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United States v. Williams

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

December 14, 2016



          Virginia M. Kendall United States District Court Judge

         In July 2013, a special grand jury indicted Defendant Charlise D. Williams on five counts of bankruptcy fraud in violation of 18 U.S.C. §§ 157(1) and 157(2). (Dkt. 1.) The Indictment alleged that Williams fraudulently filed Chapter 13 bankruptcy proceedings in order to stay collection activity by creditors seeking to enforce security interests against her condominium property while representing that she would make monthly payments under a repayment plan that she did not intend to repay, and transferring ownership of the property to her co-defendant, Ekkehard T. Wilke, for the purpose of avoiding creditors and in violation of bankruptcy rules. (Id.)

         Following a six-day trial, a jury convicted Williams of all five counts. (Dkt. 145.) After the trial, through counsel, Williams moved for acquittal or new trial under Federal Rules of Criminal Procedure 29(b) and 33(a). [155] She argues that the Government presented insufficient evidence to support the guilty verdict and that the Court erred in: 1) limiting the cross-examinations of witnesses Carrolyn Patterson and David Sugarand, and co-defendant Ekkehard Wilke; 2) limiting her ability to impeach Wilke's credibility; and 3) excluding a good faith jury instruction while including the aider and abettor instruction. The Court denies the motion for the following reasons.

         I. Ample Evidence in the Record Supports the Jury Verdict

         A motion for judgment of acquittal challenges the sufficiency of the evidence to sustain a conviction against a defendant. See Fed. R. Crim. P. 29. A defendant faces “a nearly insurmountable hurdle” in contending that the jury had insufficient evidence to convict her. See United States v. Miller, 782 F.3d 793, 797 (7th Cir. 2015) (quoting United States v. Torres-Chavez, 744 F.3d 988, 993 (7th Cir. 2014)). Once convicted, courts review the evidence presented to the jury in the light most favorable to the Government and make all reasonable inferences in the Government's favor. See United States v. Cejas, 761 F.3d 717, 726 (7th Cir. 2014) (citing United States v. Larkins, 83 F.3d 162, 165 (7th Cir. 1996)). Courts may overturn a guilty verdict “only if the record is devoid of evidence from which a reasonable jury could find guilt beyond a reasonable doubt.” United States v. Jones, 713 F.3d 336, 340 (7th Cir. 2013) (quoting United States v. Stevenson, 680 F.3d 854, 855-56 (7th Cir. 2012)). The jury must weigh the evidence and assess witnesses' credibility, and courts do not “second-guess the jury's assessment of the evidence.” See United States v. Rollins, 544 F.3d 820, 835 (7th Cir. 2008).

         Williams was convicted of violating 18 U.S.C. § 157(1)-(2), which required the Government to prove beyond a reasonable doubt that she knowingly devised or participated in a scheme to defraud with the intent to defraud, involving a materially false or fraudulent representation, claim, or promise, and for the purpose of executing or concealing the scheme, filed a document in a proceeding under Title 11. 18 U.S.C. § 157(1)-(2); see United States v. Holstein, 618 F.3d 610, 611-12 (7th Cir. 2010).

         Williams asserts that the insufficiency of the evidence can be adduced from the trial without directing the Court to any detail on the weakness of any piece of evidence or how the overall evidence failed to prove her guilt. The evidence at trial included exhibits and testimony that between 2003 and 2009, Williams filed five bankruptcy proceedings under Chapter 13 (Trial Tr. 147:6-19); possessed assets that could help repay her creditors, namely the condominium at 2901 South Michigan Avenue (see e.g., Trial Tr. 156:1-25); that she transferred her condominium title to her co-defendant, Ekkehard Wilke, in order to have him falsely claimed ownership of the property and return the property back to her (see e.g., Trial Tr. 187: 25; 188:1-17; 462:2-22); that she asked Wilke to put his name on the deed and mortgages, and instructed him on filing for bankruptcy himself in order for her to keep her condominium (see e.g., Trial Tr. 402-50; 510-576); falsely testified under oath to a Bankruptcy Judge about the ownership of the condominium (see e.g., Trial Tr. 867-870); and throughout, failed to make repayment plan payments (see e.g., Trial Tr. 211:-222). Testimony included that of her co-defendant, who described the scheme, and testimony from Wilke's bankruptcy attorney, numerous bankruptcy court documents that corroborated the trial testimony, the two sets of deeds showing the flip flopping of the condominium, and dozens of emails within which Defendant directed others on how to proceed in the bankruptcy case showing her direct involvement and orchestration in the fraud. Accordingly, there was more than sufficient evidence for the jury to find her guilty beyond a reasonable doubt.

