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

Salim, an Indonesian citizen of Chinese ethnicity and Christian faith, claims that while living in Indonesia as a teenager, he endured ongoing harassment from Muslim students at nearby public schools because of his Chinese ethnicity. He was robbed for his lunch money several times, and once a student with a knife threatened him and punctured his neck. Salim claims it was difficult for Chinese individuals and Christians to travel safely around Jakarta during intense rioting in 1998. Several Chinese businesses were burned during that time, though his family’s business was not harmed. Salim left Indonesia in 2000 and filed a timely application for asylum, withholding of removal, and protection under the Convention Against Torture. An IJ denied requested relief on grounds that Salim failed to show past or future persecution. The Board of Immigration Appeals dismissed appeal of denial of a motion to reopen because Salim offered no new, previously unavailable evidence and relied on case law from outside the circuit. The Seventh Circuit denied a petition for review, finding that Salim’s motion to reopen did not point to any evidence that was previously undiscoverable. View "Salim v. Holder" on Justia Law

After researching qui tam actions and meeting with an attorney, Dr. Watson placed an ad in a Sheboygan newspaper soliciting minor Medicaid patients who had been prescribed certain psychotropic medications. The ad referred to participation in a possible Medicaid fraud suit and sharing in any recovery. Meyer responded and entered into an agreement with Watson, who never met Meyer’s child, but obtained the child’s records by using an authorization stating that Meyer was requesting the records “[f]or the purpose of providing psychological services and for no other purpose whatsoever….” Watson searched the records for “off‐label” prescriptions written for a purpose that has not been approved by the FDA. Off‐label use is common, but generally not paid for by Medicaid. In the child’s records, Watson identified 49 prescriptions that he alleged constituted false claims to the U.S. government. The district court rejected Watson’s suit under the qui tam provision of the False Claims Act, 31 U.S.C.3729(a)(1)(A), reasoning that expert testimony was necessary to prove essential elements of the case and Watson had not named experts. While characterizing Watson’s tactics as “borderline fraudulent,” the Seventh Circuit reversed, citing the district court’s “overly rigid” view of the causation and knowledge elements of the claim. View "Watson v. King-Vassel" on Justia Law

After a search of Medina’s garage revealed 9.5 kilograms of cocaine, packaging materials, $124,124 in cash, and $51,890 worth of jewelry, Medina pled guilty to conspiracy to distribute cocaine and possession of cocaine with intent to distribute, 21 U.S.C. 841(a)(1) and 846. Based on statements by Medina’s customer and cocaine seized from Medina, the government took the position that Medina was accountable for more than 50 kilograms of cocaine. He was sentenced to 190 months. A few months later, Medina provided a safety valve interview (18 U.S.C. 3553(f)) in an effort to obtain relief from the 10‐year mandatory minimum sentence, but challenged the quantities for which he was sentenced. The Seventh Circuit affirmed. The district judge adequately considered the potential pitfalls of relying on the testimony of Medina’s customer and adopted a conservative estimate of drug quantity that was supported by the evidence. There was no improper speculation. View "United States v. Medina" on Justia Law

Iacona worked as a process server for D&L, an investigation service owned by Clymer and agreed to purchase the business. Clymer structured the arrangement so that she would retain ownership of the business while Iacona paid $2000 per month for two years toward a purchase price of $95,000, with a balloon payment of the remaining balance. The agreement contemplated a line of credit to pay a recurring monthly expense for an investigative research service. In reality, Iacona established several lines of credit in the name of D&L and in Clymer’s name. He misrepresented his position with the company and the company’s income. He had his sister represent herself as Clymer, used Clymer’s social security number and personal information, and incurred significant debt unrelated to the business. Iacona was convicted of fraud in connection with an access device and aggravated identity theft, 18 U.S.C. 1029(a)(2) and 1028A. The Seventh Circuit affirmed, rejecting a claim of prosecutorial misconduct. Where the evidence supports an inference that the defendant has lied, then a comment in closing argument as to his credibility, is a hard but fair blow, as long as the argument is based on the evidence and not a comment on the prosecutor’s personal opinion . View "United States v. Iacona" on Justia Law

After a collision, the driver of the struck vehicle chased the fleeing vehicle (Chandler), who turned into a dead-end alley. Rhodes, accompanied by Bridewell, Manuel, and Watkins, pulled up behind him and confronted Chandler. Hearing that Chandler had a gun, they backed off. Shots were fired. Chandler’s horn began to sound; his head was pressing the button. Witnesses indicated that two men, who may have been Manuel and Watkins, had a gun and left the scene. Police arrived. Bridewell and Rhodes told them that Chandler had shot at them. Detectives Eberle and Forberg, found Chandler dead, with a gun near his hand. They took Bridewell and Rhodes into custody, then located and arrested Manuel and Watkins. Rhodes and Watkins told police that Bridewell had shot Chandler. Bridewell, under indictment for possession of cocaine with intent to distribute, was charged with murder. The others were released. After three years in custody, Bridewell pleaded guilty to a reduced drug charge; prosecutors dismissed the murder charge. Bridewell, Rhodes, and Manuel filed suit against Eberle, Forberg, and the City of Chicago under 42 U.S.C. 1983, contending that their arrests were unlawful. Bridewell also claimed that the police took longer than the fourth amendment allows to present her to a judge, malicious prosecution, and emotional distress. The district judge granted summary judgment to all defendants on all claims. The Seventh Circuit affirmed. View "Bridewell v. Eberle" on Justia Law

