United States v. Jessica Arong O'Brien

In the

United States Court of Appeals

For the Seventh Circuit

____________________

No. 19-1004

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

JESSICA ARONG O’BRIEN,

Defendant-Appellant.

____________________

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 17-cr-00239-1 — Thomas M. Durkin, Judge.

____________________

ARGUED FEBRUARY 19, 2020 — DECIDED MARCH 13, 2020

____________________

Before WOOD, Chief Judge, and FLAUM and RIPPLE, Circuit

Judges.

FLAUM, Circuit Judge. A jury found Jessica A. O’Brien

guilty of both bank fraud and mail fraud affecting a financial

institution based on her participation in a 2004-to-2007 mort-

gage fraud scheme. She appeals her convictions, arguing that

the charges against her were duplicitous and that under a

properly pled indictment the statute of limitations would

have barred three of the four alleged offenses. She also argues

2 No. 19-1004

that the district court should not have admitted evidence of-

fered to prove those time-barred offenses and that there was

insufficient evidence to support the jury’s guilty verdict.

We affirm. The government appropriately acted within its

discretion to allege an overarching scheme to commit both

bank fraud and mail fraud affecting a financial institution.

Each count included an execution of the fraudulent scheme

within the applicable ten-year statute of limitations, and the

jury’s guilty verdict rested upon properly admitted and suffi-

cient evidence of the charged offenses.

I. Background

On April 11, 2017, a grand jury returned a two-count in-

dictment charging O’Brien with mail fraud in violation of 18

U.S.C. § 1341 (Count I) and bank fraud in violation of 18

U.S.C. § 1344 (Count II). Both counts alleged a 2004-to-2007

scheme in which O’Brien misrepresented her income and lia-

bilities to cause lenders to issue and refinance loans related to

two investment properties O’Brien owned on the south side

of Chicago: one at 625 West 46th Street (the “46th Street prop-

erty”), and another at 823 West 54th Street (the “54th Street

property”). During the alleged scheme, O’Brien was a li-

censed attorney with a background and experience in the real

estate industry, including as a registered loan originator,

mortgage consultant, licensed real estate broker, and owner

of O’Brien Realty LLC, a licensed Illinois real estate company.

The indictment alleged that the scheme was comprised of

four transactions: (1) in 2004, O’Brien “fraudulently obtained

mortgage loan proceeds to purchase” the 46th Street property

by submitting mortgage documents with false statements re-

garding her income and liabilities; (2) in 2005, O’Brien, with

No. 19-1004 3

co-defendant Maria Bartko as the loan originator, “fraudu-

lently refinanced [O’Brien’s] mortgage loans” on the 46th

Street and 54th Street properties by submitting applications

with false statements regarding O’Brien’s income and em-

ployment; (3) in 2006, O’Brien “fraudulently obtained a com-

mercial line of credit” by submitting an application with false

statements about her realty company’s revenue and profit

“and used those loan proceeds to maintain the 46th Street and

54th Street properties”; and (4) in 2007, O’Brien and Bartko

“agreed that O’Brien would sell the 46th Street and 54th Street

properties to Bartko” using “Buyer A,” Christopher Kwan, as

“a straw buyer whom O’Brien and Bartko knew would be

fraudulently qualified for mortgage loans.” The indictment

also alleged that O’Brien and Bartko knew “that false infor-

mation would be submitted to lenders, including Citibank,

N.A., to qualify [Kwan] for the mortgage loans.” Some of her

misrepresentations were made on HUD-1 forms (as the name

suggests, furnished by the U.S. Department of Housing and

Urban Development), which detail the costs and fees associ-

ated with a mortgage loan and are used in closing a property

sale. See United States v. Bouchard, 828 F.3d 116, 121 n.2 (2d Cir.

2016).

Within each count, the indictment charged only one exe-

cution of the scheme: In Count I, the indictment alleged that

on April 16, 2007, O’Brien and Bartko mailed a payoff check

relating to the purchase of the 46th Street property; and in

Count II, the indictment alleged that also on April 16, 2007,

O’Brien caused Citibank, N.A. (“Citibank”), a financial insti-

tution, to provide $73,000 to fund a mortgage for Kwan’s pur-

chase of the 46th Street property. The indictment described

the 2004, 2005, and 2006 transactions as part of an overarching

4 No. 19-1004

scheme rather than as separate executions of mail or bank

fraud.

