IN THE

UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

NO. 04-11356-HH

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

KIMBERLY PATILLO,

Defendant-Appellant.

On Appeal From The United States District CourtFor The Northern District of Georgia

BRIEF FOR APPELLEE

SALLY QUILLIAN YATESACTING UNITED STATES ATTORNEY

MARY JANE STEWARTASSISTANT UNITED STATES ATTORNEY

600 Richard B. Russell Bldg.75 Spring Street, S.W.Atlanta, Georgia 30303404/581-6000

Attorneys for Appellee

C-1 of 1

IN THE

UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

UNITED STATES OF AMERICA, ::

Appellee, ::

v. : APPEAL NO. 04-11356-HH:

Kimberly Patillo, ::

Appellant. :

CERTIFICATE OF INTERESTED PERSONS

AND CORPORATE DISCLOSURE STATEMENT

In addition to the persons listed by Appellant, the United

States submits that other persons and witnesses known to have an

interest in the outcome of this appeal are:

1. Chapel Funding, Victim

2. Meritage Mortgage, Victim

3. PRMI, Victim

4. Mary Jane Stewart, Assistant United States Attorney

5. SunTrust, Victim

6. Sally Quillian Yates, Acting United States Attorney

7. United States of America

i

STATEMENT REGARDING ORAL ARGUMENT

The government respectfully submits that oral argument is not

necessary in this case. The issues and positions of the parties,

as presented in the record and briefs, are sufficient to enable the

Court to reach a just determination.

ii

TABLE OF CONTENTS AND CITATIONS

Page

CERTIFICATE OF INTERESTED PERSONS

AND CORPORATE DISCLOSURE STATEMENT C-1

STATEMENT REGARDING ORAL ARGUMENT i

TABLE OF CONTENTS AND CITATIONS ii

STATEMENT OF JURISDICTION v

STATEMENT OF THE ISSUES 1

STATEMENT OF THE CASE 2

1. Course of Proceedings and Disposition Below 2

2. Statement of the Facts 3

A. Offense Conduct 3

1. Sweetbriar Trail & South Mount Drive 3

2. Harbor Cove Lane 7

3. Howell Court 9

4. Old Fuller Mill 10

5. Royal Mustang Way 13

6. Evidence from the Searches 15

B. Sentencing 16

3. Standard of Review 18

SUMMARY OF THE ARGUMENT 19

ARGUMENT AND CITATIONS OF AUTHORITY 20

CONCLUSION 30

CERTIFICATE OF COMPLIANCE 31

CERTIFICATE OF SERVICE 32

iii

FEDERAL CASES

Apprendi v. New Jersey, 530 U.S. 466 (2000) 17

Blakely v. Washington,

___ U.S. ___, 124 S. Ct. 2531 (2004) 20

United States v. Cataldo,

171 F.3d 1316 (11th Cir. 1999) 23, 29

United States v. Curtis, ___ F.3d ___,

2004 WL 1774785 (11th Cir. Aug. 10, 2004) 20

United States v. De Varon, 175 F.3d 930

(11th Cir. 1999)(en banc) 18, 21, 22, 29

United States v. Duncan, ___ F.3d ___,

2004 WL 1838020 (11th Cir. Aug. 18, 2004) 18, 20,21

United States v. Everett,

129 F.3d 1222 (11th Cir. 1997) 29

United States v. Gates,

967 F.2d 497 (11th Cir. 1992) 22, 23

United States v. Johnson,

297 F.3d 845 (9th Cir. 2002) 23

United States v. Olano, 507 U.S. 725 (1993) 20

United States v. Reese, ___ F.3d ___,

2004 WL 1946076 (11th Cir. Sept. 2, 2004) 21

United States v. Zaccardi,

924 F.2d 201 (11th Cir. 1991) 23, 29

iv

FEDERAL STATUTES

18 U.S.C. § 371 2

18 U.S.C. § 1341 2

18 U.S.C. § 1343 2

18 U.S.C. § 3742 v

18 U.S.C. § 3742(e) 21

28 U.S.C. § 1291 v

42 U.S.C. § 408(a)(7) 2

FEDERAL RULES

FRAP 32(a)(7)(B) 30

SENTENCING GUIDELINES

U.S.S.G. § 2B1.1 16

U.S.S.G. § 2B1.1(1)(H) 20

U.S.S.G. § 2B1.1(b)(1)(H) 16

U.S.S.G. § 2B1.1(b)(7)(B) 16, 17

U.S.S.G. § 2B1.1(b)(8)(C) 16, 20

U.S.S.G. § 2B1.1(b)(9)(C)(i) 16, 20

U.S.S.G. § 3B1.2(b) 22

U.S.S.G. § 3E1.1 16

v

U.S.S.G. § 3E1.1, comment (n.1) 22

U.S.S.G. § 3B1.2(B) 1

vi

STATEMENT OF JURISDICTION

This Court has jurisdiction over this direct appeal from the

judgment and sentence of the district court, pursuant to 18 U.S.C.

§ 3742 and 28 U.S.C. § 1291.

1

STATEMENT OF THE ISSUES

I. WHETHER THE DISTRICT COURT PLAINLY ERRED BY

NOT APPLYING THE RULE ANNOUNCED IN BLAKELY V.

WASHINGTON TO THE SENTENCING GUIDELINES WHEN

ENHANCING DEFENDANT'S OFFENSE LEVEL.

II. WHETHER THE DISTRICT COURT CLEARLY ERRED IN

REFUSING TO APPLY A TWO-LEVEL DECREASE TO

DEFENDANT'S BASE OFFENSE LEVEL FOR HER

MITIGATING ROLE IN THE OFFENSE UNDER USSG §

3B1.2(B).

