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

In 2006, an ATF agent posed as a drug courier and recruited Blitch and others to steal cocaine from a fictional drug cartel stash house. On the night the robbery was planned to take place, an ATF team arrested the men. On retrial, a jury found them guilty of conspiracy to possess with intent to distribute cocaine in excess of five kilograms, 21 U.S.C. 846; possession of a firearm in furtherance of a drug trafficking crime, 18 U.S.C. 924(c)(1)(A); and being felons in possession of a firearm, section 922(g)(1). Blitch was sentenced to the statutory minimum of 25 years in prison. The Seventh Circuit affirmed.In 2016, Blitch moved, pro see, to vacate his sentence under 28 U.S.C. 2255, challenging the application of a sentencing enhancement based on his prior conviction for possession of a controlled substance. More than a year after the denial of that petition, Blitch moved to reopen judgment under Federal Rule of Civil Procedure 60(b)(6). The district court denied the motion, finding it to be in substance a successive 2255 petition, which could only be brought if the Court of Appeals certified that it rested on newly discovered evidence or a new rule of constitutional law made retroactive to cases on collateral review by the Supreme Court. The Seventh Circuit affirmed. Even without the additional restrictions applicable to successive habeas corpus petitions, Blitch’s Rule 60(b)(1) motion, alleging mistake, was subject to a one-year time constraint. View "Blitch v. United States" on Justia Law

King, who was sentenced to 216 months’ imprisonment following his guilty plea to three heroin charges, sought compassionate release, 18 U.S.C. 3582(c)(1)(A)(i), To establish the required “extraordinary and compelling reasons,” King cited intervening Seventh Circuit precedent (Ruth), which held that a conviction under an Illinois law does not count as a prior cocaine conviction for purposed of certain federal recidivist enhancements.The Seventh Circuit affirmed the denial of relief. There is nothing “extraordinary” about new statutes or caselaw, or a claim that the sentencing judge erred in applying the Guidelines; these ordinary legal issues should be addressed by direct appeal or collateral review under 28 U.S.C. 2255. The Sentencing Commission’s policy statements contemplate the release of prisoners afflicted by severe medical conditions or risks, experiencing a family emergency, or otherwise in unusual personal circumstances. They do not hint that the sort of legal developments routinely addressed by direct or collateral review qualify a person for compassionate release. That the First Step Act lowered sentences for some cocaine crimes, enabled prisoners to seek compassionate release on their own motions, and more, did not modify the “extraordinary and compelling reasons” threshold for eligibility. King’s effort to use “Ruth” as a door opener under the compassionate-release statute is foreclosed by other decisions. View "United States v. King" on Justia Law

A 66-count, multi-defendant criminal indictment notified the defendants that the government would seek criminal forfeiture under 18 U.S.C. 982(a)(1), (a)(2)(A), (b) and 28 U.S.C. 2461(c) as part of any sentence imposed and would seek civil forfeiture under 18 U.S.C. 981(a)(1)(A), (a)(1)(C), (a)(1)(D), and 28 U.S.C. 2461(c). Furando and his companies pleaded guilty; Furando’s plea included agreed-upon forfeiture of personal property, assets, vehicles, funds, Saddle River, New Jersey real property, and proceeds from the sale of commercial real estate in Montvale. The subsequent preliminary forfeiture orders directed the government to give notice to potential third-party interest holders under 21 U.S.C. 853(n), which the government did.Furando’s wife and three companies (claimants) filed under 21 U.S.C. 853 to make their claim as innocent owners of the property. The district court denied the claimants’ petition to adjudicate the validity of their interest, granted the government’s motion for interlocutory sale of the Saddle River property, and denied the claimants’ section 853(n) petition without further explanation. The Seventh Circuit vacated in part. The district court erred in sua sponte denying the section 853(n) petition without a hearing or opportunity to amend. The government’s arguments that the claimants cannot prevail under 853(n)(6) and the arguments about prior vested interest are misplaced, because those statutory considerations are only relevant “after the hearing”—which never occurred. The court affirmed the order for an interlocutory sale. View "United States v. Furando" on Justia Law

