Today, the Court released an amended version of the opinion (here).
Although the new version does not help the defendant, it has better language for future cases. Here is the relevant part:
We hold that a victim’s intentional disregard of relevant information is not a defense to wire fraud and thus evidence of such disregard is not admissible as a defense to mortgage fraud. To the extent that Lindsey tried to introduce evidence of lenders’ intentional disregard and the district court prevented him, the district court did not err.Our holdings do not leave defendants powerless to challenge the materiality of false statements made in connection with securing mortgages. Among other things, defendants can disprove materiality through evidence of the lending standards generally applied in the mortgage industry. For example, defendants can offer testimony about the types of information, such as household income or assets, that lenders typically consider, as well as evidence of how much weight the industry generally gives to statements about such information. As long as defendants do not stray into evidence of the behavior of individual lenders—for instance, evidence of specific prior bad loans or particular mistakes by underwriters—defendants may attack materiality though industry practice.To illustrate, suppose a defendant is charged with wire fraud for falsely stating on a loan application that he was married. In such a case, it would be admissible for a defense expert to testify that, while mortgage applications usually ask about marital status, the general practice in the industry is to ignore marital status when making lending decisions. The defendant could then argue in closing that his false statement about marriage was immaterial, and so the elements of wire fraud have not been proven. By contrast, a district court could properly exclude evidence that (a) the particular lender to whom the defendant lied did not generally give weight to marital status when deciding whether to lend, or (b) there were prior instances in which that lender did not consider marital status in making loans.
In short: (1) negligence is not a defense to wire fraud, and evidence of lender negligence is not admissible as a defense to mortgage fraud; (2) intentional disregard of relevant information is not a defense to wire fraud, and evidence of intentional disregard by lenders is not admissible as a defense to mortgage fraud; (3) evidence of individual lender behavior is not admissible to disprove materiality, but evidence of general lending standards in the mortgage industry is admissible to disprove materiality;
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In United States v. Lindsey, --- F.3d ---, Case No. 14-10004 (9th Cir. 2016), the Court held, "lender negligence in verifying loan application information, or even intentional disregard of the information, is not a defense to fraud, and so evidence of such negligence or intentional disregard is inadmissible as a defense against charges of mortgage fraud."
It further held that, "when a lender requests specific information in its loan applications, that information is objectively material as a matter of law, regardless of the lenders’ policies or practices with respect to use of that information."Based on these holdings, the Court affirmed the defendant's wire fraud convictions, over his claim that the district court denied him the constitutional right to present a defense by excluding evidence of lender negligence.