2

STATEMENT OF THE CASE

1. Course of Proceedings and Disposition Below

A federal grand jury for the Northern District of Georgia

returned the original indictment in this case against six

defendants on July 17, 2002, for a scheme to defraud mortgage

lenders in violation of 18 U.S.C. § 371 (conspiracy); 18 U.S.C. §§

1341 and 1343 (mail and wire fraud); and 42 U.S.C. § 408(a)(7)

(fraudulent use of a social security account number). (Doc 1).

Kimberly Patillo was not one of the original defendants. (Id.).

After four defendants pleaded guilty to the first indictment,

on November 20, 2002, a federal grand jury for the Northern

District of Georgia returned a superseding indictment against the

remaining defendants, D.C. Woods and Sharon Jenkins, and added

Kimberly Patillo, as a defendant. (Doc 111). The first

superseding Indictment eliminated many of the mail and wire fraud

counts and overt acts that primarily pertained to other defendants

who had already pleaded guilty. (Doc 111). Defendant Patillo was

arraigned on November 25, 2002. (Doc 119).

On September 2, 2003, the United States obtained a second

superseding indictment against Defendant Patillo and Woods. (Doc

206). Defendant Patillo was arraigned on September 15, 2003. (Doc

213). On October 23, 2003, Defendant Patillo pleaded guilty to

Count 1 (conspiracy) and Count 16 (bank fraud). (Doc 223).

1In citing to the PSR in its statement of the facts, the UnitedStates has cited only to portions to which the defense did notobject.

3

On February 25, 2004, after a day-long sentencing hearing, the

district court sentenced Defendant Kimberly Patillo to serve 41

months in the custody of the Bureau of Prisons followed by 5 years’

supervised release and to pay $200 in special assessments and

$417,402,15 in restitution to various victms. (Doc 261, Doc 268).

The court entered a final judgment and commitment order on March 8,

2004. (Doc 268). Defendant's timely notice of appeal followed on

March 8, 2002. (Doc 269). Defendant remains on bond for the

purpose of addressing medical issues. (Doc 300).

2. Statement of the Facts

A. Offense Conduct

1. Sweetbriar Trail & South Mount Drive

The first two properties that were part of Woods’ scheme to

defraud were Sweetbriar Trail and South Mount Drive. (Doc 206).

Defendant Patillo, Woods’s wife, purchased Sweetbriar Trail on May

26, 2000, for $450,000, and South Mount Drive on June 2, 2000, for

$340,000. (PSR ¶¶ 138, 1481). Less than six months later,

Defendant Patillo sold Sweetbriar Trail to “Lorenzo Woods” on

November 7, 2000, for $550,000, an increase of $100,000 in the

purchase price. (PSR ¶ 140). On January 10, 2001, Defendant

Patillo sold South Mount Drive to “Sherita Sims” for $400,000, an

increase of approximately $60,000. (PSR ¶ 150). Neither Lorenzo

4

Woods nor Sherita Sims were aware that real estate was purchased in

their name. (Doc 271 at 62-64; PSR ¶ 41; Doc 253, Tab 13, Exhibit

45 (Sims 302)).

Lorenzo Woods, the uncle of co-defendant Woods, testified he

had discussions with Woods about going into the real estate

business with him, but denied knowing that Sweetbriar was being

purchased in his name until after it had happened. (Doc 271 at 61-

64; Doc 253, Tab 13, Exhibit 44 (Lorenzo Woods FBI 302)).

“Sherita Sims” was a stolen identity who had no relationship

to the defendants. (PSR ¶ 41). Defendant Patillo’s bank records

reflected that she provided the $3,576.35 down payment for “Sherita

Sims” to purchase South Mount Drive from Defendant Patillo in

January 2001 by using her own funds to purchase a cashier’s check

for the closing. (Doc 253, Tab 6, Exhibit 23).

To qualify Lorenzo Woods and Sherita Sims for the loans, the

defendants created false employment and income for them. (Doc 253,

Tab 4, Exhibit 13 (Lorenzo Woods’ loan); Exhibit 14 (Sims’ loan).

The false documentation included false verifications of deposit

which Woods asked Kevin Barbee to provide. (Doc 271 at 49-59; Doc

253, Tab 7, Exhibit 27). At the time of Woods’ request, Barbee was

employed at First Financial, which was a collections agency, not a

depository institution, and, therefore, neither Lorenzo Woods nor

Sherita Sims had any funds on deposit with First Financial. (Doc

271 at 50-53, 55). Barbee falsely verified that Lorenzo Woods had

5

$59,000 on deposit with First Financial. (Doc 271 at 54-55; Doc

253, Tab 7, Exhibit 27A).

Lorenzo Woods identified his brother, Lewis Woods, as the man

depicted in two photographs that were supposed to portray the

“borrower” in the attorney’s closing file for the “Lorenzo Woods’”

purchase of Sweetbriar Trail. (Doc 271 at 66; Doc 253, Tab 5,

Exhibit 19, bates numbers 26077 and 26097). When Lorenzo Woods

reviewed the tax returns, checks, Profit and Loss Statement, and

employment information on or accompanying the loan application for

Sweetbriar Trail, (long after the loan had been approved and the

fraud scheme uncovered) he stated that they reflected a fictitious

employer, and amounts of income that he never earned. (Doc 271 at

68-69).

The defendants were able to obtain money in this scheme by

filing a Deed to Secure Debt against property before the property

was sold from one coconspirator to another (or to a stolen

identity). (Doc 253, Tab 2, Exhibit 5; Doc 253, Tab 11, Exhibits

36, 37, and 39; Doc 253, Tab 14, Exhibit 58). This ensured that

when the property was sold, the grantee on the deed to secure debt

would receive a check for at least some of the proceeds at the

closing. (Id.) Woods or his company, Woods Investment Group, was

the grantee on all but one of the bogus Deeds to Secure Debt that

were filed against properties in this scheme. (Id.) As the

grantee, at closing on the sale of the property Woods was entitled

2Dionloyous is Woods’ first name.

