Opinion ID: 2709086
Heading Depth: 2
Heading Rank: 2

Heading: Sufficiency of the evidence against Helton

Text: Helton challenges his wire fraud convictions on the theo‐ ry that there was insufficient evidence supporting his intent to defraud. “Intent to defraud requires a wilful act by the de‐ fendant with the 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. Britton, 289 F.3d 976, 981 (7th Cir. 2002). This may be established “by cir‐ cumstantial evidence and by inferences drawn from examin‐ ing the scheme itself that demonstrate that the scheme was reasonably calculated to deceive.” Id. Helton was convicted on three counts of wire fraud. With respect to the two counts involving an EHNS transaction, Helton argues that he was an unknowing bystander who got mixed up in White’s scheme. By his account, Helton agreed to represent EHNS homeowners in real estate transactions, but he had no idea that White and Ford’s methods were not aboveboard. But the jury found otherwise. This is not sur‐ prising, as there was overwhelming evidence from which it could conclude that Helton knew what was going on and furthered the scheme’s success for his own gain. First, Helton was present at the EHNS closings. All of the closing documents, including the loan applications and HUD‐1 settlement statements, were available for Helton’s review; the jury could reasonably conclude that as an attor‐ ney hired to represent the homeowner’s interests in the transaction, Helton would have realized that the documents were not in order. And the government presented evidence that for certain deals, Helton was definitely made aware that 12 Nos. 11‐3240, 12‐1207, 12‐1295 the loan applications were fishy. One EHNS investor testi‐ fied that when, in Helton’s presence, the investor noticed false information in his application and asked White about it, White told him the falsehood was “part of the real estate game” and “not to worry” about it. In addition, while pre‐ sent at the closings, Helton naturally would have observed that the investor did not provide the down payment checks. On some occasions, he would have observed that no down payment was made at all. Yet Helton said nothing, and he continued to represent EHNS clients in suspicious transac‐ tion after suspicious transaction. A jury could infer that he did so not out of ambivalence, but out of a desire to pocket more fees—fees paid out of the proceeds from the fraudu‐ lently obtained mortgage loans. Indeed, the trial testimony showed that Helton was White’s go‐to guy for these transactions. Viewed in the light most favorable to the government, it was reasonable for the jury to conclude that White would not proactively arrange for an attorney to represent EHNS clients at the closings if the attorney was not also a knowing participant in the scheme. And in fact, the government presented testimony that Helton did more than just stand by—he affirmatively deceived clients by assuring hesitant parties that everything was in order. For instance, when one homeowner‐client tried to read the papers herself, Helton told her that he was in a hurry, she did not need to read the documents, and that she should just sign. Further, during his subsequent representation of EHNS clients in their Chapter 7 filings, Helton took steps to prevent the bankruptcy trustee and bankruptcy court from learning that the EHNS transactions ever took place. His instructions Nos. 11‐3240, 12‐1207, 12‐1295 13 to clients to lie about their recent real estate sales during creditor meetings, and his own lies and omissions in filings and court appearances, could certainly lead a jury to infer that he had a motive to cover up these transactions. Helton also challenges his conviction on the count in‐ volving the Diamond Management deal. He argues that Di‐ amond Management’s bailout transactions were legitimate, and that he never intended to defraud mortgage lenders. However, the jury could conclude that the similarity be‐ tween the EHNS and Diamond Management programs, and Helton’s adoption of White’s signature tactics—for instance, Helton’s recruiting third‐party investors, his providing the down payment check, and his use of Ford’s services at Title Zone—were not coincidence. At the very least, the evidence showed that Helton deceived the lenders in that he con‐ cealed the fact that the buyer was a straw purchaser. In addi‐ tion, the government presented evidence that Helton also represented Diamond Management clients in their bank‐ ruptcies, and similarly concealed the clients’ recent real es‐ tate transfers from the authorities. This was not a close call. Accordingly, we affirm the dis‐ trict court’s finding of sufficient evidence to convict Helton on the wire fraud counts.
For Helton to be convicted of bankruptcy fraud, the gov‐ ernment had to prove that Helton engaged in a fraudulent scheme and that he filed a bankruptcy petition, or another document in a bankruptcy proceeding, in order to further the scheme. See 18 U.S.C. § 157(1)–(2); United States v. Hol‐ stein, 618 F.3d 610, 611–12 (7th Cir. 2010). The government 14 Nos. 11‐3240, 12‐1207, 12‐1295 sought to prove that Helton carried out a scheme to defraud the EHNS clients’ creditors by concealing the fact that the debtors had recently transferred a major asset. Helton’s primary argument about the insufficiency of the evidence is a red herring. He contends that he and his debtor clients did not withhold any necessary information from the bankruptcy court because the proceeds from the home sales were not part of the debtors’ Chapter 7 estates. That being the case, he argues, no creditors were actually defrauded. Even if Helton were right that the debtors’ recent transfers of property were of no consequence to their bankruptcy case (he’s not),5 the government need not prove that any creditors were actually defrauded in order to establish the elements of bankruptcy fraud. 18 U.S.C. § 157; see also United States v. DeSantis, 237 F.3d 607, 613 (6th Cir. 2001) (because the “[f]iling itself is the forbidden act” under § 157, “[s]uccess of the scheme is not an element of the crime”). The government did have to prove Helton’s intent. It did so by offering evidence of the steps Helton took to prevent the bankruptcy authorities from discovering his clients’ re‐ cent sales. Helton’s defense at trial was that he did not know that the bankruptcy petitions contained material omissions (usually because the filings were prepared by his employ‐ ees), or that he was not aware that the clients had recently transferred their property, or both. But the testimony of both Helton’s employees and his clients contradicted his account. For instance, testimony revealed that Helton filed petitions 5 Trustees testified that had they known about the real estate sales, they would have investigated the sales as fraudulent transfers. Nos. 11‐3240, 12‐1207, 12‐1295 15 that left out EHNS transactions at which Helton had been physically present—in some cases only weeks before. Hel‐ ton’s employees testified that when they did include infor‐ mation about the recent property sales, Helton removed the information before the document was filed. And the clients testified that Helton told them to lie during their creditor meetings and reprimanded the clients when they disobeyed him. As we do not reweigh the evidence or second‐guess the jury’s credibility determinations on appeal, Holstein, 618 F.3d at 612, we need not credit Helton’s version of the story. Thus, there was sufficient evidence to convict Helton of both crimes, and we affirm the district court’s denial of his motion for acquittal.