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United States of America v. Gari Aldridge

April 22, 2011

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,
v.
GARI ALDRIDGE, DEFENDANT-APPELLANT.



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 06 CR 767-1-James B. Zagel, Judge.

The opinion of the court was delivered by: Wood, Circuit Judge.

ARGUED SEPTEMBER 17, 2010

Before POSNER, KANNE, and WOOD, Circuit Judges.

Gari Aldridge appeals his convictions for wire fraud and aiding and abetting wire fraud, in violation of 18 U.S.C. §§ 1343 and 2. He offers several reasons why we should rule in his favor: key evidence, he contends, should have been suppressed because it was procured through a warrantless search; even apart from this, he urges that there was insufficient evidence to sustain his convictions; and finally, he complains that his sentence was unreasonably long. We find no error, however, that requires correction, and we thus affirm the district court's judgment.

I

Aldridge's crimes involved financial misfeasance. Along with his brother Tracy Aldridge ("Tracy"), his wife Ilona Rivera, and James Casmay, he incorporated Century Financial, Inc. ("CFI"); all four organizers then served as CFI's directors. CFI held itself out as providing financial planning, investment, and mortgage brokerage services, particularly for customers with sub-prime credit histories. It raised its initial capital by selling pur-ported certificates of deposit in 2002 and 2003 to investors in the Chicago area. The problem, however, was that contrary to CFI's representations that the CDs were fully insured by the FDIC and would provide a return of 6% interest quarterly, none of that was true. Instead, they were nothing but a mechanism to enrich Aldridge and his group. The proceeds from the sales, totaling approximately $1.7 million, were transferred from an Illinois bank to the Aldridges' personal bank accounts in Florida. Aldridge then spent much of the money on personal expenses, including high-flying vacations and luxurious shopping trips.

In 2003, Rivera resigned as CFI's corporate secretary. Several years later, in early May 2006, a lawyer from the Securities and Exchange Commission ("SEC") deposed her as part of an investigation of CFI. Shortly after her deposition, Rivera called the SEC lawyer to inform him that she suspected Aldridge of insurance fraud. She revealed that she had been collecting documents about CFI since the summer of 2004. At the SEC's request, she turned the documents over to the agency.

Government agents told Rivera to let them know if she found any other suspicious materials. Rivera did so, sending two more batches of materials to the SEC in July 2006 and November 2006. She took some of these materials from a black plastic box that Aldridge had given to her with the comment, "[T]hese are the CDs and you need to destroy them." Rivera testified that she disregarded Aldridge's instructions and instead sent the documents to the government because she wanted to exonerate her son, she feared Aldridge, and she thought it was the "right thing" to do.

The government soon indicted Aldridge on six counts of wire fraud and aiding and abetting wire fraud. Before trial, Aldridge was released on bond and allowed to attend a seminar in Hawaii. In an affidavit submitted to the court, Aldridge stated that he planned to travel to Hawaii as a "prospective employee" of the "Seoul Christian Assembly" to discuss serving "as a liaison in California for a project to assist Korean immigrants with cultural assimilation." That story, too, was hogwash. In a video of his meeting, Aldridge was shown making a familiar pitch to potential investors in Hawaii. The district court understandably revoked his bond.

At trial, Casmay and Tracy testified that it was Aldridge who formed the plan to sell the supposedly risk-free, FDIC-insured investment product. They further testified that Aldridge directed Tracy to use the victims' monies for Aldridge's personal expenses. One victim testified that Aldridge made multiple excuses, such as computer error and a mistake in the account from which the checks were drawn, for not making timely payments to him. Tracy also testified that CFI had given out only three or four mortgage loans.

A jury convicted Aldridge on all counts, and the court then ordered a presentence report ("PSR"). In that report, the probation officer calculated his offense level at 33. Turning to criminal history, the probation officer concluded that Aldridge had accumulated four points, stemming from prior convictions for theft, bigamy, and patronizing prostitution. This placed him in Criminal History Category III. Based on those calculations, the PSR recom-mended a guidelines range of 168-210 months. At sentencing, the district court took the position that, although the probation officer's calculations were "technically" correct, they reflected an analysis that overstated both Aldridge's degree of culpability and his criminal history. The district court reasoned that a more appropriate sentencing calculation would be based on an offense level of 29 and two criminal history points (Category II), thereby producing a recommended guidelines range of 97-121 months. The district court acknowledged, however, that Aldridge's behavior in Hawaii was disturbing. In the end, the court sentenced Aldridge to 144 months.

II

As we noted, Aldridge raises three issues on appeal. We begin with his argument that the evidence that Rivera turned over to the government should have been suppressed. Aldridge's primary point is that Rivera was acting as an agent of the government when she located and turned over the incriminating documents. If she was, then this was a warrantless search, and we would need to consider whether the evidence that was produced should have been suppressed. If Rivera was acting on her own, however, then the analysis is different. Until now, we have not definitively resolved what standard of review should apply when we consider a ruling that a person acted as a private individual when conducting a search. See United States v. Ginglen, 467 F.3d 1071, 1074 (7th Cir. 2006). But even under the most favorable standard we can offer, de novo review, Aldridge cannot succeed.

As we interpret his brief, Aldridge is making two distinct arguments in support of suppression. First, he urges that Rivera was acting as a government agent and in that capacity she engaged in a warrantless search and seizure. Second, he suggests that even if Rivera was acting privately, she had no authority to consent to the government's search of the materials she handed ...


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