Goulding, an accountant and lawyer, has a history of mail fraud and tax fraud. Goulding formed 15 funds that hired Nutmeg’s advisory services, which he managed. The funds invested in illiquid securities, many of which were close to insolvent. Gould wrote all of the disclosure documents, which overvalued the funds. Goulding made baseless statements about increases in value. Goulding did not use outside advisors and engaged in commingling, holding some securities in his own name.The Securities and Exchange Commission charged Goulding under the Investment Advisers Act of 1940, 15 U.S.C. 80b, with running Nutmeg through a pattern of fraud, including touting his supposed financial expertise while failing to disclose his crimes, in addition to violating the Act’s technical rules. The district court issued an injunction removing Goulding from the business and appointing a receiver. A magistrate judge enjoined Goulding from violating the securities laws, required him to disgorge $642,422 (plus interest), and imposed a $642,422 civil penalty. The Seventh Circuit affirmed the finding of liability and the financial awards. The extent of Goulding’s wrongdoing makes it hard to determine his net unjustified withdrawals; as the wrongdoer, he bears the consequence of uncertainty. The restitution reflects a conservative estimate of Goulding’s ill-got gains. Nor did the judge err by declining to trace funds from their source to Goulding’s pocket. View "Securities and Exchange Commission v. Goulding" on Justia Law

Weller was convicted of insider trading, Securities Exchange Act, 15 U.S.C. 78j(b). Fleming, a vice president of Life Time Fitness, had learned that his company was likely to be acquired by a private equity firm at an above-market price. Fleming told a friend, Beshey, who told Clark and Kourtis (who knew that the information had been misappropriated), who told others, including Weller. Most of them profited by trading on the information and showed their appreciation by “kickbacks.”Weller unsuccessfully argued that he did not know that Fleming violated a duty to his employer by passing the information to Beshey and that the government did not prove a financial benefit to Fleming. The Seventh Circuit affirmed his convictions. Although Weller did not interact with all of the others, he did conspire with at least Kourtis to misuse material non-public information for their own benefit. The court upheld Weller’s 366-day below-Guidelines sentence, noting that Weller profited more than the others. View "United States v. Weller" on Justia Law

Seven years into his 15-year sentence for heroin dealing, Brock sought early discharge under the compassionate release statute, 18 U.S.C. 3582(c)(1)(A). Receiving that relief depended on Brock first identifying a legally cognizable “extraordinary and compelling” reason for ending his sentence early and then convincing the district court the outcome was further justified by an application of the 18 U.S.C. 3553(a) factors. Brock argued, as “an extraordinary and compelling ground to consider a lower sentence,” that his 2005 cocaine conviction was no longer a proper predicate for his 21 U.S.C. 851 sentencing enhancement because the Illinois statute under which he was convicted covers isomers of cocaine omitted from the federal definition of cocaine.The district court denied relief, finding that the compassionate release statute could not be used as a path to a sentence reduction based on a position available to defendants during plea negotiations or trial, direct appeal, or in a post-conviction motion under 28 U.S.C. 2255 challenging a sentence. The Seventh Circuit affirmed. Intervening Circuit precedent, even if viewed as announcing new law or a new interpretation of an existing statutory provision, cannot alone constitute an “extraordinary and compelling” reason authorizing a reduced sentence under section 3582(c)(1)(A). View "United States v. Brock" on Justia Law

Shaw served 10 years in prison for possessing cocaine base with intent to distribute and possessing a firearm as a felon, then began a six-year term of supervision. During the first two months, Shaw tested positive for marijuana, methamphetamine, and amphetamine, and was arrested for driving on a revoked license. Two months later, Shaw’s probation officer reported that Shaw had violated the terms of home confinement and submitted a fake paystub. Six months later, Shaw received another citation for driving on a revoked license. A month after that, Shaw was caught driving without a license, while traveling outside the judicial district without permission. The court ordered Shaw to spend five weekends in county jail, where Shaw got into an argument with jail staff, threatened to kill himself, threatened to flood his cell, and made an implied threat against the staff.The district court revoked Shaw’s supervised release and sentenced him to two years’ imprisonment—well above the range recommended by the Sentencing Commission’s policy statements. The court did not mention the sentencing factors from 18 U.S.C. 3583(e) but explained that it was sending Shaw to prison to “help” him and give him a chance to access rehabilitative programs. The Seventh Circuit vacated: imprisonment is not an appropriate means of promoting correction and rehabilitation, 18 U.S.C. 3582(a). View "United States v. Shaw" on Justia Law