At trial, the government presented evidence that O’Brien

had falsely represented her income and liabilities and made

other misrepresentations and omissions when buying, refi-

nancing, and maintaining the 46th Street and 54th Street prop-

erties. After the jury found O’Brien guilty on both counts and

the district court denied O’Brien’s post-trial motions, O’Brien

appealed.

II. Discussion

O’Brien argues that the district court erred by denying (1)

her motions to dismiss the indictment based on duplicity and

the statute of limitations, and (2) her motions for judgment of

acquittal and a new trial based on the insufficiency of the ev-

idence.

A. Duplicity and Statute of Limitations

We review de novo the district court’s denial of O’Brien’s

motions to dismiss the indictment on grounds of duplicity

and the statute of limitations. See United States v. McGowan,

590 F.3d 446, 456 (7th Cir. 2009) (statute of limitations); see also

United States v. Pansier, 576 F.3d 726, 734 (7th Cir. 2009) (du-

plicity).

1. Duplicity

The district court did not err in denying O’Brien’s motion

to dismiss based on duplicity because each count of the in-

dictment, “‘fairly interpreted[,]’ alleges a ‘continuing course

of conduct, during a discrete period of time.’” United States v.

Davis, 471 F.3d 783, 790–91 (7th Cir. 2006) (quoting United

States v. Berardi, 675 F.2d 894, 898 (7th Cir. 1982)). A count is

No. 19-1004 5

duplicitous if it “charges two or more distinct offenses

within” the count. United States v. Miller, 883 F.3d 998, 1003

(7th Cir. 2018) (citation omitted). A count is not duplicitous,

however, if it charges the commission of a single offense

through different means, Fed. R. Crim. P. 7(c)(1), or if it

charges acts that “comprise a continuing course of conduct

that constitutes a single offense,” Miller, 883 F.3d at 1003 (ci-

tation omitted).

The mail and bank fraud statutes prohibit schemes to de-

fraud, see 18 U.S.C. §§ 1341 & 1344, which can include a

“broad range of conduct,” United States v. Doherty, 969 F.2d

425, 429 (7th Cir. 1992). “Schemes to defraud … often are

multi-faceted and therefore the various means used in com-

mitting the offense may be joined without duplicity.” United

States v. Zeidman, 540 F.2d 314, 318 (7th Cir. 1976). Under the

mail and bank fraud statutes, “for each count of conviction,

there must be an execution” of the scheme to defraud, but

“the law does not require the converse: each execution need

not give rise to a charge in the indictment.” United States v.

Hammen, 977 F.2d 379, 383 (7th Cir. 1992). The government

has the discretion to “allege only one execution of an ongoing

scheme that was executed numerous times.” Id.

The indictment alleged a single scheme to defraud lenders

that consisted of four related transactions in which O’Brien

used lies and concealment to obtain money from lenders for

the 46th Street and 54th Street properties and for her own per-

sonal gain. Specifically, the indictment alleged that O’Brien

lied to lenders to: (1) buy the 46th Street property in 2004; (2)

refinance loans on the 46th Street and 54th Street properties

in 2005; (3) obtain a loan to maintain the 46th Street and 54th

6 No. 19-1004

Street properties in 2006; and (4) sell the 46th Street and 54th

Street properties in 2007.

O’Brien insists that “the quartet of isolated and discon-

nected transactions involving different times, people, types of

transactions, different lenders and different alleged false ma-

terial statements gives rise to the clear conclusion that there

was no single continuous scheme to defraud.” For example,

O’Brien asserts that the government contended that she

falsely certified that the 46th Street property was her primary

residence, but the indictment made no similar allegations re-

garding her 54th Street purchase. She also emphasizes that the

four transactions involved different parties, and that neither

Citibank nor its wholly-owned subsidiary and mortgage

lending arm, CitiMortgage, was involved in three of the trans-

actions. O’Brien therefore contends that “[t]he four alleged

transactions are so different and distinct that the only com-

monality is ‘financial gain’ or something equally general.”

