3178, -3180, -3276 United States of America v. John Farano

In the
United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 12‐3007, ‐3178, ‐3180, ‐3276
U NITED STATES OF A MERICA ,
Plaintiff‐Appellee,
v.
J OHN FARANO, et al.,
Defendants‐Appellants.
____________________
Appeals from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 07 CR 853 — Ronald A. Guzmán, Judge.
____________________
A RGUED FEBRUARY 19, 2014 — D ECIDED A PRIL 18, 2014
____________________
Before P OSNER , R IPPLE , and KANNE , Circuit Judges.
P OSNER , Circuit Judge. Robert Brunt, John Farano, Charles
Murphy, and Tracey Scullark were charged with mail and
wire fraud and Brunt and Scullark also with money launder‐
ing and Farano also with theft of federal government funds.
18 U.S.C. §§ 641, 1341, 1343, 1957(a). All were crimes relating
to an elaborate real estate financing fraud scheme in Chicago
during the housing bubble of the early 2000s. A jury con‐
victed the defendants, and the judge sentenced Brunt to 151

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2 Nos. 12‐3007, ‐3178, ‐3180, ‐3276
months in prison, Farano to 108, Murphy to 72, and Scullark
to 78. He also ordered them all to pay restitution.
We need to describe the criminal scheme. The U.S. De‐
partment of Housing and Urban Development sells proper‐
ties that it owns at a 10 to 30 percent discount if the buyer of
a property is a certified nonprofit organization that agrees to
resell the property to a low‐ or moderate‐income person or
family who intends to live there. The defendants obtained
the properties from HUD by using a HUD‐certified non‐
profit named Westwood Community Development, which
they corrupted (although surprisingly neither Westwood nor
its principals appear to have been prosecuted), to buy the
properties for them. Westwood in effect “fronted” for the
defendants, who paid kickbacks, sometimes labeled “dona‐
tions,” to Westwood personnel who assisted in the scheme.
Having obtained the properties from Westwood, the defen‐
dants resold them not to persons of low or moderate income
but instead to persons who wanted to invest in real estate
rather than use the real estate they bought as a place to re‐
side. To recruit these investors the defendants misrepre‐
sented the value of the properties by promising to rehabili‐
tate them so that they would be worth even more, and to
find tenants for the properties. Some of the properties the
defendants did not rehabilitate at all; the others they gave
“cosmetic rehabs” of little value.
The investor‐buyers had little or no money, and so
needed large mortgages to finance their purchases of the
properties. The defendants obtained the mortgages for them
by submitting false information to banks regarding the con‐
ditions of the properties and the investors’ assets, income,
employment, and intentions to occupy the properties. A loan

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Nos. 12‐3007, ‐3178, ‐3180, ‐3276 3
officer at a mortgage brokerage company was bribed to as‐
sist in the scheme, and appraisers were bribed to submit
fraudulent appraisals of the properties.
The defendants played different roles in administering
the scheme. Brunt and Scullark recruited the investors (that
is, the buyers of the properties) and the appraisers, and
Brunt arranged for the “cosmetic rehabs,” while Farano and
Murphy, who were lawyers, financed the transactions—the
purchase (from HUD via Westwood) and sale of properties
and the bank financing. Farano did the paperwork for many
of the transactions. Many of the investors were ruined when
the housing bubble collapsed and the banks lost money as a
result of defaults because the properties were now worth
less than the unpaid balances of the mortgages on them.
All the defendants except Brunt asked to be tried sepa‐
rately from the other defendants. The judge refused, justifia‐
bly, because severance would have caused massive duplica‐
tion of effort. With severance the entire scheme in all its
complexity would have had to be proved anew in each case
by the government’s witnesses, who included investors, ap‐
praisers, and HUD officers. The superior efficiency of trying
defendants jointly in a complex criminal case (provided it
isn’t so complex that the jury can’t understand it if there are
multiple defendants) is justification for making the only cri‐
terion for severance “prejudice” to one or more of the defen‐
dants. Fed. R. Crim. P. 14(a).
The only claim of prejudice is that the judge’s refusal to
sever allowed the admission of very damaging inadmissible
evidence against particular defendants in the form of testi‐
mony by their codefendants, notably Brunt. But their real
complaint, as should be apparent from the word “inadmissi‐

