U.S. v. Warren

• Decision Date: 27 July 2006
• Docket Number: No. 05-2791.,05-2791.
• Citation: 454 F.3d 752
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Tony L. WARREN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

454 F.3d 752

UNITED STATES of America, Plaintiff-Appellee, v. Tony L. WARREN, Defendant-Appellant.

No. 05-2791.

United States Court of Appeals, Seventh Circuit.

Argued April 14, 2006.

Decided July 27, 2006.

COPYRIGHT MATERIAL OMITTED

Kenyanna Scott (argued), Office of U.S. Atty., Chicago, IL, for Plaintiff-Appellee.

Stanley L. Hill (argued), Hill & Associates, Chicago, IL, for Defendant-Appellant.

Before BAUER, ROVNER, and EVANS, Circuit Judges.

ROVNER, Circuit Judge.

Tony Warren was convicted of various charges related to a fraudulent check scheme. What makes Warren's convictions unusual is his insistence that the fraud was authorized by the United States Secret Service. Warren stipulated that he sent several altered checks purportedly made out to "A & B Electrical" to an individual named Robert Studnicka, who cashed them and kept a portion of the proceeds for himself. Police caught Studnicka, who cooperated and implicated Warren in the scheme. The two were charged in a nine-count superseding indictment with violating 18 U.S.C. §§ 1344 (prohibiting bank fraud), 2314 (forbidding transporting forged and fraudulent checks in interstate commerce), and 513 (prohibiting making, uttering, or possessing forged securities). Studnicka pleaded guilty, but Warren went to trial, claiming that his behavior was authorized because he was a confidential informant for the United States Secret Service. The jury disbelieved Warren's defense, and convicted him on all counts. Warren now appeals, raising a number of alleged errors at both trial and sentencing.

I.

Although the details remain murky, the premise of the check scheme is fairly straightforward. Legitimate checks issued by corporations such as Whirlpool and National Geographic, among others, were altered so that the payee on each check was A & B Electric, a company owned by Studnicka. Warren, who was living in New York at the time, then sent the altered checks to Studnicka, who was living in Illinois (Warren has never disclosed how he obtained the checks). Studnicka then deposited the checks, which ranged in amount from $65,000 to $280,000, into his bank accounts at Palos Heights Bank and Trust and First Midwest Bank. Generally Studnicka would withdraw proceeds from the checks to send to Warren (between $20,000 to $30,000) and keep the remainder for himself. Warren and Studnicka repeated this pattern approximately five times between December 2002 and January 2003. That same month, Studnicka was arrested, owing in part to suspicion raised by the failure of a $214,000 check he deposited at Palos Heights Bank and Trust to clear.

After Studnicka's arrest, he agreed to cooperate in the investigation against Warren. Under the direction of federal agents, Studnicka persuaded Warren to come to Illinois to pick up his remaining share of the checks that Studnicka had cashed. Warren agreed to meet Studnicka at a mall in Matteson, Illinois, ostensibly to recover approximately $200,000 that he believed Studnicka still owed him. Studnicka met Warren in the parking lot, and agents arrested both men. The government indicted them in April 2003, and returned a superseding indictment in August 2003.

Warren admitted giving the checks to Studnicka, but he provided an unusual justification: he claimed he was working as a confidential informant for the Secret Service in New York. The government initially denied that Warren had ever worked as a confidential informant. Then in August 2003, the government acknowledged that Warren had worked as a confidential informant for a brief period between March and April 2001. The government submitted two affidavits from Douglas Farrell, a Chicago-based Secret Service agent who had investigated the pending charges against Warren. The first affidavit explained that when they first explored Warren's claim that he was a confidential informant, the New York Secret Service offices were unable to confirm the claim. After contacting the Secret Service Investigative Support Division, however, Chicago Secret Service agents learned that Warren had in fact worked briefly as a confidential informant, but that he had been "formally deactivated" in April 2001. Farrell's second affidavit, tendered in response to a court order for the government to provide Warren with "all information relating to defendant's status as a confidential informant," explained that the paperwork associated with Warren's service as a confidential informant had been destroyed by the September 11, 2001 terrorist attacks on the World Trade Center. Nearly a year later, in July 2004, the government tendered a draft Secret Service report detailing Warren's work as a confidential informant. Secret Service agent Brian Koch gave the report to prosecutors during an interview, and they tendered it promptly to Warren.

