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

After Kuczora lost his finance job in 2007, he styled himself as the managing director of KCS Financial, a phony finance firm he ran from his Elgin, Illinois basement. Kuczora falsely represented to unwary investors that he could help them secure millions of dollars in financing; they paid him large sums of money to cover fees, which Kuczora pocketed for personal use before disappearing. He ultimately pleaded guilty to wire fraud. His Guidelines range was 33-41 months in prison. The district judge, citing the seriousness and sophistication of the offense, the devastation to the victims, and the need to deter similar crime, imposed a sentence of 70 months. Kuczora argued that the judge did not adequately explain the upward variance and failed to give him advance notice of the grounds supporting it. The Seventh Circuit affirmed. The district judge thoroughly explained his reasoning. The Seventh Circuit has never held that a judge must give advance warning of an upward variance. Every defendant is on notice that the court has the discretion to impose a sentence above, below, or within the Guidelines range based on the 18 U.S.C. 3553 factors. The 70-month sentence is not substantively unreasonable and the judge did not exceed his broad discretion in concluding that a heavier penalty was justified here. View "United States v. Kuczora" on Justia Law

In 2000 Balsiger took the helm of IOS, a large coupon processing companies. IOS contracted with large retail chains and small, independently owned stores to collect and sort coupons redeemed at their stores and to submit invoices for reimbursement either directly to the manufacturer or indirectly to the manufacturer’s agent. For his role in designing and implementing a scheme to defraud those manufacturers, Balsiger was charged with 25 counts of wire fraud and conspiracy both to commit wire fraud and obstruct justice. After a decade of litigation, Balsiger represented himself at a bench trial with the assistance of stand-by counsel. The district court convicted Balsiger on 12 counts and sentenced him to 120 months’ imprisonment. The Seventh Circuit affirmed, rejecting Balsiger’s argument that the court deprived him of his Sixth Amendment right to retain the counsel of his choice by failing to grant an 18-month continuance and by refusing to order the government to remove a lis pendens on his home—a notice to potential buyers that title to the property might be impaired by the outcome of his criminal prosecution. The court upheld the district court’s conclusion, following the death of Balsiger’s attorney, that Balsiger waived his right to counsel and its decision to require him, over his objection, to proceed pro se. View "United States v. Balsiger" on Justia Law

An Indiana judge appointed Stochel as receiver for Tip Top Supermarkets, while its proprietors were embroiled in protracted litigation. Over several years Stochel stole more than $330,000 from the receivership. Stochel evaded detection by diverting funds from other sources to pay bills. As the litigation and receivership were winding down, the principals had suspicions and asked the court to appoint an independent auditor. The judge ordered Stochel to turn over the receivership’s files. To delay discovery, Stochel moved to vacate the order, falsely stating that the receivership had sufficient funds to pay the auditor and claiming that he needed more time to assemble the records. The judge removed Stochel as the receiver; the auditor uncovered the fraud. Stochel was charged with mail fraud, 18 U.S.C. 1341, based on Stochel’s motion, which he had mailed to the court; the indictment alleged that the motion perpetuated the fraudulent scheme by delaying the detection of Stochel’s embezzlement. The district judge imposed a sentence of 24 months in prison. The Seventh Circuit affirmed, rejecting challenges to the sufficiency of the evidence’ the denial of credit for acceptance of responsibility, U.S.S.G. 3E1.1(a); the loss-amount calculation, U.S.S.G. 2B1.1(b)(1)(G); and the application of a two-level enhancement for violating a judicial order, U.S.S.G. 2B1.1(b)(9)(C). View "United States v. Stochel" on Justia Law

In 2009, Scott pleaded guilty to engaging in two schemes to defraud investors and potential investors, 18 U.S.C. 1341. One of the supervised release conditions the district court imposed at sentencing was that he could not incur new credit charges or open additional lines of credit without the approval of the probation officer. After his release, Scott violated his supervised release conditions several times. At the revocation hearing for one of these violations, the district court found Scott violated one of his probation conditions and sentenced him to an additional 36 months of supervised release. The district court declined to impose further custody due to Scott’s regular restitution payments. Defense counsel stated, “we have no objection to extending the period of mandatory supervised release.” The Seventh Circuit affirmed, rejecting Scott’s argument that the district court committed procedural errors at the revocation hearing in failing to calculate or discuss the advisory Sentencing Guidelines range and in failing to afford him an opportunity to allocute, finding that Scott waived both issues. View "United States v. Scott" on Justia Law

George was charged with conspiracy, 18 U.S.C. 371, and a Medicare‐fraud kickback scheme, 42 U.S.C. 1320a-7b(b)(1) based a scheme whereby George received payments of $500 per person from Rosner Home Health Care, for each Medicare patient that she referred to it. Two owners and an employee of Rosner (Tolentino, Magsino, and Hernal) pled guilty before trial. The district court found George guilty and sentenced her to six months of imprisonment. The Seventh Circuit affirmed, rejecting George’s arguments that there was insufficient evidence to support the conviction and that the court erred in failing to limit the cross‐examination of George to matters within her knowledge as a layperson. Hernal had cooperated in the investigation, so the prosecution’s evidence included recordings of the two discussing the illegality of the scheme and establishing the referrals and payments, in cash or check, plus bank records of George’s deposits, and referral logs. The district court properly allowed cross‐examination as to the book that George raised in her direct examination and which she introduced into evidence and properly allowed questioning about her knowledge of the illegality of referral payments. A defendant can be asked about her knowledge or state of mind: a question which seeks factual information, not a conclusion as to its legal significance. View "United States v. George" on Justia Law