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4 Nos. 12‐3007, ‐3178, ‐3180, ‐3276
ble” in the preceding sentence, has nothing to do with the
refusal to sever; it concerns, rather, the judge’s rulings on the
defendants’ motions under Rules 403 and 404(b) to exclude
specific testimony. As the Supreme Court explained in Zafiro
v. United States, 506 U.S. 534, 540 (1993), “a defendant nor‐
mally would not be entitled to exclude the testimony of a
former codefendant if the district court did sever their trials,
and we see no reason why relevant and competent testi‐
mony would be prejudicial merely because the witness is
also a codefendant.” If the judge should have granted some
of the motions to exclude that he denied, and the defendants
have challenged those denials and we decide that his rulings
were erroneous and the errors not harmless, the defendants
have grounds for reversal of their convictions. Admissibility
and severance are separate concerns.
In the decision that the Supreme Court affirmed in Zafiro,
we had said that “persons charged in connection with the
same crime should be tried separately only if there is a seri‐
ous risk that a joint trial would prevent the jury from mak‐
ing a reliable judgment about the guilt or innocence of one
or more of the defendants,” as in “a complex case with many
defendants some of whom might be only peripherally in‐
volved in the alleged wrongdoing. The danger is that the bit
players may not be able to differentiate themselves in the ju‐
rors’ minds from the stars.” 945 F.2d 881, 885 (7th Cir. 1991)
(emphases in original). This is not such a case. None of the
defendants was a “bit player” in the conspiracy. In fact they
were the principals; the bit players were the investors who
misrepresented their ability to repay the mortgage loans that
they needed in order to be able to buy properties from the
defendants, the bribed loan officer, and the crooked apprais‐
ers.

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Nos. 12‐3007, ‐3178, ‐3180, ‐3276 5
Nor was the trial so long or complex that the jury’s ver‐
dict cannot be thought reliable. One can imagine a trial ex‐
pected to be so long that no employed person could take the
time off from his job to serve on the jury, with the result that
the jury might be unrepresentative. “Professionals often
cannot afford (or their employers will not abide) jury service
on protracted cases. Consequently, courts frequently excuse
them upon a showing of undue hardship or extreme incon‐
venience. The hardship results from the projected loss of pay
over a lengthier trial. Collectively, these two practices com‐
bine to seriously suppress the percentage of persons with
higher education who serve on juries in complex cases.”
Franklin Strier, “The Educated Jury: A Proposal for Complex
Litigation,” 47 DePaul L. Rev. 49, 72–73 (1997); see also “De‐
velopment in the Law—III. Jury Selection and Composi‐
tion,” 110 Harv. L. Rev. 1443, 1454 (1997); Gordon Van Kessel,
“Adversary Excesses in the American Criminal Trial,” 67
Notre Dame L. Rev. 403, 478–79 (1992). The trial in this case
was long—nine weeks—but there is no indication that the
jury was incompetent, by virtue of professional exemptions
or hardship exclusions, to render a sound decision. The fact
that the jury spent seven days deliberating and acquitted
some of the defendants of some of the counts (and a fifth de‐
fendant of the only count against him) suggests that the jury
was attentive and conscientious.
A second situation that we said in our Zafiro opinion may
require severance is “where exculpatory evidence essential
to a defendant’s case will be unavailable—or highly prejudi‐
cial evidence unavoidable—if he is tried with another de‐
fendant. … There are cases in which a person would refuse
to testify for a codefendant in a joint trial for fear of incrimi‐
nating himself, yet if tried separately and convicted might

