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United States v. Corrigan

United States District Court, N.D. Illinois, Eastern Division

September 15, 2016

UNITED STATES OF AMERICA, Plaintiff,
v.
WILLIAM D. CORRIGAN, Defendant.

          MEMORANDUM OPINION AND ORDER

          Robert M. Dow, Jr. United States District Judge

         Defendant William D. Corrigan (“Defendant”) was charged with four counts of wire fraud, 18 U.S.C. § 1343, in connection with his alleged scheme to solicit investments in his company, Embedded Control Systems (“ECS”), by falsely representing to two investors that their money was needed and would be used for health insurance for ECS employees. See [80] (Amended Indictment). Defendant voluntarily waived his right to a jury trial [81] and elected to proceed with a bench trial, which began on December 15, 2015 and concluded on December 17, 2015. See [83], [84], [85]. Prior to the bench trial, Defendant filed a motion to dismiss on sovereign immunity grounds [18], a motion to dismiss due to “Declaration of Immunity Mandate” [27], and a motion to dismiss Counts 2, 3, and 4 of the Indictment [75], and the Government filed a motion in limine [68]. The Court reserved ruling on these motions until after trial. Following trial, Defendant also filed two motions for leave to file an over-size post-trial brief [94], [96], a motion to file a corrected table of contents to Defendant's post-trial brief [95], and a motion for leave to file a reply brief in support of his motion to dismiss [98].

         For the reasons explained in Section I below, the Court denies Defendant's motion to dismiss on sovereign immunity grounds [18] and motion to dismiss due to “Declaration of Immunity Mandate” [27]; grants Defendant's motion for leave to file a reply in support of his motion to dismiss Counts 2, 3, and 4 of the Indictment [98]; denies Defendant's motion to dismiss Counts 2, 3, and 4 of the Indictment [75]; grants the Government's motion in limine [68]; grants Defendant's first-filed motion for leave to file an over-size post-trial brief [94]; denies as moot Defendant's duplicative motion for leave to file an over-size post-trial brief [96]; and grants Defendant's motion to file a corrected table of contents to his post-trial brief [95]. For the reasons explained in Sections II and III below, the Court concludes that the Government established beyond a reasonable doubt that Defendant, on four occasions, committed wire fraud in violation of 18 U.S.C. § 1343. Accordingly, the Court finds Defendant guilty of the charges in the Amended Indictment [80]. This matter is set for status on September 28, 2016 at 10:00 a.m..

         I. Pre- and Post-Trial Motions

         A. Defendant's Immunity Motions

         Prior to trial, Defendant filed a motion to dismiss due to sovereign diplomatic immunity [18] and a motion to dismiss due to immunity protection per “Declaration of Immunity Mandate” of October 7, 2011 [27]. Although Defendant was represented by counsel when the motions were filed, see [16], Defendant appears to have prepared and filed the motions himself, acting pro se.[1] This Court has “wide discretion to reject pro se submissions by defendants represented by counsel.” United States v. Patterson, 576 F.3d 431, 437 (7th Cir. 2009). In this case, the Court accepts Defendant's submissions, but concludes that they lack merit and must be denied.

         Defendant asserts in both motions that he filed a “declaration of immunity” with an administrative office of the United States Courts and that the declaration is posted and can be verified on all “Federal Screens, ” including “Blue, ” “Grey, ” “Green, ” and “Black.” Defendant argues that because he enjoys immunity, all charges against him must be dismissed. Defendant does not identify any law or facts that would give him a right to immunity protection. Defendant does not claim, for instance, to be a foreign diplomat. And the Seventh Circuit has “repeatedly rejected . . . theories of individual sovereignty, immunity from prosecution, and their ilk, ” like Defendant asserts here. United States v. Benabe, 654 F.3d 753, 767 (7th Cir. 2011). In short, Defendant fails to establish that he is entitled to have the charges against him dismissed on immunity grounds. Therefore, Defendant's motions, [18] and [27], are denied.

