Friday, May 16, 2008

U.S. v. Crandall, No. 06-50592 (5-13-08). The convictions for fraud were affirmed in this instance real estate scheme of fraudulent converting apartments to condos. The 9th though (Holland joined by Farris and Smith) vacated the sentence because the guidelines for loss were misapplied. The scheme was to jump through the hoops in converting to condos by backdating the apartment building as a stock-cooperative. Straw purchasers and fraudulent backdating eventually led to the conviction. But how to assess loss? The 9th discussed various options, from intended loss, to actual loss, and couldn't come up with any one way because all loss measurements had problems (after all, the purchasers still had the apartments to live in or rent out. The value was high. The 9th ended up by stating that it wasn't readily apparent how the district court should value loss, but that it couldn't use a straight "loss of goods" in this case. The issue of loss in real estate transactions will be bedeviling courts for some time given the current economic conditions.

U.S. v. W.R. Grace et al., No. 06-30192 (5-15-08) (en banc). Say "Grace" next time to file a motion to compel disclosure of discovery. In an en banc decision, the 9th (Fisher) upheld a district court's discretion, pursuant to Fed. R. Crim. P. 2 and 16, and its inherent authority, to order disclosure of the government's witness list and to hold the government to it. The court can do so to allow for orderly trial. The 9th therefore joins other circuits that have so held. The 9th also spent a lot of time discussing whether the governement could appeal the district court's order interlocutorily by only citing the barest of justifications ("not for delay" and "substantial proof" is material) under 3731. The 9th decides that following the sparse language, so long as it is certified by the US Atty is good enough. Concurring in judgment, Hawkins, Pregerson and Wardlaw would require more than the government's "say so."


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