U.S. v. Yoon

• Decision Date: 15 October 1997
• Docket Number: No. 96-2943,96-2943
• Citation: 128 F.3d 515
• Parties: 47 Fed. R. Evid. Serv. 1365 UNITED STATES of America, Plaintiff-Appellee, v. Susanne YOON, also known as Soon Yoon, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 515

128 F.3d 515

47 Fed. R. Evid. Serv. 1365

UNITED STATES of America, Plaintiff-Appellee, v. Susanne YOON, also known as Soon Yoon, Defendant-Appellant.

No. 96-2943.

United States Court of Appeals, Seventh Circuit.

Argued April 21, 1997.

Decided Oct. 15, 1997.

David E. Bindi (argued), Office of the United States Attorney, Criminal Division, Chicago, IL, Barry Rand Elden, Chief of Appeals, Office of the United States Attorney, Criminal Appellate Division, Chicago, IL, for Plaintiff-Appellee.

Susan Bogart (argued), Chicago, IL, for Defendant-Appellant.

Before BAUER, CUDAHY, and DIANE P. WOOD, Circuit Judges.

BAUER, Circuit Judge.

This case involves the Yoons' high-flying check-kiting scheme. The scheme was of staggering proportion; 697 checks, amounting to over $20 million dollars, were kited over a ten-month period. In connection with that scheme, Susanne Yoon and her husband David were charged in a one-count indictment with committing bank fraud by means of a check kite, in violation of 18 U.S.C. § 1344(1). After a bench trial, the district court found Mrs. Yoon guilty and sentenced her to twenty-four months, to be followed by three years of supervised release. On appeal, Mrs. Yoon argues (1) that the district court erred in refusing to dismiss the third superseding indictment; (2) that the evidence against her was insufficient to establish a guilty finding; (3) that the government's Santiago proffer was insufficient; (4) that the district court erred in permitting the expert testimony of FBI Special Agent Wolverton; (5) that the district court erred in admitting the testimony of Susan Heller; and (6) that the district court erred in its application of the Sentencing Guidelines. We affirm.

Background

Susanne Yoon and her husband David owned and operated two businesses in Lincolnwood Illinois. Davidcraft Corporation was an import company that imported various items for resale, and International Connections Incorporated ("ICI") was a mail order business. Both businesses were run out of an office in a one-story building and warehouse at 7040 North Lawndale Avenue. David Yoon was president of both companies and was in charge of sales and client contacts. Mrs. Yoon was vice-president and secretary, in charge of accounting and office management. Two of the Yoons' employees, Maureen Rasho and Susan Heller, testified at trial. Rasho was a full-time employee. She was hired as an assistant bookkeeper in 1986 and was the bookkeeper during the period charged in the indictment. Heller was a part-time employee, and worked two to three days per week performing accounting duties, reconciling bank accounts, and paying Davidcraft's bills.

Five checking accounts were involved in the check-kiting scheme. The Yoons had joint signatory authority over all five accounts. The Yoons had two personal checking accounts, one with the Affiliated Bank and one with Itasca Bank. The Yoons had a business checking account for Davidcraft with Affiliated Bank and a business checking account for ICI with Foster Bank. The Yoons also had a business checking account for Davidcraft at the Commercial Bank of Korea. ¹ In addition to the checking accounts, the Yoons also had several loans at the Affiliated Bank in both their names. They had one $200,000 revolving loan for the business and one $100,000 revolving loan for the business, both secured by the business' accounts receivables. They also had a $240,000 mortgage on the business property and a $140,000 residential mortgage on a home in Glenview.

Susan Heller and Maureen Rasho both testified that each morning, Rasho was responsible for calling all of the banks where the Yoons had accounts to obtain balance information. She would write the balance information on a piece of paper and give the paper to one of the Yoons. The Yoons would sometimes confer with each other, after which one of them would instruct Rasho or Heller as to what checks to write for deposit, in what amounts, and into which Yoon accounts. Rasho and Heller, and sometimes Mrs. Yoon, would then prepare the checks for signature. Heller testified that Mrs. Yoon sometimes gave her the instructions to call the banks to get the account balances, in particular, when David Yoon was away on business. Both Rasho and Heller testified that when they were done with the bank reconciliations at the end of the month, they would put them in Mrs. Yoon's office for review. Rasho testified that Mrs. Yoon trained her in her accounting duties and was her supervisor. Rasho also testified that the Yoons discussed and made business decisions together.