6

to receive a check for the amount he or his company was “owed” on

the property being sold. (Id.)

On October 11, 2000, Woods filed a deed to secure debt in the

amount of $45,000 against the South Mount Drive property, and a

deed to secure debt against the Sweetbriar Trail property in the

amount of $100,000. (PSR ¶ 143). Dionloyous2 Woods and Woods

Investment Group were the grantees on the Deeds (the party to whom

the debt was owed) and Defendant Kimberly Patillo was the grantor

on both Deeds (the party who owed the debt). (Doc 253, Tab 11,

Exhibits 37 and 39). Woods was the President of Woods Investment

Group. (Doc 253, Tab 16, Exhibit 69 (Secretary of State Records

for Woods Investment Group)).

When Defendant Kimberly Patillo sold the South Mount Drive

property to “Sherita Sims,” the closing attorney gave Woods a

$23,686.61 check made payable to Dionloyous Woods based on the

“debt” reflected on the deed to secure debt. (PSR ¶ 150; Doc 253,

Tab 14, Exhibit 58). There was insufficient equity in the

Sweetbriar Trail property to cover the “debt” in the Deed to Secure

Debt. (PSR ¶ 143). Instead, Defendant Patillo received the sales

proceeds check in the amount of $12,434.90 from Sweetbriar Trail

sale. (Doc 253, Tab 14, Exhibit 61).

7

2. Harbor Cove Lane

Another property that was part of the fraud scheme was Harbor

Cove Lane. (Doc 206). Arbendette Van was recruited by Woods in

late Spring of 2000 to purchase 7482 Harbor Cove Lane as an

investment property. (Doc 271 at 117). Woods gathered all the

financial information from Van that was needed to complete the loan

application. (Doc 271 at 119). During the loan application

process, Woods suggested to Van that she provide a tax return that

showed that she had more income than she really did. (Doc 271 at

121). Van was under the impression that the property would be sold

for a profit shortly after she bought it. (Doc 271 at 123).

Based on representations made by Woods, Van purchased 7482

Harbor Cove Lane on July 3, 2000, for $195,000. (PSR ¶ 67). Some

time shortly after the closing occurred, Van determined that Woods

had made several misrepresentations to her, and demanded that the

property be sold again to get it out of her name. (Doc 271 at 124-

125).

Woods arranged to sell the Harbor Cove Lane property to a

stolen identity/borrower “David Matthew.” (Doc 271 at 157-158).

The defendants used the social security number and credit

information of Matthew Marcus to qualify “David Matthew” for the

loan. (PSR ¶ 35). The defendants falsely represented that “David

Matthew” was employed at MMM&M Farms (a fictitious employer), had

a monthly income of $8,890, and provided false earning statements,

8

W-2s and other documents needed to qualify Matthew for the loan.

(Doc 253, Tab 4, Exhibit 12. PSR ¶¶ 69-71).

Woods and another individual asked Craig Davis, co-defendant

in the original indictment, to pose as David Matthew, the purchaser

of the Harbor Cove Lane property. (Doc 271 at 157). Woods

promised Davis $2,000 and the deed to a house if he would pose as

David Matthew. (Doc 271 at 158).

When Harbor Cove Lane was sold to David Matthew on September

28, 2000, Woods had increased the price from Van’s purchase price

of $195,000 to $270,000. (PSR ¶ 68). This inflation was

“justified” by a Deed to Secure Debt that Woods had filed against

the property on August 1, 2000, in the amount of $60,000. (Doc

253, Tab 2, Exhibit 5). This price inflation enabled the

defendants to pull $62,431.27 out of the sale, as a second mortgage

paid to Woods Investment, Inc. (PSR ¶ 68; Doc 253 Tab 2, Exhibit

5).

Craig Davis testified that Defendant Kimberly Patillo provided

the down payment for “David Matthew” on the purchase of the Harbor

Cove Lane property. (Doc 271 at 159). Davis’ testimony is

corroborated by the closing attorney’s records and the bank records

of Defendant Patillo which reflect that Defendant Patillo paid the

down payment of approximately $27,824.60 toward the purchase of the

Harbor Cove property in the name of David Matthew. (Doc 253, Tab

6, Exhibit 22).

9

3. Howell Court

The fourth property in this Indictment that was part of this

scheme was Howell Court. (Doc 206). Woods arranged for Howell

Court to be purchased in the name of Veronica Nelson in February

2001. (Doc 271 at 160). Woods asked Craig Davis to find someone

who they could use as the “investor” in a house located on Howell

Court. (Id.). Davis introduced Woods to his then-girlfriend,

Veronica Nelson, and provided some of the information that Woods

needed for the loan application. (Doc 271 at 160-61). The Nelson

loan application also contained false information: Carter

Enterprises was listed as the employer of “Veronica Nelson” on the

loan application when “Veronica Nelson” applied to purchase Howell

Court. (Doc 253, Tab 4, Exhibit 15 (Howell Court loan

application)). Veronica Nelson was never employed by Carter

Enterprises, according to James Dixon who owned and operated Carter

Enterprises. (Doc 271 at 84). The telephone number for Carter

Enterprises on the loan application was listed as 770-981-8000, the

telephone number that Defendant Patillo later reported to the

Georgia Secretary of State as the telephone number for Patillo

Enterprises. (Doc 253, Tab 4, Exhibit 15 (Howell Court loan

application); Doc 253, Tab 13, Exhibit 51 (Patillo Enterprises

Secretary of State records)).

