Appeal from the United States District Court for the Central District of Illinois, Springfield Division. No. 93 CR 30050--Michael M. Mihm, Judge.
Before ESCHBACH, KANNE, and EVANS, Circuit Judges.
In 1981 Jeffrey C. Strang and his father, Robyn Strang, set up a phony investment company, which they called Landmark Investment Corporation. Apparently juggling as fast as they could, they kept the company going until they were indicted in 1993 on various charges of mail fraud, money laundering, securities fraud, and conspiracy. Following their convictions and sentencings in 1995, they filed this appeal, raising a plethora of issues.
The Strangs' investment scheme really took off in 1986 when Jeffrey Strang began selling what he called "certificates of deposit." He represented the certificates as safe investments, but in fact they were not collateralized or insured. Some of the funds were collected from investors and converted to his and his father's use. Other funds collected from one investor were used to pay off, when necessary, another investor.
For example, in March 1989, a man named Charles Swain invested $18,000, some of which was used by Robyn Strang personally and at Wolf Run, his farm in Greene County, Illinois. In April, the funds were also used to repay investor Dan Edwards $6,500. In October 1989, Marian Bose invested $16,000, $5,954 of which was lost on futures contracts. In June 1990, Sharon Dietzler invested $17,105.28, $13,000 of which was deposited into the Wolf Run bank account. In August 1990, Gerald Eastburn invested $30,000, which was deposited into the Landmark bank account; $15,000 of this money was used to repay Dietzler for a portion of her investment. This pattern continues as to several other investors.
The most interesting transaction involved an elderly woman whom Jeffrey befriended. Alma Jasper invested $249,292.85 with Landmark. Periodically, Jeffrey paid her what he called interest. When she died on March 14, 1990, she owned Landmark certificates totaling $131,765.62. In an event apparently unrelated to the Landmark scheme, in September 1990, Jeffrey presented for payment a check drawn on her checking account in the amount of $300,000. Despite the fact that all her other checks were handwritten, this check was typed, except for her signature, and on the memo line were the words "post dated gift to Strangs." Her check register notation for the check stated "not in" in her handwriting and the amount she entered for the check in her register was $202. On this check, Jeffrey and Robyn point fingers--at each other; each says the other endorsed the check. The bank refused to pay because Jasper's checking account was closed. Undeterred, Jeffrey filed a claim for the money against the Jasper Estate. The court disallowed the claim. Jeffrey told his father that the check was his "ace in the hole" which would get him out of trouble.
All in all, The Strangs obtained $516,213.88 from investors. The money was used as follows: approximately $100,000 to Jeffrey Strang for personal expenses; $43,000 for cash withdrawals; $29,000 for credit card purchases; $132,000 for loan payments; and $131,000 to Robyn Strang and Wolf Run.
The use of the mails was established by the mailing of an IRS form 1099 to investor Lea Ann Smith on January 24, 1991; a letter to Sharon Dietzler concerning her investments on July 8, 1992; and a February 20, 1990, certified letter that investor Eugene Wenthe mailed to Jeffrey Strang.
In August 1992, the Illinois Secretary of State Securities Division began an investigation and found that there was no registration for any securities issued by either Strang. On August 21, 1992, a temporary restraining order was issued, and on April 13, 1993, Jeffrey Strang and Landmark were permanently prohibited from selling securities except in compliance with the Illinois Securities Act.
On May 5, 1993, the Strangs were indicted, and also on that date, the court entered an ex parte restraining order prohibiting them from dissipating assets subject to forfeiture, including substitute assets. Robyn Strang obtained a release of $25,000 of the restrained funds to retain attorney Howard Feldman to represent him. An attorney named Bruce Locher was appointed as counsel for Jeffrey. Both defendants were released on a $10,000 unsecured bond.
Jeffrey Strang got into hot water while on pretrial release. On April 7, 1994, the government petitioned to revoke his bond because he had allegedly written bad checks and committed mail fraud in connection with an organization called the Children's Rights Coalition of which he was president. During the bond revocation hearing, he asked to be allowed to proceed pro se. He was allowed to do so, and on April 29 his bond was revoked and he was ordered detained.
Jeffrey was also allowed to proceed pro se during trial. However, he expressed no dissatisfaction with attorney Locher, who remained as his standby counsel. The court made clear that his ...