US v. Richard Garries

Filing

UNPUBLISHED PER CURIAM OPINION filed. Originating case number: 4:08-cr-00050-RGD-JEB-1 Copies to all parties and the district court/agency. [998707950].. [09-4968]

Appeal: 09-4968

Document: 89

Date Filed: 10/25/2011

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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 09-4968

UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
RICHARD N. GARRIES,
Defendant - Appellant.

Appeal from the United States District Court for the Eastern
District of Virginia, at Newport News.
Rebecca Beach Smith,
District Judge. (4:08-cr-00050-RGD-JEB-1)

Argued:

September 23, 2011

Decided:

October 25, 2011

Before TRAXLER, Chief Judge, and WILKINSON and NIEMEYER, Circuit
Judges.

Affirmed by unpublished per curiam opinion.

ARGUED: Lawrence Hunter Woodward, Jr., SHUTTLEWORTH, RULOFF,
SWAIN, HADDAD & MORECOCK, PC, Virginia Beach, Virginia, for
Appellant.
Brian James Samuels, OFFICE OF THE UNITED STATES
ATTORNEY, Newport News, Virginia, for Appellee. ON BRIEF: Neil
H. MacBride, United States Attorney, Alexandria, Virginia,
Katherine Reynolds, Third Year Law Student, OFFICE OF THE UNITED
STATES ATTORNEY, Newport News, Virginia, for Appellee.

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:
Richard

Garries

was

indicted

on

twenty-four

counts,

including conspiracy to commit mail and wire fraud, and multiple
counts

each

statements.

of

mail

fraud,

wire

fraud,

and

making

false

The charges arose from a wide-ranging scheme to

defraud that centered on real estate transactions funded by subprime mortgages arranged by Garries.
of

all

counts,

and

the

months’ imprisonment.

district

The jury convicted Garries

court

Garries appeals.

sentenced

him

to

240

Finding no reversible

error, we affirm.

I.
We

briefly

summarize

the

evidence

presented

at

trial,

viewing the evidence, as we must, in the light most favorable to
See, e.g., United States v. Young, 609 F.3d

the government.

348, 355 (4th Cir. 2010).
In

2003,

Garries

pleaded

guilty

to

wire

fraud,

after

selling forged and fraudulent vehicle financing contracts on the
secondary market.

Garries was sentenced to twenty-five months’

imprisonment, followed by a term of supervised release.
After he was released from prison in 2005, Garries began
working as a mortgage originator for Security First Funding, a
mortgage brokerage company in Newport News, Virginia.

Security

First and the mortgage lenders with which it had relationships
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focused on “sub-prime” mortgages -- mortgages offered to higherrisk

borrowers.

The

government’s

evidence

established

that

Garries and his staff did whatever was necessary to make a given
client appear to qualify for a loan.

Garries (or his staff at

his direction) inflated the income of loan applicants so the
applicants
ratio.

would

meet

the

lender’s

required

debt-to-income

They altered or created out of whole cloth any documents

necessary to support the inflated income or to meet other lender
requirements,

sometimes

forging

the

applicant’s

signature

and

other times cutting a legitimate signature from one document and
pasting it onto a forged document.

For applicants who did not

have enough money in the bank to meet the lender’s requirements,
Garries gave them “show money” for deposit in their accounts and
took

the

money

back

after

the

lender

verified

the

account

balance.
Garries

also

worked

renovate and resell.
were

seeking

as

a

“flipper,”

buying

houses

to

Many of Garries’ Security First clients

investment

properties

to

rent

or

resell,

and

Garries frequently steered these clients to properties he owned.
Garries encouraged
inter

promising,
closing,
necessary

to

the
alia,

provide

repairs

a

clients
to

give

renter

after

to

buy

the

for

closing.

the

houses

buyers

property,

cash
or

Appraisals

by

falsely

back
to

after

make
for

any

these

properties often stated that the house had certain equipment or
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fixtures that were not present when the buyer took possession,
or indicated that various repairs had been done that in fact had
not been done.

Because of the true condition of the homes, most

of the buyers were unable to resell the houses for a profit or
rent

the

houses

at

a

price

that

covered

the

high-interest

mortgages Garries had placed them in, and they generally lost
the investment properties to foreclosure.
Stuart Gordon was a “hard money” lender who provided shortterm

high-interest

loans

houses he flipped.

for

Garries

to

buy

and

repair

the

After learning that Garries was inflating

his estimates for repairs and seeking draws for repairs that had
not

been

done,

Gordon

began

requiring

Garries

to

show

city

inspection stickers and verifications before he would release
money from escrow.

