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United States v. Bell

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

July 2, 2019

UNITED STATES OF AMERICA, Plaintiff,
v.
MARVIN T. BELL, MONICA HERNANDEZ, and CARLOS RAYAS, Defendants.

          MEMORANDUM OPINION AND ORDER

          VIRGINIA M. KENDALL, UNITED STATES DISTRICT JUDGE

         On December 11, 2013, a grand jury indicted Defendants Melvin Bell and Monica Hernandez with four counts of mail fraud (Counts I-IV) and Defendant Carlos Rayas with two counts of mail fraud (Counts I and IV), all in violation of 18 U.S.C. § 1341. (Dkt. 2). On January 20, 2017, Defendant Rayas pled guilty to Count IV. (Dkts. 336-37). On February 1, 2017, a jury found Defendants Bell and Hernandez each guilty on three counts of mail fraud. (Dkts. 350-353). Defendant Bell filed a Motion for Judgment of Acquittal on all three counts under Federal Rule of Criminal Procedure 29. (Dkt. 476). For the following reasons, Defendant Bell's Motion (Dkt. 476) is denied.

         BACKGROUND

         The Indictment alleged that Bell, Hernandez, and Rayas (“Defendants”) participated in a scheme beginning in October 2011 and continuing through 2013 in which they falsely marketed Washington National Trust as a trust operated and controlled by wealthy Native Americans who provided financial assistance to homeowners facing foreclosure of their homes. (Id. at ¶¶ 3-4).

         Specifically, the Government charged that Defendants falsely represented to homeowners that in exchange for fees ranging from $5, 000 to $10, 000, WNT would lower their mortgages and/or defeat foreclosure by purchasing their mortgages from the lender, applying the fees paid to WNT by the homeowners to the principal balance, and then charging the homeowners only half of their original mortgage to be paid over five years free of any interest and taxes. (Id. at ¶¶ 6-8). The Indictment further alleged that Defendants directed homeowners to sign documents and deeds purportedly transferring title to WNT and assigning WNT as their trustee and then mailed the new members signed copies of these membership documents knowing the documents would have no effect on the foreclosure process and were designed only to make WNT appear legitimate. (Id. at ¶¶ 9-10). In fact, WNT did not have sufficient funds to purchase any homeowner's mortgage and never did so, and instead used the homeowners' fees for personal expenses, WNT operations, and referral fees paid to individuals who referred additional homeowners to WNT. (Id. at ¶¶ 13-15). Defendants concealed all of this from homeowners, as well as the fact that in December 2012 the Illinois Department of Financial and Professional Regulation (IDFPR) ordered WNT to cease and desist using the word “trust” when conducting business in Illinois and in February 2013 revoked Rayas' mortgage loan originator license and ordered Bell and Hernandez to cease and desist engaging in unlawful residential mortgage origination activity in Illinois. (Id. at ¶¶ 18-21).

         Each of the four counts charged in the Indictment corresponds to a separate mailing of membership documents, alleging that on a specific date-April 11, 2012, August 8, 2012, September 6, 2012, and September 7, 2012-Defendants:

for purpose of executing the scheme to defraud, knowingly caused to be delivered by U.S. mail, according to the direction thereon, an envelope containing signed copies of membership documents from WNT to [a member in Illinois].

(Id. at Counts I-IV). The four individual victims were later identified as Rafael Ramirez, Cuahtemoc Lopez, Adan Tapia, and Blanca Gonzalez. The Government eventually dropped the charge based on the mailing to Tapia. On January 20, 2017, Rayas pled guilty to one of the charges of mail fraud against him. (Dkt. 337).

         The Court held a jury trial from January 25, 2017 to February 1, 2017 on the remaining three charges against Bell and Hernandez. The jury heard from several witnesses including Ramirez, Lopez, Tapia, Gonzalez and other victims of Defendants' scheme; WNT employees; the IDFPR employee who handled the investigation into WNT; and the auditor with the U.S. Attorney's Office who investigated WNT's finances. The Government also introduced a number of exhibits including the membership packets mailed to Ramirez, Lopez, and Gonzalez; more than 60 folders of WNT records including outgoing mail maintained by Hernandez; and WNT financial records.

         The jury judged the credibility of the witnesses, weighed the evidence, and found Bell and Hernandez guilty on three counts of mail fraud. Bell now moves for acquittal and claims the Government did not meet its burden of proof on the element that he caused the U.S. Postal Service to deliver mail “for the purpose of executing the scheme.”

         LEGAL STANDARD

         Federal Rule of Criminal Procedure 29(a) provides that “the court on the defendant's motion must enter a judgment of acquittal on any offense for which the evidence is insufficient to sustain a conviction.” Fed. R. Crim. P. 29(a). “In challenging the sufficiency of the evidence, [the defendant] bears a heavy, indeed, nearly insurmountable, burden.” United States v. Warren, 593 F.3d 540, 546 (7th Cir. 2010). The defendant “must convince [the court] that even after viewing the evidence in the light most favorable to the prosecution, no rational trier of fact could have found him guilty beyond a reasonable doubt.” Id. (quoting United States v. Woods, 556 F.3d 616, 621 (7th Cir. 2009)). In other words, a court will “set aside a jury's guilty verdict only if the record contains no evidence, regardless of how it is weighed, from which a jury could have returned a conviction.” United States v. Presbitero, 569 F.3d 691, 704 (7th Cir. 2009); see also United States v. Chhibber, 741 F.3d 852, 858 (7th Cir. 2014) (The Court “will overturn a verdict for insufficiency of the evidence only if, after viewing the evidence in the light most favorable to the government, the record is devoid of evidence from which a rational trier of fact could find guilt beyond a reasonable doubt.”). The jury must weigh the evidence and assess the witnesses' credibility and courts do not “second-guess the jury's assessment of the evidence.” United States v. Rollins, 544 F.3d 820, 835 (7th Cir. 2008); see also Warren, 593 F.3d at 547 (“Sorting the facts and inferences is a task for the jury.”). If “there is a reasonable basis in the record for the verdict, it must stand.” United States v. Moshiri, 858 F.3d 1077, 1082 (7th Cir. 2017).

         DISCUSSION

         Bell argues that the Court should enter a judgment of acquittal under Rule 29 for each count because the Government failed to present evidence that he caused the U.S. Postal Service to deliver mail for the purpose of executing the scheme. Bell argues that because the scheme was completed in person before any mailings were sent, the subsequent mailings could not have furthered the scheme and, in fact, only hastened the detection of the scheme. ...


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