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

Olalekan Jacob Ponle orchestrated a scheme to defraud businesses by using phishing emails and information from the dark web to access corporate email accounts. He and his co-conspirators sent fraudulent emails to employees, instructing them to wire funds to bank accounts controlled by Ponle. This resulted in the theft of over $8 million from seven companies, with an additional $51 million in attempted but unsuccessful thefts.The United States District Court for the Northern District of Illinois charged Ponle with eight counts of wire fraud. He pleaded guilty to one count and acknowledged owing over $8 million in restitution. The court, relying on the United States Sentencing Guidelines, used the intended loss amount to calculate his offense level, resulting in a custodial range of 168 to 210 months. Ponle objected, arguing that "loss" should only include actual loss, not intended loss. The district court disagreed and applied a twenty-two point increase to his offense level.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court affirmed the district court's decision, holding that the term "loss" in the Sentencing Guidelines includes both actual and intended loss, as clarified by the Sentencing Commission's commentary. The court found that the commentary, which underwent public notice and comment and Congressional review, was authoritative and consistent with the Supreme Court's decision in Stinson v. United States. Therefore, the district court correctly used the intended loss amount to calculate Ponle's sentence. View "USA v. Ponle" on Justia Law

Ji Chaoqun, a Chinese national, came to the United States in 2013 to study electrical engineering. In 2022, he was indicted for conspiring to commit an offense against the United States, failing to register as a foreign agent, wire fraud, and making a false statement. Evidence presented at trial showed that Ji was recruited by the Chinese Ministry of State Security (MSS) before leaving China and engaged in various activities on their behalf, including purchasing background reports on U.S. scientists and attempting to infiltrate the U.S. Army Reserves.The United States District Court for the Northern District of Illinois convicted Ji on all counts and sentenced him to 96 months in prison. Ji appealed, arguing that the government should have to prove he was not engaged in a legal commercial transaction as an element of the offense and that the jury should have been required to unanimously agree on the specific act he committed. He also challenged the district court’s evidentiary and sentencing decisions.The United States Court of Appeals for the Seventh Circuit held that the specific act a foreign agent commits under 18 U.S.C. § 951 does not require jury unanimity and that the legal commercial transaction exception is an affirmative defense, not an element of the offense. The court also found no error in the district court’s evidentiary rulings or in its sentencing decisions. The Seventh Circuit affirmed Ji’s conviction and sentence. View "United States v. Chaoqun" on Justia Law

The case involves fourteen members of the Bomb Squad, a street gang, who were charged with violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), among other crimes. One member pleaded guilty, while the remaining defendants were convicted by a jury. The defendants appealed their convictions, arguing that the district judge violated Batson v. Kentucky when selecting the jury. The court of appeals retained jurisdiction of the appeal and ordered a limited remand to allow the district court to make supplemental findings on this issue. The court of appeals found no reversible error in the remaining arguments raised by the defendants and affirmed their convictions.The Bomb Squad was a street gang that used violence to protect its reputation, territory, and drug sales. The gang members were charged with numerous crimes, including murder, attempted murder, drug trafficking, and multiple robberies. The defendants argued that the district judge violated Batson v. Kentucky when selecting the jury, which prohibits a prosecutor from using a peremptory challenge to strike a prospective juror because of their race.The court of appeals ordered a limited remand to allow the district court to make supplemental findings on the Batson issue. The court of appeals found no reversible error in the remaining arguments raised by the defendants and affirmed their convictions. The court of appeals also noted that if the district court orders a new trial, much of its opinion would become moot. However, it addressed the remaining issues raised by the defendants in the interest of judicial economy. View "USA v. Williams" on Justia Law

LaTonya Foxx, along with two others, was charged and convicted for engaging in a fraudulent tax scheme. Foxx pleaded guilty to one count of wire fraud and was sentenced to 18 months’ imprisonment, one year of supervised release, and ordered to pay $1,261,903 in restitution. The scheme involved filing fraudulent tax returns to generate improper refunds for clients and the defendants. The United States Court of Appeals for the Seventh Circuit heard Foxx's appeal of the restitution order.The court noted that any power to award restitution must come from a statute. In this case, the Mandatory Victims Restitution Act authorizes restitution for wire fraud offenses. The court noted that restitution is limited to the actual losses caused by the specific conduct underlying the offense, and the government must establish those losses by a preponderance of the evidence.Foxx argued that the district court failed to adequately delineate the scheme and make specific findings that the losses included in the restitution derived from the same scheme for which she was convicted. The court found no fatal deficiency in the district court's findings and concluded that Foxx failed to demonstrate a plain error. The court held that Foxx could be ordered to pay restitution for all the losses she caused during the scheme, not just those relating to the specific wire transactions to which she pleaded guilty. The court affirmed the restitution order. View "United States v. Foxx" on Justia Law

