Opinion ID: 174534
Heading Depth: 3
Heading Rank: 2

Heading: Count II: Wire Fraud

Text: In Count II, the government alleged that Lupton devised and participated in a scheme to defraud Equis and the State of property and the right of honest services, and that he transmitted a wire communication from Wisconsin to Illinois in furtherance of that scheme. See 18 U.S.C. §§ 1343, 1346. The district court unambiguously concluded that the government proved that Lupton was guilty of wire fraud under both alternative theories, deprivation of property and of honest services, beyond a reasonable doubt. Lupton, 2009 WL 679649, at  (The government in this case alleged both a scheme to obtain money and to deprive Equis and the State of honest services. The government proved the defendant guilty beyond a reasonable doubt under both theories.). Lupton argues that he cannot be convicted of `honest services fraud' (Count Two) under 18 U.S.C. § 1346 for disclosing the terms of competing proposals to parties to a real estate transaction because that conduct is expressly allowed, or even required, by Wisconsin's real estate and open records statutory schemes. Appellant's Br. 17. He contends that his conviction therefore violates fundamental principals [sic] of federalism and impermissibly creates a federal common law crime. Id. at 18. These arguments leave much to be desired, not least some discussion of federal rather than state law, but it's not what Lupton argues that dooms him: it's what he doesn't. The district court found Lupton guilty of wire fraud under both theories posited by the government: the traditional theory outlined in 18 U.S.C. § 1343, which the government dubs straight property, Appellee's Br. 20, and the alternative theory defined by § 1346, honest services. Yet, as the government rightly points out, Lupton's arguments indisputably pertain only to the latter type, not the former. [2] Cf. United States v. Blagojevich, No. 10-2359, 2010 WL 2778838, at  (7th Cir. July 12, 2010) ([I]f you lose for two independent reasons an appellate victory on one does not affect the judgment.). Lupton has therefore forfeited any challenge to his conviction for mine run wire fraud, United States v. Boyle, 484 F.3d 943, 946 (7th Cir.2007), which would stand in any event because the evidence is sufficient to support it, cf. United States v. Turner, 551 F.3d 657, 665-66 (7th Cir. 2008) (upholding a general verdict of guilty for violations of 18 U.S.C. §§ 1343 & 1346 where evidence supporting the so-called straight property variant was sufficient), cert. denied, ___ U.S. ___, 129 S.Ct. 2748, 174 L.Ed.2d 249 (2009). Specifically, the government's evidence proved (1) that Lupton participated in a scheme to defraud Equis out of part of the commission it was legally due, (2) acted with the intent to defraud Equis (obviously I don't want anything in writing you know, `cause you know, I don't want it leaked back to the State . . . or to Equis. . . .), and (3) transmitted an interstate wire communication in furtherance of his scheme. 18 U.S.C. § 1343; Turner, 551 F.3d at 664; Lupton, 2009 WL 679649, at -. That would be adequate to support Lupton's wire fraud conviction even if the district court had issued a general verdict. See Turner, 551 F.3d at 665-66. Lupton's state-law-grounded arguments challenging the honest services prong of his wire fraud conviction get him no further. [3] Lupton argues that he did not commit what he terms honest services fraud because Wisconsin real estate and open records laws permit or require him to disclose the intimate details of prospective buyers' bids to one another. As a threshold matter, we note that we have some reservations about Lupton's characterization of the statutes to which he points. For instance, he informs us that Wis. Stat. § 452.139(1) specifically provides that the provisions of Chapter 452 supercede [sic] any common law duties or obligations of real estate brokers. Appellant's Br. 27. But a closer look at the statute reveals that it goes on to limit its superseding reach to the extent that those common law duties or obligations are inconsistent with the duties specified in this chapter or in rules promulgated under this chapter. Wis. Stat. § 452.139(1). Likewise, the Wisconsin Supreme Court has explicitly undermined Lupton's interpretation of Wisconsin's open records law, Wis. Stat. §§ 19.31-19.39, explaining that the statutes clearly envision[] a public entity, a quasi-governmental corporation, or a governmental entity, not an independent contractor hired by such a public or governmental entity, as being the `authority' [from whom information may be requested] for purposes of the open records law. WIREdata, Inc. v. Vill. of Sussex, 2008 WI 69 ¶ 74, 310 Wis.2d 397, 438, 751 N.W.2d 736, 755-56. Even if the state laws read as Lupton says, though, his arguments misapprehend the nature of his conviction. They speak only to the alleged propriety of his information-sharing with Silverstein and do not address the elements of wire fraud. Lupton was convicted of scheming (with the aid of a wire communication) to deprive Equis and the State of Wisconsin of his honest services. 