         II. The Court Did Not Err during Trial

         Alternatively, a court may vacate a judgment and grant a new trial upon the defendant's motion “if the interest of justice so requires.” See Fed. R. Crim. P. 33; see also United States v. Berg, 714 F.3d 490, 500 (7th Cir. 2013); United States v. Smith, 674 F.3d 722, 728 (7th Cir. 2012). The Court need not view the evidence in the light most favorable to the Government. See United States v. Washington, 184 F.3d 653, 657 (7th Cir. 1999). Rather, “a defendant is entitled to a new trial if there is a reasonable possibility that a trial error had a prejudicial effect upon the jury's verdict.” United States v. Van Eyl, 468 F.3d 428, 436 (7th Cir. 2006); see also United States v. Eberhart, 388 F.3d 1043, 1048 (7th Cir. 2004), overruled on other grounds, 546 U.S. 12 (2005). Indeed, the Court cannot reweigh evidence or set aside a verdict because the Court thinks that another finding would have been more reasonable. United States v. Reed, 875 F.2d 107, 113 (7th Cir. 1989). Granting a new trial for issues relating to a witness's credibility or conflicting testimony requires extreme circumstances where the evidence “contradicts physical facts or laws.” United States v. Kuzniar, 881 F.2d 466, 470 (7th Cir. 1989). Broadly, Rule 33 motions are generally disfavored and courts only grant them in “extreme” cases. See United States v. Linwood, 142 F.3d 418, 422 (7th Cir. 1998) (quoting United States v. Morales, 902 F.2d 604, 605 (7th Cir. 1990) (internal citations omitted); see also United States v. Kamel, 965 F.2d 484, 490 n.7 (7th Cir. 1992). Jury verdicts are “not to be overturned lightly.” United States v. Santos, 20 F.3d 280, 285 (7th Cir. 1994) (citations omitted).

         A. Testimony of Witnesses Carrolyn Patterson and David Sugar

         Williams claims that the Court erred in narrowing her cross-examination of Government witnesses Carrolyn Patterson and David Sugar, which, if permitted, would have allowed her to impeach their credibility and show their bias. Through this error, Williams argues, the Court violated her Sixth Amendment right to effectively cross-examine witnesses at her trial. (Dkt. 155, at 2.) See Chambers v. Mississippi, 410 U.S. 284, 295 (1973). Williams sought to cross-examine Patterson, a member of the Board of Directors for the South Commons Condominium Association (“SCCA”), and Sugar, General Counsel for SCCA, on whether Patterson and Sugar treated her differently than any other tenant because they were aware of the lawsuit she filed against the SCCA and were thus biased in their motives to testify against Williams. (Id. at 3.) The Court did not permit Williams to question Patterson and Sugar on this particular issue. (Trial Tr. 380-381.) Nor did the Court permit Williams to question Patterson and Sugar about their knowledge of the details of the lawsuit, sought by Williams to examine their credibility. (Trial Tr. 848-849.)