The case involves Keenan Seymour, a member of the street gang, Latin Dragon Nation, who pled guilty to a Racketeer Influenced and Corrupt Organizations Act (RICO) conspiracy charge. Seymour was sentenced to 180 months' imprisonment, which was below the Sentencing Guidelines' recommendation. He appealed for re-sentencing on three grounds: (1) questioning certain factual findings, (2) challenging his accountability for a murder, and (3) pointing out the court's failure to discuss unwarranted sentencing disparities.The United States Court of Appeals for the Seventh Circuit affirmed the district court's decision. The court emphasized that Seymour was an active participant in the gang and knew about the gang's rules. It found Seymour's arguments against the court's factual findings unpersuasive, stating that the record offered ample support for the findings. The court also rejected Seymour's argument that the district court erred in calculating his offense level by attributing a murder to him, explaining that the murder was foreseeable given Seymour’s gang activities. Lastly, it dismissed Seymour's argument about unwarranted sentencing disparities, stating that the district court had adequately addressed this concern during sentencing.The court held that Seymour's 180-month sentence, which was below the Guidelines, was substantively reasonable and thus affirmed the judgment of the district court. View "USA v. Seymour" on Justia Law

Pacilio and Bases were senior traders on the precious metals trading desk at Bank of America. While working together in 2010-2011, and at times separately before and after that period, they engaged in “spoofing” to manipulate the prices of precious metals using an electronic trading platform, that allows traders to place buy or sell orders on certain numbers of futures contracts at a set price. It is assumed that every order is bona fide and placed with “intent to transact.” Spoofing consists of placing a (typically) large order, on one side of the market with intent to trade, and placing a spoof order, fully visible but not intended to be traded, on the other side. The spoof order pushes the market price to benefit the other order, allowing the trader to get the desired price. The spoof order is canceled before it can be filled.Pacilio and Bases challenged the constitutionality of their convictions for wire fraud affecting a financial institution and related charges, the sufficiency of the evidence, and evidentiary rulings relating to testimony about the Exchange’s and bank prohibitions on spoofing to support the government’s implied misrepresentation theory. The Seventh Circuit affirmed. The defendants had sufficient notice that their spoofing scheme was prohibited by law. View "United States v. Bases" on Justia Law

Agbi, born and raised in Nigeria but a resident of the U.S. since 2016, acted as a middleman in a scheme to use fake online dating accounts to solicit hundreds of thousands of dollars from unwitting elderly people. Agbi collected cash at his Indianapolis apartment, took his “cut,” and transferred the rest to accounts in Nigeria. More than 30 months after his arrest, Agbi’s counsel notified the government that Agbi intended to pursue a duress defense, claiming, for the first time, that members of the conspiracy located in Nigeria had threatened Agbi’s family. The district court granted a motion to preclude the defense. At trial, two of the scheme’s victims testified that they were deceived into believing that they were in relationships and sent “hundreds of thousands of dollars.” Secret Service agents described the details of a controlled delivery and Agbi’s subsequent interview.Agbi was convicted of mail fraud, 18 U.S.C. 1341; use of a fictitious name in furtherance of mail fraud, section 1342; conspiracy to commit mail fraud, 1341, 1349; and conspiracy to commit money laundering, 1956(a)(1), 1956(h) and was sentenced to 57 months’ imprisonment. The Seventh Circuit affirmed. The evidence supporting each count was legally sufficient to support a conviction. The district court appropriately employed the obstruction of justice enhancement based on its finding that Agbi knowingly submitted a “fake” police report concerning threats against his family. View "United States v. Agbi" on Justia Law

Lee carried out a scheme to defraud the Chicago White Sox. With the help of two Sox employees, Lee obtained thousands of discounted and free game tickets and resold them online for a profit. He was eventually convicted of wire fraud, 18 U.S.C. 1343. The indictment expressly sought forfeiture of Lee’s ill-gotten gains and Lee did not object to that request. The parties disagreed on the amount. The court failed to enter a preliminary order of forfeiture specifying what would be due and what property was subject to forfeiture (Fed. R. Crim. P. 32.2(b)(2)) but did everything else necessary for forfeiture, including giving Lee notice and an opportunity to contest the amount the government was seeking and orally imposing forfeiture in the sentence, along with an 18-month prison term, restitution, and the required special assessment. The written judgment, however, omitted forfeiture. After some additional proceedings, the court concluded that it was too late to enter a proper forfeiture order, and refused to amend the written judgment to reflect its oral sentenceThe Seventh Circuit rejected Lee’s challenges to the indictment, the court’s denial of his motion for acquittal, and his sentence but reversed and remanded for the district court to amend the judgment under Federal Rule of Criminal Procedure 36 to include forfeiture in the amount the court found–$455,229.23. View "United States v. Lee" on Justia Law

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

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