After Veronica Nelson backed out of the purchase, Woods used

another girlfriend of Davis’ to pose as Veronica Nelson. (Doc 271

10

at 162). At the closing, Woods received the proceeds from the sale

in the form of a check in the amount of $33,852.46 made payable to

Charles Lindsey. (Doc 253, Tab 14, Exhibit 59). A couple of days

after the purchase of Howell Court, Woods cashed and divided the

check proceeds between the participants in the transaction, which

included Craig Davis. (Doc 271 at 163). Woods gave Davis

approximately $17,000. (Doc 271 at 163). During an April 2001

search of 5060 Mainstreet Park Drive, federal agents found the

check stub associated with the $33,852.46 check, with notations on

it indicating the split of the proceeds. (Doc 253, Tab 14, Exhibit

59).

4. Old Fuller Mill

The fifth property that was part of the scheme to defraud was

Old Fuller Mill. (Doc 206). Defendant Patillo and Woods arranged

for Yvette Patillo, the sister of Defendant Kimberly Patillo, to

purchase Old Fuller Mill from Eric Hulsman for $460,000. (PSR ¶¶

190, 193, 194; Doc 253, Tab 4, Exhibit 16 (loan documents)). In a

somewhat complex maneuver, Woods entered into an equity-sharing

agreement with Eric Hulsman under which Woods and Hulsman agreed to

split the profit from the sale of the property to Yvette Patillo.

(PSR ¶¶ 193, 194).

To qualify Yvette Patillo for the loan, the defendants

provided the lender with false information concerning Yvette

11

Patillo’s income, rental history, and amount of cash on deposit

with Northwestern Mutual Financial Network. (PSR ¶ 190, 191).

Woods asked Shawn Wilson to provide a verification of deposit

which falsely reflected that Yvette Patillo had an account at

Northwestern Mutual Financial Network where Wilson worked. (Doc

271 at 30-48; Doc 253, Tab 4, Exhibit 16). Woods told Wilson that

he was in the real estate business, that he was “flipping”

property, and “they didn’t have enough assets and income to

continue to buy additional property.” (Doc 271 at 31). Woods

asked Wilson “to help verify funds with Northwestern Mutual Life

that were not there in order to acquire more property.” (Doc 271

at 31-32). Woods faxed Wilson the verification of deposit, already

completed, and Wilson signed it and faxed it back to Woods. (Doc

271 at 39). Shortly thereafter, Wilson received a telephone call

from Defendant Kimberly Patillo in which she asked Wilson to refax

the verification because the one he had sent was unusable. (Doc

271 at 32). Wilson advised Defendant Patillo that he was not

comfortable going through with this. (Doc 271 at 32-33).

Defendant Patillo asked Wilson to get in touch with Woods to talk

about Wilson’s concerns. (Doc 271 at 33). Ultimately, a different

verification of deposit was used than the one signed by Wilson,

because the first form was not legible and Wilson refused to sign

a second form. (Doc 271 at 32, 36). However, Wilson agreed to

orally verify the deposit at Woods’ request if he received a call

12

from the lender. (Doc 271 at 33). Wilson later orally verified

that Yvette Patillo had an account with Northwestern Mutual. (Doc

271 at 40). According to Shawn Wilson, Yvette Patillo did not have

an account at Northwestern Mutual Financial Network. (Doc 271 at

37).

Woods used the false verification from Northwestern Mutual to

prove that Yvette Patillo had sufficient funds on hand to pay Woods

a down payment of $57,500. (PSR ¶ 192). At the closing on the

purchase of Old Fuller Mill, Woods handwrote a statement in which

he falsely represented that Yvette Patillo had paid him $57,500 and

he had deposited into his account. (PSR ¶ 192). The fraudulent

verification of deposit certified that Yvette Patillo had $57,650

on deposit with Northwestern Mutual. (Doc 253, Tab 9, Exhibit 31,

bates 23662).

At the closing, Woods received a $108,415.56 check made

payable to D.C. Woods/Dionloyous Woods which was the amount he was

due under the equity-sharing agreement. (PSR ¶ 194; Doc 253, Tab

14, Exhibit 60). Under a “Power of Attorney,” Defendant Kimberly

Patillo signed all the loan documents for Yvette Patillo. (PSR ¶

192). Defendant Patillo deposited approximately $102,000 of the

$108,415.56 Woods obtained from that transaction, into her two

accounts at First Union. (Doc 253, Tab 17, Exhibit 75). Defendant

Patillo wired $14,000 to Yvette Patillo, but the rest of the money

13

stayed in Defendant Patillo’s accounts. (Doc 253, Tab 17, Exhibit

75).

5. Royal Mustang Way

The last property focused on in the Indictment was Royal

Mustang Way, a property that Woods and Defendant Patillo

unsuccessfully attempted to purchase in Defendant Patillo’s name.

(Doc 206: PSR ¶¶ 199-206). On or about December 3, 2001, Defendant

Patillo applied for a loan to purchase Royal Mustang Way with Impac

Funding. (PSR ¶ 199, 202). Defendant Patillo’s loan application

contained false representations concerning her down payment,

employment, and the lease of her current residence, Creekview

Trail. (Id.). Defendant Patillo’s application package indicated

that she had been employed at Carter Enterprises as a Senior Site

Manager for 2 years, beginning in January 1999, and continuing to

the date of the loan application (December 2001). (PSR ¶¶ 199,

200). The telephone number listed on the Verbal Verification of

Employment for Carter Enterprises was 770/686-8780, one of

Defendant Patillo’s telephone numbers. (PSR ¶ 200). The loan was

scheduled to close in January 2002, but never did because the FBI

found out about the pending sale. (PSR ¶ 202).

During the sentencing hearing, James Daryl Dixon testified

that he was the owner of Carter Enterprises, a one-man company

(that used day laborers as needed) in existence since 1998 that

performed concrete and landscaping services. (Doc 271 at 78, 89).

14

Dixon met Defendant Patillo in 1999, and, although Dixon and

Defendant Patillo had some brief business dealings relating to

equipment Defendant Patillo assisted Dixon in purchasing for Carter

Enterprises, Dixon never employed Defendant Patillo as a Senior

Site Manager and never paid her a salary. (Doc 271 at 80-2). The

only money Dixon gave Defendant Patillo was during the time they

lived together, between July and November 1999. (Doc 271 at 103-

105).