18 U.S.C. §§ 1343 & 1346. That is, he solicited a kickback from Silverstein to advance Zeller's interests in the bidding process and harmed Equis and Wisconsin intangibly by doing so. See Skilling v. United States, 561 U.S. ___, 130 S.Ct. 2896, 2926-27, 2931-32, 177 L.Ed.2d 619 (2010). Whether he was allowed to share the information he shared with Silverstein is not the guiding consideration; one can perform a perfectly legal act in a corrupt way or as a means to achieve a more sinister goal. Indeed, the information divulged to Silverstein was a pawn in Lupton's broader scheme, the quo Lupton exchanged for Silverstein's quid; the information sharing was not, as he would have it, the basis of his conviction. See Lupton, 2009 WL 679649, at  (Further, defendant's disclosure of specific bid information did not occur in a vacuum defendant disclosed Roebling's LOI terms to the same broker from whom he sought a monetary kickback.). What supports Lupton's conviction is substantial evidence showing the existence, intent, and advancement of his scheme, not the precise means by which he planned to carry it out. It is likewise unimportant that this case comes on the heels of another case out of the Eastern District of Wisconsin, United States v. Thompson, 484 F.3d 877 (7th Cir.2007), in which we reversed the federal bribery and mail fraud convictions of a Wisconsin bureaucrat because the proof at trial demonstrated, at worst, minor deviations from Wisconsin's administrative procedure rather than federal crimes. There, the government's entire case rested on the premise that any politically motivated departure from state administrative rules is a federal crime, when either the mails or federal funds are involved. Thompson, 484 F.3d at 878. Neither Thompson nor anyone else in state government was accused of taking a bribe or receiving a kickback. Id. at 881. Here, the government alleged and proved the elements of the federal crime of wire fraud as described in §§ 1343 & 1346; it did not make a federal case out of a minor dereliction of state-imposed duties. And, more importantly, Lupton's conduct, unlike Thompson's, placed him squarely within even the recently narrowed parameters of § 1346. See Skilling, 130 S.Ct. at 2931-2933. Lupton's attempt to liken the two casesrooted in his argument about federal common law crimesconsequently proves unsuccessful. We also note that any attempt to minimize the bribe-and-kickback nature, Skilling, 130 S.Ct. at 2931-32, of Lupton's scheme by emphasizing its lack of completion is equally unavailing. The wire fraud statutes criminalize the fraudulent acts undertaken to secure illicit gains, not their ultimate successes. See United States v. Capoccia, 503 F.3d 103, 112 (2d Cir.2007) (noting that some criminal statutes . . . define offenses either as actions taken pursuant to a scheme to defraud or as such schemes themselves and including among these 18 U.S.C. §§ 1341 & 1343); cf. United States v. White, 610 F.3d 956, 960 (7th Cir.2010) (discussing the inchoate crime of solicitation). So it's not pertinent that the plot was foiled long before Lupton received any kickback, nor that Lupton recommended Roebling's bid, not Zeller's, to a member of Wisconsin's Department of Administration. (There is evidence in the record indicating that Lupton unexpectedly and `out of the blue' made a pitch for Roebling to this individual, Peter Maternowski, and Lupton's counsel gave us the same information at oral argument.) In any event, it's not necessarily the case that Lupton failed to live up to his promises to Silverstein. The recommendation he made was not to the final decisionmaker, and he himself indicated that he had similar deals with other bidders he may have been recommending different bids at different points to satisfy the terms of these other alleged deals or to mitigate any appearance of inappropriately favoring one bidder over the others. While the fact that Lupton recommended Roebling may pique the interest of law enforcement officials, it does nothing to alter the validity of his wire fraud conviction in this case.