That did not prove to be much of an obstacle

for Garries -- he simply forged the inspection documents.
The conduct outlined above provided the factual basis for
most

of

the

statement

charges

charges,

alleged

however,

in
were

the

indictment.

based

on

The

statements

falseGarries

made to the probation officer to whom Garries reported while on
supervised release following his 2003 wire-fraud conviction.
to

those

Garries

charges,
made

the

numerous

government’s
false

evidence

statements

about

established
his

As
that

residence,

income, assets, bank accounts, and various business entities he
owned or operated.
4

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Over
Horace

Date Filed: 10/25/2011

Garries’

Goins

Garries.

to

The

objection,
testify

Goins

Page: 5 of 17

the

about

district

his

transactions

court

business

were

not

permitted

dealings
charged

in

with
the

indictment, but they were very similar to the charged conduct
and occurred during the same time frame as the actions charged
in the indictment.
Goins testified that he received more than $80,000 through
a

cash-out

persuaded

refinancing

Goins

Restaurant

to

invest

Equipment

operated by Garries.
market

for

used

loan

and

arranged

the

loan

Supply,

a

by

Garries.

proceeds

in

company

Garries

Williamsburg

incorporated

and

Garries told Goins that there was a big

restaurant

equipment,

that

the

company

had

already lined up several lucrative contracts, and that he needed
capital to renovate the retail store and build an inventory.

As

it turned out, only a few pieces of equipment were ever bought,
the company never began operations, the promised contracts never
materialized, and the shares of stock promised to Goins were
never issued.

Not surprisingly, Goins lost all the money he had

invested in the company.

Goins also testified about two houses

he bought through Garries that he intended to use as rental
properties.

Garries

made

false

promises

to

Goins

condition of the houses and their rental potential.

about

the

When Goins

discovered the true condition of the houses, Garries refused to
make any repairs, and Goins was forced to spend significant sums
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to make the houses habitable.

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Goins ultimately lost all of his

retirement savings, and he was forced to declare bankruptcy.

II.
Under the Federal Rules of Evidence, “[e]vidence of other
crimes, wrongs, or acts is not admissible to prove the character
of a person in order to show action in conformity therewith,”
but such evidence is admissible “for other purposes, such as
proof

of

motive,

opportunity,

intent,

preparation,

knowledge, identity, or absence of mistake or accident.”
R. Evid. 404(b).

plan,
Fed.

On appeal, Garries challenges on Rule 404(b)

grounds the district court’s decisions to admit the testimony of
Horace

Goins

and

to

admit

evidence

about

Garries’

2003

wire

fraud conviction.
A.
Garries was not charged with any crimes relating to his
dealings with Horace Goins, and Garries therefore argues that
the Goins evidence should have been excluded under Rule 404(b).
We disagree.
Rule

404(b)’s

limits

on

admissibility

do

not

apply

to

evidence of conduct that is intrinsic to the crimes charged.
See United States v. Lighty, 616 F.3d 321, 352 (4th Cir.) (“Rule
404(b) limits only the admission of evidence of acts extrinsic
to the one charged, but does not limit the admission of evidence
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of intrinsic acts.”), cert. denied, 131 S. Ct. 846 (2010), and
80 U.S.L.W. 3015 (U.S. Oct. 17, 2011) (No. 10-1010).

Uncharged

conduct is intrinsic and thus not subject to Rule 404 “if the
uncharged conduct arose out of the same series of transactions
as the charged offense.”

United States v. Siegel, 536 F.3d 306,

316 (4th Cir. 2008) (internal quotation marks omitted).

Garries

was charged with conspiracy to commit mail and wire fraud, and
the

Goins

transactions

arose

out

of

the

transactions as the charged conspiracy.
were

thus

court

intrinsic

properly

to

the

crimes

admitted

the

same

series

of

The Goins transactions

charged,

evidence.

See

and

the

United

district
States

v.

Muscatell, 42 F.3d 627, 631 (11th Cir. 1995) (in case where
defendants “were charged with conducting a continuing scheme to
defraud,

characterized

appraisals,

by

buyer-rebates,

land
and

flip

transactions,

fraudulent

loan

inflated

applications,”

evidence of uncharged transaction that was largely identical to
those

charged

in

the

conspiracy

was

properly

admitted

as

intrinsic to the crimes charged).
B.
Garries also contends that the district court erred under
Rule

404(b)

related
factual

to

by
his

basis

statements

allowing

the

government

2003

conviction

for

the

Garries

made

for

wire

to

his
7

evidence

fraud.