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6 Nos. 12‐3007, ‐3178, ‐3180, ‐3276
thereafter be willing to testify and might give testimony ex‐
culpating the other defendant.” 945 F.2d at 886. That’s really
two situations, one in which the defendants would oppose
severance and the other in which the government would
oppose it. Neither one is our case.
Our case illustrates a third situation discussed in Zafiro,
that of “mutual antagonism, finger‐pointing, and other
manifestations or characterizations of the effort of one de‐
fendant to shift the blame from himself to a codefendant”;
but those things, we said, “neither control nor illuminate the
question of severance.” Id. Consider Farano’s complaints
about Brunt’s testimony that Farano had used a racial slur
against him and Scullark, both of whom are black; Farano is
white. But his lawyer didn’t object to Brunt’s testimony
about the racial slur. He did object to Brunt’s testimony that
Farano had used his law license for theft; but the judge sus‐
tained the objection. Other objections by Farano to Brunt’s
testimony were overruled—but instead of alleging judicial
error in ruling on objections, Farano insists mistakenly that
his case should have been severed from Brunt’s.
Defendant Murphy objects to the introduction of evi‐
dence that he claims would not have been introduced had
Brunt not been on trial with him. The evidence related to
Brunt’s rehab of a building on West 72nd Street in Chicago,
in connection with which he obtained a loan of $155,000
from a title company and used most of it to buy a Rolls
Royce. The evidence of his laundering the fraud‐induced re‐
ceipt of the $155,000 by using it to buy the Rolls was used by
the government to bolster the money‐laundering charge
against Brunt; and Murphy was one of Brunt’s partners in
the West 72nd Street project. But he was not accused of par‐

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Nos. 12‐3007, ‐3178, ‐3180, ‐3276 7
ticipating in Brunt’s fraud or money laundering with respect
to the project. The judge ruled sensibly that the fact that
“Murphy knew how to establish a proper rehabilitation loan
[for a construction project] in which the funds were paid out
incrementally only after submission of proof that the work
had actually been done is also evidence that the other trans‐
actions in which he and Brunt collaborated to obtain large
amounts of money from unsuspecting banks before any reha‐
bilitation work was done were deliberately fraudulent”
(emphasis in original)—contrary to Murphy’s claim to be
unsophisticated about real estate transactions. The procure‐
ment of the rehabilitation loan showed that Murphy knew
what a lawful rehabilitation loan was, implying in turn a so‐
phisticated knowledge of real estate transactions. This evi‐
dence would have been admissible against Murphy even if
Brunt hadn’t been on trial with him.
Brunt had been represented at one time by a lawyer
named McDermott, and testified that Murphy had attended
a meeting with him and McDermott during which it became
clear that McDermott, who shared an office with Murphy,
was Murphy’s puppet. This testimony, Murphy argues,
forced him to call McDermott as a witness. So McDermott
testified—and obligingly denied having been Murphy’s
puppet. So far, so good, for Murphy. But on cross‐
examination McDermott acknowledged Murphy’s presence
in several of his meetings with Brunt, though he insisted that
his (that is, McDermott’s) advice to Brunt had been based on
his independent professional judgment. There is no ground
for thinking that joinder with Brunt, by “forcing” Murphy to
call McDermott as a witness, hurt Murphy’s defense; for
McDermott’s testimony as a whole was favorable to Mur‐
phy.