         B. Defendant's Motion to Dismiss the Indictment

         A grand jury returned a four-count indictment (“Indictment”) against Defendant in March 2013. See [4]. The Indictment identified two victims of Defendant: Victim 1, an ECS investor who resided in Wisconsin; and Victim 2, an ECS investor who resided in Colorado. The transcript from the Grand Jury shows that the Grand Jury understood Victim 1 to mean Jason Neilitz (“Neilitz”) and for Victim 2 to mean Rawah Partners. [99-1] at 2. The Indictment alleged that Defendant intentionally devised and participated in a “scheme to defraud and to obtain money and property from Victim 1 and Victim 2 by means of materially false and fraudulent pretenses, representations, and promises, and by concealment of material facts.” [4] at 2. According to the Indictment, “in or about March 2009, Corrigan asked Victim 1 and a representative of Victim 2 if they wanted to buy Company A stock, and, in doing so, falsely represented to them that he would use the investment money to pay Company A's health insurance expenses.” Id. The Indictment further alleges that, as part of the scheme, Defendant “fraudulently induced Victim 1 to transfer $50, 000 into [his] Bank of America personal account” on April 24, 2009, fraudulently induced Victim 2 to transfer $50, 000 to his personal account on March 30, 2009, and fraudulently induced Victim 2 to transfer another $10, 000 to his personal account on April 9, 2009. [4] at 3. According to the Indictment, Defendant did not use the money to pay for ECS's health insurance, and instead used a portion of the money to pay his personal expenses while falsely representing to his victims that the money had been used on health insurance.

         The original Indictment alleged that Defendant committed four counts of wire fraud by sending emails, all to “Victim 2, ” on March 22, 2009 (Count 1), March 25, 2009 (Count 2), November 7, 2011 (Count 3), and November 9, 2011 (Count 4). See [4] at 5-8. Specifically, Count 1 alleged that on March 22, 2009, Defendant emailed Victim 2 asking if Victim 2 would be interested in buying some additional stock in Company A. [4] at 5. Count 2 alleged that on March 25, 2009, Defendant emailed a representative of Victim 2 asking if he could sell Victim 2 another $50, 000 in stock “to pay the Health Insurance by the end of March.” [4] at 6. Count 3 alleged that on November 7, 2011, Defendant emailed the following statement to Victim 2, “Your funds did go into [Company A].” Id. at 7. Count 4 alleged that on November 9, 2011, Defendant sent an email to Victim 2 stating, “I can assure you that your 60k was used to pay up Health Insurance in 2009.” [4] at 8.

         On December 9, 2015, Defendant moved to dismiss Counts 2, 3, and 4 of the Indictment on the ground that they were multiplicitous of Count 1. See [75]. The Court deferred briefing on the motion until the conclusion of the bench trial. See [77]. On December 10, 2015, the Government filed a motion to file an amended indictment [76], which Defendant did not oppose, id. at 2. The Government explained that there were typographical errors in the first paragraphs of Counts 2, 3, and 4 because they purported to incorporate paragraphs 1 through 16 of Count 1 even though Count 1 included only twelve paragraphs. Id. The Government requested to amend the indictment so that Counts 2, 3, and 4 incorporate the correct paragraphs 1 through 11 of Count 1.

         The Court granted the Government's motion [83] and the amended indictment (“Amended Indictment”) [80] was filed on the docket. In addition to fixing the typographical errors noted in its motion to amend, the Amended Indictment also identifies the ECS investor who resided in Wisconsin as Jason Neilitz (Victim 1 in the original indictment) and the ECS investor who resided in Colorado as Rawah Partners (Victim 2 in the original indictment). As is relevant here, in Count 1 of the Amended Indictment the Government alleges that on March 22, 2009, Defendant asked Neilitz-rather than “Victim 2” as alleged in the original complaint-if Neilitz was interested in buying some additional stock in ECS. [80] at 5.

         Following trial, Defendant filed a motion for leave to file a reply in support of his motion to dismiss. See [98]. The Court now grants Defendant's motion for leave to file a reply brief [98] and turns to the merits of the motion to dismiss.[2]

         1. Constructive Amendment

         Defendant argues that Count 1 of the Amended Indictment must be dismissed because the Government's substitution of “Neilitz” for “Victim 2” as the recipient of Defendant's March 22, 2009 email constitutes a constructive amendment to the original Indictment, which the Government failed to resubmit to the Grand Jury in violation of the Fifth Amendment.

