Court Opinion

ID: 2718143
Source: CourtListenerOpinion
Date Created: 2014-08-14 19:00:47.828122+00
Date Added: 2024-06-11T10:02:20.965738
License: Public Domain

In the

    United States Court of Appeals
                For the Seventh Circuit
                    ____________________
Nos. 12-3919 & 13-1515
UNITED STATES OF AMERICA,
                                                   Plaintiff-Appellee,

                                 v.

DONELL A. THOMAS and
LAMAR CHRISTOPHER CHAPMAN III,
                                             Defendants-Appellants.
                    ____________________

        Appeals from the United States District Court for the
          Northern District of Illinois, Eastern Division.
            No. 10 CR 642 — Elaine E. Bucklo, Judge.
                    ____________________

      ARGUED JUNE 5, 2014 — DECIDED AUGUST 14, 2014
                 ____________________
   Before WOOD, Chief Judge, and EASTERBROOK and KANNE,
Circuit Judges.
    WOOD, Chief Judge. Donell Thomas and Lamar Chapman
III were convicted of multiple counts of wire fraud after a
jury trial. The jury found that they were part of a scheme to
fleece real estate lenders by concocting multiple false sales of
the same homes and using the loan proceeds from the later
transactions to pay off the earlier lenders. Thomas was also
convicted of aggravated identity theft for using a real estate
2                                    Nos. 12-3919 & 13-1515

investor’s identity without permission to craft a phony sale
of a home that the victim never owned.
    Thomas and Chapman both challenge the sufficiency of
the evidence underlying their convictions, though neither
disputes the government’s general depiction of the scheme.
Thomas claims only that the evidence was insufficient to
convict him of aggravated identity theft because there was
no proof that he created or used the falsified documents at
issue. Chapman argues that there was no evidence that he—
the defendant at the trial—was the Lamar Chapman identi-
fied by the evidence, because no courtroom witness testified
to that effect. Chapman also raises due process challenges to
his conviction: he asserts that his rights were violated when
the government dropped a co-defendant from the indict-
ment and that the government failed to turn over unspeci-
fied exculpatory evidence. We find that the evidence was
sufficient to support the convictions of both defendants, and
that Chapman’s due process claims are without merit. We
therefore affirm the district court in all respects.
                              I
    The government introduced a substantial amount of evi-
dence detailing the scheme, including testimony from sever-
al victims, an FBI investigator, an auditor, and an indicted
co-defendant who had already pleaded guilty. As the precise
details of the defendants’ misdeeds are largely immaterial to
this appeal, we paint their activities with a broad brush and
delve into minutiae only when necessary.
   The government initially charged Thomas, Chapman,
Juan Orozco, and Eddie J. Cox, Jr., with wire fraud in July
2010. An indictment and superseding indictment followed
Nos. 12-3919 & 13-1515                                         3

and added Anthony Allen as a defendant; Orozco and Allen
pleaded guilty to the charges against them in this latter in-
dictment pursuant to plea agreements. A second supersed-
ing indictment charged Thomas with eight counts of wire
fraud in violation of 18 U.S.C. § 1343, and Chapman with
four counts of the same. It also charged Thomas with one
count of aggravated identity theft in violation of 18 U.S.C.
§ 1028A. It was this indictment on which Thomas and
Chapman went to trial. Cox, for his part, was dismissed from
the case pursuant to a government motion shortly after the
grand jury returned the second superseding indictment.
    The trial evidence showed that Thomas and Allen were
the ringleaders of the operation, which was run out of a
business called Chicago Abstract and Title Company. The
group targeted short-term real estate lenders, referred to as
“transactional lenders” at trial. Those lenders provide fund-
ing for structured real estate transactions called “A to B, B to
C” transactions: the property is first sold by the original
owner (A) to a real estate investor or agent (B), and then re-
sold (typically within 48 hours) to an end-purchaser (C).
Critically, all aspects of the transaction are to be contemplat-
ed in advance. The transactional lenders provide the funds
to finance the front-end (A to B) transaction, although it
might be more accurate to say they provide the assurance of
funds, as they generally require the second sale to be com-
pleted before they will release the funds for the first, in order
to avoid taking on any risk. The defendants exploited this
funding model by falsely representing to the lenders that
they had completed back-end (B to C) sales of homes they
acquired. This allowed them to secure release of the transac-
tional lenders’ funds and enabled them to take a cut for
themselves. They then repaid the short-term loan money by
4                                     Nos. 12-3919 & 13-1515