The closing attorney’s file and the lender’s file contained

correspondence that indicated that Woods had arranged the sale of

Royal Mustang Way. (PSR ¶¶ 199, 203). Had the sale been approved

under the terms Woods was seeking, Defendant Wood would have

received approximately $105,000 at the closing, by virtue of an

assignment of contract signed by Defendant Kimberly Patillo in

which Defendant Patillo agreed to pay Woods $105,000 for the right

to buy the property. (PSR ¶ 203).

The closing attorney’s file also contained documents which

indicated that the defendants attempted to create the illusion that

Defendant Patillo had paid Woods a down pyament on the property.

(PSR ¶ 204). The closing file contained an altered copy of the

Non-negotiable copy of a cashier’s check: People’s Bank & Trust

Cashier’s Check # 084210, dated 10/16/2001, made Payable to Woods

Investment Group, in the amount of $65,000, Remitter: Kimberly

Patillo. (Doc 253, Tab 10, Exhibit 34). The genuine People’s Bank

15

& Trust Cashier’s check # 084210 was purchased by Dionloyous Woods

with proceeds from Yvette Patillo’s purchase of Old Fuller Mill,

was made payable to Kimberly Patillo and was deposited into

Defendant Patillo’s money market account at First Union on October

16, 2001. (PSR ¶ 204; Doc 253, Tab 10, Exhibit 35).

6. Evidence from the Searches

In April 2001, federal agents searched Woods’ office located

at Main Street Park Drive. (PSR ¶ 207). During the search agents

found many documents that are commonly used in real estate

business, some of which are exhibits to the Government Sentencing

Memorandum (Doc 253, Tab 16, Exhibits 67-71), including: Notebook

containing lists of names and properties (Tab 16, Exhibit 67);

Notepad containing lists of names and properties (Tab 16, Exhibit

68); Blank documents including bankruptcy forms, deeds to secure

debt, purchase and sale agreements, leases, W-2's, and earnings

statements (Tab 16, Exhibit 69); Blank 1999 W-2 with “white-out” on

it (Tab 16, Exhibit 70A); Blank Payroll stub for Carter Enterprises

with “white-out” on it (Tab 16, Exhibit 70B); 1998 1040 U.S.

Individual Income Tax Return for Lorenzo Woods (Tab 16, Exhibit

70D); 1999 1040 U.S. Individual Income Tax Return for Lorenzo Woods

(Tab 16, Exhibit 70E); Cellular Plus business card for Victoria

Howard, President (Tab 16, Exhibit 70F); Cellular Plus Profit and

Loss Statement (Tab 16, Exhibit 70G); Three Requests for

Verification of Deposit for Lorenzo Woods from First Financial (Tab

16

16, Exhibit 70H); and DeKalb Co. Business Certificate for Woods

Investment Group and Application for E.I.N., (Tab 16, Exhibit 71).

During the investigation federal agents also searched

Northeast Mortgage which was the broker on many loans. Agents

found false W-2s and Earnings statements in the name of Sherita

Sims that had been faxed from Woods Investment and Patillo

Enterprises. (PSR ¶ 158).

B. Sentencing

The Presentence Report (“PSR”) recommended that Defendant

Patillo be sentenced within a custody guideline range of 51 to 63

months. (PSR at 72). Using USSG § 2B1.1 (2001 Edition), the

Probation Officer recommended that the base offense level of 6 be

adjusted as follows:

• a 14 level increase pursuant to § 2B1.1(b)(1)(H) because theloss was more than $400,000, but less than $1,000,000, (PSR ¶215);

• a 2 level increase pursuant to § 2B1.1(b)(7)(B) since “theoffense involved. . .a misrepresentation or other fraudulentaction during the course of a bankruptcy proceeding,” (PSR ¶216);

• a 2 level increase pursuant to § 2B1.1(b)(8)(C) since “. ..the offense involved sophisticated means. . .”, (PSR ¶ 217);

• a 2 level increase pursuant to § 2B1.1(b)(9)(C)(i) since“the offense involved. . .the unauthorized transfer or use ofany means of identification lawfully to produce or obtain anyother means of identification. . .”, (PSR ¶ 218);

• a two level decrease for acceptance of responsibility under§ 3E1.1, (PSR ¶ 223).

3All of the United States’ exhibits were admitted into evidenceat the sentencing hearing. (Doc 271 at 239).

17

The Probation Officer found that the defendant had a criminal

history category of I. (PSR ¶ 228).

The defendant objected to each of the increases listed above,

sought a third point for acceptance of responsibility, and a two

point reduction for her “minor role” in the offense. (PSR ¶ 220).

However, none of her objections were based on Apprendi v. New

Jersey, 530 U.S. 466 (2000), or a Blakely-type argument. (PSR at

attached letter dated 12/19/03 from Rebecca Hulsey Keaton).

Prior to sentencing, the United States filed a Sentencing

Memorandum with Exhibits, setting forth the facts and the law on

each of the defendant’s objections.3 (Doc 253, Doc 257). At the

sentencing hearing, the United States presented evidence on the

issue of Defendant Patillo’s role in the offense which included the

exhibits attached to its Sentencing Memorandum, and the testimony

of several witnesses.

After a day-long sentencing hearing, the Court upheld the

recommendations of the Probation Officer on all but the 2-level

increase called for by § 2B1.1(b)(7)(B) (misrepresentation during

bankruptcy proceeding). With regard to Defendant Patillo’s request

for a two offense level reduction for her minor role in the offense

the Court simply stated: “The evidence in this record . . . does

not support a mitigating role reduction.” (Doc 271 at 261).

