Court Opinion

ID: 4367247
Source: CourtListenerOpinion
Date Created: 2019-02-13 08:01:04.806301+00
Date Added: 2024-06-11T14:48:21.012966
License: Public Domain

In the

    United States Court of Appeals
                 For the Seventh Circuit
                     ____________________

No. 18-1322
UNITED STATES OF AMERICA,
                                                   Plaintiff-Appellee,

                                 v.

EDWARD BOLIAUX,
                                               Defendant-Appellant.
                     ____________________

         Appeal from the United States District Court for the
           Northern District of Illinois, Eastern Division.
             No. 16 CR 115 — Manish S. Shah, Judge.
                     ____________________

  ARGUED FEBRUARY 4, 2019 — DECIDED FEBRUARY 12, 2019
               ____________________

   Before WOOD, Chief Judge, and EASTERBROOK and ST. EVE,
Circuit Judges.
    EASTERBROOK, Circuit Judge. Between 2002 and 2008 Ed-
ward Boliaux operated EMC Automotive, a used-car dealer-
ship, in Joliet, Illinois. He borrowed money from three lend-
ers, using inventory as security. Most loans were secured by
the cars’ certiﬁcates of title, a device called ﬂoorplanning.
Because there is supposed to be only one title certiﬁcate per
car, the dealer cannot transfer good title to a customer with-
2                                                 No. 18-1322

out paying the lender. Although lenders may allow sales to
precede payment, they demand that the money be held in
trust until the loan is retired. But beginning in 2007 Boliaux
persuaded state oﬃcials to issue duplicate certiﬁcates of title
on the pretense that the originals had been lost. He used
these to obtain multiple loans against single vehicles, exceed-
ing the cars’ market value and leaving the lenders under-
secured. He also began to sell cars without using the pro-
ceeds to repay the loans. After one of the lenders detected
this and impounded the collateral, Boliaux persuaded the
custodian to release eight cars, which he sold for his own
beneﬁt.
    Deceit continued after EMC Automotive collapsed. In
September 2008 Cindy Boliaux, then Edward’s wife, incor-
porated Joliet Motors, which Edward operated from the
premises formerly occupied by EMC. Joliet Motors received
installment payments sent by the customers of EMC yet did
not remit them to lenders. Boliaux had trouble borrowing
against the inventory of his new dealership, and in 2008 and
2009 he turned to check kiting.
   For these and related acts, a jury convicted him of four
counts of wire fraud and six of bank fraud. 18 U.S.C. §§ 1343,
1344. He has been sentenced to 48 months’ imprisonment
and three years’ supervised release.
    Boliaux contends that the evidence was insuﬃcient—on
the wire fraud counts principally because he did not trans-
mit anything by wire, and on the bank fraud counts princi-
pally because no one from the banks testiﬁed that the banks
lost money. The district court addressed these and other con-
tentions when denying Boliaux’s motion under Fed. R. Crim.
P. 29:
No. 18-1322                                                              3

   Viewed in the light most favorable to the prosecution, see United
   States v. Washington, 184 F.3d 653, 657 (7th Cir. 1999), the evi-
   dence demonstrated that Boliaux obtained ﬁnancing from lend-
   ers through materially false representations, and he perpetuated
   his scheme through the concealment of material facts. Boliaux
   argues that the evidence amounted to, at most, a disjointed se-
   ries of immaterial breaches of contract. Neither the facts nor the
   law support this argument. Obtaining money through a scheme
   intended to cheat others is a crime whether or not it is also slop-
   py business or breach of contract. It suﬃces to note that Boliaux
   lied to obtain duplicate titles for cars that he knew were ﬁnanced
   by one lender, and used the duplicate titles to obtain additional
   ﬁnancing from a second lender—thereby compromising the se-
   curity interests of both lenders. Later, he forged lien releases
   purportedly from GMAC, and with those releases, obtained car
   titles that he used to secure more ﬁnancing—thereby cheating
   those lenders by concealing GMAC’s interests. According to in-
   dustry representatives, clear title to a vehicle that was part of
   ﬂoorplan ﬁnancing was material to lenders, even when liens
   were not individually ﬁled and notwithstanding the breadth of
   the collateral securing ﬁnancing. The evidence of defendant’s
   control over the car dealerships was suﬃcient to prove his inten-
   tional participation in the scheme. His intent to defraud was
   manifest in his false statements and forgeries, and in his con-
   cealment of facts associated with Joliet Motors. The charged wire
   transmissions traveled across state lines—from Joliet Motors in
   Illinois and routed through Pennsylvania or Ohio, and they ad-
   vanced the scheme to defraud the lenders because they were
   payments for a vehicle that had been sold to the detriment of the
   lender’s interests. The evidence of Boliaux’s supervision of Joliet
   Motors, and his involvement in the payment-processing system,
   was suﬃcient to make the wire transmissions a foreseeable con-
   sequence of his scheme.
   Testimony from the victim banks was not necessary to support a
   conviction on the bank fraud counts. The bank records, coupled
   with the explanatory testimony of expert witness Wolverton
   (who testiﬁed under Rule 702 without objection) and the evi-
   dence of Boliaux’s control over the bank accounts, demonstrated
4                                                            No. 18-1322