falsifying another B-to-C transaction involving the same
property with a different transactional lender, and used the
loan proceeds from that “sale” to pay back the previous
lender, in much the same manner that one would run a
Ponzi scheme.
    Thomas and Allen recruited Orozco, a closing agent at
Chicago Abstract, to process the transactions, release the
short-term lenders’ funds, and pay back the lenders with
proceeds from a different lender. Chapman, who has never
been licensed to practice law, became involved as the opera-
tion’s putative attorney, corresponding with transactional
lenders to discuss funding for the deals and putting them off
the scent of the rotten transactions lying behind the deals.
    Though Thomas proved adept at using fake names to
avoid detection, the conspirators generally used real homes
in connection with their fraudulent transactions; that is, the
“A-to-B” portion of the structured sale was real, and only the
“B-to-C” sale was a fake. In at least one case, however,
Thomas concocted a “sale” that was a fiction from the start;
this was the basis for his aggravated identity theft charge.
Among the documents found at Chicago Abstract’s office
when it was finally audited at the request of a jilted lender
was an agreement to sell a home on South Langley Avenue
in Chicago, signed by purported homeowner Oscar Corona
with Thomas listed as the buyer. This document was accom-
panied by a HUD-1 statement for the “sale” dated October 8,
2008. Further documents included a letter from the lender
about the disbursement of the $1,050,000 paid for the proper-
ty and documents related to the back-end of the “sale,” in-
cluding an agreement signed by Thomas to sell to an end-
buyer.
Nos. 12-3919 & 13-1515                                      5

    Corona is an actual person and real estate investor with
whom Thomas had worked previously. There is no
indication that he was involved with the scheme or knew
about the fraud Thomas was engineering at the back end of
the transaction. Corona testified at trial that he never owned
the home on South Langley and had no idea that Thomas
was using his name for the sale. He stated that he never
signed or initialed the sales documents; to the contrary, he
testified, the signature on the document “looked like”
Thomas’s, and the buyer listed on the documents was a
corporation that Thomas had used when actually buying
property from him.
     The defendants were caught when a targeted lender dis-
covered that a person named “Chad Marks” who had re-
quested transactional funding was not an employee of the
title company he claimed to be. The lender contacted law en-
forcement and cooperated in an investigation, and Thomas
was arrested immediately after completing the purported
closing. The others’ involvement came to light from there.
   Thomas was ultimately convicted of eight counts of wire
fraud and sentenced to serve 70 months in prison on each, to
run concurrently, as well as one count of aggravated identity
theft for which he was sentenced to 24 months’ imprison-
ment, to run consecutively to the other counts. Chapman
was convicted of four counts of wire fraud and sentenced to
serve 65-month concurrent terms of imprisonment.
                              II
    On appeal, Thomas urges that the evidence was insuffi-
cient to support his conviction for aggravated identity theft.
When a defendant challenges the sufficiency of the evidence
6                                       Nos. 12-3919 & 13-1515

