Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

United States v. Freed

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

November 9, 2016

UNITED STATES OF AMERICA
v.
LAURANCE H. FREED

          MEMORANDUM OPINION AND ORDER

          Robert M. Dow, Jr. United States District Judge.

         This matter is before the Court on Defendant Laurance H. Freed's consolidated motion [134] for a judgment of acquittal pursuant to Rule 29 of the Federal Rules of Criminal Procedure and for a new trial pursuant to Rule 33 of the Federal Rules of Criminal Procedure. For the following reasons, the motion [134] is denied. The other pending motions [91], [104], [108], [121] are stricken as moot.

         I. Background

         On February 24, 2016, a jury found Defendant guilty of bank fraud in violation of 18 U.S.C. § 1344 (Counts One, Six, and Seven), mail fraud in violation of 18 U.S.C. § 1341 (Count Eight), and making false statements to a bank in violation of 18 U.S.C. § 1014 (Counts Ten, Eleven, Fourteen, and Sixteen). [126.] The jury acquitted Defendant on the remaining counts, which were bank fraud counts (Counts Two to Five), false statements to a bank counts (Counts Twelve and Thirteen), and a wire fraud count (Count Nine). [126.] On April 13, 2016 Defendant filed his consolidated motion for a new trial and for a judgment of acquittal. [134; see also 142 (Government's response); 143 (Freed's reply).]

         II. Analysis

         A. Motion for a Judgment of Acquittal

         Under Federal Rule of Criminal Procedure 29, "the court on the defendant's motion must enter a judgment of acquittal of any offense for which the evidence is insufficient to sustain a conviction." In reviewing a motion for a judgment of acquittal, the Court "construe[s] the evidence in the light most favorable to the government, asking whether a rational trier of fact could have found the elements of the crime beyond a reasonable doubt." United States v. Weimert, 819 F.3d 351, 354 (7th Cir. 2016). The Court's task is not to "reweigh the evidence or invade the jury's province of assessing credibility." United States v. Peterson, 823 F.3d 1113, 1120 (7th Cir. 2016) (citation and internal quotation marks omitted). Rather, the Court "will overturn the jury's verdict only when the record contains no evidence, regardless of how it is weighed, from which the jury could find guilt beyond a reasonable doubt." Id. (citation and internal quotation marks omitted). Given the deference given to jury determinations on evidentiary matters, the Seventh Circuit has stressed that defendants bringing Rule 29 motions face "a nearly insurmountable hurdle." Weimert, 813 F.3d at 354 (citation and internal quotation marks omitted).

         Defendant makes three arguments in support of his motion for a judgment of acquittal. First, Defendant argues that there was insufficient evidence to prove that he acted with intent to defraud for Count One (bank fraud). Second, he contends that there was insufficient evidence to show that the executions charged in Counts Six and Seven (bank fraud) and Count Eight (mail fraud) could have furthered a scheme to defraud the banks. Third, Defendant argues that there was insufficient evidence to prove that he knowingly made any false statements for Counts Ten, Eleven, Fourteen, and Sixteen (making false statements to a bank). The Court will address each argument in turn.

         1.Intent to Defraud: Count One

         Defendant argues that the Court should acquit him on Count One (bank fraud) because there was insufficient evidence to establish that he acted with intent to defraud. Intent to defraud must be proven to obtain a conviction for bank fraud under 18 U.S.C. § 1344. United States v. Moede, 48 F.3d 238, 241 (7th Cir. 1995). The Seventh Circuit has defined "intent to defraud" as "acting willfully and with specific intent to deceive or cheat, usually for the purpose of getting financial gain for one's self or causing financial loss to another." United States v. Jackson, 540 F.3d 578, 594 (7th Cir. 2008) (citation and internal quotation marks omitted). The Government may prove intent to defraud using circumstantial evidence and inferences drawn from the scheme itself. Id.

         The bank fraud execution charged in Count One related to the double pledge of the Uptown Goldblatt's Venture ("UGV") TIF project notes ("TIF notes"). This execution was purportedly accomplished through a PowerPoint slide entitled "Line of Credit Collateral" contained in the presentations that Defendant's business, Joseph Freed and Associates ("JFA"), made to a bank consortium led by Bank of America (collectively, "Bank of America"). The Government argued at trial that the slide falsely represented that JFA owned one hundred percent of the TIF notes, that the cost to sell the notes was $0, and that the proceeds of the sale would be $7, 698, 000[1] According to Defendant, the slide contained no affirmative misrepresentations concerning the TIF notes. Defendant contends that the only evidence the Government produced concerning Defendant's alleged intent to defraud Bank of America regarding the double pledge was that Defendant knew about the double pledge and that he did not inform Bank of America about the double pledge despite multiple opportunities to do so. Defendant argues that this is not enough to support a finding of intent to defraud.

         The Court rejects Defendant's claim that there were no affirmative misrepresentations in JFA's PowerPoint presentation to Bank of America. During his direct examination, Gary Katunas of Bank of America identified affirmative false statements on the "Line of Credit Collateral" PowerPoint slide. Specifically, the slide represented that the sale value and proceeds of the sale of the TIF notes would be $7, 698, 000.[2] Katunas explained to the jury that this was a false representation because the TIF notes were double pledged-they were previously pledged to Cole Taylor Bank. Thus, $7, 698, 000 overstated the sale value and proceeds by approximately $2, 100, 000, which was the value of the TIF notes that had been pledged to Cole Taylor.

         Defendant argues that Katunas "acknowledged during cross-examination that the affirmative representations on the PowerPoint slide were accurate, although he appeared to contend that the fact of the double pledge should have been disclosed 'somewhere' on that slide." [134, at 2.] In Defendant's view, because of Katunas' statements during cross-examination, there was insufficient evidence from which a reasonable jury could find intent to defraud beyond a reasonable doubt. Katunas stated during cross-examination that he understood the "Sale Value" of the TIF notes on the slide to be based on the notes' appraised market value. Katunas also acknowledged that "Cost of Sale" is understood to be a standard 1% allowance for real estate brokerage commissions and legal fees for the sale of real estate, and thus this expense was inapplicable to the TIF notes. He further testified that the "% JFA" line reflected Defendant's ownership vis-a-vis any partners in those ventures, and because Defendant did not have partners in the TIF notes, the 100% figure was accurate. Katunas also stated on cross-examination that the net proceeds and approximate proceeds line items on the slide were "mathematical calculations based on the above line items."

         Defendant's argument fails because considering Katunas' statements during cross-examination in the context of the rest of his testimony and viewing the evidence in the light most favorable to the government, there was sufficient evidence to support the jury's finding of intent to defraud. Simply put, a rational jury could have credited Katunas' testimony on direct examination and discounted his cross-examination. Peterson, 823 F.3d at 1120 (noting that in reviewing a motion for a judgment of acquittal, the Court's task is not to "reweigh the evidence or invade the jury's province of assessing credibility").

         Defendant's argument also overlooks much of the evidence of Defendant's motive to commit fraud in light of his financial problems and Defendant's lies to Bank of America about the value of the TIF notes. This evidence also could ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.