Given

charges

--

false-statement
to

present

probation

officer,

the

false
Garries

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concedes

that

admissible.

Date Filed: 10/25/2011

evidence

of

his

Page: 8 of 17

supervised

release

status

was

He argues, however, that the government should not

have been permitted to introduce evidence about the underlying
conviction itself or details of the conditions of his supervised
release and his compliance with those conditions.
Garries,

the

only

purpose

of

this

detailed

According to

evidence

was

assail his character, which is prohibited by Rule 404(b).

to
We

disagree.
As an initial matter, we note that much of the testimony
about

the

terms

of

Garries’

supervised

release

and

his

compliance with those terms was intrinsic to the false-statement
charges and therefore was not, as discussed above, subject to
the proscriptions of Rule 404(b).
(“Evidence

is

inextricably

See Lighty, 616 F.3d at 352

intertwined

with

the

evidence

regarding the charged offense [and thus intrinsic] if it forms
an integral and natural part of the witness’s accounts of the
circumstances surrounding the offenses for which the defendant
was

indicted.”

omitted)).

(internal

quotation

marks

and

alteration

And as we explain, the challenged evidence that was

not intrinsic was properly admitted under Rule 404(b).
To be admissible under Rule 404(b), prior bad acts evidence
must

be

relevant

to

an

issue

other

than

character,

such

as

identity or motive; necessary to prove an element of the crime
charged; and reliable.

See United States v. Blauvelt, 638 F.3d
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281, 292 (4th Cir. 2011), cert. denied, 79 U.S.L.W. 3712 (U.S.
Oct. 3, 2011) (No. 10-1473); Siegel, 536 F.3d at 317-18.

Rule

404(b) is “an inclusive rule, admitting all evidence of other
crimes or acts except that which tends to prove only criminal
disposition.”

United States v. Young, 248 F.3d 260, 271–72 (4th

Cir. 2001) (emphasis added; internal quotation marks omitted).
Given Garries’ denial of involvement in the forging and
altering of loan documents at issue in this case, evidence about
the prior conviction was probative of his intent and knowledge
on the various mail and wire fraud counts.
Queen,

132

F.3d

991,

996

(4th

Cir.

See United States v.

1997)

(“Once

an

act

is

assumed to be done, the prior doing of other similar acts is
useful as reducing the possibility that the act in question was
done

with

innocent

alteration omitted)).

intent.”

(internal

quotation

marks

and

Evidence of the restitution award was

likewise probative of Garries’ motive for the false statements
counts, by showing why he lied to the probation officer about
his bank accounts and income.
cannot

say

that

the

district

Under these circumstances, we
court’s

decision

challenged evidence was arbitrary or irrational.

to

admit

the

See Blauvelt,

638 F.3d at 292 (“Because judgments of evidentiary relevance and
prejudice are fundamentally a matter of trial management, we
defer to the discretion of trial courts and will not vacate a
conviction unless we find that the district court judge acted
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arbitrarily

or

Date Filed: 10/25/2011

irrationally

in

Page: 10 of 17

admitting

evidence.”

(internal

quotation marks and alterations omitted)).

III.
The
Garries

district
during

court

his

frequently

testimony,

and

interrupted
Garries

and

questioned

argues

that

court’s interference deprived him of a fair trial. ∗

the

Because

counsel for Garries did not object to the court’s questioning,
see

Fed.

R.

Evid.

614(c)

(“Objections

to

the

calling

of

witnesses by the court or to interrogation by it may be made at
the time or at the next available opportunity when the jury is
not present.”), we review this claim for plain error only, see
United States v. Godwin, 272 F.3d 659, 672 (4th Cir. 2001).
There is no question that a trial judge has the authority
to question witnesses.
interrogate

witnesses,

See Fed. R. Evid. 614(b) (“The court may
whether

called

by

itself

or

by

a

party.”); Godwin, 272 F.3d at 672 (“[A] trial judge possesses
broad authority to interrogate witnesses.”).

When exercising

this authority, however,
the trial judge must always remember that he occupies
a position of preeminence and special persuasiveness”
in the eyes of the jury, and, because of this, he
∗

The presiding judge became ill after the close of
testimony, and Judge Smith took over the case at the juryinstruction phase.

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should take particular care that his participation
during trial -- whether it takes the form of
interrogating witnesses, addressing counsel, or some
other conduct -- never reaches the point at which it
appears clear to the jury that the court believes the
accused is guilty.
United

States

(citation,

v.

