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United States v. Andrews

United States District Court, D. Minnesota

August 15, 2017

UNITED STATES OF AMERICA, Plaintiff,
v.
CHRISTOPHER JON ANDREWS, Defendant.

          JOHN E. KOKKINEN, ASSISTANT UNITED STATES ATTORNEY, FOR PLAINTIFF.

          CHRISTOPHER JON ANDREWS, PRO SE DEFENDANT.

          MEMORANDUM OPINION AND ORDER

          JOHN R. TUNHEIM CHIEF JUDGE UNITED STATES DISTRICT COURT

         In April 2013, Defendant Christopher Jon Andrews pled guilty to one-count in an indictment that charged him with Conspiring to Commit Mortgage Fraud pursuant to 18 U.S.C. §§ 1341, 1343. The Court originally entered judgment on December 13, 2013, imposing a sentence of 72-months' imprisonment. On October 28, 2014, the Court amended the judgment to specify restitution amounts. Andrews did not file a direct appeal. Andrews has now filed two motions: (1) a motion to vacate, set aside or correct his sentence pursuant to 28 U.S.C. § 2255; and (2) a motion to reduce his sentence - arguably under 18 U.S.C. § 3582(c)(2). For the reasons set forth in detail below, the Court will deny both motions.

         BACKGROUND

         In August 2012, a superseding indictment was returned charging Andrews with eight counts: Conspiracy to Commit Mortgage Fraud pursuant to 18 U.S.C. §§ 1341, 1343 (Count I); Mortgage Fraud Through Interstate Wire pursuant to 18 U.S.C. §§ 2, 1343 (Counts II-V); and Mortgage Fraud Through Mail pursuant to 18 U.S.C. §§ 2, 1341 (Counts VI-VIII). (Superseding Indictment, Aug. 6, 2012, Docket No. 30.) In April 2013, Andrews signed a plea agreement with the Government and pled guilty to Count I in the superseding indictment. (Ct. Mins., Apr. 24, 2013, Docket No. 49; Plea Agreement and Sentencing Stipulation (“Plea Agreement”), Apr. 24, 2013, Docket No. 50.)

         As part of the plea, Andrews agreed the government could prove “beyond a reasonable doubt . . . [that] [f]rom at least November 2006 through in or about 2008 . . . [Andrews] engaged in a scheme to defraud mortgage loan lenders.” (Plea Agreement at 1.) Andrews admitted that, as part of the fraudulent scheme, Andrews “prepared and arranged for the preparation of purchase agreements by licensed real estate agents” and “arranged for buyers to use certain mortgage loan brokers.” (Id. at 2-3.) Andrews later told a probation officer that he “knew that the purchase agreements would be provided to the lenders and further knew that, in some transactions, they concealed material facts and contained materially false information.” (Presentence Investigation Report (“PSR”) at 6 (on file with the Court).) Andrews further acknowledged that he “knew that mortgage brokers would arrange for lenders to finance the transaction at [a] higher purchase agreement sales price instead of the price [the] buyers were actually paying.” (Id. at 7.) And Andrews disclosed that if he had used a realtor other than his wife, the realtor would have advised Andrews to disclose the actual purchase price. (Id.)

         Prior to sentencing, a probation officer prepared the PSR. (Id. at F.2.) The PSR recommended: (1) a two-level enhancement for deriving more than $1 million in gross-receipts pursuant to U.S.S.G. § 2B1.1(b)(15)(A) (“gross-receipts enhancement”); (2) a four-level enhancement for the number of victims pursuant to U.S.S.G. § 2B1.1(b)(2) (“number-of-victims enhancement”); (3) a twenty-level enhancement for a loss amount exceeding $7 million pursuant to U.S.S.G. § 2B1.1(b)(1) (“loss-amount enhancement”); (4) a two-level enhancement for use of sophisticated means pursuant to U.S.S.G. § 2B1.1(b)(10)(C) (“sophisticated-means enhancement”); and (5) a four-level enhancement for Andrews' role as an organizer or leader pursuant to U.S.S.G. § 3B1.1(a) (“role-in-offense enhancement”). (Id. at 8-9.) The PSR advised that Andrews' Total Offense Level was 36 and, with a Criminal History Category of I, the advisory Guidelines range was 188 to 235 months' imprisonment. (Id. at 15.)

         After completion of the PSR, Andrews and the government contested certain enhancements. The government objected to the gross-receipts and number-of-victims enhancements; Andrews contested all of the enhancements. (See Def.'s Position on Sentencing (“Def.'s Sent'g Position”), Oct. 7, 2013, Docket No. 60; Government's Position on Sentencing, Oct. 7, 2013, Docket No. 59.) With regard to the loss-amount enhancement, Andrews argued certain transactions should not be counted because Andrews justifiably relied “in good faith on expert advice” from a real estate agent and a real estate broker. (Def.'s Sent'g Position at 2-3, 6-9.) Andrews also argued against the sophisticated-means enhancement, contending certain LLCs were formed for an innocent purpose and used at the direction of a real estate professional. (Id. at 13.)

         The Court held a two-day evidentiary hearing in November 2013 regarding the objections to the PSR. (Ct. Mins., Nov. 7, 2013, Docket No. 70; Ct. Mins., Nov. 22, 2013, Docket No. 74.) At the hearing, Andrews presented evidence that certain transactions should not be counted toward the loss-amount enhancement because Andrews relied upon the advice of real estate professionals in the structure of the real estate transactions. (See Def.'s Post-Hr'g Mem. of Law at 31-35, Dec. 9, 2013, Docket No. 76.) Andrews again objected to the sophisticated-means enhancement, arguing that the use of an LLC was not “especially complex or especially intricate” such that an enhancement under the Guidelines was warranted. (Id. at 39 (quoting U.S.S.G. § 2B1.1, cmt. n.9(b)).)

         After reviewing the evidence and position papers from both the government and Andrews, the Court held a final sentencing hearing on December 13, 2013. (Ct. Mins., Dec. 13, 2013, Docket No. 78.) The Court declined to apply a two-level increase for the gross-receipts enhancement and reduced the four-level increase for the number-of-victims enhancement to a two-level increase. But the Court found the government met its burden and applied the loss-amount enhancement, sophisticated-means enhancement, and role-in-offense enhancement for a Total Offense Level of 32. (See Statement of Reasons at 1, Dec. 23, 2013, Docket No. 80.) With a Criminal History Category of I, the advisory Guidelines range for Andrews' crime was 121 to 151 months' imprisonment. (Id.) The Court varied below the advisory Guidelines range to 72-months' imprisonment, taking into account that “the scheme was not as shocking as other mortgage schemes” and that Andrews had “otherwise been law abiding.” (Id. at 3.) The Court entered judgment on December 13, 2013, (id. at 4), but amended the judgment on October 28, 2014 to specify restitution amounts, (Am. J. in a Criminal Case, Oct. 28, 2014, Docket No. 87).

         Even though the plea agreement did not preclude Andrews from filing a direct appeal regarding his sentence, (see Plea Agreement at 9), Andrews did not file a direct appeal. In June 2016, Andrews filed a pro se motion to reduce his sentence. In August 2016, Andrews filed a motion to vacate, set aside, or correct his sentence pursuant to section 2255.

         DISCUSSION

         I. MOTION TO VACATE, SET ASIDE, ...


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