Chief Justice Garman and Justices Freeman, Thomas, Kilbride, Karmeier, and Burke concurred in the judgment and opinion.
¶ 1 At issue in this appeal is whether, pursuant to the crime-fraud exception to the attorney-client privilege, attorney Mark Helfand may testify regarding communications with Budimir Radojcic, a former client, at Radojcic's criminal trial. The circuit court of Cook County concluded that the State failed to meet its evidentiary burden for application of the exception, and struck Helfand's name from the State's witness list. The appellate court reversed, holding that the crime-fraud exception applied. 2012 IL App (1st) 102698.
¶ 2 For the reasons that follow, we affirm the judgment of the appellate court.
¶ 3 BACKGROUND
¶ 4 On December 5, 2007, a Cook County grand jury entered a 52-count indictment against Radojcic, Helfand, and three others: Suzana Radojcic and Mirjana Omickus (Radojcic's daughters), and Christa Patterson. The indictment charged defendants with the following crimes: continuing financial crimes enterprise (720 ILCS 5/16H-50 (West 2008)); conspiracy to commit a financial crime (720 ILCS 5/16H-45 (West 2008)); financial institution fraud (720 ILCS 5/16H-25 (West 2008)); theft (720 ILCS 5/16-1 (West 2008)); money laundering (720 ILCS 5/29B-1 (West 2008)); forgery (720 ILCS 5/17-3 (West 2008)); wire fraud (720 ILCS 5/17-24(a) (West 2008)); and mail fraud (720 ILCS 5/17-24(b) (West 2008)). The indictment also charged Radojcic individually with being an organizer of a continuing financial crimes enterprise. 720 ILCS 5/16H-55 (West 2008).
¶ 5 Generally, the State alleged that, beginning in August 2004, defendants participated in a scheme, orchestrated by Radojcic, under which properties owned or otherwise controlled by him, which he had allegedly converted to condominiums, were sold to straw buyers who then conveyed the properties back to Radojcic. To purchase the properties, the straw buyers allegedly obtained mortgage loans through fraudulent means.
¶ 6 The indictment focused on 10 such mortgages and two straw buyers. Specifically, the State alleged that Suzana Radojcic and Mirjana Omickus recruited Danijela Kuljanin and Biljana Aranyos to purchase certain properties for Radojcic's benefit. Aranyos purchased four condominium units at 5516 South Prairie Avenue in Chicago, and three condominium units at 3338 South Calumet Avenue in Chicago. Kuljanin purchased three condominium units at 6507 South Langley Avenue in Chicago. Suzana Radojcic paid Kuljanin at least $2, 000 to purchase the three units for Radojcic, and Radojcic told Aranyos and Kuljanin that he would make the mortgage payments for them. According to the indictment, the lenders defrauded in these transactions included Wells Fargo Bank, Franklin American Mortgage Company, Credit Suisse Financial Corporation, Countrywide Mortgage Corporation, Mortgage Lender USA, Inc., Argent Mortgage Company, Taylor Bean & Whitaker Mortgage Company, BNC Mortgage, Inc., and Long Beach Mortgage Company.
¶ 7 Suzana Radojcic and Omickus prepared the mortgage loan applications for the 10 properties at issue. Those applications, the State alleged, were materially false in that they overstated the applicant's income, overstated the amount of money the applicant had on deposit, and/or overstated the amount of the applicant's earnest money deposit. At least with respect to the purchases involving Aranyos, Omickus allegedly facilitated the temporary deposit of funds into Aranyos' personal account to create the impression that Aranyos had the appropriate funds on hand. Omickus and Suzana Radojcic also submitted to the lenders "gift letters" falsely reporting that Aranyos and Kuljanin had received gifts of money, which had been deposited into their respective accounts.
¶ 8 Christa Patterson, the office manager for Jewel Windows, which also employed Aranyos, coordinated the real estate closings, provided verification of employment for certain buyers, signed real estate sales contracts for certain properties, and arranged for appraisals that used other properties Radojcic owned as comparable properties. Patterson also communicated with Helfand who, as part of the scheme, set up a land trust under which Patterson held the power of direction.
¶ 9 The State further alleged that Radojcic took the proceeds from the condominium sales, which were received at closing in the form of checks from the title company, to the Belmont and Cicero Currency Exchange. There, Radojcic obtained several money orders in various amounts, with the name of the payee and remitter in blank, to conceal his involvement.
¶ 10 In addition to communicating with Jewel Windows and setting up a land trust, the State alleged that Helfand caused condominium declarations and bylaws to be created and filed to support the mortgage applications. Helfand further caused deeds to be signed and recorded in which Radojcic, through others, retained control of the properties. In particular, Helfand prepared deeds for the three condominium units Kuljanin purchased, and instructed her to execute the deeds, which she did, so that the units could be transferred back to Radojcic.
¶ 11 Finally, the State alleged that Radojcic, through an entity known as B&B Properties II, LLC, fraudulently obtained rental checks exceeding $500, 000 from the United States Department of Housing and Urban Development.
