IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

UNITED STATES OF AMERICA,

Plaintiff,

v.

MICHELE DICOSOLA,

Defendant.

Case No. 12 CR 446

Hon. Harry D. Leinenweber

MEMORANDUM OPINION AND ORDER

Defendant’s Motion to Sever [ECF No. 195] is granted. 

Defendant’s Motion for Disclosure of Exculpatory and Impeaching

Evidence [ECF No. 196] is denied. Defendant’s Motion for Disclosure

of Signed Indictment and Grand Jury Minutes [ECF No. 197] is granted

in part. The Government shall submit, for in camera review,

competent proof that the indictment in this case was returned by a

Grand Jury whose term had not expired. Defendant’s Motion to Dismiss

Count Two of the Indictment [ECF No. 198] is granted. 

I. BACKGROUND

Defendant Michele DiCosola (the “Defendant”) stands accused of

committing a variety of acts to defraud others and enrich himself. 

The allegations that follow are drawn exclusively from the eightcount indictment.

The first set of charges relates to fraudulent applications for

loans. Defendant is alleged to have served as President of a

business called “CD Shape Cutters.” When acting in that capacity in
July 2008, he submitted an application to Amcore Bank for two

business loans (in the amounts of $250,000 and $450,000). To induce

the bank to approve the application, he included false personal and

business tax returns from 2006 and 2007 that inflated his income. 

The next month, Defendant submitted a mortgage application to

CitiMortgage so that he could refinance his personal home mortgage

and obtain a home equity loan. He supplemented his application in

September 2008 by faxing CitiMortgage the same false tax returns from

2007 and 2008 that overstated his income. These loans were approved

and funded shortly thereafter. Despite his guarantee of full and

punctual payment, Defendant defaulted on the loans. Counts I and II

charge bank fraud in violation of 18 U.S.C. § 1344 – one count for

each business loan. Count III alleges that Defendant made a false

statement to a bank in violation of 18 U.S.C. § 1014 in his pursuit

of the business loans. Count IV charges wire fraud under 18 U.S.C.

§§ 1343 and 1342 for the fax transmission of the false 2006 and 2007

tax returns used to obtain the personal loans. 

Next, Counts V and VI charge Defendant with filing false claims

against the United States in violation of 18 U.S.C. § 287. The

indictment accuses Defendant of filing two false tax returns on

September 15, 2009 – one for himself and one on behalf of behalf of

taxpayer P.W. The fraudulent returns claimed entitlement to tax

refunds of approximately $5.5 million and $385,000. Although not

mentioned in the indictment, the Court understands that Defendant’s

claim for a tax refund was based on an original issue discount

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(“OID”) tax theory whereby a filer claims that numerous debts entitle

him to a large refund from the IRS. 

Finally, the indictment brings two Counts for bankruptcy fraud

related to Defendant’s two bankruptcy cases. First, on June 14,

2010, Defendant filed a Chapter 11 petition wherein he misrepresented

whether he had closed financial accounts within the past year and

whether he had served as an officer, director, partner, or managing

director of a business within the past six years. Then, on November

2, 2010, Defendant filed another Chapter 11 petition in which he made

those same misrepresentations. Counts VII and VIII relate to these

two false petitions. 

The case is scheduled for trial in September 2014. Now pending

before the Court are Motions to Sever, for Disclosure of Exculpatory

and Impeaching Evidence, for Disclosure of the Signed Indictment and

Grand Jury Minutes, and to Dismiss – all filed by Defendant. 

II. MOTION TO SEVER

Defendant argues that the charges in this case must be severed

into three groups: Counts I-IV for bank fraud, Counts V-VI for tax

fraud, and Counts VII-VIII for bankruptcy fraud. Rule 8(a) allows

the Government to charge multiple counts in a single indictment if

the offenses charged “are of the same or similar character, or are

based on the same act or transaction, or are connected with or

constitute parts of a common scheme or plan.” FED. R. CRIM. P. 8(a). 

“Rule 8 should be broadly construed in order to increase judicial

efficiency and to avoid costly and duplicative trials.” United

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States v. Freland, 141 F.3d 1223, 1226 (7th Cir. 1998). The

Government does not argue that the charges are based on the same act

or transaction. Thus, of the grounds for joinder listed in Rule

8(a), only the first and third are at issue. If joinder is proper

under Rule 8, then the Court will consider whether the charges should

be severed under Rule 14(a) to avoid prejudice to the defendant.