The relevant transactions, however, all involved: (1) at

least one of a pair of investment properties on Chicago’s south

side (the 46th Street and 54th Street properties); (2) O’Brien;

(3) lies in loan documents; (4) the same class of victims (lend-

ers); and (5) the same goal of obtaining financing related to

the two properties for personal enrichment. The government

acted appropriately within its discretion to charge the trans-

actions as different means for carrying out an overarching

scheme to defraud. Cf. Davis, 471 F.3d at 791 (holding there

was no duplicity where indictment charged “ongoing and

continuous course of conduct, accomplished through three

different methods,” repeated numerous times over the years,

all involving the same defendant); United States v. Prieto, 812

No. 19-1004 7

F.3d 6, 10, 12 (1st Cir. 2016) (finding no duplicity where in-

dictment alleged three-year mortgage rescue program

scheme involving 86 transactions with 30 mortgage lenders,

in which defendant engaged in sham transfers of properties

to straw purchasers who quitclaimed properties to defend-

ant’s organization, and noting that schemes to defraud “may

harm different groups of victims at different times” (citing

United States v. Buchmeier, 255 F.3d 415, 421 (7th Cir. 2001))).

2. Statute of Limitations

The district court also did not err in denying O’Brien’s mo-

tion to dismiss based on the statute of limitations because the

indictment alleged that each count was executed on April 16,

2007, which fell within the applicable ten-year statute of limi-

tations. We determine the applicable statute of limitations,

and whether the charges were timely brought, based on the

face of the indictment. See United States v. White, 610 F.3d 956,

958 (7th Cir. 2010) (“An indictment is reviewed on its face, re-

gardless of the strength or weakness of the government’s

case.”). The statute of limitations for bank fraud is ten years.

18 U.S.C. § 3293(1). The statute of limitations for mail fraud is

generally five years, id. § 3282(a), but a ten-year statute of lim-

itations applies for fraud that “affects a financial institution,”

id. § 3293(2).

The indictment plainly alleged that the scheme to defraud

affected Citibank, which O’Brien does not dispute qualified

as a financial institution. The mail fraud count (Count I) al-

leged that Citibank required mortgage loan applicants to pro-

vide truthful information, which was material to its approval

and funding of loans, and that O’Brien knew “that false infor-

mation would be submitted to lenders, including Citibank,

N.A., to qualify [Kwan] for the [2007] loans.” The bank fraud

8 No. 19-1004

count (Count II) similarly charged an offense that affected a

financial institution, as we explain below. A ten-year statute

of limitations therefore applied to both counts. The ten-year

period started to run from the date of the alleged executions,

April 16, 2007. The grand jury returned the indictment on

April 11, 2017, before the ten-year period expired.

B. Sufficiency of the Evidence

The district court did not err in denying O’Brien’s motions

for a judgment of acquittal or a new trial because there was

sufficient evidence to support O’Brien’s convictions for mail

fraud affecting a financial institution under 18 U.S.C. §§ 1341

& 3293(2) (Count I) and for bank fraud under 18 U.S.C.

§ 1344(2) (Count II). We review de novo the denial of a motion

for a judgment of acquittal, which “should be granted only

when the evidence is insufficient to sustain the conviction.”

United States v. James, 464 F.3d 699, 705 (7th Cir. 2006). The

evidence is sufficient if “any rational trier of fact could have

found the essential elements of a crime beyond a reasonable

doubt.” United States v. Kelerchian, 937 F.3d 895, 907 (7th Cir.

2019) (citation omitted). We “overturn a verdict only when

the record contains no evidence, regardless of how it is

weighed, from which the jury could find guilt beyond a rea-

sonable doubt.” Id. (citation omitted). We review for an abuse

of discretion the denial of a motion for a new trial, which

should be granted “only if the evidence preponderates heav-

ily against the verdict, such that it would be a miscarriage of

justice to let the verdict stand.” United States v. Swan, 486 F.3d

260, 266 (7th Cir. 2007) (internal quotations marks, brackets,

and citation omitted).

No. 19-1004 9

1. Mail Fraud Affecting a Financial Institution (Count I)

To convict O’Brien of mail fraud under 18 U.S.C. § 1341,

the government had to prove beyond a reasonable doubt that

O’Brien: (1) participated in a scheme to defraud; (2) intended

to defraud; and (3) used the mails in furtherance of the

scheme. United States v. Seward, 272 F.3d 831, 835 (7th Cir.