underlying a conviction, we will reverse only if no rational
trier of fact, viewing the evidence in the light most favorable
to the government, could have found the defendant guilty
beyond a reasonable doubt. United States v. Chapman, 692
F.3d 822, 825 (7th Cir. 2012). This is an “extremely deferen-
tial” standard that presents a “nearly insurmountable hur-
dle” for a defendant. United States v. Teague, 956 F.2d 1427,
1433 (7th Cir. 1992).
    The aggravated       identity   theft   statute,   18   U.S.C.
§ 1028A(a)(1), reads:
    Whoever, during and in relation to any felony viola-
    tion enumerated in subsection (c), knowingly trans-
    fers, possesses, or uses, without lawful authority, a
    means of identification of another person shall, in ad-
    dition to the punishment provided for such felony, be
    sentenced to a term of imprisonment of 2 years.
To prove aggravated identity theft, the government must es-
tablish beyond a reasonable doubt that the defendant: 1)
knowingly transferred, possessed, or used; 2) a “means of
identification”; 3) that he knew belonged to another person,
see Flores-Figueroa v. United States, 556 U.S. 646, 657 (2009); 4)
with knowledge that such use was without lawful authority;
5) in connection with a qualifying felony.
    Thomas challenges the sufficiency of the government’s
evidence only with respect to the first of these elements:
knowing transfer, possession, or use. He was prudent to lim-
it his appeal in this way, as the evidence easily supports the
other elements. Forging someone’s name on a document is
surely a knowing use of that name without lawful authority,
and a name is a “means of identification” within the mean-
Nos. 12-3919 & 13-1515                                          7

ing of the statute. See United States v. Spears, 729 F.3d 753, 755
(7th Cir. 2013) (en banc). Thomas knew that Corona was a
real person because they had done over a dozen property
deals together. And wire fraud is a qualifying felony under
18 U.S.C. § 1028A(c)(5).
     That leaves the “knowing use” element, which breaks
down into two parts: whether Thomas was the person who
filled out the false sales documents with Corona’s name, and
whether those documents were ever used or if the plan was
abandoned before he did something with them. On the latter
score, there can be no serious question that the evidence was
sufficient to show that Thomas used the documents. The
evidence presented at trial included a letter from the
targeted transactional lender, First Funding, informing
Orozco that Chicago Abstract would “receive funds totaling
$1,050,000 on Wednesday October 8 for the real property
interests … [at] S. Langley, Chicago IL 60636.” The
completed HUD-1 form and documents for Thomas’s
subsequent sale of the home provide further bases for the
jury’s finding that the documents were used.
   The other question is whether Thomas was the person
who filled out the false statements. We have no trouble con-
cluding that it was permissible for the jury to find that he
did so even though no person actually saw him fabricate the
documents. Corona testified that the signature on the docu-
ments “looked like” Thomas’s, and that details such as the
name of the company used to purchase the property (Bosch
& Cohen) matched prior transactions he had completed with
Thomas. The jury could make its own comparison of that
signature with other authentic examples of Thomas’s signa-
ture in the record. See FED. R. EVID. 901(b)(3). Orozco, testify-
8                                      Nos. 12-3919 & 13-1515

ing pursuant to his plea agreement, verified that all of the
documents came from Chicago Abstract, and that Thomas
was generally the person who provided information to
transactional lenders in the scheme. The evidence is circum-
stantial, to be sure, but it is substantial, and direct evidence
is not required to find an element of a crime beyond a rea-
sonable doubt. See United States v. Briscoe, 896 F.2d 1476, 1505
(7th Cir. 1990).
   All of this added up to enough evidence to convict
Thomas of aggravated identity theft, and we therefore affirm
that conviction.
                              III
    Chapman, like Thomas, has no squabble with the details
of the wire fraud scheme. His main argument is that no evi-
dence was introduced at trial to link him, the person sitting
at the defendant’s table, with the “Lamar Chapman” who
participated in the scheme. In this connection, he places
great weight on the fact that no witness made an in-court
identification of him at trial.
    In essence, Chapman is arguing that identification is
unique among facts required for conviction, in that (in his
view) it can be established exclusively through direct, in-
court testimony, and never through circumstantial evidence.
That is an interesting theory, but it is not one for which we
find any support in the law. Though in-court identification is
preferred to prove identity, it is not required if the defend-
ant’s identity can be inferred from the circumstances. See
United States v. Prieto, 549 F.3d 513, 525 (7th Cir. 2008). A
good example of circumstantial proof of identity can be
found in United States v. Weed, in which we upheld the con-
Nos. 12-3919 & 13-1515                                         9