         “The Fifth Amendment guarantee of the right to indictment by a grand jury” and “its protection against double jeopardy”-along with the “Sixth Amendment guarantee that a defendant be informed of the nature of the charges against him”-”establish the minimum requirements for an indictment.” United States v. Fassnacht, 332 F.3d 440, 444 (7th Cir. 2003). To comport with these constitutional requirements, an indictment must accomplish three functions: (1) state each element of each crime charged; (2) provide adequate notice of the nature of the charges so as to enable the defendant to prepare his defense; and (3) allow the defendant to raise the judgment as a bar to future prosecutions for the same offense. Id. at 444-45. “[A]fter an indictment has been returned its charges may not be broadened through amendment except by the grand jury itself.” Stirone v. United States, 361 U.S. 212, 215-16 (1960); see also United States v. Leichtnam, 948 F.2d 370, 376 (7th Cir. 1991).

         “A constructive amendment of an indictment occurs when the evidence at trial ‘goes beyond the parameters of the indictment in that it establishes offenses different from or in addition to those charged by the grand jury.'” United States v. Phillips, 745 F.3d 829, 832 (7th Cir. 2014) (quoting United States v. Pigee, 197 F.3d 879, 886 (7th Cir. 1999)). A constructive amendment of an indictment “violates the Fifth Amendment.” Id. However, “‘not all variations in proof that contradict or supplement verbiage in the indictment rise to the level of constructive amendments.'” Id. (quoting United States v. Willoughby, 27 F.3d 263, 266 (7th Cir. 1994). To constitute an impermissible constructive amendment, “the crime charged in the indictment must be ‘materially different or substantially altered at trial, [so that] it is impossible to know whether the grand jury would have indicted for the crime actually proved.'” Id. (quoting United States v. Trennell, 290 F.3d 881, 888 (7th Cir. 2002)). Changes in the indictment that are “merely a matter of form”-such as changes “to correct for a typographical or clerical error or a misnomer”-“do not constitute ‘amendments'” to the indictment. Leichtnam, 948 F.2d at 376; see also Black's Law Dictionary (10th ed. 2014) (misnomer: “[a] mistake in naming a person, place, or thing, esp. in a legal instrument”). When it does not rise to the level of a constructive amendment, a variance between the indictment and what the Government is required to prove at trial is fatal only where a defendant is prejudiced in his defense because he cannot anticipate from the indictment what evidence will be presented against him or her is exposed to double jeopardy. United States v. Howard, 619 F.3d 723, 727 (7th Cir. 2010).

         The Court concludes that, in this case, the Government did not constructively amend Count 1 of the Amended Indictment in violation of the Fifth Amendment. At trial, the Government presented evidence in support of Count 1 that, as part of his scheme to defraud and obtain money and property from Neilitz and Rawah Partners, Defendant sent Neilitz an email on March 22, 2009 seeking investment funds purportedly to pay for health insurance. It is not impossible to know whether the Grand Jury would have indicted Defendant for wire fraud based on that wire communication, Phillips, 745 F.3d at 832, because it is clear from the transcript of the November 20, 2013 grand jury proceedings that the March 22, 2009 email on which Count 1 was based was “an email from [Defendant] to Jason Neilitz.” [99-1] at 2. The insertion of the victim's identity in Count 1 of the Amended Indictment merely corrected a misnomer and did not constitute a constructive amendment that violates the Fifth Amendment. Leichtnam, 948 F.2d at 376; see also United States v. Whoolery, 579 F. App'x 78, 81 (3d Cir. 2014) (government's characterization during trial of borrowers as victims did not constructively amend indictment charging defendant with conspiracy to commit wire fraud, which alleged that lenders, not borrowers, were the victims of defendant's residential mortgage fraud scheme, because identification of a victim was not an element of conspiracy to commit wire fraud and any reference to a victim or victims was superfluous and unnecessary to the elements of the charged offense and indictment mentioned fraudulent actions taken toward both borrowers and lenders); United States v. Lucien, 78 F. App'x 141, 143 (2d Cir. 2003) (substitution of insurer for claims adjuster initially named as defrauded “health care benefit program” in health care fraud indictment did not constitute constructive amendment of indictment, where change did not raise danger that defendant was convicted of different crime than one charged by grand jury).