2001). Because the government relied on the ten-year statute

of limitations applicable to mail fraud that “affects a financial

institution,” see 18 U.S.C. § 3293(2), it was also required to es-

tablish that the fraud affected a financial institution, which

can be established by a showing that the fraud exposed the

financial institution to “a new or increased risk of loss,”

United States v. Serpico, 320 F.3d 691, 694–95 (7th Cir. 2003).

The government needed to show that O’Brien intended for

her scheme to defraud “someone,” but “a financial institution

[did] not need to be the intended victim.” United States v.

Marr, 760 F.3d 733, 744 (7th Cir. 2014); see also United States v.

Pelullo, 964 F.2d 193, 216 (3d Cir. 1992) (noting that 18 U.S.C.

§ 3293(2) applies to a “broader class of crimes” than those

“where the financial institution is the object of the fraud”).

Viewing the evidence in a light most favorable to the pros-

ecution, O’Brien devised a scheme to defraud and made nu-

merous false statements in furtherance of the scheme, includ-

ing by inflating her income and concealing her biggest liabil-

ity to obtain a loan to buy the 46th Street property in 2004;

inflating the income from her realty company to refinance the

loans on the 46th Street and 54th Street properties in 2005; in-

flating revenue and profits for her realty company to obtain a

loan to maintain the 46th Street and 54th Street properties in

2006; and selling the 46th Street and 54th Street properties in

2007 to a straw buyer, while making kickback payments to the

10 No. 19-1004

true buyer without disclosing the identity of the buyer or the

kickback payments to the lender.

The evidence further demonstrated that O’Brien fraudu-

lently caused Citibank to provide Kwan the funding for two

loans in connection with the 2007 purchase of the 46th Street

property: one loan in the amount of $73,000 and another in

the amount of $292,000. O’Brien’s misrepresentations in con-

nection with these transactions were established by, among

other things, the false and fraudulent loan applications

O’Brien submitted; documents related to the purchase and

sale of the properties; the false HUD-1 forms; evidence of

O’Brien’s and her realty company’s actual income; and testi-

mony of Citibank vice president Judy Taylor. Citibank was

not only exposed to an increased risk of loss; it suffered an

actual loss as a result of the 2007 loans because it had to fore-

close on the 46th Street property and ultimately sold the prop-

erty at a “significant loss.”1

The parties agree that—during the time relevant to this

case—Citibank qualified as a financial institution, but its

1O’Brien appears to suggest that, even though her husband was not

a co-borrower on one of the loans, her husband’s income should have been

counted when calculating her income to qualify for the loan. O’Brien has

pointed to no authority explaining why the law compels such a result or

otherwise explained how this circumstance undermines confidence in the

jury’s conclusion that she harbored the requisite fraudulent intent.

O’Brien also contends that a witness from Chase testified that “it was pos-

sible that the Chase branch loan officer may have made mistakes when

she entered O’Brien’s LLC loan information” in connection with one of the

loans. Such a speculative possibility, however, does not provide grounds

for overturning the jury’s verdict.

No. 19-1004 11

wholly-owned subsidiary, CitiMortgage, did not.2 O’Brien

maintains that CitiMortgage, not Citibank, was the lender for

the $73,000 loan in April 2007.3 She also concedes, however,

that “countless exhibits presented by the government and de-

fense offered conflicting testimony/exhibits regarding

whether [CitiMortgage] or Citi[bank] funded” the $73,000

loan, and that related exhibits “cut both ways.” This is pre-

cisely the kind of conflicting evidence that is within the jury’s

province to resolve.

This is not a case like United States v. Bennett, where “the

government relied solely on [the mortgage lender]’s status as

a wholly-owned subsidiary [of a financial institution], and

presented no evidence indicating what kind of parent-

subsidiary relationship actually existed.” 621 F.3d 1131, 1139

(9th Cir. 2010). Nor is this a case like United States v. Banyan,

where the government did not “make any effort at trial to

prove that the loans were funded by the mortgage companies’

parent corporations, which were banks.” 933 F.3d 548, 551

(6th Cir. 2019).