viction without in-court identification of a person who was
caught carrying some $28,000 in German and U.S. currency
through customs after he answered “no” to the question
whether he was carrying over $5,000 in currency. 689 F.2d
752, 753–54 (7th Cir. 1982). Despite the lack of in-court iden-
tification, we were satisfied that identity could be inferred
because none of the witnesses ever hinted that the man on
trial was not the same Weed that they had stopped with the
currency. Both the prosecution and defense counsel referred
to Weed as the person involved in the events, and defense
counsel never objected to the prosecution’s references to
Weed as the accused. Id. at 755–56.
    In the final analysis, the defendant’s identity is nothing
more or less than an element that must be established be-
yond a reasonable doubt in order to demonstrate guilt. That
is, of course, a demanding standard, and if there were any
reason to think that the “Chapman” in the courtroom was
not the same “Chapman” involved in the scheme, the de-
fense was free to make this argument, and the prosecution
would have borne the risk of uncertainty. Identity, in short,
is not a unique issue that can be proved only by someone
pointing a finger at the defendant in the courtroom. Indeed,
the Federal Rules of Evidence allow for a variety of means of
proving identity: it is a permissible use of “other acts” evi-
dence under Rule 404(b)(2), and Rule 901(b) lists several
ways by which evidence can be linked to a defendant be-
yond direct witness testimony, including handwriting and
voice comparisons, distinctive characteristics, and telephone
records. If the evidence at trial was sufficient to permit jurors
to find beyond a reasonable doubt that the man seated at the
defense table was the same person referred to in the account
of the offense, then there is no reason to overturn the jury’s
10                                     Nos. 12-3919 & 13-1515

conviction based on the government’s alleged failure to
prove identity.
    Judged against that standard, a reasonable jury could
find that Chapman’s identity as the “Chapman” identified
by the evidence was established beyond a reasonable doubt.
Chapman’s son-in-law testified that Chapman ran one of the
“businesses” identified with the scheme (the firm of Alexan-
der, Cavanaugh, and Block), and he identified Chapman’s
signature on a letter to one of the targeted lenders. The son-
in-law never suggested that the person on trial was not his
father-in-law, nor that there was any sort of identity mix-up.
If there were anything to this point, Chapman could have
cross-examined his son-in-law about it. The fact that he did
not is one reason for the jury to infer, reasonably, that the
correct “Chapman” had been brought before the court. Fur-
ther evidence supporting that inference included telephone
records from AT&T that linked Chapman’s phone to one
used in the scheme and provided a link to his address.
    Another reason the jury had no cause to doubt that the
right man was on trial was his lawyer’s trial strategy, which
was inconsistent with an identity-based defense. At one
point during closing arguments, counsel argued that Chap-
man “g[ot] involved” in the scheme by speaking with one of
the targets. He argued that Chapman was only trying to help
her, not to delude her. This statement would make little
sense if Chapman wanted the jury to believe that the gov-
ernment was charging the wrong person named “Chap-
man,” or that Chapman’s name was being used without his
permission. We recognize that counsel’s arguments are gen-
erally not evidence. See United States v. Henry, 2 F.3d 792, 795
(7th Cir. 1993). But unlike, for example, a characterization of
Nos. 12-3919 & 13-1515                                       11

