Justia U.S. 7th Circuit Court of Appeals Opinion Summaries

Dr. Xiao taught mathematics for many years at Southern Illinois University. He also did academic work based in China, for which he received more than $100,000 in payments. An investigation of Xiao's grant applications led FBI agents to examine his finances. Xiao was charged with wire fraud, making a false statement, failing to disclose his foreign bank account on his income tax returns, and failing to file a required report with the Department of the Treasury. Xiao was acquitted of wire fraud and making a false statement, but convicted of filing false tax returns and failing to file a report of a foreign bank account, 31 U.S.C. 5314(a).The Seventh Circuit affirmed, rejecting arguments that the evidence was insufficient, primarily on the question of willfulness, that the tax return question was ambiguous, and that the foreign-account reporting regulation is invalid. The evidence permitted the jury to find beyond a reasonable doubt that Xiao acted willfully in choosing not to disclose his foreign bank account. The tax return form was not ambiguous as applied to Xiao’s situation. The government proved beyond a reasonable doubt that he engaged in reportable transactions. In 2019 he received deposits to the Chinese account and made withdrawals and investments using that account. View "United States v. Xiao" on Justia Law

Whitfield was scheduled for discharge from Menard Correctional Center in January 2010, to begin a term of mandatory supervised release. On that day, prison officials handed Whitfield only the signature page of a document called the “Electronic Detention Program Agreement.” That page stated that “the following conditions of the Program apply only to sex offender cases.” Whitfield was not a sex offender and objected to signing the Agreement without an explanation from a prison official clarifying why he, a non-sex offender, had to sign a form designed exclusively for sex offenders. Whitfield’s objections were rejected. Four times, clinical services supervisor Spiller directed Whitfield to sign the form. After his continued refusal, she issued a disciplinary ticket for failure to follow a direct order. Whitfield was transferred to disciplinary segregation; the Illinois Prisoner Review Board held a hearing and found he had violated the terms of his supervised release. His eligibility for supervised release was revoked. Whitfield remained in custody for another 18 months.Whitfield sued Spiller, other Menard officials, and Board members, alleging constitutional violations under 42 U.S.C. 1983. The case has narrowed to Whitfield’s claims against Spiller and then-warden Gaetz for First and Eighth Amendment violations. The Seventh Circuit held that the district court correctly granted the defendants summary judgment on some claims, but that Whitfield has sufficient evidence that Spiller’s conduct violated his First Amendment rights. View "Whitfield v. Cowan" on Justia Law

Simmons used another person’s Social Security number and falsified employment information to open a savings account and apply for multiple loans and credit cards at a credit union. Convicted of bank fraud, 18 U.S.C. 1344, and aggravated identity theft, section 1028A, Simmons argued that the government had not proved that he knew the Social Security number belonged to another person and, at sentencing, objected to the PSR’s calculation of the intended loss amount. The PSR calculated Simmons’s total intended loss amount at $176,326. That included a cashier’s check Simmons had cashed plus each loan and credit card amount for which he had applied—some of which had been denied. Simmons argued that he only intended to obtain one credit card and one auto loan and that if he had succeeded in obtaining a credit card and car loan on January 23, he would have stopped. Excluding two additional applications would have brought the loss amount under $150,000, resulting in an enhancement of only eight levels instead of ten.The district court adopted the PSR’s loss amount, and, with a Guidelines range of 30-37 months, sentenced Simmons to 46 months on the bank fraud counts, followed by a mandatory consecutive sentence of 24 months on the aggravated identity theft count. The Seventh Circuit affirmed. Sufficient evidence supported Simmons’s aggravated identity theft conviction, and the loss amount finding was not clearly erroneous. View "United States v. Simmons" on Justia Law