Parodi,

internal

703

quotation

F.2d

768,

marks,

775

and

(4th

Cir.

alteration

1983)

omitted).

The ultimate inquiry is “whether the trial judge’s comments were
so prejudicial as to deny a party an opportunity for a fair and
impartial trial.”

Godwin, 272 F.3d at 679 (internal quotation

marks omitted).
It is apparent from the record that Garries was a difficult
witness.

He rarely gave a direct answer to a question, but

would instead spend paragraphs and paragraphs talking his way
around

the

frustrated

question.
with

The

Garries’

district

conduct,

court

and

a

was
great

understandably
many

of

the

court’s interruptions were attempts to get Garries to answer the
question that had been asked.

See, e.g., J.A. 1415-16 (“He just

asked you if you made any income.
okay?
can

Just answer the question,

Good speeches, but just answer the question.

explain

it,

all

Answer questions.”).

right?”);

J.A.

1504

(“Stop.

Then you
Just

stop.

Some of the statements perhaps may have

been a bit intemperate, see J.A. 1626 (“Can you say, ‘No,’ N-O?
Can you?”), but the court’s efforts at keeping Garries focused
can in no sense be considered prejudicial.

11

See United States v.

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Smith, 452 F.3d 323, 333 (4th Cir. 2006) (“[E]ven a stern and
short-tempered

judge’s

ordinary

efforts

at

courtroom

administration do not establish bias or partiality. . . .

A

tart remark or two might be what is needed to keep a lengthy
trial

on

track.”

(internal

quotation

marks

and

alteration

omitted)).
Some of the court’s comments and questions, however, seem
to undermine the substance of Garries’ testimony.

For example,

when Garries was testifying about Horace Goins’ investment in
the restaurant supply company, the court asked Garries whether
he

had

bought

any

restaurant

equipment

with

Goins’

money.

Garries said that he had bought equipment, to which the court
responded, “Oh, you did.
equipment?”

J.A. 1496.

What did you do with the restaurant
When Garries insisted that the company

had sold some equipment, the court asked, “Who was this person
who was purchasing . . . restaurant equipment?
and how much they purchased.”

J.A. 1497.

Name me just one

Another problematic

exchange involved Garries’ testimony about Terance Boothe, who
worked with Garries as a loan processor and pleaded guilty to a
conspiracy charge arising from his conduct in this case.
testified

that

he

had

created

a

phony

check

to

convince

mortgage lender that a buyer had paid earnest money.
however,

testified

that

the

buyer

had

actually

Boothe

paid

a

Garries,
earnest

money -- not with the phony check that had been submitted to the
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lender, but with a legitimate check that had been held in the
file

and

not

provided

to

the

lender.

The

district

court

interrupted Garries to say, “So Mr. Boothe did this himself, and
you had nothing to do with it.

And he did it, and although

there was perfectly valid stuff in the file he did it to screw
up the transaction.

Is that correct?”

J.A. 1729.

We believe that the questions and comments of this nature
can be construed as reflecting the district court’s disdain for
Garries and disbelief of his testimony, sentiments to which the
jury should not have been privy.
(“[C]ross-examination

of

a

See Godwin, 272 F.3d at 678

witness

by

the

trial

judge

is

potentially more impeaching than such an examination conducted
by an adversary attorney.

The judge, by his office, carries an

imprimatur of impartiality and credibility in the eyes of the
jury.

In fact, a judge’s apparent disbelief of a witness is

potentially

fatal

to

the

witness’s

credibility.”

(emphasis

added; footnote omitted)); cf. Quercia v. United States, 289
U.S. 466, 470 (1933) (“It is important that hostile comment of
the judge should not render vain the privilege of the accused to
testify in his own behalf.”).

Accordingly, we will assume that

Garries has satisfied his burden of demonstrating that plain
error occurred.
The existence of plain error, however, is not enough to
entitle Garries to relief; Garries must also show that the error
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See Godwin, 272 F.3d at 679.

affected his substantial rights.

An error affects a defendant’s substantial rights when the error
“actually

affected

the

outcome

of

the

proceedings.”

United

States v. Hastings, 134 F.3d 235, 240 (4th Cir. 1998).

We have

no difficulty concluding that any error in this case did not
affect the outcome of the trial.
In Godwin, we applied plain-error review to questions and
comments made by the district court that were similar in nature
to the problematic comments at issue in this case.
272 F.3d at 674-76.