18

As a result of these adjustments, Defendant Patillo’s offense

level was 22, her Criminal History was Category I, and her

sentencing range was 41 to 51 months. (Doc 271 at 270). Defendant

Patillo was sentenced to serve 41 months’ incarceration. (Doc

268).

3. Standard of Review

I. Because defendant did not make a Blakely-based objection

before the district court at sentencing, review is limited to plain

error. See United States v. Duncan, ___ F.3d ___, 2004 WL 1838020

(11th Cir. Aug. 18, 2004).

II. A district court's determination as to a defendant's

mitigating role in the offense is a finding of fact subject to the

clearly erroneous standard. United States v. De Varon, 175 F.3d

930, 937 (11th Cir. 1999)(en banc). The defendant has the burden

of proving a mitigating role in the offense by a preponderance of

the evidence. Id. at 939, 946.

19

SUMMARY OF THE ARGUMENT

I. It was not error, plain or otherwise, for the district

court to enhance Defendant's sentence under any section of the

Guidelines calling for an upward adjustment even though this

sentencing factor was neither admitted by Defendant nor found by a

jury beyond a reasonable doubt, because the rule announced by the

Supreme Court in Blakely v. Washington does not apply to the

Federal Sentencing Guidelines.

II. The district court did not clearly err in denying

Defendant the 2-level downward adjustment for minor role in the

offense under USSG § 3B1.2(b). Defendant failed to carry her

burden to show that she was substantially less involved in the

criminal conduct than most participants. She was involved in six

fraudulent real estate transactions. In less than six months, she

bought and then sold two properties with the purchase price of one

increasing $100,000 and the other increasing $60,000. She provided

down payments for several of the purchases and false information on

loan applications. When her sister acted as one of the buyers,

Defendant, acting under a power of attorney, signed all the loan

documents for her sister. After closing, she deposited most of the

proceeds into her accounts and then wired $14,000 to her sister.

Thus, she did not have a minor role in the scheme, and the district

court did not err in so ruling.

4Defendant complains of the following adjustments to her baseoffense level: 1) +14 for offense characteristics (§ 2B1.1(1)(H));2) +2 for sophisticated means (§ 2B1.1(b)(1)(8)(C)); and 3) +2 forfraudulent identification ( § 2B1.1(b)(9)(C)(i))). Appellant’sBrief at 10.

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ARGUMENT AND CITATIONS OF AUTHORITY

I. THE DISTRICT COURT DID NOT PLAINLY ERR IN NOTAPPLYING THE RULE ANNOUNCED IN BLAKELY V.WASHINGTON TO THE SENTENCING GUIDELINES WHENENHANCING DEFENDANT'S OFFENSE LEVEL.

Defendant Patillo contends, for the first time on appeal, that

the district court erred in enhancing her sentence pursuant to any

upward adjustment, in violation of her Fifth and Sixth Amendment

rights, because those sentencing factors4 was neither admitted by

Defendant Patillo nor found by a jury beyond a reasonable doubt.

In essence, Defendant argues that the Supreme Court's decision in

to Blakely v. Washington, ___ U.S. ___, 124 S. Ct. 2531 (2004),

applies to the Sentencing Guidelines, and should be applied to her

case.

Because Defendant Patillo did not raise a Blakely-type

argument below, however, review is for plain error. See United

States v. Duncan, ___ F.3d ___, 2004 WL 1838020, at *2 (11th Cir.

Aug. 18, 2003); United States v. Curtis, ___ F.3d ___, 2004 WL

1774785, at *2 n.2 (11th Cir. Aug. 10, 2004); see also United

States v. Olano, 507 U.S. 725, 732-36, 113 S. Ct. 1770 (1993).

Here, there is no error, plain or otherwise, because this Court has

ruled that Blakely does not apply to the Federal Sentencing

5In his standards of review section, defendant states that thecourt’s ruling on a mitigating role adjustment is reviewed forclear error. Appellant’s Brief at 6. However, in the text of herargument, she argues that the court erred as a matter of law andabused its discretion. Appellant’s Brief at 11-13, 14-17.

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Guidelines. See United States v. Reese, ___ F.3d ___, 2004 WL

1946076 (11th Cir. Sept. 2, 2004). See also Duncan, supra,(holding

that it is not plain error to fail to apply Blakely to the Federal

Sentencing Guidelines). For this reason, Defendant's Blakely

challenge is meritless.

II. THE DISTRICT COURT DID NOT CLEARLY ERR INREFUSING TO APPLY A TWO-LEVEL DECREASE TODEFENDANT'S BASE OFFENSE LEVEL FOR HERMITIGATING ROLE IN THE OFFENSE.

Defendant argues that the district court erred in refusing to

apply a two-level decrease to her base offense level pursuant to

USSG § 3B1.2(b) for her mitigating role in the offense.

Specifically, she argues that because she was held accountable for

relevant conduct for which she was “clearly less culpable,” she

should have received the two-level downward adjustment for minor

participant.

A district court's determination as to a defendant's

mitigating role in the offense is a finding of fact subject to the

clearly erroneous standard. United States v. De Varon, 175 F.3d

930, 937-38 (11th Cir. 1999)(en banc).5 See also 18 U.S.C. §

3742(e) (appellate courts "shall accept the findings of fact of the

district court unless they are clearly erroneous and shall give due

6 A participant must be criminally responsible, but need nothave been convicted. USSG § 3B1.2, comment. (n.1), incorporatingUSSG § 3B1.1, comment. (n.1).

22

deference to the district court's application of the Guidelines to

the facts"). The district court does not have a duty to make "any

specific subsidiary factual findings" in determining a defendant's

role in the offense. De Varon, 175 F.3d at 939. "So long as the

district court's decision is supported by the record and the court

clearly resolves any disputed factual issues, a simple statement of

the district court's conclusions is sufficient." Id.

