U.S. v. LeDonne

• Decision Date: 25 July 1994
• Docket Number: No. 93-1548,93-1548
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. James P. LeDONNE, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1418

21 F.3d 1418

UNITED STATES of America, Plaintiff-Appellee, v. James P. LeDONNE, Defendant-Appellant.

No. 93-1548.

United States Court of Appeals Seventh Circuit.

Argued Oct. 5, 1993.

Decided April 22, 1994.

Rehearing Denied July 25, 1994.

Andrew B. Baker, Jr., Asst. U.S. Atty., Dyer, IN, Ruth Hennage (argued), Office of U.S. Atty., South Bend, IN, for plaintiff-appellee.

Gregory K. Blanford, Laurie A. Bigsby, South Bend, IN, Shelly B. Kulwin (argued), Chicago, IL, for defendant-appellant.

Before COFFEY, FLAUM, and KANNE, Circuit Judges.

KANNE, Circuit Judge.

James P. LeDonne appeals from the denial of his motion to withdraw his plea of guilty to wire fraud and bank fraud. LeDonne contends that the district court failed to inform him of the elements of either offense to which he pleaded guilty and that the record demonstrates an inadequate factual basis which cannot support his convictions. In essence, he argues that he pleaded guilty under the misconception that knowingly drafting checks on insufficient funds was enough to establish a scheme to obtain money or property by means of false or fraudulent pretenses, representations, or promises, under 18 U.S.C. Sec. 1343 and Sec. 1344 and therefore his plea was not knowingly and voluntarily made.

I. BACKGROUND

A. The Charges

Count I of the two-count information charged that LeDonne had "knowingly devised and intended to devise a scheme and artifice to defraud Walden Leasing and Walden Fleet Group and other dealerships, leasing companies and individual purchasers, of money and property by means of false and fraudulent pretenses, representations, and promises, while knowing that the pretenses, representations and promises were false when made" and had executed the scheme by use of telephone and telefax in violation of 18 U.S.C. Sec. 1343. Count II charged LeDonne with having "knowingly devised a scheme and artifice to defraud Bank One, a financial institution, and to obtain monies and funds owned by and under the custody and control of Bank One by means of false and fraudulent pretenses, representations and promises" in violation of 18 U.S.C. Sec. 1344.

B. The Facts

The facts as summarized by the government at the plea hearing encompass two separate but related fraudulent schemes. Together these transactions formed the basis of the two-count information. LeDonne, a thirty-nine year old businessman, was the incorporator and manager of a number of distributing and leasing companies engaged in the business of buying and selling wholesale and retail vehicles to various leasing companies, dealers, and rental car companies. His position with the various companies authorized him to make deposits in and write checks on several bank accounts in order to manage the financial transactions involved in procuring and distributing vehicles. Between the months of February and July of 1991, LeDonne contacted various companies from his Elkhart, Indiana office, via telephone or telefax to place purchase orders for vehicles. Knowing that there were insufficient funds to pay for the vehicles, he would assure the sellers that he would provide cash payment in compliance with the purchase agreement. He would then submit payment in the form of an overdraft check and arrange to have the vehicles picked up on a Friday afternoon in order to prevent the seller from confirming whether sufficient funds were available before completing the transaction. When the sellers contacted LeDonne after discovering they had received insufficient funds checks, LeDonne provided ready excuses for the overdraft. He would then sell the vehicles to generate cash knowing, however, that he could not deliver title as the vehicles were not paid for because they had been purchased with overdraft checks. This scheme formed the basis of the charge of wire fraud.

As it became increasingly difficult to support this method of doing business, LeDonne devised a check kiting scheme utilizing various bank accounts throughout Indiana and Michigan. On one occasion, LeDonne owed an automobile dealership approximately $148,000. In an effort to cover the deficit, LeDonne opened an account with the Summit Bank in Indianapolis on May 10, 1991 and had an associate open an account with Bank One in Elkhart, Indiana on May 15, 1991. LeDonne then wrote a $150,000 check on the Summit account to his associate for deposit in a separate pre-existing account at Bank One. His associate then transferred the funds to the new Bank One account and immediately began issuing checks from that account. By the time the check came back from Bank One there were insufficient funds in the Summit account to cover it. As a result of this scheme Bank One suffered a $98,000 loss and LeDonne was charged with bank fraud.

