In the Courts

On Nov. 7, 2012, the United States Court of Appeals for the Eighth Circuit issued a relatively non-controversial opinion in United States v. Spencer, —F.3d.—, 2012 WL 5416151 (2012), in which the court ruled on several evidentiary challenges and upheld a below-guidelines sentence against a substantive reasonableness challenge. In his dissent from the majority's opinion, however, Circuit Judge Myron H. Bright offered a notably passionate and thoughtful critique of the U.S. Sentencing Guidelines as applied to high-loss fraud sentences. In his dissent, Judge Bright criticizes the reliance the sentencing guidelines place on loss in sentencing calculation, likening the injustice of this approach to the critiques levied by many critics regarding the emphasis of weight calculation in drug sentencing.

The case involved a real estate broker, John Anthony Spencer, who was found guilty by a jury with respect to 13 fraud-related counts for his role as the architect in a real estate fraud scheme. Id. at *1. The scheme began in 2005, when Spencer began recruiting buyers to participate in a series of fraudulent transactions, in which he and the staff at his real estate firm, Mortgage One, provided false information and documentation to lenders, including fraudulent appraisals, in order to generate additional funds for himself and the participating buyers. Id. Spencer was indicted on 10 counts of wire fraud and one count each of bank fraud, conspiracy to commit wire and bank fraud and money laundering under 18 U.S.C. ' 1957. Id. He was convicted on all counts and sentenced to 125 months' imprisonment and to pay $7,874,089.21 in restitution to the lenders that were defrauded as part of the scheme. Id.