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

To fix a 2004 Teamsters election, Bania and the union president diverted ballots by changing members’ addresses in the database. They collected those ballots and cast falsified votes. After an investigation, they employed the same fraud during a second election. Bania was convicted of conspiracy to commit mail fraud and theft from a labor organization (18 U.S.C. 371), four counts of mail fraud (13 U.S.C. 1341 and 1346), and six counts of embezzling, stealing, and unlawfully and willfully abstracting and converting property and other assets of a labor organization (29 U.S.C. 501(c)). In 2009, the court sentenced Bania to concurrent 40-month terms, departing from the low-end of the guidelines, 97 months, and ordered Bania to pay $900,936 in restitution, reflecting salaries paid to co-defendants and expenses of the second election. The court later rejected Bania’s 28 U.S.C. 2255 motion, alleging ineffective assistance of counsel in disregarding Bania’s instruction to appeal. In 2012, Bania completed his prison term. In 2013, the district court denied Bania’s motion for early termination of supervised release because of his outstanding financial obligation. Bania did not challenge that rationale, but argued that the restitution calculation improperly totaled the loss he intended to cause, rather than the loss actually caused. The Seventh Circuit affirmed the decision not to terminate supervised release. Bania filed an unsuccessful “Motion to Terminate Order of Restitution and Order of Forfeiture.” The Seventh Circuit affirmed; the court lacked jurisdiction to hear Bania’s motion. The time to appeal his sentence has long passed. View "United States v. Bania" on Justia Law

Over four years, Dade, a former licensed real estate agent, with co-defendants, facilitated loans to purchase residential real estate by knowingly providing lenders with false statements and documents. Dade referred potential buyers to loan officers and provided false payroll stubs and W-2 forms from fake companies. Dade (with help) refinanced a mortgage on his own Chicago property, stating that he was paying monthly rent of $1,450 (he did not live in the house), and provided a rental verification from “Jireh,” which did not exist. Dade received a $156,000 loan. He was charged with bank fraud, 18 U.S.C. 1344, wire fraud, section 1343, and mail fraud, section 1341. He pleaded guilty to bank fraud, based on the fraudulent refinancing; the remaining charges were dismissed. The government sought a 2-level upward adjustment for his role as an organizer, leader, manager, or supervisor in the offense, U.S.S.G. 3B1.1(c). When preparing the presentence report, however, the probation officer concluded that a 4-level upward adjustment would be appropriate, stating that the scheme had involved five or more participants and Dade had organized the scheme. The government adopted that position, recounting the facts underlying the charges dismissed as part of Dade’s plea agreement. The Seventh Circuit affirmed his 20-month sentence, upholding the upward adjustment. View "United States v. Dade" on Justia Law

Clark’s trucking business was hired to perform hauling services on a state‐ and federally funded highway project in Missouri. Because federal funds were involved, Clark’s contract with the project’s general contractor required that he pay his truck drivers the federal prevailing wage pursuant to the Davis‐Bacon Act (then $35.45/hour). Clark did not do so, but individually contracted with his drivers for roughly $15/hour instead. Throughout the project, Clark submitted weekly payroll certifications in which he falsely attested to paying his workers $35.45/hour. After his work concluded, he submitted an affidavit to the Missouri Department of Transportation, certifying compliance with Missouri state law and its state wage order. Based on these attestations, the government charged Clark with 10 counts of making false statements,18 U.S.C. 1001. The Seventh Circuit affirmed his convictions on nine counts, rejecting An argument that there was insufficient evidence to conclude that his false statements were material to the federal government. The court agreed that the government failed to prove that his affidavit to MODOT had a natural capability of influencing the federal government and reversed conviction on Count 10. View "United States v. Clark" on Justia Law

