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

In 2009, Sheth, a cardiologist, pled guilty to a single count of healthcare fraud, 18 U.S.C. 1347. As agreed by Sheth, the district court entered an order of criminal forfeiture for cash and investment accounts then valued at $13 million plus real estate and a vehicle. The government represented that the forfeited assets represented the proceeds of Sheth’s fraud, calculated to be about $13 million. Sheth’s plea agreement specifies that forfeited assets would be credited against the amount of restitution, which the district court had determined to be $12,376,310. In 2012, before the government had liquidated all of the forfeited assets or disbursed any of the proceeds, it sought more of Sheth’s assets to apply to restitution. Sheth objected. Without resolving the factual dispute, the district court ordered turnover of the assets, which were held by third parties. The Seventh Circuit vacated, holding that the court erred by ordering turnover of the assets without first allowing for discovery and holding an evidentiary hearing. View "United States v. Sheth" on Justia Law

Moeser was a commercial loan officer at a Milwaukee bank and, in 2004, prepared a presentation on behalf of co-conspirator Woyan for a $790,000 construction loan. Woyan operated PARC, which planned to build townhouses. Other conspirators included the project’s manager, architect, and real estate agent. Moeser told his superiors that the project’s land would serve as collateral and that PARC would provide the land up front. The bank approved the loan. Before closing, Moeser learned that Woyan did not own the land and did not have the funds to purchase it. Rather than informing his superiors, Moeser loaned Woyan $30,500 to purchase the land; Woyan paid Moeser back, plus $15,000 in interest, using funds from the loan’s initial disbursement of $111,299. Although Moeser learned that the project was not progressing and that disbursements were being used for other purposes, he continued to deceive his superiors. The project was never completed and PARC defaulted on its loan. Three contractors and a lumber supplier were never fully paid. The bank foreclosed. Moeser was charged with bank fraud, corrupt acceptance of money, fraud of a financial institution by an employee, and making false statements during an investigation. Moeser and his co-defendants pleaded guilty to conspiracy to commit bank fraud, 18 U.S.C. 1344. The district court gave Moeser a below-guidelines sentence of two years’ probation, which Moeser did not appeal, but found him jointly and severally liable for full restitution. The Seventh Circuit affirmed, rejecting an argument that he should be liable for a lesser share. View "United States v. Moeser" on Justia Law

The Hallahans engaged in fraud, 1993-1999, relating to purported tanning businesses, that bilked investors out of more than $1,000,000. They pled guilty to conspiracy to commit mail and bank fraud, 18 U.S.C. 371, 1341, and 1344, and conspiracy to commit money laundering, 18 U.S.C. 1956(h). Rather than face sentencing for their crimes, they fled the district and remained on the run in Missouri and Arizona for 12 years. After they were arrested, both pled guilty without a plea agreement to the additional crime of failing to appear for sentencing. The district court imposed above-guideline sentences of 270 months on Nelson and 195 months on Janet Hallahan. They challenged their sentences despite having waived their rights to appeal in their original plea agreements. The Seventh Circuit initially affirmed. Denying a petition for rehearing, the Seventh Circuit rejected arguments based on use of a base offense level of seven, instead of six, for calculating the advisory sentencing guideline for the conspiracy counts, stating that the error does not change the result. View "United States v. Hallahan" on Justia Law