If a borrower defaults on a loan guaranteed by the Small Business Administration (SBA), the lender asks the SBA to purchase the outstanding balance of the defaulted loan. The SBA then decides whether to honor the guarantee after reviewing the paperwork to ensure that the loan complied with SBA requirements. A lender can retain a lending service provider (LSP) to package, originate, disburse, service, or liquidate SBA-guaranteed loans on the lender’s behalf. The five defendants worked at, or with, an LSP, and engaged in a scheme to obtain SBA guarantees for loans that did not meet the SBA’s guidelines and requirements. They made false statements on loan-guarantee applications and purchase requests sent to the SBA about matters such as borrowers’ eligibility to receive a loan and how loan proceeds would be disbursed.The Seventh Circuit affirmed the defendants’ convictions for conspiracy to commit wire fraud affecting a financial institution, 18 U.S.C. 1349, and wire fraud affecting a financial institution, section 1343) and their sentences. The court rejected arguments concerning a constructive amendment to the indictment, that the government did not prove that the wire fraud scheme deprived the SBA of a protectable money or property interest, jury instructions, the sufficiency of the evidence, and loss calculation. View "United States v. Griffin" on Justia Law

From 2011-2017, Care Specialists provided care to homebound Medicare beneficiaries. At least part of its operation was fraudulent. Care Specialists would submit Medicare claims for health services, including skilled nursing services, provided to many patients who did not qualify for Medicare reimbursement. Newton, a quality assurance specialist and the owner’s secretary, helped implement the scheme. A former Care Specialists employee, Bolender, filed a whistleblower letter describing the scheme and met with federal investigators, directly implicating Newton as a key figure in the conspiracy. The owners pleaded guilty. Newton was convicted of conspiracy to commit both health care fraud and wire fraud, following testimony from multiple Care Specialists employees. Bolender avoided testifying by invoking her rights against self-incrimination under the Fifth Amendment. Newton unsuccessfully argued that the court wrongly accepted the invocation and that the government’s refusal to grant Bolender immunity violated her due process rights.The Seventh Circuit affirmed Newton’s conviction. The government's actions did not distort the fact-finding process; Bolender’s testimony was just as likely, if not more likely, to inculpate Newton as it was to exculpate her. Bolender’s invocation of her rights under the Fifth Amendment had been proper because she potentially could have opened herself up to prosecution. The court vacated Newton’s sentence. The district court’s calculation of Medicare’s loss attributable to Newton was unreasonable. View "United States v. Newton" on Justia Law

Freyermuth and five others were indicted for their involvement in a conspiracy to distribute large quantities of methamphetamine. Freyermuth pleaded guilty to conspiring to both distribute over 50 grams of methamphetamine and launder money. The PSR reported that Freyermuth—at his brother’s direction—received drug shipments, leased a storage unit to store the drugs, delivered the drugs to the regional dealers, collected money from the dealers, and sent that money to his brother The PSR concluded that Freyermuth was “integral” to the conspiracy, and a minor-role reduction was not warranted. Freyermuth argued that he was “essentially [his brother’s] drug mule,” uninvolved in decision-making and poorly compensated. Without the reduction, Freyermuth’s sentencing range was 262-327 months. A minor-role reduction would have lowered Freyermuth’s range to 135-68 months.The district judge concluded that Freyermuth’s role was “multifaceted”: he stored the drugs “relatively independently,” maintained the inventory, delivered the drugs to the dealers and collected and laundered the conspiracy’s proceeds, which enhanced his knowledge of the conspiracy’s “scale.” The judge acknowledged that Freyermuth’s discretion was limited by his brother’s instructions but found that factor insufficient to justify a reduction. The Seventh Circuit affirmed his 102-month sentence. The judge adequately compared Freyermuth’s role to the average conspiracy member’s and applied the relevant guideline factors. View "United States v. Freyermuth" on Justia Law

In 2017, Elion pleaded guilty to three counts of distributing methamphetamine, 21 U.S.C. 841(a)(1) and (b)(1)(C). The Probation Office classified him as a career offender, U.S.S.G. 4B1.1(a), 4B1.2(b), yielding a heightened Guidelines range, 151–188 months, rather than 70-87 months. Elion’s attorney did not challenge the enhancement. Elion appealed his 167-month sentence, but his attorney moved to withdraw. Elion voluntarily dismissed his appeals. Months later, Elion filed a pro se motion to vacate, set aside, or correct his sentence, 28 U.S.C. 2255. Elion argued that had trial counsel objected to the career offender designation, he would have received a lower Guidelines range and a much-reduced sentence. Elion’s prior convictions were a 1999 Illinois conviction for unlawful delivery of a look-alike substance within 1,000 feet of public housing property, a 2000 Illinois conviction for unlawful delivery of a look-alike substance, and a 2006 federal conviction for distribution of a cocaine base.The Seventh Circuit reversed the denial of Elion’s motion. The Illinois look-alike statute punishes conduct more broadly than the Guidelines controlled substance offense, and it is indivisible. Elion should not have been sentenced as a career offender. The district court must examine whether his attorney’s performance was deficient under the Strickland standard. View "Elion v. United States" on Justia Law