Eagan, Minnesota, assisted in apprehending Procknow, who had absconded while serving supervised release imposed by a Wisconsin state court for forgery. Authorities had received information that Procknow and his girlfriend were staying at an Eagan hotel. The girlfriend was registered at the hotel. Officers spotted Procknow’s car, chased Procknow through the lobby, and arrested him. Through the windows of Procknow’s car, they saw a scanner or copier. Learning of the arrests, the hotel manager stated that the their stay was being terminated and asked the officers to collect a dog, believed to be in their room and ensure that there were no other occupants. Officers knocked, and announced. No one answered, so they used a hotel key and found a dog. Entering to ensure that there were no other occupants, officers saw, in plain view, an electric typewriter, a credit card issued in the name of “Smith,” and financial forms bearing various names and social security numbers. Officer photographed the room, sealed it, and obtained search warrants for the room and car. They seized blank W‐2 forms, partially completed tax forms, lists of business employer identification numbers, and prepaid debit cards (tax refunds) in the names of different people. Further investigation revealed that Procknow had obtained the personal identifying information of at least 40 individuals, which he used to file fraudulent tax returns and claim refunds. Procknow pleaded guilty to theft of government money and aggravated identify theft. The Seventh Circuit affirmed denial of a motion to suppress evidence obtained by the warrantless entry into the hotel room and evidence obtained by grand jury subpoena following the withdrawal of IRS administrative summonses requesting the same information. View "United States v. Procknow" on Justia Law

In 2007, Suarez, a 75-year-old widower from Mexico, opened a checking account at an Illinois Chase Bank. DeMarco, the branch manager, assisted him. The two became friends. Suarez was trying to sell his three acre property, listed for $1.8 million. DeMarco convinced Suarez to break his listing contract, indicating that he had a buyer. DeMarco told Suarez that he needed a home equity line of credit (HELOC) to complete the sale. DeMarco obtained a $250,000 HELOC, under Suarez’s name, secured by Suarez’s property. DeMarco caused the lender to transfer the proceeds into a joint checking account, which he opened in his and Suarez’s name. After the transfer, DeMarco withdrew $245,000 and deposited the funds into his personal account. After Chase terminated his employment, DeMarco transferred the funds into new accounts and spent most of the proceeds to pay off his credit card debt, improve his home and on cars and vacations. He used a small fraction of the money to pay off Suarez’s debts. Suarez later noted irregularities in his bank statement and contacted the FBI. DeMarco was convicted of wire fraud, 18 U.S.C. 1343 and sentenced to 48 months in prison. The Seventh Circuit affirmed, rejecting challenges to evidentiary rulings and to the sentence, claiming that the court erred by applying a two-level increase to his base offense level for abuse of a position of trust, U.S.S.G. 3B1.3, and the use of sophisticated means, U.S.S.G. 2B1.1(b)(1). View "United States v. DeMarco" on Justia Law

France had a Chicago dental business and fraudulently billed insurers for city employees. France closed his practice after being injured in an accident and started collecting benefits from a disability income policy. In 1999, he exchanged monthly payments, for a limited time, for a lump sum of $300,000. He transferred this money to other people, including his wife, Duperon, before filing a Chapter 7 bankruptcy petition. He failed to disclose the payment or transfers. He later pleaded guilty to mail fraud, 18 U.S.C. 1341, and to knowingly making a false declaration under penalty of perjury, 18 U.S.C. 152(3). The district court sentenced France to 30 months in prison and ordered him to pay $800,000 in restitution. The bankruptcy trustee obtained title to ongoing disability insurance payments. France and Duperon divorced. A California court approved a settlement with payments for child support from the disability payments. France’s insurance company sued in California to resolve conflicting claims. The parties reached an agreement, which the bankruptcy court approved, purporting to control all other judgments, but did not mention the criminal restitution lien. The government filed Illinois citations to discover assets. France moved to quash, but the insurance company responded and began withholding $9,296 that had been going to France. The government moved to garnish the entire distribution under the Mandatory Victims Restitution Act (MVRA), 18 U.S.C. 3613(a). The Seventh Circuit affirmed a ruling allowing the government to garnish the entire disability payment. View "United States v. France" on Justia Law