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8 Nos. 12‐3007, ‐3178, ‐3180, ‐3276
There are other objections to the district judge’s rulings at
the trial, but they fall with the objections that we’ve already
discussed. We add that the evidence of the defendants’ guilt
was overwhelming, and if there were any erroneous rulings
(which we don’t think there were) they were therefore harm‐
less. We turn to the sentences.
Farano and Murphy each received a four‐level enhance‐
ment of their guidelines sentencing range on the ground that
each was an organizer or leader of criminal activity in which
there were at least five participants or that was “otherwise
extensive.” U.S.S.G. § 3B1.1(a). Both conditions were satis‐
fied.
Brunt and Scullark, however, did not receive the en‐
hancement. The omission is puzzling, but may reflect the
ambiguity of Application Note 4 to the guideline. It states
that “in distinguishing a leadership and organizational role
from one of mere management or supervision … the court
should consider” factors that “include [but are not necessar‐
ily exhausted by] the exercise of decision making authority,
the nature of participation in the commission of the offense,
the recruitment of accomplices, the claimed right to a larger
share of the fruits of the crime, the degree of participation in
planning or organizing the offense, the nature and scope of
the illegal activity, and the degree of control and authority
exercised over others.”
Years ago we observed that this multifactor, open‐ended,
unweighted so‐called test “contributes to the murk sur‐
rounding review of § 3B1.1 adjustments.” United States v.
Mustread, 42 F.3d 1097, 1104 n. 3 (7th Cir. 1994). We elabo‐
rated our concerns in United States v. Rosales, 716 F.3d 996,
997 (7th Cir. 2013), complaining that “as with most multifac‐

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Nos. 12‐3007, ‐3178, ‐3180, ‐3276 9
tor tests, the application note’s seven‐factor test is none too
clear. No weighting of the factors is indicated (so really the
‘multifactor test’ should be called a ‘list of factors’). And a
majority of the factors are vague or redundant. That is true
of ‘the nature of [the defendant’s] participation in the com‐
mission of the offense,’ ‘the degree of participation in plan‐
ning or organizing the offense,’ ‘the nature and scope of the
illegal activity,’ and even ‘the degree of control and author‐
ity exercised over others.’ For what is the difference between
‘control’ and ‘authority’? And for that matter is there a dif‐
ference between a ‘leader’ and an ‘organizer’? The phrase ‘a
leadership and organizational role’ appears to fuse them.”
We noted that “the apparent equation of ‘organizer’ to
‘leader’ is another oddity. The ‘organizer’ of an entire enter‐
prise would usually be thought the person who had started
it; he might not be running it; he might not be a leader.” Id.
at 998.
We don’t understand the singling out of Farano and
Murphy as the sole leaders or organizers of the fraudulent
scheme. The gang had officers and enlisted men. The officers
were our four defendants. The enlisted men were the buyers
who misrepresented their financial situation, the bribed ap‐
praisers, and the bribed loan officer. The four defendants
were all leaders, though they led in different domains. The
lawyers, Farano and Murphy, played the decisive role in the
financial negotiations with Westwood and the banks. Brunt
and Scullark were responsible for recruiting investors (the
buyers of the properties) and appraisers. Brunt also dealt
with Westwood and managed the cosmetic rehabs, which
doubtless meant that he was in charge of workers who
didn’t know they were assisting in a fraud. But in determin‐
ing how extensive a criminal enterprise is for purposes of the

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10 Nos. 12‐3007, ‐3178, ‐3180, ‐3276
leader/organizer enhancement, “unknowing … outsiders”
assisting the enterprise count. U.S.S.G. § 3B1.1, Application
Note 3.
Scullark might have been thought a manager or supervi‐
sor, a type of leader who receives only a three‐level en‐
hancement. U.S.S.G. § 3B1.1(b); see also United States v. Fi‐
gueroa, 682 F.3d 694, 695–97 (7th Cir. 2012). The government
sought a four‐level enhancement for Brunt, but no enhance‐
ment for Scullark, though her presentence report had rec‐
ommended the three‐level enhancement for her. The judge
imposed no section 3B1.1 enhancement on either one. This is
especially puzzling with regard to Brunt, who according to
his presentence report had “organized and led the nominee
buyers’ activities, the submission of loan applications, and
gave specific directives to Defendants Scullark, D’Aifallah,
and Jackson. In addition, Defendant Brunt was primarily re‐
sponsible for identifying properties to acquire. … Although
each defendant participated in the scheme of their own voli‐
tion, it was Defendant Brunt that brought the parties to‐
gether. Without Defendant Brunt, neither Defendant Farano
or Defendant Murphy had knowledge of the specific proper‐
ties or had relationships with an appraiser and loan officer
who would readily participate in the scheme; not to mention
Defendant Brunt’s relationship with the individuals who
served as nominee buyers, who appear to have been easily
duped by the defendants.” But the government has not ap‐
pealed the denial of the enhancement.
The length of the defendants’ prison sentences was influ‐
enced by the amount of loss that the district judge found had
been caused by the fraudulent scheme. See U.S.S.G. § 2B1.1.
There were losses of two types: losses to the banks that made

