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United States v. Banyan

United States Court of Appeals, Sixth Circuit

August 5, 2019

United States of America, Plaintiff-Appellee,
v.
Amir Babak Banyan; Bryan Puckett, Defendants-Appellants.

          Argued: October 4, 2018

          Appeal from the United States District Court for the Middle District of Tennessee at Nashville. No. 3:14-cr-00101-Aleta Arthur Trauger, District Judge

         ARGUED:

          J. Alex Little, BONE MCALLESTER NORTON PLLC, Nashville, Tennessee, for Appellant in 17-6410.

          Stuart A. Berman, LERCH, EARLY, & BREWER, CHTD., Bethesda, Maryland, for Appellant in 17-6493. Sangita K. Rao, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee.

         ON BRIEF:

          J. Alex Little, BONE MCALLESTER NORTON PLLC, Nashville, Tennessee, for Appellant in 17-6410. Stuart A. Berman, LERCH, EARLY, & BREWER, CHTD., Bethesda, Maryland, for Appellant in 17-6493.

          Elizabeth H. Danello, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., Byron M. Jones, UNITED STATES ATTORNEY'S OFFICE, Nashville, Tennessee, for Appellee.

          Before: SILER and KETHLEDGE, Circuit Judges; OLIVER, District Judge. [*]

          OPINION

          KETHLEDGE, CIRCUIT JUDGE.

         In this case the government charged the defendants with the wrong crimes. Amir Banyan and Bryan Puckett engaged in a scheme in which they eventually obtained more than $5 million from a pair of mortgage companies by means of fraudulent mortgage applications. The scheme was revealed about two years after it began. Had the government charged Banyan and Puckett with mail or wire fraud within the five-year limitations periods for those offenses, the two likely would have lacked any plausible defense. But for whatever reason the government blew that deadline and instead later charged Banyan and Puckett with bank fraud, of which they were both convicted. That offense has a longer limitations period, but brings the complication that the fraud must be perpetrated against a bank-which (as a matter of statutory definition) the mortgage companies obviously were not, because they were not federally insured. Nor did the government make any effort at trial to prove that the loans were funded by the mortgage companies' parent corporations, which were banks. The government now offers various theories to work around these deficiencies, but none has merit. We therefore reverse the defendants' convictions.

         I.

         In January 2006, Puckett was a homebuilder in Nashville; Banyan was a mortgage broker who had previously worked at SunTrust Mortgage Company. Puckett was overloaded with debt incurred while building some half-dozen luxury homes that he had not yet sold. With Banyan, Puckett recruited straw buyers to purchase his unsold homes with loans funded by SunTrust Mortgage Company and Fifth Third Mortgage Company. For a fee typically in the neighborhood of $10, 000, each buyer submitted to the mortgage company a loan application-in most cases filled out by Banyan-that overstated the buyer's income and falsely stated that the buyer intended to live in the home, among other misrepresentations. None of those misrepresentations, on the record here, reached the parent corporations of the mortgage companies, namely SunTrust Bank and Fifth Third Bank, both of which were federally insured. Nor, on the record here, did either of the parent banks fund any of the loans.

         Puckett received the proceeds of the loans, which he told the buyers he would use to make their mortgage payments for them. Altogether, pursuant to the scheme, Puckett sold eight homes to straw buyers and received more than $5 million from the mortgage companies. (Presumably Banyan took a share as well.) By late 2007, however, Puckett could not keep up with all the payments for the fraudulent loans and his preexisting debt. By the end of 2008, the mortgage companies had foreclosed on most if not all the homes.

         Although the FBI began investigating the scheme in 2009, the government did not indict Banyan or Puckett until 2014, on various counts of bank fraud in violation of 18 U.S.C. § 1344 and conspiracy to commit bank fraud in violation of 18 U.S.C. § 1349. A jury convicted each defendant of two counts of bank fraud and one count of conspiracy. Although each defendant's Guidelines range exceeded five years' imprisonment, the district court sentenced ...


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