         The Court further concludes that there was not a fatal variance between the Indictment and what the Government proved at trial. Prior to trial, the Indictment was replaced with the Amended Indictment, with no objection from Defendant. Moreover, even before the Indictment was corrected, Defendant could anticipate that Count 1 would be based on evidence surrounding his March 22, 2009 email to Neilitz. The original Indictment identified two victims and alleged that in March 2009, Defendant asked both “Victim 1 and a representative of Victim 2 if they wanted to buy Company A stock” and falsely represented to both “that he would use the investment money to pay Company A's health insurance expenses.” [4] at 1-2. While Count 1 of the original Indictment erroneously referred to the recipient of the March 22, 2009 email as “Victim 2” rather than “Victim 1, ” the email on which Count 1 was based was a Grand Jury exhibit and clearly showed that the recipient was Neilitz. See United States v. Ratliff-White, 493 F.3d 812, 823-24 (7th Cir. 2007) (variance between indictment, which pinpointed a particular step in payment process, and proof at trial, which established another, was harmless in wire fraud prosecution, where defendant had notice by the description of the scheme in the indictment to prepare its defense and the prosecution disclosed exhibits to the defendant before trial); United States v. Steele, 82 F. App'x 172, 176-77 (7th Cir. 2003) (error in indictment concerning defendant's prior conviction did not require reversal where mislabeling did not confuse or mislead defendant). Therefore, Defendant was able to anticipate prior to trial what evidence would be presented against him on Count 1. See Howard, 619 F.3d at 727.

         Finally, there is no risk of Defendant being exposed to double jeopardy, Howard, 619 F.3d at 727, because the Government fixed the misnomer in Count 1 of the Amended Indictment. It would be clear to anyone looking at the Amended Indictment that Count 1 is based on a wire communication sent from Defendant to Neilitz on March 22, 2009 and, therefore, Defendant does not face the risk of being charged with the same crime twice.

         2. Multiplicity

         Defendant argues that Counts 3 and 4 of the Amended Indictment must be dismissed because they are multiplicitous of Count 2. In particular, Defendant argues that the underlying wire transactions identified in Counts 2, 3 and 4 of the Amended Indictment constitute executions of the same scheme to obtain a $50, 000 investment from Rawah Partners purportedly so Defendant could pay his company's health insurance. Defendant argues that the only wire communication properly charged is the March 25, 2009 email identified in Count 2, in which Defendant told Rawah Partners' agent, Kevin Duncan (“Duncan”): “Today, I asked you if we could sell another $50k to you in stock. I need this to pay the Health Insurance by the end of March.” [80] at 6. According to Defendant, the November 7 and November 9, 2011 emails identified in Counts 3 and 4 were “neither essential to, nor a step toward, the execution of the scheme described in the Indictment.” [97] at 4.

         “Multiplicity is the charging of a single offense in separate counts of an indictment. This exposes a defendant to the threat of receiving multiple punishment for the same offense. In order to determine whether a given indictment contains multiplicitous counts, we look to the applicable criminal statute to see what the allowable ‘unit' of prosecution is-the minimum amount of activity for which criminal liability attaches.” United States v. Allender, 62 F.3d 909, 912 (7th Cir. 1995).

         Plaintiff was charged with four counts of wire fraud in violation of 18 U.S.C. § 1343, which provides:

Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both.