A. Same or Similar Character

The Seventh Circuit has articulated two different approaches,

both valid, to determining whether charges are “of the same or

similar character.” First, different charges are “of the same or

similar character” if they “refer to the same type of offenses

occurring over a relatively short period of time, and the evidence as

to each count overlaps.” United States v. Turner, 93 F.3d 276, 283

(7th Cir. 1996). Second, even if they are separate in time, charges

can still be of the same or similar character if they share

“categorical, not evidentiary, similarities.” Id. Either way, the

charges need not share an “identical statutory origin.” United

States v. Alexander, 135 F.3d 470, 476 (7th Cir. 1998). 

Searching first for categorical similarities, the Court notes

that all of the charges in this case involve a false statement made

for financial gain. But how much deeper do the similarities extend? 

For the bank fraud charges, Defendant misrepresented his income and

used false tax returns from 2007 and 2008 as verification. The tax

fraud charges are based on false tax returns filed in September 2009

that listed numerous debts; there is no indication that Defendant

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misrepresented his income in those tax returns. In the bankruptcy

filings, Defendant is alleged to have misrepresented his financial

affairs by omitting details regarding closed accounts and his service

as an officer of a business entity. Thus, the three sets of charges

relate to three different types of misrepresentations: one about

Defendant’s income, another about his debts, and a third about his

business affairs. 

“Financial gain” is similarly broad and misleading. The

different misrepresentations alleged in this case were in furtherance

of attempts to obtain different types of financial help from

different entities: the loan applications requested funds on credit

from private banks, the tax returns claimed entitlement to cash

refunds from the IRS, and Defendant’s bankruptcy petitions asked for

judicially-imposed relief from various creditors. Disparate charges

can always be made to appear similar if the descriptive language

employed is broad enough. Therefore, to measure whether charges are

similar categorically, the Court must look for meaningful

similarities. United States v. Kaquatosh, 227 F.Supp.2d 1045, 1047

(E.D. Wis. 2002) (explaining that “courts must be careful not to find

similarity at a level of generality so high as to drain the term of

any real content”) (internal quotation omitted). In this case, the

similarities are more superficial than substantial. 

Other important differences are apparent. First, the

misrepresentations related to different transactions: the bank fraud

charges derive from Defendant’s loan applications, the tax fraud

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charges stem from his false claims for refunds, and the false

bankruptcy filings arise out of separate bankruptcy cases. Second,

the misrepresentations were separated in time: the acts underlying

the bank fraud charges took place between July 2008 and September

2008, the false tax returns were filed in September 2009, and the

false bankruptcy filings were submitted in June 2010 and November

2010. The indictment alleges that the acts underlying the bank fraud

charges were in furtherance of a scheme that continued until July

2010. But it is not clear what actions, other than Defendant’s

default on those loans, took place after September 2008; by then,

Defendant had already made the false statements and obtained the

loans. United States v. Anderson, 188 F.3d 886, 888 (7th Cir. 1999)

(explaining that “the crime of bank fraud is complete when the

defendant places the bank at a risk of financial loss, and not

necessarily when the loss itself occurs”). The Government must do

more than invoke the concept of a scheme in order to put forth a

plausible claim of continuing misconduct. The fact that the

misrepresentations relate to different transactions separated in time

weighs against joinder. 

To justify joinder, the Government relies on the broad

similarity mentioned above: that the charges all involve a knowingly

false representation. But none of the cases cited by the government

rely on a unifying strand that thin. In United States v. Koen, for

example, joinder was proper where the act of embezzlement in one

count was relevant to “the establishment of either motive or intent

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for all the other charges.” United States v. Koen, 982 F.2d 1101,

1112 (7th Cir. 1992). And, in United States v. Alexander, joinder

was proper where three disparate counts all related to actions taken

to enhance a single enterprise: (1) fraud on a mortgage application

was committed to obtain the residence out of which the defendant

would operate the business, (2) insurance fraud represented an

attempt to obtain additional money for the business by fraudulent

means, and (3) bankruptcy fraud charges both resulted from the

operation of the business itself and “were designed to keep the

business afloat by preventing the mortgage company from foreclosing

on the property where the business was operated.” United States v.