¶ 12 In November 2009, following discovery, the State indicated its intent to call Helfand as a witness during its case in chief, in exchange for "use immunity." See 725 ILCS 5/106-2.5(b) (West 2008). Both Helfand and Radojcic filed written objections, arguing that such testimony would violate the attorney-client privilege. According to Helfand's pleading, in which Radojcic joined, between late 2002 and 2008, Helfand was hired to perform legal work for Radojcic, Patterson, "and their affiliated companies." Helfand, who described himself as a "real estate and corporate attorney, " stated that the "real estate work for Radojcic consisted primarily of representing Bozena Radojcic [Radojcic's wife] and the affiliated companies of Radojcic in the buying and selling of real estate, converting apartment buildings into condominiums, and appearing in court to clear up building [code] violations."
¶ 13 The State maintained that Helfand's testimony regarding the work he performed in connection with the real estate transactions identified in the indictment would not require disclosure of confidential communications and, therefore, would not implicate the attorney-client privilege. The State further maintained that, to the extent Helfand's testimony would reveal confidential communications, his testimony should be allowed pursuant to the crime-fraud exception to the attorney-client privilege. In support of its argument that the crime-fraud exception applied, the State relied on the grand jury testimony of Patterson and Aranyos, as well as the grand jury testimony of Thomas Hoffman, an agent for the Department of Housing and Urban Development, upon which the indictment in this case was returned.
¶ 14 Aranyos testified that she worked for Jewel Windows from February 2005 through September 2006, primarily in the company's construction and home improvement sector. She was paid $500 per week in cash. Aranyos understood that Radojcic, who hired her, was the owner. Aranyos, however, reported to Patterson, the office manager. Radojcic was in the office for only brief periods of time, typically meeting with Patterson behind closed doors.
¶ 15 According to Aranyos, Radojcic's three daughters—Mirjana, Suzana, and Zorika—all worked in the mortgage industry. In early 2006, Mirjana approached Aranyos about buying a condominium in a three-unit building at 3338 South Calumet Avenue in Chicago. Aranyos understood that Radojcic would be the actual owner and, pursuant to a written agreement, Radojcic would make the payments on the mortgage Aranyos obtained. Aranyos agreed to obtain a mortgage for that property, as well as the other two condominiums in the three-unit Calumet Avenue building. In addition, she obtained mortgages in her name on all four condominiums in a four-unit building at 5116 South Prairie Avenue in Chicago. In exchange for her participation in the condominium purchases, Aranyos received $40, 000 in cash. Aranyos understood that each condominium she purchased was in some way "operated" by Radojcic or B&B Properties, a Radojcic company that bought and sold real estate. Aranyos became aware that the condominium units were later rented and that B&B Properties was the landlord.
¶ 16 Aranyos further testified that she did not understand the mortgage process and simply signed the mortgage applications and related documents that Mirjana and Patterson prepared. Some of the mortgage documents misstated the length of her employment at Jewel Windows or overstated her income. In addition, the earnest money required for the purchases was supplied by Patterson. Aranyos explained that cash, totaling as much as $65, 000, was temporarily deposited into her account and withdrawn after closing. At least in one instance, the funds were returned to B&B Properties. Aranyos also testified regarding a "gift letter" submitted to a lender which falsely indicated a gift of $65, 000 had been made to her by her uncle, Marvin Freeman. No gift was made, and Freeman was not her uncle; he was the owner of the Belmont and Cicero Currency Exchange, with whom Jewel Windows did considerable business.
¶ 17 Aranyos testified that following two of the closings, she signed quitclaim deeds transferring the properties back to Radojcic or Jewel Windows. She recalled that Helfand attended at least two closings, representing Radojcic or B&B Properties.
¶ 18 Patterson testified that she worked for Radojcic for 15 years. Although she is listed with the Secretary of State's office as the sole proprietor of Jewel Windows, Patterson testified that Radojcic owns and operates the company. Patterson identified other companies, including B&B Properties, B&R Investments, Fields Windows and Doors, and Fields Interior and Exterior Corporation, that are owned and operated by Radojcic, even though, on paper, Patterson or Radojcic family members are identified as the owners. Patterson testified that Radojcic would purchase multiunit buildings, convert the buildings to condominiums, and sell the condominiums to straw buyers. The buyers would transfer the property back to one of Radojcic's companies, after which Radojcic would rent the units. Radojcic's name, however, would not appear on any of the documentation.
¶ 19 While employed at Jewel Windows, Patterson was involved in obtaining straw buyers and facilitating the mortgage application process. She confirmed that the mortgage applications contained false information, and that funds, belonging to Radojcic, were temporarily deposited into a buyer's account until the mortgage was obtained. Funds were obtained through the Belmont and Cicero Currency Exchange, which Radojcic and Jewel Windows used as a bank. Radojcic maintained no bank accounts. Patterson also worked with certain ...