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

Gary Matthews and Monte Brannan collaborated on a project to redevelop a landmark hotel in Peoria, Illinois. Instead of fulfilling their financial obligations to lenders, they diverted project revenue for personal gain. This led to federal charges of mail fraud and money laundering, resulting in guilty verdicts by a jury.The United States District Court for the Central District of Illinois oversaw the initial trial. Matthews and Brannan were convicted of mail fraud, money laundering, and, in Brannan’s case, conspiracy to commit money laundering. They appealed their convictions, raising multiple issues.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court found the evidence against Matthews and Brannan overwhelming, affirming their convictions. The court noted that Matthews and Brannan failed to comply with Circuit Rule 30(b)(1) by not including necessary district court rulings in their appendices, which hindered the appellate review process. Despite this, the court ensured a fair review by independently locating the relevant rulings. The court ordered Matthews’s and Brannan’s counsel to show cause why they should not be sanctioned for their violations of Circuit Rule 30. The court affirmed the district court’s judgment, ensuring that Matthews and Brannan received fair consideration of their appeals. View "USA v Brannan" on Justia Law

Derrick Clark and Shawn Mesner worked for Didion Milling, Inc., a corn milling company. In May 2017, Didion’s grain mill exploded, killing five employees. The Occupational Health and Safety Administration (OSHA) investigated and referred Didion for criminal prosecution. The government charged Didion and several employees with federal crimes related to their work at the mill. Clark and Mesner proceeded to trial, challenging the district court’s evidentiary rulings, jury instructions, the indictment, the sufficiency of the evidence, and the constitutionality of their convictions.The United States District Court for the Western District of Wisconsin convicted Clark on four counts and Mesner on two counts. Clark was found guilty of conspiracy to commit federal offenses, false entries in records, using false documents within the EPA’s jurisdiction, and obstruction of agency proceedings. Mesner was found guilty of conspiracy to commit mail and wire fraud and conspiracy to commit federal offenses. Both defendants were sentenced to 24 months’ imprisonment and one year of supervised release.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court vacated Mesner’s conviction on Count 4, remanding for an entry of judgment of acquittal and further proceedings consistent with the opinion. The court affirmed the district court’s evidentiary rulings and jury instructions, as well as Clark’s convictions and Mesner’s conviction on Count 1. The court found sufficient evidence to support the convictions and determined that the jury instructions, when considered as a whole, accurately reflected the law. The court also rejected challenges to the constitutionality of the OSHA regulation involved. View "USA v Mesner" on Justia Law

Mark Sorensen, owner of SyMed Inc., a Medicare-registered distributor of durable medical equipment, was involved in a business arrangement with PakMed LLC, Byte Success Marketing, and Dynamic Medical Management. They advertised orthopedic braces, obtained signed prescriptions from patients' doctors, distributed the braces, and collected Medicare reimbursements. Byte and KPN, another marketing firm, advertised the braces, and interested patients provided their information, which was forwarded to call centers. Sales agents then contacted patients, generated prescription forms, and faxed them to physicians for approval. Physicians retained discretion to sign and return the forms, with many choosing not to.A federal grand jury indicted Sorensen on four counts: one count of conspiracy and three counts of offering and paying kickbacks for Medicare referrals. The jury found Sorensen guilty on all counts. Sorensen moved for acquittal, arguing insufficient evidence and lack of awareness of the scheme's illegality. The district court denied his motions, finding the evidence sufficient for the jury to conclude Sorensen knew the fee structure and purchase of doctors' orders were illegal. Sorensen was sentenced to 42 months in prison but was released on bond pending appeal.The United States Court of Appeals for the Seventh Circuit reviewed the case and reversed the district court's judgment due to insufficient evidence. The court found that Sorensen's payments to PakMed, KPN, and Byte were for advertising, manufacturing, and shipping services, not for patient referrals. The court emphasized that the Anti-Kickback Statute targets payments to individuals with influence over healthcare decisions, which was not the case here. The court concluded that Sorensen's actions did not violate the statute, as there was no evidence of improper influence over physicians' independent medical judgment. View "USA v Sorensen" on Justia Law