Alexander, 135 F.3d 470, 476 (7th Cir. 1998). While these cases may

be relevant to the Court’s analysis of whether joinder is proper on

the basis of a “common scheme or plan” (discussed below), they do not

show that charges may be joined as similar merely because they all

involve a false statement. 

One district court in this circuit has explained that where the

alleged offenses involve different victims, it is not enough that the

offenses “generally involve fraud of some sort or the ultimate motive

of obtaining money from another.” United States v. Jenkins, 884

F.Supp.2d 789, 792 (E.D. Wis. 2012). This rule makes sense: 

prohibitions against false statements are ubiquitous in the federal

criminal code, and ambitions of financial gain can be found in many

of those who disobey the law. The joinder rules call for more

meaningful categorical similarities. Turner, 93 F.3d at 283-84 (two

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offenses were “categorically related” where the “indictment alleges

the violation of two closely-related statutory prohibitions, and each

count involves the same controlled substance); United States v.

Patel, No. 01-CR-716, 2002 WL 1611593, at *2 (N.D. Ill. July 18,

2002) (allowing joinder of “crimes of theft perpetrated by a single

person who used her position to exploit a single victim, her

employer”).

In short, the Court’s search for meaningful categorical

similarities among these charges has yielded none. The indictment

charges different types of fraud based on different

misrepresentations made to different victims to obtain different

monetary benefits in separate transactions. Thus, the Court cannot

say that the charges share categorical similarities. Jenkins, 884

F.Supp.2d at 792 (severing as dissimilar counts that had “little or

nothing in common” except the “defendant’s alleged motive to collect

money to which he [was] not entitled”).

Turning to evidentiary similarity, the Government argues that

Defendant’s financial difficulties provided a common motive for all

of the Counts alleged in the indictment, and thus the Government will

call a financial investigator and other witnesses to testify to

Defendant’s financial struggles and the authenticity of various

records. But as described in Jenkins and discussed above, an

ultimate motive of financial gain is too broad to justify joinder,

and thus evidentiary overlap related to that motive is similarly

unhelpful. Again, however, whether Defendant’s actions flowed from

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a common motive may inform the “common scheme or plan” analysis that

follows in Part B. 

The Government also argues that evidence of Defendant’s

financial hardship relates directly to the charged conduct because it

helps prove the falsity of the statements made to obtain the loans

and the materiality of the false statements in the bankruptcy

filings. As noted at the outset, evidentiary overlap can serve as a

basis for finding charges to be “of the same or similar character”

only if the acts underlying those charges “occurr[ed] over a

relatively short period of time.” United States v. Turner, 93 F.3d

276, 283 (7th Cir. 1996). In Turner, the Seventh Circuit indicated

that fourteen months was too long. In United States v. L’Allier,

however, the court noted “the relative closeness in time” of two

crimes separated by six months. United States v. L’Allier, 838 F.2d

234, 241 (7th Cir. 1988). The acts underlying the bank fraud charges

preceded the first fraudulent bankruptcy filing by twenty-one months,

even longer than in Turner. As discussed above, while the indictment

does invoke the idea of a bank fraud scheme, it does not mention a

single act that took place after September 2008 that would suggest

that Defendant’s bank fraud misconduct was continuing. Thus, the

bank fraud and the bankruptcy fraud are too distant in time to allow

for joinder based on evidentiary overlap. The false tax returns are

sandwiched in the middle, but there is no indication that the

evidence needed to establish the tax fraud overlaps with the evidence

needed to prove the other charges. 

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Thus, joinder cannot be sustained under either of the Seventh

Circuit’s formulations of the “same or similar character” category. 

B. Common Scheme or Plan

Charges are part of the same “common scheme or plan” if they

share a “logical relationship,” such as where one charge serves as a

“logical precursor” for the other. United States v. Woody, 55 F.3d

1257, 1267 (7th Cir. 1995). In Woody, for example, a charge of

assault was joined properly to a charge of possession of stolen mail

because “[e]vidence of the defendant's first arrest for possession of

stolen mail and the subsequent surveillance operation was relevant to

establish his motive to assault the inspectors in his ill-fated

attempt to avoid apprehension.” Id. The court explained that both

offenses were part of a scheme “to cash forged checks stolen from

residential mailboxes without detection from law enforcement.” Id.