Section 3B1.2 of the Sentencing Guidelines sets forth the

circumstances in which a defendant may be awarded a decrease in his

base offense level based on a mitigating role in an offense that

involves multiple participants.6 Section 3B1.2(b) provides that a

defendant is entitled to a two-level reduction in his offense level

if, based on his role in the offense, he was a "minor participant"

in the jointly undertaken criminal activity. USSG § 3B1.2(b).

Application Note 5 defines "minor participant" as a participant

"who is less culpable than most other participants, but whose role

could not be described as minimal." Id., comment. (n.5).

The defendant has the burden of proving a mitigating role in

the offense by preponderance of the evidence. De Varon, 175 F.3d

at 939, 946; United States v. Gates, 967 F.2d 497, 501 (11th Cir.

1992). In determining a defendant's role in the offense, the

district court (1) "must measure the defendant's role against the

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relevant conduct for which [she] was held accountable at

sentencing," and (2) "may also measure the defendant's role against

the other participants, to the extent they are discernable, in that

relevant conduct." Id. at 945. The fact that a defendant might

have played a lesser role than her co-conspirators does not alone

warrant a role reduction. United States v. Cataldo, 171 F.3d 1316,

1320 (11th Cir. 1999). "It is entirely possible for conspiracies

to exist in which there are no minor participants. . . ." United

States v. Zaccardi, 924 F.2d 201, 203 (11th Cir. 1991). Moreover,

even the least culpable defendant does not necessarily qualify for

a role reduction. See United States v. Johnson, 297 F.3d 845 (9th

Cir. 2002). The court must make its factual determination of

whether a defendant qualifies for a role reduction based on the

totality of the circumstances in each given case.

Here, the district court did not clearly err in denying the

reduction because Defendant failed to carry her burden of proof

that she was less culpable than most other participants.

Therefore, she was not entitled to a minor role reduction.

In arguing that she was entitled to the two-level role

reduction, Defendant quotes the prosecutor saying: “‘she was less

culpable than D. C. Woods. . . .’ (Doc 271 at 252).” Appellant’s

Brief at 10. The prosecutor did concede that Defendant Patillo was

less culpable than her co-defendant Woods, but she also strongly

asserted that Defendant was not entitled to the downward role

24

adjustment as shown in the following excerpt from the sentencing

hearing:

THE COURT: All right. Ms. Alexander, I bet youdon’t think she deserves a mitigaing role.

MS. ALEXANDER: No. I strenuously object to anyrole reduction at all. She is clearly--I would agree sheis less culpable tan D. C. Woods but not to the point ofgetting minor or minimal.

(Doc 271 at 252). The prosecutor then went on to summarize the

evidence supporting the denial any mitigating role reduction. A

review of the evidence presented at the sentencing hearing shows

that the court’s ruling was supported by the evidence.

Defendant Patillo purchased Sweetbriar Trail on May 26, 2000,

for $450,000, and South Mount Drive on June 2, 2000, for $340,000.

(PSR ¶¶ 138, 148). Less than six months later, Defendant Patillo

sold Sweetbriar Trail to “Lorenzo Woods” on November 7, 2000, for

$550,000, an increase of $100,000 in the purchase price. (PSR ¶

140). On January 10, 2001, Defendant Patillo sold South Mount

Drive to “Sherita Sims” for $400,000, an increase of approximately

$60,000. (PSR ¶ 150). Defendant Patillo’s bank records reflected

that she provided the $3,576.35 down payment for “Sherita Sims” to

purchase South Mount Drive from Defendant Patillo in January 2001

by using her own funds to purchase a cashier’s check for the

closing. (Doc 253, Tab 6, Exhibit 23). Neither Lorenzo Woods nor

Sherita Sims were aware that real estate was purchased in their

25

names. (Doc 271 at 62-64; PSR ¶ 41; Doc 253, Tab 13, Exhibit 45

(Sims 302)).

Craig Davis testified that Defendant Kimberly Patillo provided

the down payment for “David Matthew” on the purchase of the Harbor

Cove Lane property. (Doc 271 at 159). Davis’ testimony is

corroborated by the closing attorney’s records and the bank records

of Defendant Patillo which reflect that Defendant Patillo paid the

down payment of approximately $27,824.60 toward the purchase of the

Harbor Cove property in the name of David Matthew. (Doc 253, Tab

6, Exhibit 22).

During the sentencing hearing, James Daryl Dixon testified

that he was the owner of Carter Enterprises, a one-man company

(that used day laborers as needed) in existence since 1998 that

performed concrete and landscaping services. (Doc 271 at 78, 89).

Dixon never employed Defendant Patillo as a Senior Site Manager and

never paid her a salary. (Doc 271 at 80-2).

Dixon also never employed Veronica Nelson. (Doc 271 at 84).

Yet, the “Veronica Nelson” loan application for the purchase of

Howell Court listed Carter Enterprises as her employer. (Doc 253,

Tab 4, Exhibit). The telephone number for Carter Enterprises on

the loan application was listed as 770-981-8000, the telephone

number that Defendant Patillo later reported to the Georgia

Secretary of State as the telephone number for Patillo Enterprises.

(Doc 253, Tab 4, Exhibit 15 (Howell Court loan application); Doc

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253, Tab 13, Exhibit 51 (Patillo Enterprises Secretary of State

records).

Defendant Patillo and Woods arranged for Yvette Patillo, the

sister of Defendant Kimberly Patillo, to purchase Old Fuller Mill

from Eric Hulsman for $460,000. (PSR ¶¶ 190, 193, 194; Doc 253,

Tab 4, Exhibit 16 (loan documents)). Shawn Wilson provided a

verification of deposit which falsely reflected that Yvette Patillo

had an account at Northwestern Mutual Financial Network where

Wilson worked. (Doc 271 at 30-48; Doc 253, Tab 4, Exhibit 16).