Here, the government presented substantial evidence be-

yond Citibank’s parent-subsidiary relationship with

CitiMortgage to support the conclusion that Citibank funded

the $73,000 and $292,000 loans. Citibank vice president Tay-

lor, for example, testified that the $73,000 loan was a Citibank

2 See Bouchard, 828 F.3d at 124 (“Prior to 2009, the term ‘financial insti-

tution’ was defined to include insured depository institutions of the FDIC,

but not mortgage lenders.”); see also 18 U.S.C. § 20(1) (amended in May

2009 to include non-FDIC mortgage lenders in definition of “financial in-

stitution”).

3 O’Brien does not appear to contest that the $292,000 for the other

April 2007 loan came from Citibank.

12 No. 19-1004

product and that “all of the money used to fund both the

$292,000 and the $73,000 loan came from a Citibank account.”

Several documents additionally identified Citibank as the

lender on the $73,000 loan, such as the note, mortgage, HUD-

1 settlement statement, truth-in-lending disclosure, affiliated

business arrangement disclosure, and homeowner’s insur-

ance documents. O’Brien’s signature on some of those docu-

ments is assurance enough that she saw them; the evidence of

her link to other documents is not as direct.

The evidence on Count I was therefore sufficient to estab-

lish that O’Brien devised and participated in a fraudulent

scheme, that she intended to defraud CitiMortgage, and that

the fraud affected Citibank. Cf. United States v. Mullins, 613

F.3d 1273, 1278–79 (10th Cir. 2010) (affirming application of

ten-year statute of limitations for fraud affecting a financial

institution where jury heard evidence “explaining how fraud-

ulent information on a loan application increases the risk of

loss to the lender and its parent bank”); United States v. Bouyea,

152 F.3d 192, 195 (2d Cir. 1998) (per curiam) (holding there

was sufficient evidence that financial institution was affected

where employee of wholly-owned subsidiary testified that

subsidiary borrowed money for transaction at issue from par-

ent financial institution); Pelullo, 964 F.2d at 215–16 (disposing

of defendant’s assumption that “a fraud perpetrated against

a financial institution’s wholly owned subsidiary cannot af-

fect the parent”). O’Brien does not contest the sufficiency of

the evidence regarding the April 16, 2007 mailing in further-

ance of the scheme. The mail fraud conviction is sound.

No. 19-1004 13

2. Bank Fraud (Count II)

The evidence was also sufficient to convict O’Brien of bank

fraud under 18 U.S.C. § 1344(2). Section 1344 provides that a

defendant may be found guilty of bank fraud if she:

knowingly executes, or attempts to execute, a

scheme or artifice—

(1) to defraud a financial institution; or

(2) to obtain any of the moneys, funds,

credits, assets, securities, or other

property owned by, or under the cus-

tody or control of, a financial institu-

tion, by means of false or fraudulent

pretenses, representations, or prom-

ises.

Count II of the indictment charged O’Brien with violating

§ 1344, which the government was permitted to prove under

subsection (1) or (2). See United States v. LeDonne, 21 F.3d 1418,

1427 (7th Cir. 1994) (reasoning that the government may

charge both sections of § 1344 in same count). While the gov-

ernment must prove that the defendant had the specific intent

to defraud a financial institution under § 1344(1), proof of

such intent is not required under § 1344(2). Loughrin v. United

States, 573 U.S. 351, 356–57 (2014) (“[N]othing in [§ 1344(2)]

additionally demands that a defendant have a specific intent

to deceive a bank. And indeed, imposing that requirement

would prevent § 1344(2) from applying to a host of cases fall-

ing within its clear terms.”).

Rather, to obtain a conviction under § 1344(2), the govern-

ment may demonstrate that the defendant knowingly “de-

ceiv[ed] a non-bank custodian into giving up bank property

14 No. 19-1004

that it holds.” Id. at 357. In Loughrin, the Supreme Court held

that “the text of § 1344(2) preclude[d]” the defendant’s argu-

ment that “his intent to deceive ran only to Target,” a non-

financial institution, “and not to any of the banks on which

his altered checks were drawn.” Id. at 356. The Court reasoned

that applying § 1344(2) only “in the (presumably rare) circum-

stance in which the fraudster’s intent to deceive extended be-

yond the custodian to the bank itself … would … function as

an extra-textual limit on the clause’s compass.” Id. at 357. The

defendant nevertheless “must at least know that the property

belongs to or is under the custody or control of a bank.” Bou-

chard, 828 F.3d at 126. Hence, to overturn the bank fraud con-

viction, O’Brien must convince us that no rational jury could

infer that she knowingly deceived CitiMortgage into giving

up Citibank funds.