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Nos. 12‐3007, ‐3178, ‐3180, ‐3276 11
mortgage loans to the investors because of misrepresenta‐
tions of the investors’ financial situation, and losses to HUD
equal to the 10 to 30 percent discount at which it sold prop‐
erties to Westwood that were never used to provide low‐ or
moderate‐income housing.
All four defendants object that the losses to the banks of‐
ten occurred after the properties that secured the bank loans
had been refinanced. (In the case of five such properties, the
losses attributed to the defendants were $768,450.) Suppose
one of the investors had bought a property for $80,000
nominally from Westwood but actually from the defendants,
obtained a $100,000 mortgage on the basis of a phony ap‐
praisal, and later refinanced the property by obtaining a
$110,000 mortgage from another bank, replacing the original
mortgage. And suppose that later still, when the bubble
burst, the mortgagor defaulted and the mortgagee fore‐
closed, but at the foreclosure sale the property brought only
$60,000. The government in such a case would assess the loss
as $40,000 ($100,000 original loan amount, minus $60,000
foreclosure sale proceeds), but would ignore the further
$10,000 loss to the refinancing bank. The $40,000 loss would
also have been incurred by the refinancing banks rather than
by the banks with which the defendants had dealt; and the
defendants argue that refinancing breaks the causal link be‐
tween the original fraud and the loss.
Not true. United States v. Morris, 80 F.3d 1151, 1171–72
(7th Cir. 1996). Actual loss is defined as “reasonably foresee‐
able pecuniary harm that resulted from the offense,” and
“reasonably foreseeable pecuniary harm” as “pecuniary
harm that the defendant knew or, under the circumstances,
reasonably should have known, was a potential result of the

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12 Nos. 12‐3007, ‐3178, ‐3180, ‐3276
offense.” U.S.S.G. § 2B1.1, Application Notes 3(A)(i), (iv).
The defendants knew that the properties were overpriced
and that the buyers (the “investors”) were underfinanced.
They could therefore foresee the likelihood of default and
consequent loss.
The additional loss—the $10,000 in our example for
which the defendants were not punished—had resulted
from the decision to refinance, a decision that may well have
been influenced by factors, such as declining interest rates,
that the defendants couldn’t be assumed to have foreseen;
and so for that incremental loss they would not be held re‐
sponsible. But there could be no doubt that they were re‐
sponsible for the $40,000 loss, which would have been a
foreseeable loss to the first lender had the borrower not refi‐
nanced.
The judge assessed the loss to HUD as the amount of the
discounts that HUD gave Westwood on the sales of proper‐
ties intended, HUD thought—as it was the motivation for
the discount—for low‐ and moderate‐income housing, yet
never used for that purpose because the defendants sold the
discounted properties to investors who had no interest in
providing low‐ or moderate‐income housing. The defen‐
dants argue that HUD lost nothing because it would have
sold the properties at a discount to someone else. The argu‐
ment is unsound. HUD was led to believe that it was buying
something of value to it for the amount of the discounts,
namely low‐ and moderate‐income housing; and the defen‐
dants stole the money, thus depriving HUD of a thing of
value that had been promised. It’s as if you order a product,
pay for it in advance, but never receive it, because the prod‐