Coney was convicted on multiple charges of sex-trafficking minors, based on “the compelling and memorable testimony of the six minor victims.” Coney did not deny his involvement with these girls, nor did he deny posting prostitution advertisements featuring them on Backpage.com. He argued that, although the evidence made it look as if he had run a prostitution ring, he actually committed only violent robberies, using the girls to lure men to hotel rooms.While the jury was deliberating, the parties and court realized that a computer containing the evidence for the jury to consider had too many files on it. The court ordered the computer removed from the jury room. Meanwhile, the jury reported that it had reached a verdict. That verdict was never examined by the court but was destroyed. After a weekend break for briefing the issue, a curative instruction, and more deliberation time, the jury returned its verdict of guilty on all counts. In rejecting Coney’s motion for a new trial, the district court carefully considered the inadvertently provided evidence and found no reasonable possibility that it affected the verdict. The Seventh Circuit affirmed, noting the overwhelming evidence of guilt, and the low likelihood that the jurors actually saw the challenged messages and photographs in the mass exhibits improperly provided to them for a few hours. View "United States v. Coney" on Justia Law

After downloading images of child pornography from an internet address associated with Donoho, officers executed a search warrant at his Wisconsin residence and recovered digital images of child pornography and evidence that he had produced child pornography. In closing arguments, Donoho insisted that the jury should consider whether the conduct depicted was sexually explicit under a “community standard,” The prosecution argued that the inquiry was whether the images were intended to arouse the viewer. The court explained that neither the Supreme Court nor the Seventh Circuit had determined which of the definitions controlled and urged the jury to “consider the aspects of the image itself, the setting, the pose assumed by the minor and any other persons depicted,” and the photographer’s state of mind; whether it was a sexually explicit image was left to it as “the lay conscience of society.” Donoho was convicted of possession of child pornography and production and attempted production of child pornography.The Seventh Circuit affirmed. The district court did not err in instructing the jury that it could consider Donoho’s intent in determining whether the images were lascivious and whether the images were intended to arouse sexual desire. Based on the content, setting, and framing of the images and the steps Donoho took to capture them, a reasonable jury could find that he used or attempted to use minors to create visual depictions of lascivious exhibitions of their genitals, anus, or pubic areas. View "United States v. Donoho" on Justia Law

A grand jury returned a 34-count indictment against 12 defendants involved in selling heroin. Page was charged in just two counts, and not with conspiracy. Based on wiretap investigations and a search of Page’s apartment, among other evidence, prosecutors alleged Hamlin purchased heroin from Harris and distributed those drugs to purported mid-level distributors like Page. Two years later, a superseding indictment charged Page, Harris, Hamlin, and others, with a drug-trafficking conspiracy involving over 100 grams of heroin. Page was charged with 12 counts of attempting to distribute and possession with intent to distribute heroin.Page was the only defendant who did not plead guilty. The jury instructions included Seventh Circuit pattern instruction on “Membership in Conspiracy." Page’s counsel did not propose a jury instruction that would have highlighted the difference between a drug conspiracy and a conventional buyer-seller relationship. Convicted on all counts, Page received a below-guidelines 90-month sentence. The Seventh Circuit reversed, rejecting a challenge to the sufficiency of the evidence but holding that the district court committed plain error by failing to instruct the jury on the difference between a buyer-seller relationship. Page characterizes his connection to the top drug dealer as a buyer-seller relationship, not a conspiracy, where two parties share some joint purpose in building a drug business together. View "United States v. Page" on Justia Law