Woods faxed Wilson the verification of deposit, already completed,

and Wilson signed it and faxed it back to Woods. (Doc 271 at 39).

Shortly thereafter, Wilson received a telephone call from Defendant

Kimberly Patillo in which she asked Wilson to refax the

verification because the one he had sent was unusable. (Doc 271 at

32). Wilson advised Defendant Patillo that he was not comfortable

going through with this. (Doc 271 at 32-33). Defendant Patillo

asked Wilson to get in touch with Woods to talk about Wilson’s

concerns. (Doc 271 at 33). Ultimately, a different verification

of deposit was used than the one signed by Wilson, but Wilson later

orally verified that Yvette Patillo had an account with

Northwestern Mutual. (Doc 271 at 32, 36, 40). According to Shawn

Wilson, Yvette Patillo did not have an account at Northwestern

Mutual Financial Network. (Doc 271 at 37).

27

At the closing, Woods received a $108,415.56 check made

payable to D.C. Woods/Dionloyous Woods which was the amount he was

due under the equity-sharing agreement. (PSR ¶ 194; Doc 253, Tab

14, Exhibit 60). Under a “Power of Attorney,” Defendant Kimberly

Patillo signed all the loan documents for Yvette Patillo. (PSR ¶

192). Defendant Patillo deposited approximately $102,000 of the

$108,415.56 Woods obtained from that transaction, into her two

accounts at First Union. (Doc 253, Tab 17, Exhibit 75). Defendant

Patillo wired $14,000 to Yvette Patillo, but the rest of the money

stayed in Defendant Patillo’s accounts. (Doc 253, Tab 17, Exhibit

75).

Defendant Patillo, along with Woods, unsuccessfully attempted

to purchase the Royal Mustang Way property in her name. (PSR ¶¶

199-206). On or about December 3, 2001, Defendant Patillo applied

for a loan to purchase Royal Mustang Way with Impac Funding. (PSR

202). Defendant Patillo’s loan application contained false

representations concerning her down payment, employment, and the

lease of her current residence, Creekview Trail. (PSR ¶ 199).

Defendant Patillo’s application package falsely indicated that she

had been employed at Carter Enterprises as a Senior Site Manager

for 2 years, beginning in January 1999, and continuing to the date

of the loan application (December 2001). (PSR ¶¶ 199, 200; Doc 271

at 80-82). The telephone number listed on the Verbal Verification

of Employment for Carter Enterprises was 770/686-8780, one of

28

Defendant Patillo’s telephone numbers. (PSR ¶ 200). The loan was

scheduled to close in January 2002, but never did because the FBI

found out about the pending sale. (PSR ¶ 202).

The closing attorney’s file and the lender’s file contained

correspondence that indicated that Woods had arranged the sale of

Royal Mustang Way. (PSR ¶ 203). Had the sale been approved under

the terms Woods was seeking, Defendant Wood would have received

approximately $105,000 at the closing, by virtue of an assignment

of contract signed by Defendant Kimberly Patillo in which Defendant

Patillo agreed to pay Woods $105,000 for the right to buy the

property. (PSR ¶ 203).

The closing attorney’s file also contained documents which

indicated that the defendants attempted to create the illusion that

Defendant Patillo had paid Woods a down pyament on the property.

(PSR ¶ 204). The closing file contained an altered copy of the

Non-negotiable copy of a cashier’s check: People’s Bank & Trust

Cashier’s Check # 084210, dated 10/16/2001, made Payable to Woods

Investment Group, in the amount of $65,000, Remitter: Kimberly

Patillo. (Doc 253, Tab 10, Exhibit 34). The genuine People’s Bank

& Trust Cashier’s check # 084210 was purchased by Dionloyous Woods

with proceeds from Yvette Patillo’s purchase of Old Fuller Mill,

was made payable to Kimberly Patillo and was deposited into

Defendant Patillo’s money market account at First Union on October

16, 2001. (PSR ¶ 204; Doc 253, Tab 10, Exhibit 35).

29

Defendant Patillo had involvement in the fraudulent real

estate sales as described above. Looking at the relevant conduct,

the roles of the other participants, and Patillo’s role supports

the conclusion that she did not carry her burden of showing that

she was less culpable than the most other participants.

Here, the court found that “[t]he evidence in this record I

believe does not support a mitigating role reduction. I overrule

the defendant’s objection on that.” (Doc 271 at 261). As shown

above, the court correctly assessed that the evidence did not

support the role reduction. Accordingly, the court did not clearly

err in refusing to award the mitigating role adjustment sought by

the defendant. See, e.g., De Varon, 175 F.3d at 945-46; Cataldo,

171 F.3d at 1320; United States v. Everett, 129 F.3d 1222, 1224

(11th Cir. 1997); Zaccardi, 924 F.2d at 203.

30

CONCLUSION

For the above and foregoing reasons, the government

respectfully requests that this Court affirm the defendant's

sentence.

Respectfully submitted,

SALLY QUILLIAN YATESACTING UNITED STATES ATTORNEY

MARY JANE STEWARTASSISTANT UNITED STATES ATTORNEY

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CERTIFICATE OF COMPLIANCE

I certify that this brief complies with the type-volume

limitation set forth in FRAP 32(a)(7)(B). This brief contains 6484

words.

___________________________MARY JANE STEWARTASSISTANT UNITED STATES ATTORNEY

32

CERTIFICATE OF SERVICE

This is to certify that I have this day served upon the

persons listed below copy of the foregoing document by depositing

in the United States Mail a copy of same in an envelope with

correct postage for delivery. This is also to certify that the

foregoing document will be uploaded to the Court's website.

Donald F. Samuel andW. Charles LeaGarland, Samuel, & Loeb3151 Maple Drive, NEAtlanta, GA 30305

This day of September, 2004.

MARY JANE STEWARTASSISTANT UNITED STATES ATTORNEY