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

Kolbusz, a dermatologist, submitted thousands of claims to the Medicare system and private insurers for the treatment of actinic keratosis, a skin condition that sometimes leads to cancer. He received millions of dollars in payments. Convicted of six counts of mail or wire fraud, 18 U.S.C. 1341, 1343, he was sentenced to 84 months in prison plus $3.8 million in restitution. The Seventh Circuit affirmed. The evidence permitted a reasonable jury to conclude that many, if not substantially all, of the claims could not have reflected an honest medical judgment and that the treatment Kolbusz claimed to have supplied may have failed to help any patient who actually had actinic keratosis. Because the indictment charged a scheme to defraud, the prosecutor was entitled to prove the scheme as a whole, and not just the six exemplars described in the indictment. The judge did not err in excluding evidence that, after his arrest and indictment, Kolbusz continued to submit claims to Medicare, and many were paid. “It would have been regrettable to divert the trial into an examination of Medicare’s claims-processing procedures in 2013 and 2014, rather than whether Kolbusz knew that he was submitting false claims in 2010 and earlier." View "United States v. Kolbusz" on Justia Law

In 2008, Johnston, a horse racetrack executive, promised a $100,000 campaign contribution to then-Governor Blagojevich in exchange for his signature on a bill to tax the largest casinos in Illinois for the direct benefit of the Illinois horse racing​ industry. After Blagojevich’s corruption came to light, the casinos sued the racetracks, alleging a conspiracy to violate the federal Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961, and state‐law claims for civil conspiracy and unjust enrichment. A jury awarded the casinos $25,940,000 in damages, which was trebled under RICO to $77,820,000. The Seventh Circuit affirmed in part, holding that the jury did not have legally sufficient evidence to support a verdict finding a conspiracy to engage in a “pattern” of racketeering activity, as required for liability on a RICO conspiracy theory. The casinos are still entitled to the $25,940,000 in damages on the state‐law claims, but not to have those damages trebled under RICO. View "Empress Casino Joliet Corp. v. Balmoral Racing Club, Inc." on Justia Law

Eberts is a film producer whose credits include Lord of War (2005) and Lucky Number Slevin (2006). After a string of failed movies, in 2009, he filed for bankruptcy. He was introduced to Elliott, an Illinois novice author who wanted to adapt his book into a movie. Eberts and Elliott formed a limited liability company. Both agreed to invest money. Eberts did not disclose his insolvency. Over the next year Elliott wired $615,000 to accounts controlled by Eberts. Eberts applied only 10% of that money toward the movie; he paid his father and bankruptcy attorney and spent the rest on personal items like art, furniture, designer clothing, and fine wines. Eberts also solicited and received a $25,000 loan from Elliott for an unrelated project and never repaid it. After Elliott discovered the scam, he filed suit. Later, Eberts pleaded guilty to seven counts of wire fraud, 18 U.S.C. 1343, and three counts of money laundering, section 1957, and was sentenced to 46 months’ imprisonment, the top of the guidelines range. The Seventh Circuit affirmed, rejecting an argument that the court failed to consider the 18 U.S.C. 3553(a) sentencing factors or Eberts’s mitigation arguments, but based the sentence on unsupported facts. View "United States v. Eberts" on Justia Law

Stoller, the beneficiary of a trust that holds title to a house, assigned his beneficial interest to his daughter but reserved a “power of direction” with the right to obtain loans for himself, secured by the property. He directed the trust to rent out the property; he received the income. IStoller filed for bankruptcy. None of his filings mentioned the property. A question specifically asked about “all property owned by another person that [he] [held] or control[led].” Under penalty of perjury, he answered “none.” Stoller was charged with two counts of knowingly and fraudulently concealing property that belonged to a bankruptcy estate, 18 U.S.C. 152(1), and seven counts of knowingly and fraudulently making a false statement in a bankruptcy proceeding, 18 U.S.C. 152(3). Represented by an appointed lawyer, he pled guilty to one count of making a false statement; the government dismissed the remaining counts. Before sentencing, Stoller considered moving to withdraw his plea on the ground that he was not mentally competent. A new lawyer was appointed. Stoller was examined by a board‐certified neuropsychologist, who concluded that Stoller was competent to plead guilty. Stoller’s lawyer then unsuccessfully moved to withdraw the plea based on alleged defects in the plea colloquy. Stoller was sentenced to 20 months’ imprisonment. The Seventh Circuit affirmed. Stoller was competent to plead guilty, his plea was not coerced, the colloquy included most of the basics, and Stoller was not prejudiced by any deficiency. View "United States v. Stoller" on Justia Law

The Bickarts prepared and filed an income tax return containing false income and withholding amounts, supported by fabricated 1099‐OID forms, appearing to come from major financial institutions. The IRS paid a claimed refund of $115,412. Their legitimate refund would have been $263. The IRS discovered the fraud and sent a bill for $217,923. For years, the Bickarts engaged in obstructive conduct, sending a 1040‐V payment coupon and continuing to insist that the bill had been paid. They made baseless accusations against IRS agents. They were convicted of conspiring to file and filing a false claim to defraud the government, 18 U.S.C. 286 and 287. The Bickarts represented themselves at trial, asserting “sovereign citizen” claims and making nonsensical accusations. The PSR applied a two‐level enhancement for sophisticated means based on the fictitious Forms 1099‐OID and a two‐level enhancement for obstruction of justice, resulting in a guidelines imprisonment range of 33-41 months. Neither objected to the calculations. The court sentenced each defendant to 24 months in prison. Defendants objected to supervised release conditions requiring them to notify third parties of risks related to their criminal history when directed by the probation office. The court modified it to require the probation office to seek court approval. They also objected to the condition permitting a probation officer to visit them at home or at work at any reasonable time. The court overruled the objection. The Seventh Circuit vacated the third‐party notification condition, but otherwise affirmed the remaining conditions of supervised release and sentence. View "United States v. Bickart" on Justia Law

