US v. Graham
Case Date: 06/05/1998
Court: United States Court of Appeals
Docket No: 97-1274
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For the First Circuit ____________________ No. 97-1274 UNITED STATES, Appellee, v. KARLA LEE GRAHAM, A/K/A KARLA ZAHORUIKO, Defendant - Appellant. ____________________ APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE [Hon. Paul J. Barbadoro, U.S. District Judge] ____________________ Before Boudin, Circuit Judge, Godbold and Cyr, Senior Circuit Judges. _____________________ Bjorn Lange, Assistant Federal Defender, Federal Defender Office, for appellant. Jean B. Weld, Assistant United States Attorney, with whom Paul M. Gagnon, United States Attorney, was on brief for appellee. ____________________ June 5, 1998 ____________________ GODBOLD, Senior Circuit Judge. Karla Graham appeals from her conviction and sentence for making false statements in loan documents presented to a federally insured bank in violation of 18 U.S.C. 1014. We affirm both. I. Factual and Procedural History The jury was entitled to find the following facts, either as undisputed or based on sufficient evidence. Between 1987 and 1989 Karla Graham worked as a mortgage account executive for Dime Real Estate Services of New Hampshire (Dime-NH)a wholly owned subsidiary of Dime Savings Bank of New York (Dime-NY) that provided residential mortgage loans. Graham originated the loans and was paid on commission. During this time the bank had a low-documentation lending program that approved loan applications without verification of income, employment or assets as long as the borrowers could make a twenty percent down payment with their own funds. Graham and her co-defendants found ways to avoid the down payment requirement and submitted fraudulent loan applications to the bank's underwriters in Massachusetts (Dime-MA). Dime-NY provided the funds for these mortgages, and all mortgages were eventually assigned to Dime-NY. Dime-NY is a federally chartered savings bank with deposits insured by the Federal Deposit Insurance Corporation (FDIC). After a large scale investigation into Dime's operations, a federal grand jury returned a sixty-count indictment against Graham and six co-defendants. Graham was charged in eleven counts of the indictment. Two of these counts were severed and later dismissed by the government. Graham was tried by a jury on the remaining counts. Count 1 charged her with conspiring to make false statements for the purpose of influencing Dime-NY on loan applications in violation of 18 U.S.C. 371. Counts 17 through 26 charged her with knowingly submitting materially false statements on ten different loan applications, HUD-1 Settlement Statements, and Fannie May Affidavits for the purpose of influencing Dime-NY in violation of 18 U.S.C. 1014. The jury returned a verdict of guilty on counts 18 and 25 and not guilty on the remaining counts. The district court sentenced her to eighteen months imprisonment on each count to be served concurrently and a term of one year supervised release. II. Discussion of the Issues A. Selective Prosecution and Conflict of Interest Graham asserts that her conviction violated her right to due process because it was the product of selective prosecution on the part of the government. She maintains that the district court erred in failing to hold an evidentiary hearing on the issue of selective prosecution. Graham points to the fact that Dime Bank- New York was not indicted on criminal charges after it gave a $2,000,000 donation to a nonprofit housing program in Manchester, New Hampshire. She also notes that the U.S. Attorney in charge of the case resides in the New Hampshire community that received the donation. Further complicating this picture is the fact that Dime- NY was partially owned by the FDIC and that the decision not to indict the bank came just before a successful public offering of shares in the bank, thus benefitting the FDIC by ensuring that the sale would not be marred by threats of future criminal liability. By cumulating all of these circumstances, Graham suggests that she was selectively prosecuted either because she did not have the wealth to avoid criminal liability through civic contributions or because a government conflict of interest kept the bank from being prosecuted. An improper selective prosecution arises when a defendant "has been singled out for prosecution when others similarly situated have not been prosecuted and the prosecutor's reasons for doing so were impermissible." U.S. v. Magana, 127 F.3d 1, 8 (1st Cir. 1997); see also U.S. v. Pe |