C. The Entry of the Plea

Pursuant to a written plea agreement, LeDonne entered a plea of guilty to the charges of bank fraud and wire fraud. At the plea hearing, the government proffered the evidence it would have produced on the statutory requirement for each count had the case proceeded to trial. The judge questioned the assistant U.S. Attorney during the presentation, focusing on elements of the offenses. The judge then asked defense counsel to question LeDonne, under oath, regarding the factual basis of the charges. After counsel finished his examination, the judge directly inquired of LeDonne whether he wished to plead guilty to both counts because of his admission that he committed the acts outlined in the information and orally recounted by the government. LeDonne assured the court that this was correct. The government then briefly summarized some additional facts relating to each count. Reading from the written plea agreement which LeDonne acknowledged having understood and signed, the court advised LeDonne again of the rights he was waiving by his plea, including the right to trial, the right to confront witnesses against him, and the right against self-incrimination. LeDonne responded affirmatively when asked whether he understood that he was waiving these rights by pleading guilty. He acknowledged having been informed of the maximum possible penalties for the specific charges to which he entered his plea and about the process of sentencing under the Guidelines. After determining that no threats or promises were made to induce his plea, the court again asked LeDonne whether he wished to persist in his plea because he was in fact guilty of the conduct alleged. LeDonne responded affirmatively, and the court accepted the guilty plea and set the date for sentencing.

D. The Motion to Withdraw the Plea

Prior to the sentencing hearing, LeDonne acquired new counsel and moved to withdraw his plea as not knowingly and voluntarily made. Among other issues raised in his motion, LeDonne claimed that there was not a sufficient factual basis to establish that he intended to defraud either Walden Leasing Company or the bank and that the court failed to adequately advise him of the essential elements of both offenses. ¹ Despite acknowledging that his plea of guilty was a tactical decision made in order to avoid more severe consequences, LeDonne argued that he did not harbor the intent to defraud as charged. The district court rejected this argument relying on the defendant's affirmative responses at the plea hearing that he was pleading guilty because he was in fact guilty, and denied the motion to withdraw. Memorandum and Order of Feb. 25, 1993, at 2-3. The court then proceeded to sentence LeDonne to sixty-three months' imprisonment to run consecutively to any state sentence. LeDonne appeals only the district court's denial of his motion to withdraw the plea.

II. DISCUSSION

We review the denial of a motion to withdraw a guilty plea within the framework of Federal Rules of Criminal Procedure 11 and 32. Rule 32(d) provides that "if a motion for withdrawal of a plea of guilty ... is made before sentence is imposed, the court may permit withdrawal of the plea upon a showing by the defendant of any fair and just reason." A defendant, however, does not have an absolute right to withdraw his plea of guilty prior to sentencing. United States v. Groll, 992 F.2d 755, 758 (7th Cir.1993). Rather, the decision whether to allow withdrawal of a guilty plea is a matter within the sound discretion of the district court and we will reverse that decision only for an abuse of discretion. Id.; United States v. Saenz, 969 F.2d 294, 296 (7th Cir.1992). In reviewing the district court's decision, findings regarding whether the defendant has demonstrated a "fair and just reason" will be upheld unless they are clearly erroneous. Saenz, 969 F.2d at 296; United States v. Ray, 828 F.2d 399, 422 (7th Cir.1987), cert. denied, 485 U.S. 964, 108 S.Ct. 1233, 99 L.Ed.2d 432 (1988).

Rule 11 is designed to address the issues the district court must review in determining whether "a defendant's guilty plea is a voluntary and intelligent choice among the alternative courses of action open to him." Saenz, 969 F.2d at 296. A guilty plea taken without attention being given to the matters set forth in Rule 11 could constitute a "fair and just" reason justifying the request for withdrawal of a plea, and the denial of a motion to withdraw under such a circumstance would be an abuse of discretion. Id. Following the format of Rule 11 tends to ensure the accuracy of the plea and to enable a meaningful and expeditious review. See, e.g., United States v. Price, 988 F.2d 712, 719 (7th Cir.1993); Ray, 828 F.2d at 404. Yet the failure to comply with the strictures of the Rule is not necessarily fatal. United States v. DeCicco, 899 F.2d 1531, 1534 (7th Cir.1990) (citing United States v. Frazier, 705 F.2d 903, 906 (7th Cir.1983) (per curiam)). Rule 11(h) specifically provides: "Any variance from the procedures required by this rule which does not affect substantial rights shall be disregarded." Thus, "in reviewing Rule 11 proceedings, matters of reality, and not mere ritual...