Bokhari is a dual citizen of the U.S. and Pakistan. While living in Wisconsin, Bokhari allegedly conducted a fraudulent scheme with his brothers, bilking a nonprofit entity that administered the E‐Rate Program, a federal project to improve internet and telecommunications services for disadvantaged schools, out of an estimated $1.2 million, by submitting false invoices. In 2001, while the alleged fraud was ongoing, Bokhari moved to Pakistan, where, according to the prosecution, he continued directing the illegal scheme. In 2004, a federal grand jury in Wisconsin indicted the brothers for mail fraud, money laundering, and related charges. The brothers pleaded guilty and were sentenced to more than five years in prison. The government submitted an extradition request to Pakistan in 2005. Bokhari contested the request in Pakistani court, and the Pakistani government sent an attorney to plead the case for extradition. In 2007, following a hearing, a Pakistani magistrate declined to authorize extradition. In 2009, the U.S. secured a “red notice” through Interpol, notifying member states to arrest Bokhari should he enter their jurisdiction. In the U.S., Bokhari’s attorneys moved to dismiss the indictment and quash the arrest warrant. The district court denied Bokhari’s motion pursuant to the fugitive disentitlement doctrine. The Seventh Circuit affirmed, characterizing the appeal as an improper attempt to seek interlocutory review of a non‐final pretrial order. View "United States v. Bokhari" on Justia Law

Chychula and her codefendants engaged in a fraudulent investment scheme, involving more than 60 investors who lost almost $4.5 million. The scheme lasted several years and took various forms, including investment in companies that Chychula and her codefendants incorporated; dissemination of false information to investors by electronic mail and facsimile; and receipt of wire transfers of funds from investors’ bank accounts. Convicted of nine counts of participating in a scheme to defraud by means of interstate wire communications, 18 U.S.C. 1343, Chychula was sentenced to 48 months in prison. The Seventh Circuit affirmed, rejecting an argument that the district court erred in applying a two‐level enhancement to her offense level for obstruction of justice because it failed to make the necessary findings. View "United States v. Chychula" on Justia Law

Beavers was a Chicago alderman from 1983-2006, when he began serving as a Cook County Commissioner. He was the chairman of each of his three campaign committees and the only authorized signor for each committee’s bank account. Beavers’ federal tax returns underreported his 2005 income, misstated expenditures in semi-annual disclosure reports (D-2s), did not disclose use of campaign funds to increase his pension annuity, misrepresented loans between the committees and Beavers, did not report monthly stipends that Beavers took as a Commissioner, and did not disclose that Beavers wrote himself checks totaling $226,300 from committee accounts to finance gambling trips, without documenting the purpose of the expenditures or any repayment. After federal agents approached Beavers in connection with a grand jury investigation, Beavers filed amended tax returns and attempted to repay the committees. Beavers was convicted of three counts of violating 26 U.S.C. 7206(1), which prohibits willfully making a material false statement on a tax return, and with one count of violating 26 U.S.C. 7212(a), which prohibits corruptly obstructing the IRS in its administration of the tax laws. Beavers was sentenced to six months’ imprisonment and was ordered to pay about $31,000 in restitution and a $10,000 fine. The Seventh Circuit affirmed. View "United States v. Beavers" on Justia Law

Stein ran legitimate companies for which he maintained bank accounts. In need of capital for construction projects, he approached his Wiley, a part-owner of currency exchanges, and proposed that Stein write checks from (underfunded) bank accounts to cash at the exchanges in order to have use of money for a few days to run his business. At the end of that period, if his business had turned the necessary profit, the checks would clear; if not, he could write more checks, cash them, deposit proceeds to cover the earlier checks, and have money to continue operations. Stein ran the check-kiting scheme for five months. To clear previous checks and obtain capital for the next period, he had to write larger (or more) checks each cycle. Each time a check was cashed, the exchange also charged a fee, so the balance was spiraling upward. Eventually Stein was injured and not physically able to continue the scheme. The Wiley exchanges lost $440,000 from checks that did not clear. Another exchange lost $250,000. Stein pleaded guilty to wire fraud, 18 U.S.C. 1343. After a remand, the district court revised the loss amount, and again gave a below-guidelines sentence of 21 months’ imprisonment, but still entered a restitution amount of over one million dollars. The Seventh Circuit affirmed, rejecting an argument that the loss to Wiley’s exchanges should not be incorporated into restitution because of Wiley’s complicity in the scheme. View "United States v. Stein" on Justia Law