In United States v. Anderson, charges of tax evasion were joined

properly with charges of mail fraud, RICO bribery, and extortion

affecting interstate commerce because “[t]he tax evasion count was

based on [the defendant’s] failure to report the income from [the

misconduct charged in the other counts].” United States v. Anderson,

809 F.2d 1281, 1288 (7th Cir. 1987). But in United States v.

Creamer, Judge James Moran of this Court severed independent bank

fraud and tax evasion charges because they shared no logical or

evidentiary link and “the government d[id] not contend that the tax

violations were based on income produced by the bank fraud.” United

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States v. Creamer, 370 F.Supp.2d 715, 732 (N.D. Ill. 2005), vacated

in part on other grounds on reconsideration, No. 04-CR-281-1, 2006 WL

2037326 (N.D. Ill. April 4, 2006). 

Just as in Creamer, where “the face of the indictment fail[ed]

to link the two groups of offenses,” the tax fraud and bankruptcy

fraud charges in this case do not incorporate any of the previous

paragraphs that allege misconduct (they incorporate only general

statements, such as Defendant’s name and address and the operations

of various government agencies). Creamer, 370 F.Supp.2d at 730. 

Indeed, this is not the typical case where the tax fraud charges

relate to the defendant’s failure to report income. See, e.g.,

Anderson, 809 F.2d at 1288 (“Joinder of a tax evasion count is

appropriate when it is based upon unreported income flowing directly

from the activities which are the subject of the other counts.”). 

Rather, the bank fraud charges relate to Defendant’s

misrepresentations in the loan application process, and the tax fraud

charges arise out of his claim for a $5 million tax refund based on

a bogus OID tax theory. There is no basis to say that the bank fraud

is a logical precursor to the tax fraud, as Defendant could have

committed either one without committing the other. 

A similar situation was presented in United States v. Randazzo,

in which the president and majority shareholder of a shrimp company

was charged with a variety of misconduct. United States v. Randazzo,

80 F.3d 623 (1st Cir. 1996). The defendant was indicted on charges

of making false statements to the United States because he had failed

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to disclose on the shrimp container’s label that the company used

certain banned substances when it produced the shrimp. Id. at 626. 

The substances “increased profits by altering the weight or color of

the shrimp.” Id. Meanwhile, the defendant siphoned off corporate

cash for his own use and misreported his theft as a corporate

expense, for which he was charged with causing the company to file

false corporate tax returns. Id. at 626-27. The First Circuit held

that the two groups of charges were not joined properly – even though

tax fraud charges often accompany charges of filing false statements

– because “it was pure happenstance whether the overstated expenses

happened to reduce legal income or illegal income of the Company.” 

Id. at 627. In other words, the tax misconduct of misappropriating

cash that was listed as an expense could have taken place regardless

of whether the company was also increasing its profits by failing to

disclose its use of a banned product. 

While it may often be the case that tax fraud charges connect to

a common scheme or plan that includes making false financial

statements, this case involves tax fraud charges that do not relate

to underreported income or previous false statements. The same

reasoning applies to the bankruptcy fraud counts: if Defendant was

experiencing financial troubles, as the Government contends, then

Defendant could have made the exact same misrepresentations regarding

his financial affairs in his bankruptcy petition even if he had not

made false statements in support of his loan application or filed

fraudulent tax returns. None of these crimes served as a logical

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precursor for another or depended on another for its success. United

States v. Hubbard, 61 F.3d 1261, 1270 (7th Cir. 1995) (firearm

possession and narcotics charges were not joined properly because the

fact that the defendant carried guns “tells us little about his

distribution of narcotics nearly a year and a half earlier, and vice

versa”).