18 U.S.C. § 1343.

         In mail and wire fraud cases, “each mailing or interstate communication” sent in furtherance of a fraudulent scheme “is a separate indictable offense, even if each relates to the same scheme to defraud.” Ashland Oil, Inc. v. Arnett, 875 F.2d 1271, 1278 (7th Cir. 1989) (citing United States v. Aldridge, 484 F.2d 655, 660 (7th Cir. 1973)) (emphasis added); see also Pattern Criminal Jury Instructions of the Seventh Circuit, 18 U.S.C. §§ 1341 and 1343 Use of Mails/Interstate Carrier/Interstate Communication Facility, p. 409 (2012) (“[Each separate use of [the mail] [an interstate carrier] [interstate communications facilities] in furtherance of the scheme to defraud constitutes a separate offense.]”).

         In order to obtain a conviction for wire fraud, the Government is required to prove Defendant's “participation in a scheme to defraud, his intent to defraud, and his use of the wires in furtherance of the fraudulent scheme.” United States v. McGowan, 590 F.3d 446, 457 (7th Cir. 2009). A communication need not be made before or at the time the Defendant obtains the victim's money in order to support a charge of wire fraud. “Wire communications that lull a victim into a false sense of security after the victim's money had already been obtained, or that assist the defendant in avoiding detection may be sufficient to further a scheme.” Id.; see also United States v. Freed, 2016 WL 374133, at *3 (N.D. Ill. Feb. 1, 2016).

         In this case, Counts 2, 3 and 4 of the Amended Indictment each identify a wire communication that Defendant made in furtherance of his alleged scheme to defraud Rawah Partners. Count 2 is based on an email Defendant sent to Duncan (Rawah Partners' agent) on March 22, 2009 stating: “Today, I asked you if we could sell another $50k to you in stock. I need this to pay the Health Insurance by the end of March.” [80] at 6. Count 3 is based on an email Defendant sent to Duncan on November 7, 2011, assuring him “Your funds did go into ECS.” [80] at 7. And Count 4 is based on an email that Defendant sent to Duncan on November 9, 2011, stating “I can assure you that your 60k was used to pay up Health Insurance in 2009.” [80] at 8. The Amended Indictment suggests that these later communications were intended to “lull [the] victim[s] into a false sense of security after [their] money had already been obtained, ” and also to “avoid[] detection” of Defendant's fraudulent scheme. McGowan, 590 F.3d at 457.

         The fact that these communications occurred several years after the communication described in Count 2 is irrelevant, given that they occurred while the scheme was ongoing. [80] at 2, ¶ 2 (allegation in Amended Indictment that Defendant's scheme lasted from approximately March 2009 to March 2012); see also McGowan, 590 F.3d at 457 (eighteen telephone calls made by defendant after the government knew about the fraud and after defendant had obtained the victim's money furthered the scheme to defraud, and therefore supported Defendant's conviction for eighteen counts of wire fraud under 18 U.S.C. § 1343); United States v. Cherif, 943 F.2d 692, 696 (7th Cir. 1991) (indictment stated violation of mail and wire fraud statutes based on mailings and wirings, although former bank employee alleged that mailings and wirings necessary for his stock transactions occurred long after he fraudulently obtained information about stocks from bank, where stock trades were integral part of fraudulent scheme and whole point of scheme); United States v. Dacri, 827 F.Supp. 550, 555-56 (E.D. Wis. 1993) (counts of mail fraud indictment alleging that defendant mailed progress report and project profile to investor and mailed letter in response to investor's request for accounting were not constitutionally deficient on grounds that mailings were allegedly made after funds had been obtained from alleged victims and thus could not have been in furtherance of scheme to defraud; government alleged that these mailings furthered fraudulent scheme by lulling victims into false sense of security that minimized their ability to detect fraud and recover their money, and alleged mailings did not occur after time at which indictment alleged that fraudulent scheme had ended).

         Defendant cites to cases involving the federal bank fraud statute for the proposition that each wire transaction charged in the indictment must itself constitute an execution of the scheme charged. But unlike the wire fraud statute, the bank fraud statute “‘punish[es] each execution of a fraudulent scheme rather than each act in furtherance of such a scheme.'” United States v. Longfellow, 43 F.3d 318, 323 (7th Cir. 1994) (quoting United States v. Molinaro,11 F.3d 853, 859 (9th Cir. 1993)); ...


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