United States of America v. Jin Hua Dong

The Honorable James E. Shadid, United States District Court å
for the Central District of Illinois, sitting by designation.
In the
United States Court of Appeals
For the Seventh Circuit
No. 11-1347
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
JIN HUA DONG,
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 08 CR 371-2—James B. Zagel, Judge.
ARGUED FEBRUARY 23, 2012—DECIDED MARCH 27, 2012
Before FLAUM and TINDER, Circuit Judges, and SHADID,
District Judge.å
SHADID, District Judge. Jin Hua Dong pled guilty to
participating with his co-defendants in a scheme
to commit bank fraud by knowingly obtaining multiple
equity lines of credit secured by the same property. He

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2 No. 11-1347
was sentenced to a term of 51 months and three years
of supervised release, as well as ordered to pay $337,250
in restitution. On appeal, Dong challenges only the pro-
priety of the restitution award, arguing that he cannot
be ordered to pay restitution for the relevant conduct
of other co-defendants. We disagree that this is the case.
I. BACKGROUND
In April 2008, Dong was in the United States illegally
when he traveled from Los Angeles to Chicago to meet
with Yoon Sae Kim. Dong agreed to help Kim obtain
home equity lines of credit (HELOC) for properties to
be purchased to serve as collateral for the loans. On
April 3, 2008, at the direction of Kim, Dong purchased
a single-family home located at 4066 South Lake Park,
Chicago, Illinois, for $675,000 for the purpose of using
the property to obtain multiple HELOC loans. He
made a $200,000 down-payment on the property after
receiving the money from Kim. Dong then helped Kim
submit a mortgage application to Countrywide Bank
to finance the purchase of the Lake Park property. The
application contained several false statements made
with the intent to induce Countrywide to approve the
loan, including: (1) that Dong was the true purchaser
when in fact he was a nominee purchaser for Kim;
(2) that Dong intended to occupy the property; and (3) that
Dong had certain employment, income, and assets.
Countrywide ultimately approved the mortgage loan
for $472,250.
Dong simultaneously applied for HELOC loans from
National City Bank and LaSalle Bank, both secured by

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No. 11-1347 3
the Lake Park property. In doing so, he concealed the
other loan applications from the lenders, creating the
appearance that each lender was the only lender pro-
viding a HELOC loan on the property. These applica-
tions contained false representations as to Dong’s citi-
zenship, social security number, employment history,
and salary. In the case of the application to LaSalle
Bank, the application also contained a copy of the orig-
inal purchase mortgage and settlement statement
that had been altered to falsely reduce the amount of
the original mortgage on the property by $300,000. On
May 5, 2008, Dong accompanied Kim and Sung Ar Kim
to LaSalle Bank for the closing on the $350,000 line of
credit secured by the Lake Park property. Dong was
scheduled to receive the funds from the closing on May 9,
2008, but no funds were ultimately received because
he was arrested prior to the disbursement. The Lake Park
property was sold in December 2009 for $135,000,
resulting in a $337,250 loss to Countrywide.
Dong pled guilty to Counts Seven and Eight of the
Indictment, which charged him with engaging in a
scheme with his co-defendants to defraud financial in-
stitutions and to obtain monies and funds owned by
and under the custody and control of the financial in-
stitutions by means of materially false and fraudulent
pretenses, representations, promises, and omission in
violation of 18 U.S.C. § 1344.
Prior to sentencing, the Probation Office issued a
presentence report calculating an advisory guideline
range of 51 to 63 months and a criminal history category

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4 No. 11-1347
of I. The total offense level was projected to be 24
based in part on a 16-level increase as a result of a state-
ment in Dong’s Plea Declaration that the total intended
loss was between $1,000,000 and $2,500,000 given the
$472,250 mortgage from Countrywide and the $784,900
in HELOC loans requested from National City and
LaSalle Bank, less the $135,000 obtained from the sale
of the Lake Park property.
At sentencing, Dong seized upon the presentence re-
port’s characterization of the Countrywide mortgage
as “relevant conduct” and argued that he could not be
ordered to pay restitution for that amount. He also
objected that the $337,250 loss to Countrywide was over-
stated given the significant difference between the pur-
chase price of $675,000 and the sale price two years later
of $135,000. Excluding this amount, Dong argued,
would result in an offense level increase of only 14 levels
and an advisory guideline range of 41 to 51 months. On
January 14, 2011, the district court appears to have ac-
cepted Dong’s argument and sentenced him as if there
was only a 14-level increase and an offense level of
22 rather than 24. Dong was sentenced to a term of
51 months in prison on each of Counts Seven and Eight
to be served concurrently followed by three years of
supervised release. He was also found jointly and
severally liable with his co-defendants for $337,250 in
restitution, which represents the $472,250 mortgage
from Countrywide, minus the $135,000 recovered when
the property was sold.
On appeal, Dong challenges only the restitution
portion of his sentence. Specifically, he contends that

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No. 11-1347 5
the district court erred in ordering restitution for
relevant conduct to which he did not plead guilty, as
the two transactions to which he pled guilty resulted in
no actual loss. He further asserts that the restitution
amount exceeds the actual loss caused by his jointly-
undertaken criminal activity and was not reasonably
foreseeable to him.
II. DISCUSSION
The district court’s interpretation of the Sentencing
Guidelines is reviewed de novo, and its factual findings
are reviewed for clear error. Accordingly, the challenged
calculation of the restitution amount in this case is re-
viewed for clear error and will be reversed “only if the
district court used inappropriate factors or did not
exercise discretion at all.” United States v. Frith, 461 F.3d
914, 919 (7th Cir. 2006).
Initially, the Court notes that the argument regarding
the amount of the Countrywide mortgage being
included in the loss calculation is different from the
argument that the $337,250 figure was overstated
because the sale price was unreasonably low. In fact,
Dong’s Plea Declaration also included a projected sen-
tencing estimate that contained an offense level increase
of 16 for an intended loss between $1,000,000 and
$2,500,000, which encompassed amounts for the initial
purchase mortgage from Countrywide and the two
HELOC loans from National City and LaSalle Bank. By
admitting that the Countrywide mortgage was properly
included in the loss computation, Dong essentially relin-