It might appear that joinder would be justified under the common

scheme or plan category based on the Government’s contention that all

of Defendant’s actions flowed from a single motive: alleviating his

financial hardship. Some courts have found seemingly disparate

charges to be similar where the acts underlying one charge provided

a motive for subsequent acts that led to other charges (such as where

one perpetrates a crime and then later commits others to cover-up or

mitigate the first). See, e.g., Koen, 982 F.2d at 1112 (joinder

proper where the act of embezzlement in one count was relevant to

“the establishment of either motive or intent for all the other

charges”); United States v. Dominguez, 226 F.3d 1235, 1242 (11th Cir.

2000) (drug offenses and mortgage fraud charges were joined properly

because “[c]oncealing income from the drug activity was the motive

for the mortgage fraud”). But this Court is aware of no authority

for finding that different charges relate to the same scheme just

because they share a similar uncharged or non-criminal motive,

especially when it is a generic one like “financial gain.” Joinder

therefore cannot be maintained under the “common scheme or plan”

category. 

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C. Conclusion

In light of the foregoing, joinder was improper under Rule 8. 

In addition, as in Creamer, “[t]he dearth of shared evidence suggests

that severance will not lead to wasted judicial resources.” Creamer,

370 F.Supp.2d at 731. The three groups of charges arise from

different bodies of law, so separate juries will be able to consider

separate evidence and separate instructions. United States v.

Coleman, 22 F.3d 126, 132 (7th Cir. 1994) (noting that “separate

counts that for the most part depend on separate evidence save fewer

steps when tried together”). Therefore, the Court severs the charges

into three groups: Counts I-IV for bank fraud, Counts V-VI for tax

fraud, and Counts VII-VIII for bankruptcy fraud. 

III. DISCLOSURE OF IMPEACHING AND

EXCULPATORY INFORMATION

Defendant has moved to compel the Government to disclose any

evidence or information that would tend to exculpate Defendant of the

charged offenses or mitigate the possible punishment. See Brady v.

Maryland, 373 U.S. 83 (1963); Giglio v. United States, 405 U.S. 150

(1972). Defendant has listed a variety of evidence that he would

like the Government to produce. 

This Court has already ruled on a prior Motion from Defendant

seeking to obtain exculpatory and impeachment evidence pursuant to

Brady and Giglio. When it denied the Motion, the Court explained

that the Government had “acknowledged its obligations to provide

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discovery” and assured Defendant and the Court that it would “comply

with Giglio and Brady.” ECF No. 125 at 12-15. 

Defendant emphasizes that Brady evidence is due on demand. See

Brady, 373 U.S. at 88. In response, the Government affirms that it

will produce exculpatory evidence “should any such evidence come to

the Government’s attention.” ECF No. 201 at 4. The Government has

inquired with the IRS regarding any notes of communications with the

Defendant or his representatives – information that Defendant

requests specifically – and will produce any discoverable responses

that it receives from the agency. The Court takes from these

representations that the Government does not have any of the

information requested in the Motion. If that is not the case, the

Government should either produce the information or file a statement

indicating why it believes that the evidence does not qualify for

disclosure under Brady.

As to Giglio, the Government affirms that it is aware of and

will comply with its obligation to disclose information that

impeaches its witnesses. The Government indicates that it will do so

within two weeks of trial, which this Court held previously was

sufficient. ECF No. 125 at 14-15. For these reasons, and those

stated in the Court’s opinion dated February 12, 2013, Defendant’s

Motion [ECF No. 196] is denied. 

IV. DISCLOSURE OF SIGNED INDICTMENT

Defendant has requested a copy of the signed indictment and the

grand jury minutes. Defendant made a similar request, back when he

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was proceeding pro se, when he asked for a copy of the signed

indictment and a list of all of the members of the special grand

jury. When the Court ruled on those previous requests, it noted that

Defendant had access to the unsigned indictment and that the names of

the grand jury members were irrelevant to Defendant’s case. ECF No.

125 at 19. To protect the secrecy of the grand jury proceedings, the

Court denied the motions. Id. 

Defendant’s suspicion persists. Now, with the assistance of

counsel, he argues that discovery tendered so far shows that the

Special February 2011-1 Grand Jury (Case Number 10 GJ 437) in this

case issued subpoenas as early as April 2010, approximately 26 months

before the indictment in this case was filed. Ordinarily, a special

grand jury serves for a term of 18 months, although the term can be

truncated or extended. 18 U.S.C. § 3331(a). Given that an

indictment is invalid if it is returned after the grand jury’s term

has expired, see United States v. Bolton, 893 F.2d 894, 895 (7th Cir.