Farmer learned that a man (Allen), a casino employee, had used a company credit card without authorization. Using an alias, Farmer contacted Allen by cell phone and threatened to inform management unless Allen paid him. Farmer had a female acquaintance travel to Indiana to collect the extortion money. Allen contacted law enforcement. The female associate was apprehended. Farmer pleaded guilty to violating 18 U.S.C. 1952(a)(3) and 875(d), by attempted extortion, using interstate communications. A presentence investigation report indicated that Farmer had a 2003 conviction for using interstate communications to transmit extortionate threats, three convictions for obtaining property by false pretenses (involving customers of his sports-schedule business), and a conviction for larceny. Neither the PSR nor any document disclosed proposed conditions of supervised release. Farmer was sentenced to incarceration for 22 months, plus three years of supervised release, with conditions that Farmer submit to the search of his person, vehicle, business, and residence, and property, including computer devices, and to the seizure of any contraband, and warn other occupants that the premises may be subject to searches. The prosecution suggested that Farmer be barred from self-employment during supervised release. Farmer’s counsel, objected that “I don’t think this Court should restrict his ability to earn a living. If he wants to be an entrepreneur and be in business for himself.” The district court overruled that objection and did not solicit objections to the other conditions. The Seventh Circuit vacated and remanded, finding that the search and self-employment conditions did not bear a reasonably direct relationship to the underlying crimes. View "United States v. Farmer" on Justia Law

Ogletree ran a tax preparation service. Robtrel and Larryl provided Ogletree with birth dates and social security numbers of individuals unlikely to file tax returns; Ogletree filed false returns using that information and her Electronic Filers Identification Number. They also generated false W2 statements to support the claims. In 2006 Ogletree filed 200 fraudulent returns, seeking refunds of $834,548. The actual loss to the IRS was $652,730.In 2007, Robtrel established a tax business and obtained EFINs for new tax preparation entities. Ogletree claims she withdrew from the conspiracy and did not file fraudulent tax returns in 2007 or later. Robtrel and Larryl continued the scheme into 2008, when they were caught. Charged with conspiracy to defraud the U.S. government, 18 U.S.C. 286, and presenting a false claim against the IRS, 18 U.S.C. 287 and 2, Robtrel and Larryl pleaded guilty, but Ogletree went to trial. Her attorney did not present any witnesses, but argued that the government did not establish that Ogletree had joined the conspiracy or knowingly filed false returns, noting that the witnesses all identified Robtrel and Larryl and that no one had identified Ogletree. She was convicted and sentenced to 51 months imprisonment, the low end of the sentencing range. The Seventh Circuit affirmed her sentence, rejecting challenges to the loss calculation, to a finding that she participated in the tax fraud scheme in 2007, and that the district court did not adequately consider the section 3553 sentencing factors. View "United States v. Williams-Ogletree" on Justia Law

Haldar, an Indian citizen, came to the U.S. in 1999 and has been a permanent resident since 2006. He founded GVS-Milwaukee, a Hare Krishna religious society and, from 2004 to 2007, GVS sponsored 25 applicants for religious-worker “R-1 visas,” 8 C.F.R. 214.2(r)(1), 17 of which were approved. In 2007 the State Department advised the Department of Homeland Security (DHS) that GVS-Milwaukee might be involved in visa fraud. DHS also received a similar anonymous tip and began an investigation that included temple visits, surveillance, searches of Haldar’s luggage on international trips, and interviews with GVS-sponsored visa recipients. In 2010 Haldar was convicted of conspiracy to defraud the U.S. under 18 U.S.C. 371. The Seventh Circuit affirmed, rejecting arguments (not raised in the district court) that certain statements from the prosecutor and a government witness improperly called into question the validity of his temple and were unfairly prejudicial under Federal Rule of Evidence 403; the prosecutor misrepresented testimony during his closing argument and relied on facts outside the record; and the district court on its own initiative should have instructed the jury not to scrutinize the religious qualifications of the visa recipients. View "United States v. Haldar" on Justia Law