For five years, DeHaan, a licensed family‐practice physician working in the Chicago and Rockford areas, was affiliated with agencies providing medical services to homebound patients, and served as medical director of several home health agencies, assisted living facilities, and hospices. DeHaan billed Medicare at the highest levels for services to homebound patients that were ostensibly time‐consuming or complex, when in fact he had either conducted a routine, non‐complex patient visit or had not seen the patient at all on the occasion for which he was billing. At the behest of home health agencies, DeHaan certified as homebound patients whom he either knew did not meet Medicare’s criteria (42 U.S.C. 1395n(a)(2)(A)) for home care or as to whom he lacked meaningful knowledge. DeHaan pled guilty to two counts of a 23‐count indictment, admitting to overbilling and fraudulent certifications. The district court took evidence and found that he was responsible for fraudulently certifying the eligibility of least 305 individuals for home health care services, resulting in wrongful billings to Medicare of nearly $2.8 million. The Seventh Circuit affirmed, finding no error in the district court’s “conservative loss‐estimation methodology,” and upheld a within‐Guidelines sentence of 108 months in prison with an order to pay restitution of $2,787,054.58. View "United States v. DeHaan" on Justia Law

Moose solicited investors with a stock tip; instead of investing all the $680,000 he received from 16 investors, Moose invested only $200,000. The remaining $480,000 he took for himself. Without a plea agreement, Moose pleaded guilty to defrauding investors in violation of the federal wire fraud statute, 18 U.S.C. 1343. The district court gave him a below-guideline sentence of two years in prison plus two years of supervised release. The Seventh Circuit affirmed the prison sentence and the length of the supervised release term, but remanded for the limited purpose of considering several conditions of supervised release that had not been adequately explained. The court rejected Moose’s challenges to the loss amount the district court used in calculating his guideline sentencing range and the fraud guideline’s treatment of loss amounts more generally. Though Moose admitted that he pocketed the $480,000, he argued for a loss figure of just $70,000, claiming to qualify for the discount based on returning stolen property before the crime was detected. View "United States v. Moose" on Justia Law

In 2003, Williams, behind on paying SCCA condominium association fees, filed the first of five, Chapter 13 Bankruptcy petitions so that creditors were stayed from initiating collection. Her scheme was to not make payments required by her Chapter 13 plan so that the court would dismiss the case; SCCA would file eviction and collection suits; Williams would then file a new Chapter 13 petition. After voluntarily dismissing her second bankruptcy petition, Williams signed a deed transferring the condominium to Wilke. A deed recorded weeks later returned title to Williams. Wilke paid nothing and never occupied the condominium but obtained loans secured by the condominium. In her subsequent bankruptcy petitions, Williams failed to disclose the transfers but stated, falsely, that Wilke was a co‐debtor and would contribute toward the mortgage. After dismissing Williams’s fifth petition, the court barred Williams from filing a new petition for 180 days. She again deeded the condominium to Wilke, who filed a bankruptcy petition stating it was his property. The court dismissed the case. Both were charged with bankruptcy fraud, 18 U.S.C. 157. Wilke pled guilty and cooperated. The court limited the defense’s cross-examination of SCCA's board member and attorney about a class action lawsuit Williams had filed against SCCA and about SCCA’s treatment of Williams relative to other tenants, reasoning that the topics were an irrelevant attack on the underlying debt. Williams was convicted. With enhancements for causing a loss of $193, 291 and because the offense involved 10 or more victims, her Guidelines Range was 51–63 months’ imprisonment. The court sentenced her to 46 months. The Seventh Circuit affirmed, rejecting challenges to the court’s limitation on cross-examination and to the sentencing enhancements. View "United States v. Williams" on Justia Law

As CEO of the Chicago Public Schools, Byrd-Bennett worked behind the scenes to assure that companies headed by Solomon and Vranas received lucrative contracts. In exchange, Solomon and Vranas agreed that they would pay Byrd-Bennett a percentage of the revenue generated by those contracts when she came to work for them at the end of her tenure with CPS. After the fraudulent scheme was exposed, each participant pleaded guilty to committing wire fraud, 18 U.S.C. 1343 and 1346. Solomon was sentenced to 84 months’ imprisonment, 30 months more than Byrd-Bennett received. Solomon argued that the district court erred by incorporating the value of a contract unrelated to the criminal agreement into his advisory sentencing guidelines calculation, resulting in an offense score that was four levels higher than Solomon believes it should have been and claimed that the disparity between Byrd-Bennett’s sentence and his sentence is unwarranted, making his sentence substantively unreasonable. The Seventh Circuit affirmed. The record supports the court’s decision to include the contested contract in the offense level calculation, and dissimilar cooperation is a reasonable basis for a sentencing disparity. View "United States v. Solomon" on Justia Law

Schock resigned from Congress in 2015, after disclosures about trips he took at public expense, the expense of his elaborate office furnishings, and how he had applied campaign funds. Schock was charged with mail and wire fraud, theft of government funds, making false statements to Congress and the Federal Elections Commission, and filing false tax returns. Schock moved to dismiss the indictment, arguing that the charges are inconsistent with the Constitution’s Speech or Debate Clause and with the House of Representatives’ constitutional authority to determine the rules of its proceedings. The Seventh Circuit affirmed the denial of the motion. The indictment arises out of applications for reimbursements, which are not speeches, debates, or any other part of the legislative process. Submitting a claim under established rules differs from the formulation of those rules. The foundation for Schock’s rule-making” argument—the proposition that if Body A has sole power to make a rule, then Body A has sole power to interpret that rule—does not represent established doctrine. “ Judges regularly interpret, apply, and occasionally nullify rules promulgated by the President or another part of the Executive Branch, as well as statutes enacted by the Legislative Branch; why would reimbursement rules be different?” View "United States v. Schock" on Justia Law