1990) (per curiam), Defendant argues that he may have grounds to file

a Motion to Dismiss. The Federal Rules authorize the Court to order

the disclosure of grand jury material “at the request of a defendant

who shows that a ground may exist to dismiss the indictment because

of a matter that occurred before the grand jury.” FED. R. CRIM. P.

6(e)(3)(E)(ii). 

In response, the Government asserts that “[t]he Special February

2011-1 grand jury was originally empaneled in February 2011, and the

indictment was returned about 14 months later, well within its 18-

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month term.” ECF No. 201 at 9. The Government offers no response to

Defendant’s idea that the same grand jury may have returned subpoenas

in 2010 except to say that “[h]e is wrong.” Id. 

As to Defendant’s first request, the Court has reviewed the

original indictment and can verify that it bears the signature of

both the grand jury foreperson and the United States Attorney. To

protect the independence of the grand jury and the privacy of the

foreperson, the Court is not inclined to reveal a copy of the signed

indictment absent a stronger showing by Defendant of a

“particularized need” to view the signatures. Pittsburgh Plate Glass

Co. v. United States, 360 U.S. 395, 400 (1959). 

Defendant’s second request is for disclosure of the grand jury

minutes. The Court, as much as the parties, would like to put this

issue to rest. But the Government’s response to the Motion is

unsatisfactory to this end. Defendant has raised the possibility

that grounds might exist to dismiss the indictment, but the

Government offers no response of any substance. Therefore, the

Government shall submit, for in camera review, competent proof that

the indictment in this case was returned by a grand jury whose term

had not expired. Such competent proof must reconcile the

Government’s representation that “[t]he Special February 2011-1 grand

jury was originally empaneled in February 2011,” ECF No. 201 at 9,

with Defendant’s contention that “discovery tendered thus far” shows

that the Grand Jury “issued subpoenas as early as April of 2010,” ECF

No. 197, ¶ 4. 

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V. MULTIPLICITY

Defendant has asked the Court to dismiss Count II as duplicative

of Count I. As discussed above, these Counts charge Defendant with

bank fraud in violation of 18 U.S.C. § 1344. Count I is for the

$250,000 business loan, and Count II is for the $450,000 business

loan. If these two Counts charge Defendant for a single offense,

they would expose Defendant to “the threat of receiving multiple

punishment for the same offense.” United States v. Allender, 62 F.3d

909, 912 (7th Cir. 1995). 

The bank fraud statute makes it unlawful to defraud financial

institutions or obtain money or other property under the control of

a financial institution “by means of false or fraudulent pretenses,

representations, or promises.” 18 U.S.C. § 1344. “[T]he bank fraud

statute punishes 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) (internal quotation

omitted). A single scheme may be executed multiple times, but

multiple acts are not separate “executions” under the statute unless

they are “chronologically and substantively independent and not

dependent on another for [their] existence.” Allender, 62 F.3d at

912. 

As mentioned above, the indictment alleges that Defendant

submitted an application for two business loans (one for $250,000 and

another for $450,000). To induce the bank to approve the

application, he included false personal and business tax returns from

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2006 and 2007 that inflated his income. The bank issued the loans,

and Defendant eventually defaulted on his obligation to make monthly

payments. 

The two loans appear to arise from the same transaction. Both

loans involve Defendant and Amcore Bank but no third parties, and

both loans were funded on July 9, 2008. As best the Court can tell

from the indictment, the loans in Counts I and II resulted from a

single loan application. Indictment ¶ 3 (alleging that Defendant

“submitted to Amcore Bank an application for business loans . . . in

the amount of $250,000 and $450,000”) (emphasis added). In his Reply

brief, Defendant represents that “the discovery tendered in this

case,” including the bank’s internal documentation, shows that “the

two loans were presented, reviewed, and approved together.” ECF No.

204 at 2. 

