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United States v. Lonich

United States v. Lonich

United States Court of Appeals for the Ninth Circuit

February 10, 2021, Argued and Submitted, San Francisco, California; January 10, 2022, Filed

Nos. 18-10298, 18-10395, Nos. 18-10299, 18-10408, Nos. 18-10300, 18-10394, Nos. 18-10301, 18-10407, Nos. 18-10303, 18-10405, Nos. 18-10304, 18-10390

Opinion

BRESS, Circuit Judge:

This complex criminal appeal arises from fraudulent schemes concerning bank loans and real estate in Sonoma County, California. The three defendants, Sean Cutting, Brian Melland, and David Lonich, appeal their convictions and sentences, raising numerous issues for our review.

We affirm defendants' convictions. Among other things, we hold that the government [*7]  did not infringe defendants' rights under the Sixth Amendment's Speedy Trial Clause; that the district court's jury instructions for money laundering and misapplication of bank funds do not require reversal; and that sufficient evidence supported Melland's conviction for bribery by a bank employee and Lonich's conviction for attempted obstruction of justice.

However, we vacate defendants' sentences and remand for resentencing. The defendants' advisory Sentencing Guidelines ranges increased substantially based on sentencing enhancements that hinged on finding that defendants caused the Sonoma Valley Bank to fail. We hold that because the government has not sufficiently demonstrated that defendants caused the bank's failure, the enhancements are not supported by the record.3

I. Facts and Procedural History

This case involves two overarching fraudulent schemes involving bank officers, a real estate developer, and the developer's lawyer. Defendants Sean Cutting and Brian Melland were officers at Sonoma Valley Bank (SVB). Cutting was SVB's Chief Lending Officer between 2005 and 2011. He joined its board of directors in 2008 and became its CEO in 2009. Melland was a commercial loan officer [*8]  at SVB. Bijan Madjlessi was a real estate developer who died shortly after being indicted in this case. Defendant David Lonich worked as Madjlessi's in-house lawyer between 2009 and 2012.

Defendants' extensive fraudulent schemes took place over many years. In the first scheme, which we will call the "legal lending limit scheme," Cutting and Melland conspired with Madjlessi and Lonich to induce SVB to approve, over a period of years, millions of dollars in bank loans to Madjlessi and entities he controlled. These loans exceeded SVB's legal lending limit—the maximum amount that California law permits a bank to lend a borrower or his affiliates.

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2022 U.S. App. LEXIS 623 *; 23 F.4th 881; 2022 WL 90881

UNITED STATES OF AMERICA, Plaintiff-Appellee, v. DAVID LONICH, Defendant-Appellant.UNITED STATES OF AMERICA, Plaintiff-Appellee, v. BRIAN SCOTT MELLAND, Defendant-Appellant.UNITED STATES OF AMERICA, Plaintiff-Appellee, v. DAVID LONICH, Defendant-Appellant.UNITED STATES OF AMERICA, Plaintiff-Appellee, v. BRIAN SCOTT MELLAND, Defendant-Appellant.UNITED STATES OF AMERICA, Plaintiff-Appellee, v. SEAN CLARK CUTTING, Defendant-Appellant.UNITED STATES OF AMERICA, Plaintiff-Appellee, v. SEAN CLARK CUTTING, Defendant-Appellant.

Subsequent History: Counsel Amended January 12, 2022.

Prior History:  [*1] Appeal from the United States District Court for the Northern District of California. D.C. No. 3:17-cr-00139-SI-3, D.C. No. 3:17-cr-00139-SI-2, D.C. No. 3:14-cr-00139-SI-2, D.C. No. 3:14-cr-00139-SI-4, D.C. No. 3:14-cr-00139-SI-3, D.C. No. 3:17-cr-00139-SI-1. Susan Illston, District Judge, Presiding.

United States v. Lonich, 2018 U.S. Dist. LEXIS 172104, 2018 WL 4849682 (N.D. Cal., Oct. 4, 2018)

Disposition: AFFIRMED in part, VACATED in part, and REMANDED.

CORE TERMS

enhancements, district court, loans, sentence, indictment, defendants', knowingly, conspiracy, convicted, charges, superseding, factors, money laundering, Guidelines, corruptly, grand jury, losses, cases, new charge, recommended, lending, preponderance of evidence, convincing standard, enhanced sentence, causation, official proceedings, obstruction, disputed, bank funds, misapplication

Criminal Law & Procedure, Appeals, Standards of Review, Clear Error Review, Clearly Erroneous Review, Findings of Fact, De Novo Review, Conclusions of Law, Constitutional Law, Fundamental Rights, Criminal Process, Speedy Trial, Preliminary Proceedings, Speedy Trial, Constitutional Right, Statutory Right, Trials, Defendant's Rights, Right to Speedy Trial, Pretrial Motions & Procedures, Dismissal, Subpoenas, Challenges to Subpoenas, Motions to Quash, Right to Public Trial, Challenges to Jury Venire, Bias & Prejudice, Right to Unbiased Jury, Abuse of Discretion, Jury Instructions, Reversible Error, Harmless & Invited Error, Banking Law, Racketeering, Money Laundering, Elements, Acts & Mental States, Mens Rea, Knowledge, Burdens of Proof, Prosecution, Substantial Evidence, Sufficiency of Evidence, Evidence, Proof Beyond Reasonable Doubt, Criminal Offenses, Bank Fraud, Bribery, Public Officials, Commercial Bribery, Penalties, Weight & Sufficiency, Obstruction of Administration of Justice, Witness Tampering, Allocation, Procedural Due Process, Scope of Protection, Clear & Convincing Proof, Sentencing, Imposition of Sentence, Findings, Factors, Inchoate Crimes, Conspiracy, Ranges, Governments, Courts, Creation & Organization, Preponderance of Evidence, Actus Reus, Fraud Against the Government, False Claims, Departures From Guidelines, Upward Departures, Property Damage