Curtis, a lawyer, filed 1996-1997 returns reporting tax obligations of $218,983 and $248,236, but made no payments. His partner had taken $600,000 from the practice and declared bankruptcy; Curtis underwent an expensive divorce. Curtis failed to file a return for 1998. Curtis entered into an installment agreement. He filed a return for 2000 but failed to pay $90,000. He entered into a second agreement, but filed returns for 2003 and 2004 reflecting unpaid tax liabilities of $176,802 and $61,000. Curtis did not make estimated payments and stopped making installment payments. He filed returns for 2007, 2008 and 2009, but paid nothing. Curtis was charged with misdemeanor willfully failing to pay taxes owed for 2007, 2008 and 2009, 26 U.S.C. 7203. The court allowed evidence under Rule 404(b), of Curtis’s history of failing to pay his taxes and his withdrawals of money from his law practice for personal expenses. Curtis did not object, but objected to the government’s proposed evidence that he failed to pay payroll taxes for his employees in 2013, arguing that any violations after the charged years did not bear on his state of mind during the time of the charged offenses. Although the court gave Curtis’s proposed instruction on good faith, it declined to modify the pattern instruction to include a requirement for bad motive, with respect to willfulness. The Seventh Circuit affirmed his convictions. View "United States v. Curtis" on Justia Law

DiFoggio worked as an FBI cooperating witness and introduced Medrano to a man purporting to be Castro, a health care consultant. Castro told Medrano that by bribing a corrupt official he could obtain contract approval from Los Angeles County for the purchase of bandages for its hospital system. Castro was an undercover FBI agent. There was no corrupt official. When the medical bandages deal was concluded, Medrano approached Castro about making another deal to involve his friend, Buenrostro. Buenrostro and Castro brought Barta into the discussions; A bribe would be paid to the corrupt official by Castro to obtain a county contract for Sav‐Rx, a company founded by Barta, to provide pharmaceutical dispensing services. Sav‐Rx would service the contract through a business started by Buenrostro and Medrano. Barta wrote a check for $6,500 to Castro. Buenrostro and Medrano were to pay their 35 percent share after that last meeting. Before that happened, they were arrested. In a separate opinion, the Seventh Circuit held that Barta was entrapped as a matter of law. Neither Buenrostro nor Medrano argued entrapment. The Seventh Circuit affirmed their convictions for conspiracy to commit bribery, rejecting challenges to the sufficiency of the evidence and the sentences. View "United States v. Buenrostro" on Justia Law

Hawkins and Racasi were analysts on the staff of a member of the Cook County Board of Review, when they accepted money from Haleem, a corrupt Chicago police officer acting as an undercover agent to reduce the penalties for his own crimes. The Board hears complaints by property owners who believe that the assessed valuation (which affects real-estate taxes) is excessive. Haleem paid Hawkins and Racasi to arrange for lower assessments. They took his money, and the assessments were reduced, except for one parcel about which the protest was untimely. A jury found that they had violated 18 U.S.C.666 (theft or bribery concerning programs receiving federal funds) and 1341 (mail fraud), plus corresponding prohibitions of conspiracy. Hawkins and Racasi contend that they took the money with the intent to deceive Haleem and did nothing in exchange and that the jury was improperly instructed. The Seventh Circuit affirmed the section 666 convictions, but vacated the section 1341 convictions. The jury may have found that defendants intended to be influenced; but if they did not, they intended to be rewarded for the positions they held, if not for services delivered. They were guilty either way. Section 1341 covers only bribery and kickbacks. View "United States v. Racasi" on Justia Law

A jury convicted Garten of conspiracy to commit mail and wire fraud in the conduct of telemarketing, 18 U.S.C. 1349, 2326(1). The district court then sentenced her to 168 months in prison and a five-year term of supervised release, and ordered Garten to pay $909,278 in restitution. The Seventh Circuit affirmed, rejecting challenges to the sufficiency of the evidence supporting conviction, the admission of testimony that a non-testifying co-conspirator had pleaded guilty to the same offense, the court’s statement, “that’s accurate” in overruling Garten’s objection to testimony that the “gross amount” on an exhibit was the amount “stolen from the consumer,” and that the evidence was insufficient to support the district court’s finding that the loss involved totaled nearly $6 million. View "United States v. Garten" on Justia Law