Moreover, Defendant requested the funds so that he could

refinance existing loans from two separate banks that held competing

security interests in his business assets. Id. Neither of the loans

from Amcore, on its own, would have been enough to pay off the

balance of the existing loans. Defendant needed both loans from

Amcore so that he could satisfy the other loans and allow Amcore to

take first position. Without that priority status, Amcore likely

would not have funded either loan. The Government has not responded

to this argument except to say that “the two loans were not dependent

on one another.” ECF No. 201 at 7-8. 

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In situations like this one, courts ask whether the loans were

independent or whether they relied on each other. Longfellow, 43

F.3d at 325 (loans were separate executions where they were funded

two years apart). Because the loans were applied for at the same

time and funded on the same day, there is no chronological separation

between these acts. Moreover, the loans in this case appear to have

been a package deal: Amcore would have the proper incentives to

approve either loan only if it gave Defendant both loans, which would

provide him enough money to pay off the two other banks and give

Amcore priority as a secured creditor. Thus, each loan depended on

the other for its approval. 

The Fifth Circuit faced a similar question in United States v.

Heath, in which the defendant was charged with two counts of bank

fraud after he procured two loans from the same bank. United States

v. Heath, 970 F.2d 1397, 1401 (5th Cir. 1992). The court noted that

the two loans were part of the same scheme to misrepresent the value

of real estate that “involve[d] intent to defraud only one bank .

. . albeit by procuring two loans.” Id. at 1402. The court reasoned

that the two loans “were integrally related,” as both were necessary

“for the sole purpose of facilitating the [real estate] sale” and

thus “one could not have succeeded without the other.” Id. The

court dismissed the second count of bank fraud as multiplicitous. 

Id. As in Heath, the fact that the two loans depended on each other

weighs heavily in favor of finding that the loans were not separate

“executions” by Defendant. 

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The Government argues that the two loans are separate

“executions” because they had slightly different terms and they

exposed the same bank to two distinguishable risks of loss. An

identical argument was advanced unsuccessfully in Heath. There, the

Fifth Circuit explained that “[a]lthough a two-loan scheme may

subject an institution to greater risk than a scheme involving only

one transaction, it is the execution of the scheme itself that

subjects a defendant to criminal liability, not . . . the execution

of each step or transaction in furtherance of the scheme.” Heath,

970 F.2d at 1402. That conclusion accounts for the fact that the

bank fraud statute focuses on the defendant’s actions and the

“execution” of a scheme, not necessarily the effect of those actions

on the bank. Longfellow, 43 F.3d at 323; see also, United States v.

Anderson, 188 F.3d 886, 888 (7th Cir. 1999) (explaining that “the

crime of bank fraud is complete when the defendant places the bank at

a risk of financial loss, and not necessarily when the loss itself

occurs”). In any event, the Court does not perceive a meaningful

difference between the risk of loss associated with one $700,000 loan

and that associated with two smaller loans, say for $250,000 and

$450,000, when offered to the same person at the same time. Thus,

the fact that Defendant obtained two loans is insufficient to sustain

Count II. 

Ultimately, Defendant is alleged to have submitted to Amcore

Bank a single package of documents with a variety of

misrepresentations about his finances. Though he induced the bank to

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give him two loans, those loans were approved and funded together. 

The two loans depended on each other because the bank could not

obtain first priority if it approved only one loan. Thus,

Defendant’s actions formed a single “execution” under the bank fraud

statute, and Count II must be dismissed as multiplicitous. See also,

United States v. Lilly, 983 F.2d 300, 302 (1st Cir. 1992) (multiple

charges of bank fraud were multiplicitous where the defendant sent

“to a single bank a single package of documents that consistently

misstated a single material fact in order to obtain a single loan,

the proceeds of which funded a single real estate purchase”).

VI. CONCLUSION

For the reasons stated herein, Defendant’s Motion to Sever [ECF

No. 195] is granted. Defendant’s Motion for Disclosure of

Exculpatory and Impeaching Evidence [ECF No. 196] is denied. 

Defendant’s Motion for Disclosure of Signed Indictment and Grand Jury

Minutes [ECF No. 197] is granted in part. Defendant’s Motion to

Dismiss Count II of the Indictment [ECF No. 198] is granted.

IT IS SO ORDERED.

Harry D. Leinenweber, Judge

United States District Court

Date: August 14, 2014

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