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6 No. 11-1347
quished his right to make this argument as a tactical
choice in favor of the stronger argument regarding over-
statement of loss. Failure to raise this argument before
the district court results in the waiver of that argument
on appeal. United States v. Murray, 395 F.3d 712, 717
(7th Cir. 2005).
Even assuming arguendo that the argument has not
been waived, the restitution award does not support
a finding of clear error. Dong is correct that a loss to
Countrywide was not specifically set forth in Counts
Seven and Eight of the Indictment. However, he fails to
acknowledge that fraud causing a loss to Countrywide
was expressly stated in the description of the scheme
contained in paragraphs 1 through 67 of Count One,
which was incorporated by reference in Counts Seven
and Eight. Paragraphs 56 and 57 of the Indictment allege
that part of the scheme involved Dong making false
statements to Countrywide in order to obtain the
initial purchase mortgage for the Lake Park property,
which was then used as collateral to support fraudulent
equity loans.
Moreover, in his Plea Declaration, Dong specifically
admitted:
Beginning no later than in or around April, 2008,
and continuing until at least on or about May 9, 2008,
in the Northern District of Illinois, Eastern Division,
defendant participated with his co-defendants Yoon
Sae Kim, Sung Ar Kim, Myung Ja Pak, and Yoo Jung
Lee, in a scheme to defraud certain financial institu-
tions and to obtain monies and funds owned by

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No. 11-1347 7
and under the custody and control of certain
financial institutions by means of materially false
and fraudulent pretenses, representations, promises
and omissions.
In or around April, 2008, defendant JIN HUA
DONG met with Yoon Sae Kim in the Chicago area.
Defendant JIN HUA DONG understood at the time
that applying for more than one loan on a single
property without informing each bank of this was
illegal . . . .
On or about April 3, 2008, defendant JIN HUA
DONG purchased a single-family home located at
4066 South Lake Park, Chicago, Illinois, (hereinafter
“the Lake Park property”) for $675,000 for the
purpose of using it fraudulently to obtain multiple
HELOC loans. Defendant JIN HUA DONG pur-
chased and financed the Lake Park property at the
direction and under the control of Yoon Sae Kim.
Defendant JIN HUA DONG made a down-payment
of approximately $200,000 on the Lake Park prop-
erty. Defendant JIN HUA DONG had received
the $200,000 down-payment from Yoon Sae Kim.
Defendant JIN HUA DONG helped to facilitate
Yoon Sae Kim’s submitting of a mortgage loan ap-
plication to Countrywide Bank to finance the
purchase of the Lake Park property which falsely
represented that JIN HUA DONG was the true pur-
chaser of the property. In fact, defendant JIN HUA
DONG was acting as nominee purchaser for Yoon
Sae Kim. In addition, the mortgage loan application

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8 No. 11-1347
for the Lake Park property was fraudulent in that
it contained false statements, including statements
regarding the purchaser’s intent to occupy the prop-
erty, employment, income and assets, which were
intended to induce Countrywide Bank to approve
a mortgage loan. Countrywide Bank ultimately ap-
proved the mortgage loan.
Accordingly, Dong clearly pled guilty to the conduct
that resulted in the actual loss of $337,250 to Country-
wide, and his assertion that he is being held responsible
for an amount of restitution that is based on “relevant
conduct” or conduct that was beyond the scope of his
plea agreement is plainly incorrect. As set forth above,
Dong’s Plea Declaration also contained a projected sen-
tencing estimate of an intended loss between $1,000,000
and $2,500,000, which included amounts for the initial
purchase mortgage from Countrywide. This con-
stitutes an affirmative acknowledgment by Dong that
the Countrywide mortgage was properly included in
the loss calculation.
Dong contends that the district court failed to
make the findings required by U.S. Sentencing Guideline
§ 1B1.3(a)(1)(B), which requires a determination of the
scope of the jointly undertaken criminal activity and
findings as to whether the conduct was in furtherance
of that joint criminal activity and the foreseeability of
the conduct. However, Sentencing Guideline § 1B1.3
Application Note 2 makes clear that this requirement
applies only where the acts in question were not com-
mitted by the defendant but rather were solely the acts

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No. 11-1347 9
of others. The record in this case, as discussed
above, refutes Dong’s suggestion that the Countrywide
mortgage loss was “relevant conduct” arising from the
acts or omissions of others rather than conduct that
constituted part of his offense of conviction. As such,
his reliance on Sentencing Guideline § 1B1.3(a)(1)(B)
is misplaced.
Finally, Dong was sentenced within the precise guide-
line range that he argued to be applicable. The district
court agreed that the loss amount was overstated and
sentenced Dong as if he had an offense level of 22 instead
of 24, which coincides with a loss of between $400,000
and $1,000,000 based on the HELOC loans alone. Ac-
cordingly, he has failed to demonstrate any plain error
or actual harm as a result of the sentence imposed.
III. CONCLUSION
For the reasons stated herein, we AFFIRM Dong’s sen-
tence.
3-27-12

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