Bond was shot three times by her husband, who then killed himself. She survived and filed suit under 42 U.S.C. 1983, acknowledging that the state is not obliged to protect residents from crime but arguing that when the state chooses to provide protective services it cannot protect men while failing to protect women. She claimed that relatives of her husband had informed police that her husband was suicidal and potentially violent; that she reported that her husband had hit her and had acquired an arsenal of guns, some stolen, despite being disqualified from gun ownership; that she had an order of protection; that he was not arrested despite admitting violating that order; that she requested that the sheriff confiscate the guns; and that when he was arrested for domestic battery, her husband was released. The district court denied a motion to dismiss based on qualified immunity. The Seventh Circuit vacated, stating that the fact that officials assessed the risk to bond differently than Bond herself assessed the risk did not establish sex discrimination. View " Bond v. Atkinson" on Justia Law

The Tax Court upheld the IRS’ disallowance of losses claimed by various LLCs that had been created by a tax attorney as tax shelters and a 40 percent penalty for a “gross valuation misstatement,” 26 U.S.C. 6662(a). An LLC is generally treated as a partnership for tax purposes, so that its income and losses are deemed to flow through to the owners and are taxed to them rather than to the business. How much income or loss should be recognized on the owners’ tax returns is now determined by an audit of the business. The LLCs at issue were formed to reduce taxes by transferring the losses of a bankrupt Brazilian electronics retailer to create what is called a distressed asset/debt (DAD) tax shelter, based on a tax loophole closed by the American Jobs Creation Act of 2004, 26 U.S.C. 704(c) the year after creation of the tax shelters at issue. The Seventh Circuit affirmed, characterizing the LLCs as entities without economic substance, not recognized for federal tax law purposes. View "Superior Trading, LLC v. Comm'r of Internal Revenue" on Justia Law

Attorney Turza sent out a fax, titled the “Daily Plan-It,” containing business advice. The fax was sent to CPAs who were not Turza’s clients, about every two weeks. The Telephone Consumer Protection Act of 1991, 47 U.S.C. 227, prohibits any person from sending unsolicited fax advertisements; even permitted fax ads must tell the recipient how to stop receiving future messages. Turza’s faxes did not contain opt-out information. The district court certified a class of the faxes’ recipients and ordered Turza to pay $500 in statutory damages for each of 8,430 faxes. ($4,215,000): $7,500 to the representative plaintiff ; $1,430,055.90 to class counsel for attorneys’ fees and expenses; and any residue, after payments to class members, to the Legal Assistance Foundation of Metropolitan Chicago “as a cy pres award.” The Seventh Circuit affirmed on the merits, rejecting an argument that the faxes were not ads, but vacated the remedial order. View "Holtzman v. Turza" on Justia Law

The Tax Court found that in 2003 Rogers and his wife failed without justification to report $984,655 of taxable income attributable to income of PPI, an S corporation wholly owned by Rogers, and to a distribution that he had received from PPI. The Seventh Circuit affirmed, rejecting arguments that the disputed income had been held in trust for third parties and was not taxable to Rogers. View "Rogers v. Comm'r of Internal Revenue" on Justia Law

Before its 2007 bankruptcy, Sentinel was an investment manager. Its customers were not typical investors; most were futures commission merchants (FCMs), which operate in the commodity industry like to the securities industry’s broker‐dealers. Through Sentinel, FCMs’ client money could, in compliance with industry regulations, earn a decent return while maintaining the liquidity FCMs need. To accept capital from FCM customers, Sentinel had to register as an FCM, but it did not solicit or accept orders for futures contracts; it received a no‐action letter from the Commodity Futures Trading Commission (CFTC) exempting it from certain requirements applicable to FCMs. Sentinel represented that it would maintain customer funds in segregated accounts as required under the Commodity Exchange Act, 7 U.S.C. 1. In reality, Sentinel pledged hundreds of millions of dollars in customer assets to secure an overnight loan at the Bank of New York. Sentinel’s bankruptcy trustee claimed fraudulent transfer, equitable subordination, and illegal contract, in an effort to dislodge the Bank’s secured position. The district court rejected all of the claims. The Seventh Circuit reversed, rejecting a finding that Sentinel’s failure to keep client funds properly segregated was insufficient to show actual intent to hinder, delay, or defraud. View "In re Sentinel Mgmt. Grp., Inc." on Justia Law