U.S.A. v. Paneras

• Decision Date: 28 July 2000
• Docket Number: No. 99-3754,99-3754
• Citation: 222 F.3d 406
• Parties: (7th Cir. 2000) United States of America, Plaintiff-Appellee, v. Ioanis V. Paneras, Defendant-Appellant
• Court: U.S. Court of Appeals — Seventh Circuit

Page 406

222 F.3d 406 (7th Cir. 2000)

United States of America, Plaintiff-Appellee, v. Ioanis V. Paneras, Defendant-Appellant.

No. 99-3754

In the United States Court of Appeals For the Seventh Circuit

Argued April 13, 2000

Decided July 28, 2000

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 98 CR 380--Charles P. Kocoras, Judge. [Copyrighted Material Omitted] Before Harlington Wood, Jr., Flaum, and Diane P. Wood, Circuit Judges.

Flaum, Circuit Judge.

On February 11, 1999, defendant Ioanis V. Paneras was convicted of mail fraud in violation of 18 U.S.C. sec. 1341, engaging in a prohibited financial transaction in violation of 18 U.S.C. sec. 1957, wire fraud in violation of 18 U.S.C. sec. 1343, and failing to file income tax returns in violation of 26 U.S.C. sec. 7203. The defendant now appeals, arguing that the evidence was insufficient to establish that he defrauded his alleged victims. In addition, the defendant contends that the district court erred in denying his motion for a new trial and in calculating his sentence. For the reasons stated herein, we affirm the defendant's convictions and sentence.

I. Background

In the summer of 1994, the defendant was hired as the national sales manager for Global Chemical Corporation ("Global") in Chicago, Illinois. At the time Global hired the defendant, the company had no sales staff and virtually no customers. The company purportedly had three product lines, including the chlorine replacement "Oxydyne," several household cleaning products, and an oil- spill cleanup and oil pipeline drag reducer product.

Immediately after being hired by Global, the defendant attempted to recruit distributors for the company's products. Although Global was a struggling start-up company, the defendant repeatedly told distributorship candidates that Global was a successful company that was closely affiliated with a large and wealthy middle eastern oil company. Through these efforts, the defendant managed to convince Jean Gaerlan of Los Angeles and Jerry Beougher of Phoenix to become distributors.

During the course of his dealings with Gaerlan and Beougher, the defendant made continuous false representations about Global's business status as a multi-national corporation. The defendant also requested money from Gaerlan and Beougher pursuant to their distributorship agreements. As a result, Gaerlan spent an estimated $250,000 on security deposits, payments for product shipments, and warehouse expenses. Beougher estimated he paid out $75,000 in reliance on the defendant's representations before he terminated his association with Global. Of the funds paid by Gaerlan and Beougher to Global, at least some of the money was converted to the defendant's personal use.

In addition to his activities on behalf of Global, the defendant also entered into a series of romantic relationships with six women between 1977 and 1998. During these relationships, the defendant frequently misrepresented himself as a wealthy businessman and promised to marry several of the women. The defendant also requested various advances of both cash and property from these women, usually justifying these requests by explaining that he was temporarily unable to access his assets. In total, these six women suffered losses of almost $250,000 through their relationships with the defendant.

The defendant was charged with various crimes arising from the conduct of both his business and personal affairs, including mail fraud, engaging in a prohibited financial transaction, wire fraud, and failing to file income tax returns. On February 11, 1999, the defendant was convicted by a jury on all counts. In calculating the defendant's sentence, the district court increased the offense level applicable to the defendant's crimes under both U.S.S.G. sec. 3A1.1 for the vulnerability of his victims and U.S.S.G. sec. 3B1.3 for an abuse of trust. The defendant was then sentenced to a total of seventy-one months in prison and a $6,000 fine, as well as a five-year term of supervised release. The defendant now appeals

II. Analysis

The defendant challenges both his convictions and sentence, arguing that the evidence presented at trial was insufficient to support a finding that he committed fraud in his activities on behalf of Global and during his relationships with the six women who testified at trial. In addition, the defendant contends that the district court erred in refusing to grant his post-trial motion for a new trial, and in departing upward on his sentence based on the district court's conclusion that he defrauded vulnerable victims and that he abused a position of trust. We address each of the defendant's claims in turn.

