Appeal from the United States District Court for the Northern District of California Susan Illston, District Judge, Presiding D.C. No. 3:09-cr-00376-SI-1
The opinion of the court was delivered by: Ikuta, Circuit Judge:
Argued and Submitted October 25, 2011-San Francisco, California
Before: Susan P. Graber and Sandra S. Ikuta, Circuit Judges, and Gordon J. Quist,*fn1 Senior District Judge.
Judy Yeung appeals from a restitution order imposed by the district court after a jury convicted Yeung of various crimes associated with her involvement in a fraudulent real estate investment scheme.*fn2 We have jurisdiction pursuant to 28 U.S.C. § 1291. We hold that the district court failed to provide an adequate explanation of its reasoning in calculating the amount of restitution owed to two of the victims and, therefore, vacate that portion of the restitution order. We remand for recalculation and explanation of the award pursuant to the Mandatory Victims Restitution Act of 1996 ("MVRA"), 18 U.S.C. § 3663A.
From 2005 until 2007, Judy Yeung and her co-conspirators developed a scheme to make money in the then-booming housing market and to pay off various debts. Yeung recruited five individuals with good credit scores to act as straw buyers to purchase and refinance residences in San Francisco and Gilroy, California. Yeung and other members of the conspiracy falsified information on the straw buyers' loan applications, for example by materially overstating the supposed borrower's income and assets and misstating their employment information and rental obligations. As part of the scheme, the conspirators developed a false letter from an accountant and a false "verification of deposit" letter from Hang Seng Bank to support the fraudulent loan applications. Despite her promises to the straw buyers, Yeung stopped making mortgage payments and defaulted on the loans, which triggered foreclosure of the properties held as collateral. After she was convicted, the district court determined that the victims of two of the five fraudulent schemes (the "Ferrari loans" and the "Lam loans") were entitled to restitution in the amount of $1,321,564. The relevant facts about the two schemes at issue, drawn from the record, are as follows.
The scheme involving the Ferrari loans began in 2005. At the suggestion of real estate broker Alex Yee (an alleged co-conspirator), Yeung obtained loans in the name of Kenneth Ferrari, Yee's friend and former co-worker, in order to repur-chase the property at 1351 Third Street from a previous straw buyer who wanted out of the scheme. Yee and Yeung prepared a loan application for Ferrari that falsely stated that 1351 Third Street would be Ferrari's primary residence and falsely inflated Ferrari's income and present rental obligations. Relying on this loan application, in December 2005, Long Beach Mortgage Company made two separate loans to Ferrari, the first for $664,000 and the second for $166,000.
The loans were secured by the 1351 Third Street property. Ferrari paid the first mortgage payment himself, and Yee, who felt responsible for involving Ferrari, made the second payment. Yeung reimbursed Ferrari for the first month's mortgage payment and also made the third month's payment. She made no further payments.
According to the government's expert witness, in March 2006, Long Beach Mortgage Company sold the two Ferrari loans to Long Beach Mortgage Securities Corporation, which then sold or transferred the loans, as part of a pool of loans, to the Long Beach Mortgage Trust 2006-2 ("Long Beach Trust"), a corporate entity. No evidence was submitted regarding the price Long Beach Mortgage Securities Corporation or the Long Beach Trust paid for the loans; the government witness at the evidentiary hearing testified that she did not know the amount. The Long Beach Trust sold interests in the securitized pool of loans to investors.
On December 4, 2006, after Ferrari defaulted on the loans, foreclosure proceedings commenced. The unpaid principal balance of the two loans at the time of Ferrari's default was $829,382. Deutsche Bank National Trust Company ("Deutsche Bank"), as trustee for the Long Beach Trust, took title to the 1351 Third Street property at the foreclosure sale for a credit bid of $707,388.*fn3 In March 2008, Deutsche Bank sold the real estate to a ...