    the risk of loss to the banks and Boliaux’s intent to deceive
    through check kiting.
    The evidence was not just suﬃcient, it was overwhelming, and
    defendant’s motion for a judgment of acquijal under Rule 29 is
    denied.

It is not necessary to say more about the suﬃciency of the
evidence. Later we discuss the decision by Boliaux’s lawyer
to omit from his brief the district court’s analysis of this sub-
ject.
    Boliaux asked the district judge to instruct the jury that it
had to agree, unanimously, how he carried out his scheme to
defraud. The judge properly declined. Each wire-fraud
count of the indictment charged a single scheme to defraud
implemented in 17 ways (obtaining duplicate titles by falsely
asserting that others had been lost, pledging the same car to
multiple lenders, selling cars without repaying the loans,
and so on). The means used to carry out a fraudulent scheme
are not separate elements requiring unanimity. See, e.g.,
Richardson v. United States, 526 U.S. 813, 817 (1999). Boliaux
seeks to avoid this rule by contending that the wire-fraud
charges are duplicitous—in other words, that each count re-
ally charges multiple crimes, rather than one crime com-
mijed through multiple acts. The district court addressed
this argument, too, in the order from which we have already
quoted:
    Boliaux raises an untimely argument concerning duplicity, but
    he never challenged the indictment under Rule 12(b)(3)(B)(i) and
    oﬀers no excuse for this failure. The claim is forfeited, but in any
    event, there was no duplicity, much less prejudicial duplicity.
    Each wire fraud count alleged one execution of a single scheme
    to defraud with a variety of alleged means. No unanimity with
    respect to those means was required. United States v. Daniel, 749
F.3d 608, 614 (7th Cir. 2014).
No. 18-1322                                                  5

Thus Boliaux lost in the district court on two grounds: forfei-
ture and the merits. His opening brief on appeal ignores the
forfeiture. If you lose in the district court on multiple
grounds, you must contest all on appeal; prevailing on one
won’t suﬃce. After the prosecutor relied on the forfeiture
ruling, Boliaux ﬁnally addressed it in his reply brief. That’s
too late—and as it happens too lijle as well.
    Federal Rule of Criminal Procedure 12(b)(3) lists more
than a dozen defenses or arguments that must be presented
before trial, so that any error may be corrected (and the
prosecutor can appeal an adverse decision without encoun-
tering a problem under the Double Jeopardy Clause). See
United States v. Nixon, 901 F.3d 918, 920–21 (7th Cir. 2018).
Duplicity is among them. There is an escape hatch: “If a par-
ty does not meet the deadline for making a Rule 12(b)(3) mo-
tion, the motion is untimely. But a court may consider the
defense, objection, or request if the party shows good
cause.” Fed. R. Crim. P. 12(c)(3). The district judge stated
that Boliaux has not oﬀered an excuse for his delay. That
remains true. The reply brief does not contend that Boliaux
had “good cause”—or indeed any cause—for raising a du-
plicity argument only in mid-trial. The decision may well
have been strategic, deferring majers until it was too late for
the prosecutor either to amend the indictment or appeal
from an adverse decision. This is exactly the kind of strategy
that Rule 12(b)(3) is designed to block.
   Not content with holding back a duplicity argument until
mid-trial, Boliaux withheld a multiplicity argument until his
opening appellate brief. Multiplicity means charging a single
crime in multiple counts. Boliaux tells us that he commijed
at most one bank fraud, no majer how many checks he
6                                                   No. 18-1322