We conclude that a rational jury could find—based on

O’Brien’s experience in the real estate industry and with Citi-

bank in particular, as well as her intimate involvement in the

fraudulent scheme and the 2007 transactions—that O’Brien

knew that the funds for the April 2007 loans originated from

Citibank. In Bouchard, the Second Circuit overturned a mort-

gage fraud conviction under § 1344(2) because the govern-

ment had not established that the defendant knew that the

funds fraudulently obtained from the mortgage lenders be-

longed to or were under the custody or control of a bank. 828

F.3d at 126–27. The Second Circuit noted that “the Govern-

ment might have been able to prove that [the defendant]

knew that money from mortgage lenders came from banks by

virtue of his knowledge of the industry” but ”failed to make

this argument or proffer evidence of [the defendant]’s exten-

No. 19-1004 15

sive knowledge of the real estate and mortgage lending in-

dustry as a reason to convict him at trial.” Id. at 127. The gov-

ernment provided precisely such evidence here.

O’Brien had an extensive background and experience in

the real estate industry, including as a registered loan origi-

nator, mortgage consultant, licensed real estate broker, and

owner of O’Brien Realty LLC, a licensed Illinois real estate

company. She had prior experience working with Citibank in

particular. Moreover, when Citibank vice president Taylor

was asked about “a typical day at Citi back in 2007,” she ex-

plained that “Citibank would provide funds to CitiMortgage”

to fund loans in a similar way that it funded the April 2007

loans. Pairing O’Brien’s extensive expertise in the real estate

and mortgage lending industry with the fact that Citibank

funded the April 2007 loans as it would in the ordinary course

of its business supports the inference that O’Brien knew the

funding would originate from Citibank.

Such an inference is buttressed by evidence of O’Brien’s

intimate involvement in the fraudulent scheme and especially

her involvement in the April 2007 transactions. O’Brien acted

as both the seller and seller’s attorney, was present for the

closings, was closely involved with the sale, and prepared the

closing statements. The HUD-1 form O’Brien signed listed

Kwan’s $73,000 loan, and the HUD-1 form for that loan ex-

pressly identified Citibank as the lender. One might not nor-

mally expect a seller in an arms-length real estate transaction

to have access to information to which the buyer has access,

but this was no arms-length transaction. O’Brien and Kwan

were co-participants in a scheme to defraud in which O’Brien

and Bartko used Kwan as a straw purchaser. O’Brien, Kwan,

and Bartko had signed notarized “Acknowledgement &

16 No. 19-1004

Agreements” forms (undisclosed in the HUD file and to the

lender) that identified both Kwan and Bartko as buyers.

O’Brien also made undisclosed payments to both Kwan and

Bartko, including a $4,000 check to Kwan dated the day of the

46th Street closing, which Kwan endorsed over to Bartko.

Hence, the jury could reasonably have connected

O’Brien’s background and experience with the other evidence

regarding the relationship between Citibank and CitiMort-

gage, as well as the identification of Citibank as the lender on

loan documents and O’Brien’s participation in the fraudulent

scheme (and in the 2007 transactions in particular), to con-

clude that O’Brien knew the funds originated from Citibank.

Cf. United States v. Rabuffo, 716 F. App’x 888, 898–99 (11th Cir.

2017) (affirming § 1344 conviction where it was reasonable to

infer that defendant “knew the fraudulent loan applications

would place SunTrust Bank at a risk of harm” based on de-

fendant’s background as “experienced real estate developer,”

defendant’s involvement in scheme, similarity of names be-

tween SunTrust Bank and its wholly-owned subsidiary (Sun-

Trust Mortgage), and defendant’s previous interactions with

SunTrust Bank).