See Godwin,

While finding the court’s participation in

the trial “troublesome,” id. at 681, we nonetheless concluded
that the defendants could not establish that the outcome of the
trial was affected by the district court’s error:

“In the face

of

them

the

overwhelming

Government,
[defendants’]

there
good

evidence

was
faith

no

presented

reasonable

defense

would

against

by

the

probability

that

the

succeed.

Where

the

evidence is overwhelming and a perfect trial would reach the
same result, a substantial right is not affected,” id. at 680
(citation omitted).
As in Godwin, the government’s evidence in this case was
overwhelming.

At trial, the government presented almost 300

exhibits and called twenty-six witnesses, including members of
Garries’ staff (one of whom was his daughter) who were involved
in

the

schemes

and

testified

about
14

their

own

wrongdoing

and

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Garries’ awareness of and involvement in the misconduct; law
enforcement officers who testified about obviously forged and
altered

documents

files;

and

approved

found

representatives

loans

falsified.
Garries’

in

in

The

from

reliance

government

clients,

Garries’

who

gave

the

on

also

trash

and

in

mortgage

wrenching

as

office

lenders

information
called

his

that

Garries

witnesses

testimony

that

many

about

of

losing

everything because they trusted the wrong man.
The only significant evidence countering the government’s
compelling evidence was Garries’ own testimony.

Garries denied

being involved in any wrongdoing, but he offered no evidence to
substantiate his claims, frequently claiming that the government
had in its possession but refused to turn over the receipts or
other documents that would show he was telling the truth.

His

testimony was often self-contradictory and at times was patently
incredible,

and

it

explanation

for

the

presented

by

the

simply

failed

testimonial

government.

to
and

As

in

provide

a

coherent

documentary

evidence

Godwin,

there

is

no

reasonable probability that, had the improper questioning by the
district

court

not

Garries’

claims

in

Accordingly,
rights

were

Garries

occurred,
the

face

cannot

affected

by

the
of

jury
this

establish
the

15

would

have

overwhelming
that

district

his

accepted
evidence.

substantial

court’s

improper

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participation

Date Filed: 10/25/2011

in

the

trial,

and

Page: 16 of 17

his

claim

thus

fails

under

plain-error review.

IV.
Garries raises two other issues on appeal, neither of which
merits detailed discussion.
Garries first contends that the evidence was insufficient
to support his convictions.

The government presented evidence

establishing each element of every charge against Garries, and,
as

discussed

above,

Garries’ guilt.

that

evidence

overwhelmingly

established

See United States v. Beidler, 110 F.3d 1064,

1067 (4th Cir. 1997) (“Reversal for insufficient evidence is
reserved for the rare case where the prosecution’s failure is
clear.” (internal quotation marks omitted)).
Garries also contends that the mail and wire fraud statutes
are unconstitutionally vague as applied to him.
prohibition
obtaining

of

money

“any
or

scheme

or

artifice

to

property

by

means

false

of

The statutes’

defraud,
or

or

for

fraudulent

pretenses, representations, or promises,” 18 U.S.C.A. §§ 1341,
1343

(West

Supp.

2011),

raises

due

process

questions

of

vagueness if applied in “honest services” cases not involving
bribery or kickbacks.
2896, 2931 (2010).

See Skilling v. United States, 130 S. Ct.

This case, however, did not involve honest-

services fraud but instead involved “a conventional fraudulent
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scheme to obtain money,” a form of fraud that “is untouched by
Skilling and remains illegal.”
F.3d 547, 553 (7th Cir. 2011).

United States v. Joshua, 648
There is nothing vague about the

statutory prohibition when applied to the conduct at issue in
this case.

See Skilling, 130 S. Ct. at 2927-28 (explaining that

a criminal statute is not vague if it “define[s] the criminal
offense [1] with sufficient definiteness that ordinary people
can understand what conduct is prohibited and [2] in a manner
that

does

not

encourage

arbitrary

and

discriminatory

enforcement”).

V.
To

summarize,

we

find

no

error

in

the

district

court’s

admission of evidence about Garries’ prior conviction or his
business dealings with Horace Goins.

The mail and wire fraud

statutes are not unconstitutional as applied to Garries, and the
evidence

was

convictions.

more

than

sufficient

to

sustain

each

of

the

While the district court may have erred in its

questioning of Garries, Garries cannot establish prejudice under
plain-error
overwhelming.

review,

because

the

evidence

of

his

guilt

was

Accordingly, we affirm Garries’ convictions.

AFFIRMED

17