fact that does not conform to the evidence, counsel’s version
of events that is at odds with the defendant’s own asserted
theory of the facts comes close to being a factual concession.
Cf. United States v. Rusan, 460 F.3d 989, 993–94 (8th Cir. 2006)
(concessions made by counsel as part of trial strategy can be
considered evidence). That said, we need not rely on the
statement or decide whether counsel crossed the line divid-
ing “zealous advocacy” and admissions. See Ferroline Corp. v.
General Aniline & Film Corp., 207 F.2d 912, 916–17 (7th Cir.
1953). The jury had sufficient grounds to infer Chapman’s
identity even without characterizing counsel’s argument as a
concession.
    Proof of identity can be especially difficult when crimes
can be committed from a remote location and without direct
contact with the victim—a possibility that is likely to become
increasingly common as technology continues to evolve.
Chapman played his role in the scheme entirely from the
other end of a cell phone or via correspondence, and so it
would be all but impossible for any of the victims or investi-
gators to take the stand and say that Chapman was the per-
son they “saw” committing the wire fraud. Someone may be
able to identify the person in the courtroom as Lamar Chris-
topher Chapman, but that would hardly solve the problem
of proving that he was the Lamar Chapman involved in the
scheme; it would prove only that 1) this man is named La-
mar Chapman and 2) the Lamar Chapman name was used in
the scheme. With such crimes, juries will often be forced to
rely on circumstantial evidence to determine that the de-
fendant has been correctly identified. That evidence may be
substantial, but it does require in the end that an inference
be drawn. But, as we said at the outset, circumstantial evi-
dence is entirely acceptable to prove even such a weighty
12                                      Nos. 12-3919 & 13-1515

point as who pulled the trigger. It is also permissible to use
for identity. In fact, given mounting scientific evidence about
the unreliability of eyewitness identification, establishing or
bolstering evidence of the defendant’s identity through
means other than eyewitness testimony may in many cases
be desirable. See, e.g., Hal Arkowitz & Scott O. Lilienfeld,
Why Science Tells Us Not to Rely on Eyewitness Accounts, SCI.
AM., Jan.-Feb. 2010, available at http://www.scientific
american.com/article/do-the-eyes-have-it/?page=1 (last visit-
ed Aug. 14, 2014); Henry F. Fradella, Why Judges Should Ad-
mit Expert Testimony on the Unreliability of Eyewitness Testimo-
ny, 2006 FED. CTS. L. REV. 3. Finally, Chapman’s case is an es-
pecially unattractive one in which to break new ground,
since he did not raise this point at trial and did not present
any argument to the jury that might have caused it to ques-
tion the identity of the defendant.
    The last issues before us are Chapman’s due process ar-
guments. He first claims that the government should be ju-
dicially estopped from prosecuting him (we assume) be-
cause it initially indicted Eddie J. Cox as part of the scheme,
but later dismissed Cox from the indictment. This change of
position on Cox, says Chapman, deprived him (Chapman) of
due process. He does not indicate why that should be so.
The requirements for judicial estoppel—a party taking two
inconsistent litigating positions, successfully persuading a
court to accept the earlier position before asserting the latter,
and thereby deriving an unfair advantage if not estopped—
are not met here. See Wells v. Coker, 707 F.3d 756, 760 (7th Cir.
2013) (estoppel requirements). No court ever accepted any
position regarding Eddie Cox’s role in the scheme. And there
is certainly no rule requiring the government to bring all de-
fendants initially charged into a case to trial or plead them
Nos. 12-3919 & 13-1515                                      13

out, lest they be “estopped” from trying the other defend-
ants. Here, for example, the government dropped Cox be-
cause it determined that it was Thomas using Cox’s name on
the relevant documents, rather than Cox himself. There is
nothing to this point.
    Finally, Chapman argues that the government failed to
turn over evidence favorable to him, as required under Brady
v. Maryland, 373 U.S. 83 (1963). He does not identify what
this evidence is. He just thinks that it must exist because, he
reasons, whatever caused the government to drop Cox from
the case must also have been favorable to Chapman. He
points to nothing, however, to support that hypothesis. And
in any event, without a showing that certain evidence has
been withheld there is nothing to support a Brady claim.
                               IV
    In today’s world, as this scheme illustrates, frauds can be
committed without ever meeting the victims face-to-face.
The evidence here was sufficient to show, for Chapman, that
the government had the right person in the dock. It also suf-
ficed to prove the aggravated identity theft charge against
Thomas. Finally, neither of Chapman’s due process argu-
ments has any merit. We AFFIRM the judgments entered
against both defendants.