and that therefore he should have been ac-

quitted on all counts. He concedes that he partici-

pated in the scheme and that a wire fraud occurred,

but he contends he was actually a victim of the

scheme — unaware of the illegality of the transactions

and not intending to defraud the lenders. Green’s chal-

lenge fails because the testimony at trial, along with

the documentary evidence, was sufficient for a jury to

find beyond a reasonable doubt that Green engaged in

wire fraud for each of the three properties underlying

his convictions.

Early on, Green worked through his cousin and

recruiter Joseph Green. Joseph Green testified that he

told defendant Green in their earliest conversations

about real estate that Green would be paid for his trans-

actions and that he could get assistance obtaining false

pay stubs and W-2s when necessary. The jury heard that

one of Green’s co-schemers, James Robert Thomas, told

Green that he had to purchase false documents to

qualify for a loan for the South Givins property in early

Nos. 09-3098, 09-3482 & 09-3681 27

2005. James Robert Thomas also told Green that Green

did not have to repay the “seller second” mortgage that

had been arranged for him and that was listed on his

loan application for the South Givins house.

Beginning with the transaction at 1418 Portland

Avenue, Green worked more closely with the financiers

of the scheme rather than through his cousin. James

Robert Thomas testified that he paid Green after the

closings at the Portland property and East 153rd Street

in April and May 2005. At trial, Green himself admitted

that he accepted money for his role as the purchaser of

all three properties without notifying lenders about

these transactions. Further, the jury heard that, at

his cousin’s instruction, Green falsely represented to

lenders that he worked for a company called The Art of

Construction. Viewing this testimony in the light most

favorable to the prosecution, a reasonable fact finder

could have found that Green intended to defraud

lenders through his participation in the scheme.

F. Loss Calculation in Sentencing

Green was sentenced to 37 months in prison based in

part on an aggregate loss amount of $189,500. He con-

tests the district court’s calculation of the loss amount

attributable to him. We review loss calculations for clear

error. See United States v. Powell, 576 F.3d 482, 497 (7th Cir.

2009). We have stated on many occasions that loss calcula-

tions need only be a reasonable estimate of the loss. See

United States v. Borrasi, 639 F.3d 774, 783 (7th Cir. 2011);

U.S.S.G. § 2B1.1, note 3(C) (“The court need only make

28 Nos. 09-3098, 09-3482 & 09-3681

a reasonable estimate of the loss.”). For Green to succeed,

he must show that the court’s loss calculations “were not

only inaccurate but outside the realm of permissible

computations.” United States v. Radziszewski, 474 F.3d

480, 486 (7th Cir. 2007), quoting United States v. Lopez,

222 F.3d 428, 437 (7th Cir. 2000).

At his sentencing hearing, Green introduced evidence

showing that some of the properties involved in the

fraud were sold at public auction and requested that

proceeds from the sales, at which the lenders were the

highest bidders, be credited against the loss. The district

court rejected Green’s calculations. Green re-asserts his

argument on appeal, claiming that the district court

improperly calculated the loss amount by not using

the prices at which the lenders obtained title to the prop-

erties at the public auctions.

Green’s suggested calculation misses the mark. Where

a lender forecloses and acquires the property at public

auction by making a credit bid (i.e., a bid that offers to

cancel the outstanding principal, interest, and related

fees in return for title to the property), the credit bid is

not a reliable measure of the actual market value of the

property. See generally River Road Hotel Partners, LLC v.

Amalgamated Bank, ___ F.3d ___, ___, 2011 WL 2547615,

at *7 (7th Cir. June 28, 2011); In re Philadelphia Newspapers,

LLC, 599 F.3d 298, 320-21 (3d Cir. 2010) (Ambro, J., dis-

senting) (explaining credit bidding in Chapter 11 bank-

Nos. 09-3098, 09-3482 & 09-3681 29

ruptcy context).6 In a typical fraudulent mortgage

scheme, a credit bid is highly likely to overvalue the

property. The whole point of the fraud was to fool the

lender into lending far more than the market value of the

property, and then to disappear, leaving the lender with

a property worth far less than the loan. Using a credit

bid based on the fraudulently inflated loan amount

to measure loss would surely understate the actual loss.

Thus, in this situation, it would have been an error for

the district court to use Green’s proposed method of

calculating loss.

Here, the district court correctly determined the appro-

priate loss amount using the formula we outlined in

United States v. Radziszewski. The court subtracted the

sale price the lender received after it recovered posses-

sion of the property from the amount of its original loan, as

in Radziszewski. See 474 F.3d at 486-87; see also United

States v. Serfling, 504 F.3d 672, 679 (7th Cir. 2007) (up-

holding district court’s loss calculation which subtracted

the price obtained for collateral from the amount of loan

proceeds, and rejecting calculation proposed by defendant

based on fraudulent appraisal); U.S.S.G. § 2B1.1, note

3(E)(ii) (loss shall be reduced by “the amount the victim

has recovered at the time of sentencing from disposi-

tion of the collateral, or if the collateral has not been

disposed of by that time, the fair market value of the

collateral at the time of sentencing”). The district court

6

In River Road Partners, we agreed with Judge Ambro’s

dissent in Philadelphia Newspapers.

30 Nos. 09-3098, 09-3482 & 09-3681

used this method that we have previously upheld for

the same situation and that properly captures the loss

suffered by the lenders. We find no error and uphold

Green’s sentence.

III. Conclusion

The convictions and sentences of defendants Braziel,

Miller, and Green are A FFIRMED.

8-9-11