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Nos. 12‐3007, ‐3178, ‐3180, ‐3276 13
uct is stolen en route to you. The money you pay to buy a
product you never receive is a loss.
Of course the defendants could not have foreseen the
precise loss to the lenders (as distinct from the loss to HUD),
because, while they must have known that the buyers of the
properties were very likely to default, having overpaid for
the properties with fraudulently obtained mortgage loans,
they could not know what the properties would bring at a
foreclosure sale, given uncertainty about future real estate
prices. Far more financially sophisticated people than the
defendants, employed at companies like Bear Stearns, Leh‐
man Brothers, and American International Group, also failed
to predict the housing crash. But remember that the loss
guideline requires only a “pecuniary harm that the defen‐
dant knew or, under the circumstances, reasonably should
have known, was a potential result of the offense.” U.S.S.G.
§ 2B1.1, Application Note 3(a)(iv). The key word is “poten‐
tial,” which means “could happen.” The losses to the lenders
were a “potential result” of the defendants’ fraud, as the de‐
fendants well knew.
The last issue involves the judge’s calculation of the
amount of restitution that the defendants were ordered to
pay. Remember that in calculating loss for purposes of de‐
termining the defendants’ prison sentences, the judge had
ignored the loss to banks that refinanced properties sold by
the defendants, as distinct from the loss that the banks that
had originally financed the sales would have incurred had
those banks’ mortgages not been refinanced. Yet the lesser
loss, the loss the judge used in calculating the defendants’
prison sentences, had actually been borne by the refinancing
banks, as we know; for the original lenders had been repaid

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14 Nos. 12‐3007, ‐3178, ‐3180, ‐3276
when their loans were refinanced. And so the judge also in‐
cluded as victims entitled to restitution the refinancing
banks, but deemed them entitled to restitution only for the
initial loss, the loss the first tier of banks would have borne
had their loans not been repaid. In our example of a prop‐
erty on which the first bank had lent $100,000 and the refi‐
nancing bank $110,000 and the property went into default
and brought only $60,000 at the foreclosure sale, the loss in‐
dependent of the refinancing was $40,000, and that would be
the amount of restitution ordered.
In arguing for restitution to the refinancing banks, the
government confounds loss amount, which requires only
“pecuniary harm that the defendant knew or, under the cir‐
cumstances, reasonably should have known, was a potential
result of the offense,” U.S.S.G. § 2B1.1, Application Note
3(A)(iv), with restitution, authorized only for a “victim,” de‐
fined as “a person directly and proximately harmed as a re‐
sult of the” defendant’s crime. 18 U.S.C. § 3663A(a)(2); see
United States v. Shepard, 269 F.3d 884, 886–87 (7th Cir. 2001);
cf. United States v. Donaby, 349 F.3d 1046, 1053 (7th Cir. 2003);
United States v. Marino, 654 F.3d 310, 319 (2d Cir. 2011). The
refinancing banks may have been caught up in the housing
bubble and willing therefore to make “liars’ loans,” that is,
loans made without requiring proof of ability to repay. The
$110,000 loan in our example may have been such a loan.
But banks making such loans would be coauthors of their
loss, since had they required proof of financial soundness
from the borrowers they would not have refinanced the
properties in question.
United States v. Yeung, 672 F.3d 594, 603 (9th Cir. 2012),
held that banks that had bought fraudulently obtained

