United States v. Rizk

Where an indictment alleges a conspiracy, summary evidence under Federal Rule of Evidence 1006 that includes acts not specified in the indictment, does not constitute “other acts” evidence under Rule 404(b), as such evidence is offered to show the full scope of that conspiracy.

Lila Rizk appealed a jury conviction for conspiracy, bank fraud, and loan fraud. Rizk, a licensed real estate appraiser, participated in a mortgage fraud scheme with Mark Abrams, a mortgage broker, and Elliot Fitzgerald, a real estate developer. Abrams and Fitzgerald purchased homes at their market values. To obtain loans in amounts exceeding the homes’ actual purchase prices, Abrams and Fitzgerald used inflated appraisal reports, many of which were prepared by Rizk. In preparing the appraisals, Rizk ignored the original sellers’ list prices and used “comparable” homes that differed in nature, location, or time of sale. On appeal, Rizk challenged the admission of charts summarizing the real estate transactions involved in the scheme, arguing inter alia, that because the charts included transactions not specified in the indictment, they were “other acts” evidence under Federal Rule of Evidence 404(b). The Ninth Circuit disagreed, concluding that Rule 404(b) is inapplicable where the evidence the proponent seeks to admit is “inextricably intertwined with” the conspiracy. After rejecting Rizk’s challenges to the sufficiency of the evidence supporting each of her convictions, the Court found that the district court did not err in ordering that restitution be paid to the victim lenders, despite a prior civil settlement releasing all claims against Rizk. In so doing, the Court reaffirmed its decision in U.S. v. Cloud, which held that “[c]riminal restitution is mandatory under the [Mandatory Victim Restitution Act] and cannot be waived by a prior civil settlement.” AFFIRMED. The District Court's restitution order is VACATED and REMANDED.