Deutsche Bank employed Chanu and Vorley as precious metals traders. They received training that “market manipulation” was prohibited. The two engaged in “spoofing,” placing orders for precious metals futures contracts on one side of the market that, at the time the orders were placed, they intended to cancel prior to execution. At times they placed opposite orders. The government alleged that they placed such orders with the intent “to create and communicate false and misleading information regarding supply or demand in order to deceive other traders” and entice them to react to the false and misleading increase in supply or demand. After the court rejected Speedy Trial Act motions, the two were acquitted of conspiracy to commit wire fraud affecting a financial institution. 18 U.S.C. 1343. Vorley was convicted of three counts of wire fraud; Chanu was found guilty of seven counts of wire fraud.The Seventh Circuit affirmed. Manual spoofing violated the wire fraud statute; the defendants’ s actions amounted to a scheme to defraud by means of false representations or omissions and the implied misrepresentations were material. The court upheld the denial of the defendants’ request to modify jury instructions explaining the term “scheme to defraud” and to issue a good‐faith instruction. The court found no legal error in the district court's ends‐of‐justice rationale for excluding time in considering Speedy Trial issues. View "United States v. Chanu" on Justia Law

Mangine, serving a 35- year sentence for federal drug and firearm offenses, sought post-conviction relief under 28 U.S.C. 2241, contending that the sentencing court mischaracterized him as a career offender and that the error resulted in his ineligibility for a discretionary sentence reduction he would like to pursue under 18 U.S.C. 3582(c)(2). His previous post-conviction motions under sections 2266 and 2241 had been unsuccessful. He had previously been denied a sentence reduction under 18 U.S.C. 3582(c)(2); Amendment 782 to the Guidelines, which retroactively reduced by two levels the offense level for most drug-trafficking crimes. did not change his Guidelines range as originally calculated.The district court denied relief, concluding that such ineligibility does not amount to a miscarriage of justice—thereby precluding Mangine from satisfying the conditions for pursuing post-conviction relief under section 2241. The Seventh Circuit affirmed. Mangine could no longer be designated as a career offender in light of intervening Supreme Court decisions but that is not what drove his sentence. Even without the designation, his Guidelines range would have been 360 months to life. Mangine did not receive “far greater punishment than that usually meted out for an otherwise similarly situated individual who had committed the same offense.” He did not suffer a miscarriage of justice. View "Mangine v. Withers" on Justia Law

The DEA was watching a suspected drug house near Indianapolis, Indiana. Detective Maples was monitoring traffic on Rockville Road. DEA agents reported that a white Audi had just departed from the suspected drug house and was heading towards Rockville Road. Maples observed the Audi pass him at approximately 40-45 miles per hour, following the car in front of it by less than a car length. He decided to conduct a traffic stop for the infraction of following too closely. During a pat-down search, Maples saw a vacuum-sealed plastic bag in Radford’s inner pocket that Maples believed contained heroin. Minutes after Radford was taken into custody, Maples learned that there was an outstanding warrant for Radford’s arrest based on charges for operating a vehicle after a lifetime suspension of his license. An inventory search of the Audi revealed a gun. The substance in the bag was fentanyl rather than heroin. Radford was charged with possession with intent to deliver a controlled substance, 21 U.S.C. 841(a)(1). Radford moved to suppress the evidence, arguing that he was driving under the speed limit, was operating his vehicle in a safe manner, and did not commit any traffic violations.The Seventh Circuit affirmed the denial of Radford’s motion. The court made appropriate findings in crediting Maples’ testimony over Radford’s with respect to both the traffic offense and Maples’ observations leading to the search. View "United States v. Radford" on Justia Law