The defendant in Loughrin violated § 1344(2) “because he

made false statements, in the form of forged and altered

checks, that a merchant would, in the ordinary course of busi-

ness, forward to a bank for payment.” 573 U.S. at 366. Simi-

larly, O’Brien’s fraudulent misrepresentations were “the

No. 19-1004 17

mechanism naturally inducing a … custodian of bank prop-

erty … to part with money in its control.” Id. at 363. 4 Her bank

fraud conviction must stand.

3. Materiality

O’Brien raises a new argument on appeal that “there were

no mail or bank fraud material misrepresentations because

Citi[bank]’s loss risk was extraordinarily de minimis.” Accord-

ing to O’Brien, Citibank’s risk of loss due to this scheme rep-

resented only a small fraction of the $550 million “that

[CitiMortgage] (and its subsidiaries) received … on a daily

basis to fund its mortgage loan docket.” O’Brien did not raise

this argument in the district court and has therefore forfeited

it, so our review is for plain error. See United States v. Walsh,

723 F.3d 802, 807 (7th Cir. 2013). In any event, there was no

error, plain or otherwise.

Materiality requires only the tendency or capability of in-

fluencing the victim; there is no requirement that the misrep-

resentations must have actually influenced the decision-

maker or that the decision-maker in fact relied on the misrep-

resentations. See United States v. Roberts, 534 F.3d 560, 571 (7th

Cir. 2008). O’Brien has pointed to no authority supporting her

novel argument that fraudulent misstatements are material

only if they affect more than a de minimis proportion of a vic-

tim’s funds.

Here, the jury heard evidence that if O’Brien had disclosed

O’Brien Realty LLC’s true financial status, her application for

a commercial loan would have been denied. The jury also

4 Because there was sufficient evidence to sustain the bank fraud con-

viction under § 1344(2), we need not reach the question of whether we

could also sustain O’Brien’s conviction under § 1344(1).

18 No. 19-1004

heard that, had O’Brien disclosed to Citibank that Kwan was

a straw buyer and Bartko the true buyer, it would have raised

a “red flag” and affected Citibank’s risk analysis. The mis-

statements were therefore material. Cf. United States v. Reyn-

olds, 189 F.3d 521, 525–26 (7th Cir. 1999) (affirming conviction

and finding sufficient evidence of materiality “[b]ecause [de-

fendant]’s false statements regarding his financial condition

could clearly influence a bank deciding whether to approve a

loan (even if they did not in fact influence the decision)”).

C. Admissibility of Evidence

Finally, the district court did not abuse its discretion in ad-

mitting evidence relating to the 2004, 2005, and 2006 transac-

tions as direct evidence of the fraudulent scheme alleged. See

United States v. Quiroz, 874 F.3d 562, 569 (7th Cir. 2017) (re-

viewing evidentiary rulings for abuse of discretion). “[T]he

fact that only one or two executions fell within the Statute of

Limitations does not detract from the entire pattern of loans’

being a scheme, and renders [the defendant] no less culpable

for the entire scheme.” United States v. Longfellow, 43 F.3d 318,

325 (7th Cir. 1994). We need not conduct a Federal Rule of Ev-

idence 404(b) analysis because “if the evidence is admitted as

direct evidence of the charged offense, Rule 404(b) is not ap-

plicable.” United States v. Adams, 628 F.3d 407, 414 (7th Cir.

2010).

O’Brien tacks on that the district court should not have ad-

mitted the May 2007 quit claim deeds because those deeds are

outside of the statute of limitations. Those deeds, however,

are dated within the applicable ten-year statute of limitations,

which began to run in April 2007. In any event, the district

court appropriately admitted those deeds as direct evidence

demonstrating that Kwan (the straw buyer) quit claimed the

No. 19-1004 19

properties to Bartko (the true buyer) shortly after the closings.

They are admissible even though they are dated after the ex-

ecutions of the scheme to defraud. See United States v. Ajayi,

808 F.3d 1113, 1120 (7th Cir. 2015) (stating that the govern-

ment may introduce uncharged acts of bank fraud after exe-

cution of scheme to support its case). The district court did

not err in admitting the contested evidence.

III. Conclusion

For the foregoing reasons, we AFFIRM O’Brien’s convic-

tions.