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Nos. 12‐3007, ‐3178, ‐3180, ‐3276 15
mortgages were victims of the fraud entitled to restitution
because as part of the defendant’s fraud “the borrower for
each loan had misrepresented his financial ability to repay
the loan” and the banks had relied on that fraudulent infor‐
mation, which had been concocted by Yeung. There is as yet
no evidence in this case of such reliance by the refinancing
banks, and in its absence those banks cannot be counted as
“victims” for restitution purposes, though their loss is loss
under section 2B1.1 and thus usable in determining the de‐
fendants’ prison sentences.
A second question concerning restitution concerns the
method of calculating it for victims entitled to restitution.
The defendants argue that the method used was wrong, cit‐
ing United States v. Robers, 698 F.3d 937, 939 (7th Cir. 2012),
cert. granted, 134 S. Ct. 470 (2013). The victims in that case
were a mortgage lender and a mortgage guarantor (for sim‐
plicity we’ll call them both “mortgagees”). They correspond
to the defrauded banks in our case. As a result of Robers’s
fraud, the properties were worth less than the balance of the
mortgages and so the mortgagees could not recover the bal‐
ance when the mortgagors defaulted. The restitution statute
entitles a victim to “the value of the [victim’s] property on
the date of sentencing, less the value (as of the date the
property is returned) of any part of the property that is re‐
turned.” 18 U.S.C. §§ 3663A(b)(1)(B)(i)(II), (ii). The question
was whether “the date the property is returned” should be
the date of the foreclosure or, later, when the property is
sold (presumably by the mortgagee, on the assumption that
the mortgagee had acquired title to the property at the fore‐
closure sale). We held that it was the latter. Four circuits
agree with this approach, United States v. Statman, 604 F.3d
529, 538 (8th Cir. 2010); United States v. James, 564 F.3d 1237,

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16 Nos. 12‐3007, ‐3178, ‐3180, ‐3276
1244–47, (10th Cir. 2009); United States v. Innarelli, 524 F.3d
286, 294 (1st Cir. 2008); United States v. Himler, 355 F.3d 735,
745 (3d Cir. 2004), and maybe a fifth. See United States v. Boc‐
cagna, 450 F.3d 107, 115–20 (2d Cir. 2006). Two disagree.
United States v. Holley, 23 F.3d 902, 914–15 (5th Cir. 1994);
United States v. Smith, 944 F.2d 618, 625–26 (9th Cir. 1991).
The Supreme Court will decide; until it does, we’ll stick with
our Robers decision.
Since the refinancing banks probably were not victims
and therefore were not entitled to restitution, the choice of
the transaction date to use to measure the restitution that
would have been due them had they been victims is irrele‐
vant. But not all the banks awarded restitution were refi‐
nancers—some were owners of the original mortgages, and
thus entitled to restitution. Robers would make the amount
of that restitution the loss the banks suffered when they sold
the properties that they acquired after they foreclosed their
mortgages, just as the district court calculated.
That completes our analysis of the colorable issues pre‐
sented by the defendants. We affirm the judgments against
them except for the order of restitution to the refinancing
lenders, which we vacate. The district judge will have to
consider evidence on whether the refinancing banks that are
seeking restitution had based their refinancing decision in
whole or part on fraudulent representations by the defen‐
dants, and, depending on the outcome of that consideration,
the judge may have to recalculate the restitution that the de‐
fendants owe. And of course should the Supreme Court re‐
verse or modify our decision in the Robers case, the judge
will be guided by the Court’s opinion rather than by this
opinion in calculating the amount of restitution.

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Nos. 12‐3007, ‐3178, ‐3180, ‐3276 17
We would be remiss if we ended this opinion without
expressing our concern with the length of time that this case
has taken to reach us—six and a half years since indictment.
The initial delays were attributable largely to the complexity
of the government’s investigation of the defendants, which
continued after the indictment was returned and resulted in
a superseding indictment that added Murphy as a defen‐
dant. Trial was scheduled to begin on January 31, 2011—
already more than three years since the initial indictment—
but on the eve of trial Brunt switched lawyers, and as a re‐
sult the trial was postponed nine months; it shouldn’t have
been postponed that long for that reason. The trial took nine
weeks, and after that the defendants were allowed two
months for briefing their motions for acquittal, which was
followed seven months later by sentencing. The defendants
filed their notices of appeal in July 2012, other than Murphy,
who filed in October of that year. The defendants’ lawyers
than withdrew, and new counsel were appointed. The ap‐
peal was not argued until 19 months after the original no‐
tices of appeal. The delay troubles us, especially as there
must now be further proceedings in the district court.
A FFIRMED IN P ART , R EVERSED IN P ART , AND R EMANDED.

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