U.S.A. v. Gracia

• Decision Date: 19 November 2001
• Docket Number: No. 00-2946,00-2946
• Citation: 272 F.3d 866
• Parties: (7th Cir. 2001) UNITED STATES OF AMERICA, Plaintiff-Appellee, v. MARIO GRACIA, Defendant-Appellant
• Court: U.S. Court of Appeals — Seventh Circuit

Page 866

272 F.3d 866 (7th Cir. 2001)

UNITED STATES OF AMERICA, Plaintiff-Appellee, v. MARIO GRACIA, Defendant-Appellant.

No. 00-2946

United States Court of Appeals For the Seventh Circuit

Argued May 17, 2001

Decided November 19, 2001

Appeal from the United States District Court for the Southern District of Illinois. No. 98 CR 40125--G. Patrick Murphy, Chief Judge. [Copyrighted Material Omitted] Before WOOD, JR., KANNE, and ROVNER, Circuit Judges.

HARLINGTON WOOD, JR., Circuit Judge.

Mario Gracia ("Gracia") appeals his jury conviction and sentencing on counts of conspiracy to commit bank fraud under 18 U.S.C. secs. 371 & 1344, bank fraud under 18 U.S.C. sec. 1344, wire fraud under 18 U.S.C. sec. 1343, and conspiracy to commit money laundering under 18 U.S.C. sec. 1956(h). We have jurisdiction under 28 U.S.C. sec. 1291, and we affirm both the conviction and sentence.

I. BACKGROUND

Because most of Gracia's arguments are challenges to the factual findings and sufficiency of the evidence, the facts, as set forth in the trial transcript, are presented in detail. In 1995, a group of approximately fifteen inmates incarcerated at the federal penitentiary in Greenville, Illinois devised and implemented an extensive check kiting scheme. The scheme was masterminded by prisoner Ernie Hill and included Jesus Bonillas. Unable to conduct the bank transactions themselves, Hill and the inmates recruited numerous friends and relatives outside of the prison. Hill sent blank business checks to his half- brother Michael Ochoa, who then filled out the checks which were usually drawn on the account of a closed or fictitious mortgage company. The checks, most written for tens of thousands of dollars, were then sent directly to various banks for deposit into the personal bank accounts of individuals designated by Hill or other co-conspirators.

Most of the personal bank accounts were ones that had not been recently opened and were in good standing. The account holders were carefully instructed when to withdraw funds. Hill or a co-conspirator would wait until the worthless check was deposited, then allow a certain amount of time for the check to be posted. A posted check makes the funds available in the account but has not yet been honored (or, in this case, always declined) by the bank on which it was drawn. The account holder was instructed to withdraw money during this crucial period before the check bounced. The money was then split between Hill, Ochoa, and other participants. The success of the scheme greatly depended on precision timing, which necessitated three-way calls to co ordinate the withdrawals. Gracia's brief states that losses to the banks totaled approximately $430,000.

Bonillas, who was married to Gracia's sister (who was also involved in the scheme), recruited Gracia. Gracia contacted his brother Frank ("Frank")¹ about participating. Both Gracia and Frank resided in Tucson, Arizona. Frank was instructed by Gracia to come to Gracia's home in order to take a telephone call from Bonillas, who offered to place a certain amount of money in Frank's bank account to be disbursed to other parties as directed by Bonillas, with Frank keeping a certain percentage. Although Bonillas told Frank the money to be deposited was money owed to himself and other inmates, Frank testified that he believed almost from the start that this was a fraudulent scheme and was convinced it was fraud by the time he participated in the first transaction. Two checks were eventually deposited in Frank's account, one for $20,300 and one for $15,000. Frank was told by Bonillas to withdraw $18,000 and to purchase two cashier's checks for $5,000 made payable to Luisa Cardenas. At that same time, Bonillas agreed that Frank could take $3,000 of the money to purchase a cashier's check made payable to Frank's mortgage company. Bonillas also instructed Frank to give $3,000 to Gracia.

Frank sent the check to his mortgage company but two days later the mortgage company called to tell him the bank would not honor the check. When this occurred, Frank went to complain to his brother. Gracia placed a call to Bonillas from his home. Frank spoke with Bonillas and threatened to go to the authorities about the scheme if Bonillas did not give him $3,000. Bonillas then asked to speak to Gracia, who had remained in the room during the call. After speaking to Bonillas, Gracia left the room, returned, and handed Frank $3,000 in cash. Several days after a second fraudulent deposit had been made in Frank's account, the bank closed his account.