         Neither exclusion violated Williams's constitutional right to cross-examine Patterson and Sugar. Courts have “wide discretion” to decide which evidence to admit through cross-examination. See United States v. Linzy, 604 F.3d 319, 323 (7th Cir. 2010) (quoting United States v. Reyes, 542 F.3d 588, 593 (7th Cir. 2008)). Cross-examination limitations that do not foreclose defendants' opportunity to establish witnesses' biased motives to testify do not implicate the confrontation clause. Id. (citing United States v. Recendiz, 557 F.3d 511, 530 (7th Cir. 2009)). This includes courts' ability to weigh the relevance of particular evidence against its unfairly prejudicial effect. See Fed. R. Evid. 403.

         On cross examination of Patterson, she was asked by defense counsel, “But you were also aware that Ms. Williams had filed a lawsuit against South Commons?” Patterson responded, “Yes.” (Trial Tr. 371:4-6.) She was then further asked whether South Commons had to pay legal fees to defend that suit, to which she also replied yes. (Trial Tr. 371:7-9.) Patterson was also asked whether she knew that Williams had tried to get others to join a class action, and again the answer was yes. (Trial Tr. 371:10-13.) At this point, there was an objection to the line of cross, and the Court held a sidebar to explore where the defense was going with the lawsuit. (Trial Tr. 371-374.) At the sidebar, the defense posited that they believed she was treated differently in that the Condo Association did not offer her a payment plan, which is why she eventually, according to her attorneys, had to file for bankruptcy. (Trial Tr. 372:1-10.) The Court excluded further examination on those grounds, finding that this was merely an effort to create jury nullification as an effort on the defense's part to present to the jury the idea that the assessments were not valid debts, such that Williams could not have committed a fraud. (Trial Tr. 372:11-20.) Therefore, the Court only limited an area that was not relevant and highly prejudicial in that it could have been used to argue jury nullification to the jury. In truth, the Court permitted numerous questions regarding whether others were given payment plans and whether the defendant was offered one. (Trial Tr. 368-372.) The Court also permitted the line of questions that elicited that Williams may have been treated differently because she had filed a lawsuit, encouraged others to join her in her lawsuit, and was not offered a payment plan. (Id.) As such, the defense was given the materials that it needed to argue, if it wanted, that Williams was treated differently by South Commons due to her filing of the lawsuit. What she was not permitted to argue was that the assessments were invalid debts, and therefore could not form the basis for a bankruptcy filing. (Trial Tr. 371-74.) Williams was not foreclosed from cross-examining Patterson to expose any bias or motives to testify - if such a bias or motive could even be inferred from the filing of the lawsuit. Instead, the Court correctly limited Patterson's testimony in order to prevent a collateral issue from being tried, one which could result in confusion and jury nullification, and was not even questioned on direct. Accordingly, the Court correctly acted within its discretion to limit the cross-examinations of Patterson by determining that the prejudicial effect stemming from testimony about her prior lawsuit would outweigh the relevance of any information regarding it: “And the reason I say that is because it isn't a defense for this jury to unilaterally . . . look at the problem in the underlying debt and say, you know, that not a good debt, like that wasn't right that they made her have that debt, which is not a defense to any of the elements.” (Trial Tr. 375:2-6). The Court had already permitted the testimony regarding the filing of the lawsuit and the fact that the Condo Association did not permit Williams to file for a payment plan, which was sufficient evidence to allow the defense to attempt to demonstrate potential bias on the part of the witness. See Linzy, 604 F.3d at 323; Fed.R.Evid. 403.

         Williams seeks to argue that the cross examination of Sugar was similarly flawed. Again, Williams is incorrect. The Court allowed the defense to inquire about the filing of the lawsuit and the collection of debts through payment plans. (Trial Tr. 654-658.) The cross examination fell flat because Sugar testified that no lawsuit was filed, and she had nothing to do with payment plans. Regardless, the cross examination of the witness to show bias against Williams due to her filing of the lawsuit was permitted by the Court and was conducted. Courts can exclude evidence where the risk of wasting time by showing it outweighs its probative value. See Fed. R. Evid. 403. This Court found that the relevance of the details of Williams's other lawsuit were not sufficiently material to this trial to permit the attack of Patterson and Sugar through this particular line of questioning “because [they ...

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