In 2013-2015, defendant and her accomplices defrauded several people in the U.S. and Canada, whom they had met on dating websites, by persuading them to wire money to bank accounts controlled by the schemers to help their fictitious selves deal with fictitious personal tragedies or take advantage of fictitious money‐making opportunities. They repeatedly victimized some of the same people.The defendant pleaded guilty to wire fraud, 18 U.S.C. 1343, was sentenced to 120 months in prison (half the statutory maximum). At sentencing the district judge focused on 21 of the defendant’s victims, who had lost a total of some $2.2 million and who ranged in age from 47 to 71. The judge added a two‐level vulnerable‐victim enhancement, U.S.S.G. 3A1.1(b)(1), without which the guidelines range would have been 63 to 78 months. The Seventh Circuit affirmed, noting the district court’s concern that the defendant continued to pose a risk and that that “the impact on the victims, although considered under the guidelines to the extent that the guidelines contemplate vulnerable victims … doesn’t actually fully appreciate or really contemplate the specific emotional and financial impact on the victims, and so that is the basis for my departure from the guideline range.” View "United States v. Iriri" on Justia Law

Peterson, a Madison Wisconsin entrepreneur, owned a polyurethane scrap-foam material company and a development company, with Shapiro and Spahr. Peterson made unauthorized intercompany loans and used corporate funds to pay off his personal gambling debts. Eventually all of his businesses failed, the companies defaulted, and federal agents investigated. Peterson was indicted on 13 counts: bank fraud, making false statements to banks, money laundering, and pension theft. The judge entered judgment of acquittal on two counts and at sentencing imposed a within-guidelines prison term of 84 months on the remaining six. The Seventh Circuit rejected claims of evidentiary and instructional error and his arguments for judgment of acquittal or a new trial as having no merit; the evidence was easily sufficient to support the jury’s verdict. The court also upheld the joinder of the pension-theft count for trial with the others. The court vacated the sentence. The judge correctly calculated the gross receipts Peterson derived from his fraud; because he was the sole perpetrator, all proceeds of the fraud were properly attributed to him. But Peterson repaid in full a $300,000 wire transfer before detection of his fraud, so that sum should not have been included in the total loss amount. View "United States v. Peterson" on Justia Law

Four persons were charged with arranging the murder of “Montes” in Mexico to reduce competition against a Chicago-based criminal organization that created bogus immigration documents. The Seventh Circuit reversed dismissal on grounds that the indictment proposed the extraterritorial application of U.S. law. On remand, one defendant pleaded guilty. Three were convicted under 18 U.S.C. 1959, the Racketeer​ Influenced and Corrupt Organizations Act (RICO); 18 U.S.C. 956(a)(1), which forbids any person “within the jurisdiction of the United States” from conspiring to commit a murder abroad; and conspiring to produce false identification documents, 18 U.S.C. 371. On appeal, defendants cited the Supreme Court’s 2010 decision, Morrison v. National Australia Bank, which reiterated the presumption against extraterritorial application of civil statutes. The Seventh Circuit affirmed, noting that its earlier decision recognized that presumption and thought it not controlling, because of the differences between criminal and civil law, and because the murder in Mexico was arranged and paid for from the U.S., and was committed with the goal of protecting a criminal organization that conducted business in the U.S., to defraud U.S. officials and employers. View "United States v. Leija-Sanchez" on Justia Law

American Litho was owed $113,772 by Union Transport (Las Vegas), a large amount by Alcan (Wisconsin), and $146,167 by Concrete Media (New Jersey). Dziuban, American's part-owner, unsuccessfully attempted to obtain repayment through legal means, including litigation. In 2010, Dziuban contacted Orlando, a salesman at American, to help collect the debts. Orlando recruited Carparelli and Brown. The four men implied, upon meeting, that they would use physical violence and threats. Dziuban promised half of any money they collected. The men began travelling and making threats. McManus eventually joined them. Brown began cooperating with the FBI. In 2013, acting under the government’s instructions, Brown told Carparelli that he had received a call from New Jersey state police. This prompted recorded conversations between Orlando, Carparelli, and Brown, in which they discussed the scheme and attempted to cover it up. Dziuban, Orlando, Brown, Iozzo, Carparelli, and McManus were charged with Hobbs Act violations, 18 U.S.C. 1951; Orlando and McManus were charged with conspiracy to commit extortion; McManus was also charged with attempted extortion. A jury convicted Orlando and McManus. The court sentenced McManus to two concurrent sentences of 60 months and sentenced Orlando to 46 months imprisonment. The Seventh Circuit affirmed McManus’s conviction and Orlando’s sentence. View "United States v. Orlando" on Justia Law

The defendant was convicted for defrauding Medicare and Blue Cross Blue Shield by submitting claims for reimbursement for respiratory therapy that had not been provided and was sentenced to 75 months in prison and also ordered to pay restitution of some $2.5 million. Three days after the jury rendered its guilty verdict, a juror sent the court a three-page “report on jury misconduct.” It was a follow-on to a phone call, in which he’d told a staff member that he wanted to retract his vote to convict. The Seventh Circuit affirmed, rejecting his argument that his constitutional right to be tried by an impartial jury was violated because the judge refused to order the jurors to return to court for a hearing about alleged juror misconduct or to order a new trial. The court also upheld the application of a four-level enhancement for crimes involving more than 50 victims, U.S.S.G. 2B1.1(b)(2)(B), and a two-level increase in his offense level for abuse of a position of public or private trust. The patients, whose identification information was used, were victims, although they suffered no financial loss. View "United States v. Roy" on Justia Law