U.S. v. Richman

• Decision Date: 03 October 1991
• Docket Number: No. 90-1395,90-1395
• Citation: 944 F.2d 323
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Fred RICHMAN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 323

944 F.2d 323

UNITED STATES of America, Plaintiff-Appellee, v. Fred RICHMAN, Defendant-Appellant.

No. 90-1395.

United States Court of Appeals Seventh Circuit.

Argued Dec. 13, 1990.

Decided Sept. 12, 1991.

Rehearing Denied Oct. 3, 1991.

Loretta H. Davenport, Asst. U.S. Atty. Criminal Div. (argued), Barry R. Elden, Asst. U.S. Atty., Criminal Receiving, Appellate Div., Chicago, Ill., for plaintiff-appellee.

Joseph A. Lamendella (argued), Stone, McGuire & Benjamin, Kris Daniel, Lamendella & Daniel, Chicago, Ill., for defendant-appellant.

Before CUMMINGS, COFFEY and MANION, Circuit Judges.

COFFEY, Circuit Judge.

Fred Richman appeals his convictions of two counts of wire fraud under 18 U.S.C. § 1343 ¹ and eight counts of mail fraud under 18 U.S.C. § 1341. ² We affirm.

I. FACTS

Fred Richman, an attorney practicing in Chicago, Illinois, was charged with mail fraud and wire fraud as a result of his involvement in two separate schemes to defraud Wausau Insurance Company.

The first of Richman's schemes to defraud the insurance company arose from Richman's legal representation of Herbert Bluhm in an accident claim against the owner of Tinley Park Plaza, a shopping mall in Tinley Park, Illinois, and its insurer, Wausau Insurance Company. On October 20, 1984, Bluhm, an elderly man fell to the sidewalk or pavement ³ outside the Cozy Corner Restaurant in the Plaza and fractured his hip, resulting in significant medical expenses. After reporting the accident to Coldwell Bankers Real Estate Company, the leasing agent for the Tinley Park Plaza, Bluhm's son, Richard, retained Fred Richman's law firm to represent Herbert Bluhm in Herbert's claim for damages.

In early 1985 Wausau's regional office referred the investigation of the Bluhm case to Michael Wachala, one of their adjusters. When Wachala attempted to interview Herbert Bluhm on February 1, 1985, concerning his injury, Bluhm advised Wachala that he was represented by the law firm of Richman and Evins. Wachala made several attempts to contact the law firm through phone calls and letters, but was unsuccessful in reaching anyone until December 18, 1985, when he received a phone call from an individual who identified himself as Gil Lande, a legal assistant with Richman and Evins. Lande stated that he was calling about the Bluhm case and during the conversation asked whether "with the holidays coming up, you might be able to use a little something extra in your pocket, and one hand can help the other." Wachala reported this comment to his supervisor, Jim Ebel, who in turn contacted the company's home office, and it was suggested that Wachala speak with Lande again to determine the meaning of Lande's statement.

Lande and Wachala met at the offices of Richman and Evins in early January 1986. At this meeting, Lande said: "[s]o you decided to make yourself some 'buckie-wuckies,' " and thereafter proceeded to outline a plan in which Wachala would receive five percent of the compensation if he settled the case. Lande showed Wachala two photographs of the accident site, one photo displaying a wheelchair ramp and the other a crack in the parking lot pavement. Pointing to the wheelchair ramp, Lande stated: "This is where the accident happened, but it doesn't look good there. Let's move it over here to where there is a crack in the pavement, and let's say that the accident happened there." Lande initially suggested a settlement amount of $50,000, but then said, "[n]o, make yourself look good. Let's go for $40,000." After this discussion Lande introduced Wachala to attorney Fred Richman who told Wachala that he "would have to use [his] imagination" to settle the case and reminded Wachala that he "did not have to announce this to the world."

Wachala likewise reported this information to his supervisor, Ebel. Thereafter, it was arranged for Ebel and Wachala to meet with Postal Inspector John Joyce to inform the federal authorities of the pay-off scheme. ⁴ Wachala agreed to assist the postal inspectors in their investigation of the fraudulent scheme at the Richman and Evins law firm and at the suggestion of the federal authorities, he allowed his conversations with members of the Richman law firm to be recorded. Except for one unrecorded telephone conversation of January 16, 1986, between Wachala and Lande, subsequent meetings and telephone calls were taped and recorded as part of the mail and wire fraud investigation.