wrote against insuﬃcient funds, making the six bank-fraud
counts multiplicitous. Yet multiplicity is among the majers
that must be raised before trial. Fed. R. Crim. P.
12(b)(3)(B)(ii). Consideration of the argument now depends
not only on a demonstration of plain error (the standard for
all contentions ﬁrst presented on appeal) but also on a
demonstration of good cause. Boliaux does not argue that he
had good cause—or any cause at all—for delay in making
this argument. We therefore do not consider it.
    One evidentiary contention requires a few words. John
Brincat appeared for the prosecution as an expert witness on
the topic of ﬂoorplanning. He explained to the jury how
these loans are made and why lenders’ risk is increased by
the existence of multiple title certiﬁcates and multiple loans
against a single vehicle. The district judge found this testi-
mony proper under Fed. R. Evid. 702. Still, Boliaux contends
that the testimony should have been barred because Brincat
acted as both an expert witness and a fact witness, a dual
role that may leave the jury confused about how to treat the
testimony. See, e.g., United States v. Je@, 908 F.3d 252, 267–68
(7th Cir. 2018). The district court disagreed, stating: “The tes-
timony elicited by the government from witness Brincat was
limited to his role as an industry expert and did not stray
into fact-witness territory”. Boliaux contests this by observ-
ing that Brincat testiﬁed about how the whole ﬂoorplan-
lending industry works, and Boliaux insists that because
Brincat is employed by Automotive Finance Corp. (AFC),
one of the defrauded lenders, the jury likely would have un-
derstood him to be a fact witness.
   The district judge did not abuse his discretion by per-
mijing Brincat to testify. He did not describe any special fea-
No. 18-1322                                                    7

tures of AFC’s practices or any of the dealings between AFC
and Boliaux. The jury surely understood Brincat to be testi-
fying exclusively as an expert. We are surprised that the
prosecutor would present Brincat as an expert, enabling the
defense to paint a vital witness as biased, but puzzling deci-
sions do not make evidence inadmissible.
    Boliaux presents a few additional arguments, which do
not require discussion. They have been considered and are
rejected.
    We promised earlier to return to how Boliaux has treated
the district court’s explanations for its decisions. Circuit Rule
30(b)(1) requires every appellant to include, in an appendix
to the brief, “[c]opies of any … opinions, orders, or oral rul-
ings in the case that address the issues sought to be raised.”
Circuit Rule 30(d) adds: “The appendix to each appellant’s
brief shall contain a statement that all of the materials re-
quired by parts (a) and (b) of this rule are included.”
Boliaux’s brief, signed by Andrew S. Gable of Chicago, con-
tains the required certiﬁcation. But it is false. The appendix
omits the district court’s statement of its reasons for ﬁnding
the evidence suﬃcient, ﬁnding the duplicity argument (and
the proposed unanimity instruction) forfeited under Rule
12(b), and permijing Brincat to testify. (The opinion ad-
dresses other topics as well.) The appendix also omits sub-
stantial parts of the district judge’s mid-trial discussions of
these and other issues. Was Gable hoping that we would not
discover those rulings?
   False representations to the court of appeals have conse-
quences. In civil litigation a false certiﬁcate of compliance
with Circuit Rule 30(a) and (b) leads to summary aﬃrmance
or dismissal of the appeal. See, e.g., Urso v. United States, 72
8                                                  No. 18-1322

F.3d 59, 61–62 (7th Cir. 1995); Mortell v. Mortell Co., 887 F.2d
1322, 1327 (7th Cir. 1989); Teitelbaum v. Curtis Publishing Co.,
314 F.2d 94, 95–96 (7th Cir. 1963); Sparrow v. Yellow Cab Co.,
273 F.2d 1, 4 (7th Cir. 1959); Chicago & Eastern Illinois Ry. v.
Southern Ry., 261 F.2d 394, 400 n.7 (7th Cir. 1958). The client
then may be able to recover from counsel for malpractice.
We concluded in United States v. Smith, 953 F.2d 1060, 1068
(7th Cir. 1992), that this would not be appropriate in criminal
cases, where defendants have diﬃculty monitoring their
lawyers’ performance—and where dismissal of the appeal or
summary aﬃrmance would lead straight to a decision ﬁnd-
ing that counsel had furnished ineﬀective assistance, which
would authorize a new appeal. It is best in criminal cases to
give the defendant plenary appellate review, as we have
done, and penalize the lawyer directly. See In re Galvan, 92
F.3d 582 (7th Cir. 1996). See also Guentchev v. INS, 77 F.3d
1036 (7th Cir. 1996) (same approach in immigration law).
    Galvan established $1,000 as the presumptive ﬁne for a
violation of Circuit Rule 30 in a criminal case. 92 F.3d at 584–
85. See also, e.g., United States v. Evans, 270 F.3d 1076, 1085
(7th Cir. 2001). Adjusting for inﬂation, $1,000 in 1996 is
equivalent to $1,597 today. This implies that the presumptive
ﬁne should become $1,600.
   Counsel has 14 days to show cause why he should not be
ﬁned $1,600, and reprimanded, for his violation of Circuit
Rule 30(b) and his false statement under Circuit Rule 30(d).
   The judgment is aﬃrmed, and an order to show cause
will be issued.