The two cashier's checks for $5,000 were sent to Luisa Cardenas.² Cardenas met Hill sometime in 1989-90, when Hill and her brother were incarcerated in the federal prison in San Pedro, California. Shortly after, she began "doing favors" for Hill by setting up three-way phone calls and receiving money from Western Union wire transfers. Sometime in 1993- 94, she also began writing fraudulent checks for Hill.

Cardenas received the two $5,000 checks sent by Frank, but testified that she refused to cash them because her name would then become part of the paper trail and that it would be too dangerous and she might get caught. Gracia flew to Los Angeles to meet Cardenas. At the airport, Cardenas had a telephone conversation with Hill, confirming that Gracia had arrived to pick up the two checks. Cardenas testified that Gracia questioned her about how the operation worked. She told him that Hill arranged for money to be deposited into an account, then Hill would tell him to withdraw a certain amount and Gracia would get to keep half of the total withdrawal. Gracia asked if "anybody [had] gotten caught, anybody gotten in trouble." She told him that as far as she knew, "no one had gotten in trouble or caught."

Upon his return to Tucson, Gracia attempted unsuccessfully to cash the two cashier's checks. He went to a branch bank where a relative-by-marriage worked as a service manager. This relative testified that she refused to cash the two checks because they were not made out to Gracia nor were they endorsed over to him. The original uncashed checks were submitted as evidence at trial.

In August of 1995, Gracia also went to his nephew Phillip Mota and asked Mota to send money to someone not known to Mota. Gracia drove Mota to Western Union and gave Mota approximately $5,000, with $200 to pay for the wiring fees. While Gracia waited in the car, Mota was instructed to send a $5,000 wire transfer to a Maria Rolon.³ Gracia gave Mota $75 for his help. Rolon, who had been recruited by Hill, testified that she received several checks like the one from Mota, totaling approximately $60,000. She stated that she kept about $10,000 out of that total and forwarded the rest to various names as instructed by Hill.

Also in August, Miguel Jimenez, an inmate at the Fairview Heights, Illinois state prison, contacted his niece, Angie Jimenez Badilla ("Angie"), in Tucson and told her he was sending someone to take her to open a bank account in her name. Angie was fifteen at the time and did not drive. Although she was married, she and her husband Daniel lived with Angie's mother. On August 17, 1995, Gracia, a complete stranger to Angie, picked her up along with her mother, drove them to a branch bank in Green Valley, Arizona, and gave Angie $150 in cash, telling her to open an account while he waited in the car. On August 21, two fraudulent mortgage checks, one for $40,000 and one for $29,000, were deposited in Angie's account. Although both checks were endorsed with the name Angie Jimenez, Angie testified that she had never endorsed the checks.

Several days later, Gracia called Angie and told her to take out as much money as she could from her bank account. Gracia met Angie outside the bank and questioned her when she came out. Angie said that the teller told her she could withdraw $11,000, but as she was filling out the paperwork, she was informed that the account had been frozen. After telling Gracia what happened, she returned home. She was contacted by Gracia a day or two later. He called her, then arrived at her house, giving her a cashier's check made out to Enedino Egurrola,⁴ Bonillas' aunt, for $7,324.67. Gracia drove her to a bank in Tucson and told her to cash the check while he waited in the car. She re turned with $7,324.67 in cash, which Gracia took. He gave her $50 for her cooperation. Another day or so later, Gracia called Angie again and came to her house. He drove both her and her husband to Western Union. He gave Angie $3,000 plus the fee for the wire transfer, and told her to send it to Delores Rolon (Maria Rolon's sister), someone unknown to Angie.

Gracia also used Angie's husband Daniel for several transactions. On the first occasion, Gracia came to the home of Angie's mother, where Angie and Daniel were living. Daniel had never met Gracia. Gracia asked Daniel to cash a $5,000 cashier's check for him, which he then filled out with Daniel's name. Gracia drove Daniel to the bank and waited outside for Daniel to cash the check. Gracia then took Daniel to Western Union, giving Daniel the $5,000 plus $200 for the wiring fee, and instructed him to send a wire transfer to Cardenas. The next day Gracia returned to Daniel's home, gave Daniel $4,000 plus approximately $200 for the transfer fee, took him to Western Union and instructed him to wire the money to a Norma Santos.⁵ Gracia paid Daniel $50 each time for his assistance. Gracia contacted Daniel one last time to tell Daniel that he was going to put some money in Daniel's credit union account, explaining to Daniel that it was money from some of Gracia's friends in jail who were owed money. Gracia drove Daniel to the bank after the checks had been deposited, but when Daniel tried to make a withdrawal, credit union officials informed him that his account had been frozen.

Bonillas sent a fraudulent check for $22,000 to be deposited in the account of his elderly aunt, Egurrola,...