United States v. Borrero, 102714 FED7, 13-3430

Docket Nº:13-3430, 13-3468, 13-3516, 13-3517, 13-3559
Opinion Judge:Easterbrook, Circuit Judge.
Party Name:United States of America, Plaintiff-Appellee, v. Evelyn Rivera Borrero, et al., Defendants-Appellants.
Judge Panel:Before Wood, Chief Judge, and Easterbrook and Williams, Circuit Judges.
Case Date:October 27, 2014
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit
 
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United States of America, Plaintiff-Appellee,

v.

Evelyn Rivera Borrero, et al., Defendants-Appellants.

Nos. 13-3430, 13-3468, 13-3516, 13-3517, 13-3559

United States Court of Appeals, Seventh Circuit

October 27, 2014

Argued October 27, 2014

Opinion Issued November 12, 2014

Appeals from the United States District Court for the Northern District of Indiana, South Bend Division. No. 3:12cr067 - Jon E. DeGuilio, Judge.

Before Wood, Chief Judge, and Easterbrook and Williams, Circuit Judges.

Easterbrook, Circuit Judge.

Indiana's Bureau of Motor Vehicles will not register or transfer title to a car or other motor vehicle unless the buyer furnishes information that includes a Social Security number. 140 Ind. Admin. Code §6-1-2. For corporations and similar entities, by contrast, Indiana wants a federal employer identification number (EIN). It is possible to obtain an EIN without having a Social Security number. The Internal Revenue Service will issue an employer identification number to anyone who has an individual taxpayer identification number (ITIN), and it will issue an ITIN to anyone who wants one. Persons who cannot obtain Social Security numbers-including not only aliens whose visas do not allow them to work in the United States, but also aliens who lack authority to be in the United States at all-can have an ITIN for the asking and use it for many financial transactions.

Omar Duran Lagunes and four colleagues established a business to help people without Social Security numbers navigate the process of titling vehicles in Indiana and obtaining license plates. For each client, Duran's service used a client's individual taxpayer identification number to obtain an employer identification number, registered a limited liability company named after the client (so John Doe received "John Doe LLC"), and submitted in the LLC's name the required paperwork and fees. The service used clients' real names and addresses. Each client paid about $350, which included the fees remitted to the Bureau of Motor Vehicles. Indiana issued the titles and licenses as requested; the state has never suggested that holding title to a personal vehicle through an LLC violates any rule of state law. Nor has the Internal Revenue Service stated that it is improper to obtain an employer identification number for use by an entity that will own property but not generate income.

But the United States Attorney for the Northern District of Indiana procured an indictment charging Duran and colleagues with two federal crimes. Count One alleges that defendants conspired, in violation of 8 U.S.C. §1324(a)(1)(A)(v)(I), to violate 8 U.S.C. §1324(a)(1)(A)(iii) and (iv) by shielding unauthorized aliens from detection and encouraging them to reside in the United States. It also alleges that defendants violated 18 U.S.C. §2 by aiding and abetting the violation of §1324(a)(1)(A); this does not add anything, so we do not mention §2 again. Count Two alleges that defendants conspired to commit mail or wire fraud, in violation of 18 U.S.C. §1349. All defendants were convicted of both counts and have been sentenced to imprisonment as short as 24 months (Evelyn Rivera Borrero and Yalitza Exclusa-Borrero) and as long as 84 months (Duran).

The charge of fraud could have been a simple one. Indiana taxes the sale of motor vehicles. An application for transfer of title must report the price at which the sale occurred and include the appropriate tax. Duran and the other defendants inserted false prices, such as $100 or $200, into the forms and remitted sales tax less than state law required-or so the indictment charged. Defendants used the means of interstate commerce (including the Internet) to acquire tax identifiers and create LLCs, and Indiana used the mails to send registration papers and license plates, so a financial fraud comes within the scope of the mail-fraud statute. See Schmuck v. United States, 489 U.S. 705 (1989).

But at trial the prosecutor did not emphasize Indiana's financial loss. To convict of mail or wire fraud, the jury must find that false statements injured a victim by depriving it of "money or property". See 18 U.S.C....

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