Brian Gustafson was convicted of wire fraud in the United States District Court for the Northern District of Illinois. He was employed as a manager at a Public Storage facility in Deerfield, Illinois, where he facilitated the theft of valuable items from a tenant's storage unit. Gustafson provided a key to John Garcia, who, along with Marilyn Rothschild, sold the stolen items. The stolen goods included antiques and artwork valued at $185,000. Garcia and Rothschild sold these items to buyers, receiving payments in cash and checks, which initiated interstate wire transfers.The district court sentenced Gustafson to twenty-four months in prison, followed by two years of supervised release, and ordered him to pay $330,237 in restitution. Gustafson filed motions for a judgment of acquittal and a new trial, arguing that he did not cause the interstate wire transmissions. The district court denied these motions, concluding that while Gustafson may not have known wire transmissions would occur, their use was reasonably foreseeable given the high value of the stolen items.The United States Court of Appeals for the Seventh Circuit reviewed the case. Gustafson challenged the sufficiency of the evidence for his wire fraud conviction, prosecutorial misconduct during closing arguments, and the restitution order. The appellate court held that the use of wires was reasonably foreseeable due to the high value and volume of the stolen items and the involvement of geographically distant buyers. The court also found that the prosecutor's comments during closing arguments did not deprive Gustafson of a fair trial and that the restitution order did not violate his Sixth Amendment rights. Consequently, the Seventh Circuit affirmed the district court's judgment. View "USA v Brian Gustafson" on Justia Law

Jeffery Henson was convicted of federal fraud, including aggravated identity theft, money laundering, and wire fraud, for diverting nearly $330,000 from his employer to his personal account. He was ordered to pay $436,495.93 in restitution. Following his arrest, Illinois police found $17,390 in cash in his car. The government sought to apply this cash towards Henson's restitution, but Henson argued that the money was obtained through an illegal search and seizure, as the warrant was issued nine hours after the search.The United States District Court for the Central District of Illinois, through a magistrate judge, granted the government's motion to turn over the cash. Henson appealed, contending that the magistrate judge lacked the authority to issue a final decision on the matter.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court determined that the magistrate judge acted outside of his authority, as there was no final decision in the case. The Federal Magistrates Act and the local rules of the Central District of Illinois did not authorize the magistrate judge to issue a final decision on the turnover motion without the district court's explicit assignment. Consequently, the Seventh Circuit dismissed the appeal for lack of appellate jurisdiction, as the magistrate judge's order was not an appealable final decision. View "USA v Henson" on Justia Law

Eric Kyereme was indicted on five counts of wire fraud for misleading investors in his company, Sika Capital Management, LLC. He solicited $200,000 for the "Alpha Fund," which he lost through poor trading. Instead of informing investors, he created fake account statements to show positive returns. Kyereme pleaded guilty to one count but disputed his dealings with Da Zhou, a business associate who invested $133,000, allegedly for shares in RestoreFlow Allografts (RFA). The government claimed Kyereme used Zhou's money to cover Alpha Fund losses, while Kyereme argued it was a legitimate transaction.The United States District Court for the Northern District of Illinois held an evidentiary hearing and found that Kyereme defrauded Zhou. The court determined that Zhou's $133,000 investment was part of the wire fraud scheme, increasing the total loss amount to $335,500. This led to a higher offense level and a sentencing range of 41 to 51 months. The court sentenced Kyereme to 36 months in prison, three years of supervised release, and ordered $185,500 in restitution, including $135,500 to Zhou.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court found no clear error in the district court's determination that the Zhou transaction was part of the wire fraud scheme. The court noted that the evidence, including the membership agreement and the Primrose operating agreement, supported the finding that Kyereme defrauded Zhou. The appellate court also held that Kyereme had sufficient notice that the district court would rule on the Zhou transaction at the final sentencing hearing. Consequently, the Seventh Circuit affirmed Kyereme's sentence. View "United States v. Kyereme" on Justia Law

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