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United States v. Williams

United States Court of Appeals, Seventh Circuit

June 6, 2018

United States of America, Plaintiff-Appellee,
Charlise Williams, Defendant-Appellant.

          Argued May 16, 2018

          Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:14-cr-0557-1 - Virginia M. Kendall, Judge.

          Before Flaum, Sykes, and Hamilton, Circuit Judges.

          Flaum, Circuit Judge.

         Charlise Williams was charged in a five-count indictment for bankruptcy fraud. After a weeklong jury trial, she was found guilty on all counts and sentenced to a below-Guidelines prison term of 46 months. On appeal, Williams argues that the district court erred by: (1) restricting her ability to cross-examine witnesses in violation of the Confrontation Clause; and (2) applying certain Guidelines offense-level enhancements based upon the total loss amount and number of victims. We affirm.

         I. Background

         A. Factual Background

         On December 14, 1999, Williams purchased two combined condominium units (collectively, the "condominium") overseen by the South Commons Condominium Association ("SCCA"). Williams financed the purchase with a mortgage, and refinanced twice. By 2003, Williams fell behind on payments to various creditors, including to SCCA for condominium association fees.

         On January 30, 2003, Williams filed the first, of eventually five, Chapter 13 Bankruptcy petitions in the Bankruptcy Court for the Northern District of Illinois. Importantly, when an individual files a bankruptcy petition, all creditors are automatically stayed from initiating debt collection activities. Her scheme was generally as follows. After filing for bankruptcy, Williams would fail to make all required payments as required by her Chapter 13 payment plan. As a result, the bankruptcy court would dismiss the case. After the dismissal, SCCA would often file eviction and collection suits. Williams would then file a new Chapter 13 bankruptcy petition in order to stay the action. Again, Williams would fail to make most of the required plan payments, and the cycle would continue.

         Notably, after voluntarily dismissing her second bankruptcy petition, Williams arranged to temporarily transfer the condominium to a companion, Ekkehard Wilke. On March 21, 2005, Williams and Wilke signed two documents: a warranty deed by which Williams transferred the condominium to Wilke, and a quitclaim deed that returned title to Williams.

          Williams recorded the warranty deed on April 12, 2005 and the quitclaim deed on May 12, 2005. At Williams's trial, Wilke testified that he provided nothing of value in exchange for title and never lived in the condominium. With title in his name, Wilke obtained two mortgage loans secured by the condominium. Neither Williams nor Wilke made all the required payments. Moreover, in her bankruptcy petitions that followed, Williams failed to disclose the transfers of her condominium to and from Wilke. Additionally, she told the bankruptcy court that Wilke was a co-debtor and agreed to contribute $1, 324 a month toward the mortgage. However, at trial, Wilke testified this was not true.

         After dismissing Williams's fifth and final petition, on December 4, 2009, the bankruptcy court also barred Williams from filing a new bankruptcy case for 180 days. As a result, SCCA's eviction suits could proceed. However, in January 2010, Williams and Wilke agreed to a plan that Williams believed could prevent eviction: Williams would transfer title of the condominium to Wilke, and Wilke would file for bankruptcy in his name. Like in 2005, Williams prepared two deeds-a warranty deed transferring title from Williams to Wilke, and a quitclaim deed transferring title back to Williams. Wilke and Williams signed both deeds, which were later notarized. The warranty deed was recorded on February 1, 2010. The quitclaim deed was not recorded until March 4, 2011.

         On February 9, 2010, Wilke filed a Chapter 13 bankruptcy petition stating the condominium was his property. Because neither Wilke nor Williams made the required plan payments, Wilke's attorney suggested converting the bankruptcy to a Chapter 7 case. Wilke testified Williams opposed this change because she would lose ownership of the condominium. In April 2010, an attorney filed a motion on behalf of Wilke requesting an order staying SCCA's eviction proceedings and seeking sanctions against SCCA. The motion stated that Wilke owned the condominium and Williams rented from Wilke. At trial, however, Wilke testified that he did not retain this attorney or ask him to file the motion. On May 11, 2010, Wilke admitted to the bankruptcy court that he testified falsely to benefit Williams, and the court dismissed his bankruptcy case.

         B. Procedural Background

         On October 2, 2014, Williams and Wilke were charged in a five-count indictment for bankruptcy fraud under 18 U.S.C. §§ 157(1) and (2). Wilke pled guilty to a misdemeanor and agreed to cooperate with the government in its prosecution of Williams. Williams proceeded to trial, which began on June 13, 2016. The government called several witnesses, including SCCA board member Carrolyn Patterson, SCCA attorney David Sugar, and Wilke.

         Relevant to this appeal, on cross-examination, defense counsel sought to ask Patterson and Sugar about a class action lawsuit Williams had filed against SCCA in order to show that SCCA had strong negative feelings about Williams. Additionally, Williams sought to ask the witnesses about SCCA's treatment of Williams relative to other tenants, and specifically, whether SCCA offered her a payment plan. The government raised a Federal Rule of Evidence 403 objection to this line of questioning. The court, while recognizing that Williams could cross-examine the witnesses to show bias, restricted questioning as to these topics. It permitted defense counsel to ask the witnesses whether they were aware of Williams's role in filing the class action and the related legal fees, but barred further inquiry into the substance of her allegations. It reasoned that the topics "raise[d] a jury nullification issue" because they were an attack on the underlying debt, which was irrelevant to the elements of bankruptcy fraud.

         On June 20, 2016, after a week-long jury-trial, Williams was found guilty on all five counts charged in the indictment; on December 14, the district court denied Williams's motion for acquittal or a new trial. The court held a sentencing hearing on May 30, 2017. It determined Williams had a base offense-level of 6 and criminal history category of I. The government sought several offense-level enhancements, two of which are relevant to this appeal: ten levels for causing a total loss greater than $150, 000 and two levels because the offense involved ten or more victims. The government calculated total loss at $193, 291-"the increase in the amount of money that defendant owed to her creditors (and which the creditors were prevented from trying to collect) between when she filed her first bankruptcy case and when she filed her fifth one." It determined that Williams's offense involved more than ten victims because in 2009, Williams had over thirty creditors she did not have in 2003. Williams, on the other hand, maintained that "the sole purpose of the scheme was for Ms. Williams to maintain control of her condominium" and therefore, "liability ...

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