In the unrecorded telephone conversation of January 16, 1986, Wachala informed Lande that he wished to procure a signed statement from Bluhm describing the accident. ⁵ Lande suggested to Wachala that Lande and Wachala meet and that the two of them prepare a statement for Bluhm's use concerning the events surrounding Bluhm's injury. When Wachala expressed concern about whether Bluhm might say something different than what was contained in the fabricated statement, Lande advised Wachala that Bluhm would say exactly what he (Lande) wanted him to say.

Pursuant to the plan described during the phone conversation of January 16, 1986, Lande and Wachala met at Richman's office on January 20, 1986. In this meeting Lande conducted a telephone interview of Bluhm. During the call Lande asked Bluhm questions and contemporaneously repeated to Wachala what Bluhm supposedly was telling him. Lande stated that Bluhm declared that he walked from the wheelchair ramp to the parking lot using a metal walker, and at this time his walker became lodged in a crack in the parking lot, thereby causing him (Bluhm) to be thrown off balance and catapulted to the pavement. Wachala recorded the statements Lande was making as if they were personal statements of Bluhm. Wachala later testified that while he was listening to the phone conversation between Lande and Bluhm he gained the impression that Lande was putting words in Bluhm's mouth, as Lande didn't give Bluhm enough time to respond to the questions prior to informing Wachala of Bluhm's alleged answers. Bluhm's purported "personal statement" recorded by Wachala during the telephone conversation between Lande and Bluhm was in contradiction to Lande's earlier statement to Wachala that the fall had taken place at the wheelchair ramp rather than at the crack in the parking lot, but the "personal statement" was consistent with Lande's devised scheme revealed at the earlier meeting that Wachala should misrepresent the location of the accident.

The Bluhm settlement was finalized on February 3, 1986, during Wachala and Lande's next meeting when Wachala presented Lande with a draft in the amount of $40,000. Richman entered the room and told Lande and Wachala that his partner, Sam Evins, would work with them to complete the transaction. When Evins arrived he handed Lande an envelope containing $2,000 in cash, and Lande turned the money over to Wachala. During the meeting Lande made clear to Wachala that he and the law firm partners were interested in similar deals and made it clear that Wachala would be compensated if he provided information about other unrepresented claimants.

Richman's second caper to defraud Wausau and line his own pocket arose out of Wachala's response (under the supervision of Postal Inspector John Joyce) to Lande's solicitation of future leads to unrepresented claimants. Unlike the Bluhm case, which involved an actual accident, the subsequent claim was a fictional case the government and Wachala created solely for the purpose of investigating Richman. All of the conversations concerning this fabricated claim were tape recorded.

In response to Lande's solicitation of information, Wachala telephoned Richman on May 16, 1986 and informed him that he had discovered a case of an unrepresented Illinois Structural Work Act claimant in Wausau's files. He inquired whether Richman would be interested in the case and stated that Lande had informed Wachala that he "could get some money up front." Immediately after Wachala's statement concerning the receipt of "up front" money, Richman responded "of course you can," and proceeded to inquire concerning how valuable it would be and whether the injured person was seeking representation through Wachala. Wachala told Richman that the injured party was a roofer who fell off a roof and incurred $90,000 in "specials," but that the claimant was unaware of Wachala's contact with Richman. Richman expressed an interest in gaining background information on the claim. He further stated a need "to have some rationale of calling [the injured party] without involving anyone with ... [Wausau]." Richman asked Wachala if he "could pull a few pieces from the file to photostat," and stated "I really have to see the file." After this exchange Wachala informed Richman that a workers compensation case was supposedly being handled by Wausau, but there had been no claim filed against the applicable liability insurance policy.

Richman and Wachala met on May 30, 1986, to further discuss the Structural Work Act claim. Wachala told Richman that the roofer was named Don Williams, lived in Hanover Park, Illinois, and was earning $17.50 to $18.00 an hour at the time of the accident working for F.W. Waters & Sons Roofing of Naperville, Illinois. Richman stated that he was trying to "figure out a hook" to justify contacting Williams and declared that:

"I could tell them that I ... ordered some records from Loyola University ... on another case and his records were included. And it looked like an accident case and I wondered if he had anybody representing him."

Wachala replied that he had no objection to that course of conduct. Richman attempted to telephone Williams, but was unable to reach him. Richman and Wachala proceeded to discuss the question of which adjuster would handle the case for Wausau and explored the possibility as to whether it might be Wachala. Richman noted that if Wachala were the adjuster, "that makes it even more advantageous because there's, you know, money to be made at that end." ...