In addition to Agent Farrell's affidavits and Agent Koch's report, at Warren's request the government facilitated a telephone interview between Warren's counsel and Secret Service agent Matthew Quinn, who had worked with Warren. Quinn provided background information about how Warren became involved with the Secret Service. Quinn explained that in February 2001 he worked on the "West African Task Force," investigating crimes committed primarily by Nigerian nationals in the United States and overseas. Warren had come to the attention of the Secret Service in 1999 when agents obtained a counterfeit check made out to Warren and drawn on the Central Bank of Nigeria. Nothing came of this initial contact, but Warren later approached the Secret Service in early 2001, at which point he had lost approximately $400,000 in a scam known as an "advance fee fraud." In one iteration of this scheme, someone from Nigeria contacts a United States citizen (often a small business owner who can readily access capital) with a lucrative but somewhat shady "business" venture. The story would be, for instance, that due to a government contract overrun, between $20 and $40 million of "free" money was tied up in Nigeria. With a cash bribe for some Nigerian government official, however, the money could be released. The individual contacted would be asked to advance, for example, $10,000 or $15,000 for the bribe, and would be promised anywhere from 10 to 50 percent of the multi-million dollar sum in exchange. This fantastic-sounding "opportunity" was accompanied by official-looking documentation. The scheme did not stop after the first $10,000 to $15,000. Instead, the perpetrator encountered a series of supposed snags in accessing the money, each of which required the victim to continue sending funds in hopes of getting the big payoff or at least recouping his original "investment."

As a victim of this scheme, Warren was enlisted by the Secret Service to help infiltrate the Nigerian fraud ring and bring one of its leaders to the United States for arrest. According to agents who worked with Warren, his time as a confidential informant was short-lived due to his frustration with the pace of the investigation and ultimately his refusal in March 2001 to turn over a counterfeit $3 million check. In connection with this incident and a later independent federal investigation into fraudulent checks, Warren was arrested in June 2002 by federal officials in New York. However, the complaint against him was later dismissed.

Before his trial on the current charges, Warren stipulated that he had caused the checks to be sent to Studnicka. His trial thus centered on his public authority defense. Studnicka testified against Warren, and the government played taped conversations between Studnicka and Warren made after Studnicka's arrest. In the tapes, Warren refers repeatedly to the "Nigerians," and his need to go to the "motherland" to get his money back.

Two Secret Service agents who had worked with Warren also testified. The first, Matthew Quinn, explained that he and two other agents, Kevin Worthington and Brian Koch, met with Warren in late 2000 or early 2001. After seeing the documents Warren had received from the perpetrators, the agents enlisted Warren as a confidential informant. Shortly thereafter, at the beginning of March 2001, Quinn was transferred from the West African Task Force to the presidential detail. Despite the transfer, Quinn continued to work informally with Worthington and Koch when the need arose. Quinn testified that one of his last conversations with Warren was to tell him that he was no longer to do anything on behalf of the Secret Service.

In connection with that testimony, Warren's counsel asked Quinn what "deactivation" meant, to which Quinn responded, "`deactivation' is not really a word that I would use." Believing that Quinn had used the term in his pretrial telephone interview, counsel sought to impeach Quinn using the telephone interview, but the court sustained the government's objection.

Agent Brian Koch, who had taken over supervising Warren when Quinn was transferred, also testified. He recounted that in April 2001 Warren had received a check for $3 million from a Nigerian man named Dr. Oduebo. Warren faxed Koch a copy of the check, and Koch informed him that it was counterfeit. He testified that he told Warren to hold on to the check until agents could come retrieve it. But when Koch arrived to pick up the check, Warren told Koch that he was too late; the check was gone. Warren then left under the pretense of retrieving the check. After waiting an hour or so for Warren to return, Koch left and returned to his office. He later spoke to Warren on the phone and informed him that he was no longer working as an informant, and that if he tried to cash the check he would be prosecuted.

Warren testified in his own defense. He insisted that Secret Service agents had never told him that he was no longer to act as a confidential informant. Instead, he maintained that he was authorized to do "whatever it takes" to infiltrate the "Nigerian mob." He claimed that he was still acting pursuant...