A. Sufficiency of the Evidence

The defendant's challenge to the sufficiency of the evidence centers on his convictions for wire fraud and mail fraud. In order to find the defendant guilty of these crimes, the jury had to determine that the defendant engaged in his alleged schemes with an "intent to defraud." See United States v. Montani, 204 F.3d 761, 769 (7th Cir. 2000) (mail fraud); United States v. O'Brien, 119 F.3d 523, 532 (7th Cir. 1997) (wire fraud). An "intent to defraud" means that the defendant "act[ed] willfully and with specific intent to deceive or cheat, usually for the purpose of getting financial gain for [himself] or causing financial loss to another." United States v. Moede, 48 F.3d 238, 241 (7th Cir. 1995). However, "[b]ecause direct evidence of a defendant's fraudulent intent is typically not available, specific intent to defraud may be established by circumstantial evidence and by inferences drawn from examining the scheme itself which demonstrate that the scheme was reasonably calculated to deceive persons of ordinary prudence and comprehension." United States v. LeDonne, 21 F.3d 1418, 1426 (7th Cir. 1994). In evaluating the defendant's sufficiency of the evidence claim, "[w]e consider the evidence in the light most favorable to the prosecution, making all reasonable inferences in its favor, and affirm the conviction so long as any rational trier of fact could have found the defendant to have committed the essential elements of the crime." United States v. Masten, 170 F.3d 790, 794 (7th Cir. 1999) (citing Jackson v. Virginia, 443 U.S. 307, 319 (1979)).

The defendant now admits that his actions were dishonest, but claims that he did not engage in any of his allegedly fraudulent activities with the specific intent necessary to support a conviction of either mail fraud or wire fraud. In support of this argument, the defendant contends that there was no direct evidence of an intent to defraud, and that the evidence presented at trial failed to establish a sufficient connection between his lies and his financial benefit such that a specific intent to defraud could be inferred. However, after a review of the record, it is clear that the defendant has not met the heavy burden he bears in attempting to make a sufficiency of the evidence claim. As we noted previously, the defendant cannot prevail on his sufficiency of the evidence claim unless he demonstrates that no rational jury could have found that the circumstances of his crimes indicated an intent to defraud. See Masten, 170 F.3d at 794 (citing Jackson, 443 U.S. at 319). Instead of making such a showing, the defendant offers a competing characterization of the evidence which misapprehends both the role of the jury and our standard of appellate review. See United States v. Cueto, 151 F.3d 620, 633 (7th Cir. 1998).

It is the function of the jury to evaluate the credibility of witnesses and to weigh the evidence adduced at trial, see United States v. Moore, 115 F.3d 1348, 1364 (7th Cir. 1997), and we overturn a verdict "[o]nly when the record contains no evidence, regardless of how it is weighed, from which the jury could find guilt beyond a reasonable doubt . . . ." Brandom v. United States, 431 F.2d 1391, 1400 (7th Cir. 1970). In this case, the circumstantial evidence presented at trial and the testimony of the victims demonstrate a pattern of deceit in the defendant's business activities and in his personal life that a rational jury could infer was part of a scheme designed to defraud. Moreover, the evidence clearly establishes that the defendant benefitted financially from his relationships with the Global distributors and the women with whom he was romantically involved, and that these benefits were contemporaneous with his misrepresentations. This evidence is more than adequate to establish the defendant's intent to defraud beyond a reasonable doubt, and we therefore conclude that the defendant's sufficiency of the evidence claim has no merit.

B. The Defendant's Motion for a New Trial

The defendant next contends that the district court erred in denying his post-trial motion for a new trial. In his motion, the defendant alleged that on February 10 1999, David Huey, one of the jurors and a professional artist, created a cartoon depicting his perception of the defendant and the events described at trial. Huey then shared this cartoon with the other jurors during deliberations. According to the defendant, Huey's actions in creating and sharing this cartoon constitute juror misconduct that introduced extraneous and prejudicial material into the deliberation process and consequently deprived the defendant of his right to a fair trial. The defendant contends that the appropriate remedy for this juror misconduct is a new trial, and that the district court erred in refusing to grant one.

"A criminal defendant in our system has a right to be tried on the basis of the evidence admitted at his trial, and this right may be violated if the jury gets access to extra-record evidence . . . even if that access is not the result of any prosecutorial misconduct." United States v. Bruscino, 687 F.2d 938, 940 (7th Cir. 1982) (en banc). "Nevertheless, a new trial is not automatically...