In 1983, David Yoon hired John Zalud, a CPA, to be the accountant for Davidcraft, and later, to a limited extent, for ICI. Zalud also testified at trial. In 1983, Zalud did a certified audit of Davidcraft, and from 1983 through 1989, Zalud did compilations for the company as well as financial statements, quarterly tax returns, and corporate and personal tax returns for the Yoons. He reviewed the company's cash receipts and disbursement journals, sales and payroll journals, bank statements, and reconciliations. He visited the Yoons' office at least once per quarter, and he testified that when he did so, he usually set up the appointment with Mrs. Yoon. He testified that Mrs. Yoon was the office manager and that he would ask her if he had particular questions or problems. Heller also testified that Zalud worked with Mrs. Yoon when he came to the office.

Zalud testified that from 1983 to 1986, Davidcraft had gross sales averaging $11 million and an average yearly profit of $500,000. In 1987, sales dropped to $9 million, and in 1988, to $7.8 million, with a profit of approximately $200,000. Zalud testified that the Yoons' salaries were also dropping; combined, they had totaled about $500,000 in 1986 and 1987, and in 1988, they totaled about $75,000 (a serious adjustment indeed). In 1989, Davidcraft's gross sales were $4.2 million with expenses of $4.8 million, putting the Yoons' business $600,000 in the red. Oddly, despite the serious decrease in their combined income and the decline in sales, in 1989 the Yoons contributed $200,000 to their church, and in the fall of 1989 the Yoons bought a $1.4 million dollar home in Winnetka with monthly mortgage payments of approximately $10,500.

From January 2, 1990 to October 17, 1990, the period charged in the indictment, the Yoons' checking accounts were highly active, to state the case mildly. In April of 1990, Zalud became concerned with the status of the business and with what he observed in Davidcraft's cash disbursement journals. It seemed to him that there were numerous company checks being written to both Yoons in increasing amounts and with increasing frequency, and numerous company checks being cross-deposited into other Yoon accounts. In April of 1990, he talked with the Yoons in their office, and expressed concern about the decline in sales and the cross-depositing of company checks. David Yoon responded that he hoped the business would pick up, but he did not respond to Zalud's comments about the cross-deposits. Zalud testified that cross-depositing was not an unusual practice for the business, but the increased number of deposits and the increased amounts caused him to raise the issue with the Yoons. After that conversation, Zalud did not receive any more bank reconciliations for 1990, and he was told that the books were not yet ready for his review. Zalud began to decrease the amount of work he did for the Yoons at that point because they owed him money.

At trial, FBI Special Agent Randal Wolverton testified as an expert in check-kiting. He examined a series of check transactions using a chart with a step-by-step analysis, to illustrate a series of cross-deposits between the Affiliated Bank Davidcraft account, the Affiliated Bank personal account, the Foster Bank ICI account, and the Itasca Bank personal account. These cross-deposits were made over a two-day period. Agent Wolverton described how the time in the "float" made it look like the balances in the accounts were positive when they were actually negative. This phenomenon occurred, according to Agent Wolverton's testimony, because deposited funds posted to an account are available immediately even though it may take at least a day for the check to be honored by the bank on which it is drawn.

Agent Wolverton testified that from the period of July 19, 1990 to October 31, 1990, the total amount of deposits to all five checking accounts was $16,811,662.61. Of this amount, only $701,186.14 came from outside sources, and the remaining $16,110,436.47 came from checks drawn on other Yoon accounts. That is, 95.7% of the deposits made during that time came from cross-deposits among the Yoons' accounts. Agent Wolverton concluded that, in his opinion, check-kiting occurred in this case and put the banking system at a risk of loss.

FBI Special Agent Deborah Jones also testified at trial. She had performed a computer analysis of the Yoons' bank records from January 1989 through October 1990. She testified that all five Yoon accounts had combined total deposits of $2,432,577 for the calendar year 1989. In the first ten months of 1990, all five Yoon accounts had combined total deposits of $24,771,077, a more than $20 million increase from 1989. In the first ten months of 1990, $4,032,305.99 was deposited into the five Yoon accounts from outside sources. In that period, $4,678,368.33 in checks were written from all five Yoon accounts to third parties. The total amount of cross-deposited checks into all five Yoon accounts for that period was $20,385,713.45. She concluded that 697 kited deposits were made during the indictment period. Mrs. Yoon signed 389 of these checks, for a total of $10,785,518.86. David Yoon signed 308 of the kited checks, for a total of $9,376,543.79.

In October 1990, the Affiliated Bank personal account had a balance of $50.78. All other Yoon accounts, however, were...