United States v. Kouttoulas
| Citation | 182 F.Supp.3d 881 |
| Decision Date | 19 April 2016 |
| Docket Number | Case No. 3:12-CR-048 JD |
| Parties | United States of America v. Thomas G. Kouttoulas |
| Court | U.S. District Court — Northern District of Indiana |
Donald J. Schmid, U.S. Attorney's Office, South Bend, IN, for United States of America.
R. Steven Bom, Attorney at Law, Laporte, IN, for Thomas G. Kouttoulas.
After serving a term of imprisonment on his conviction for wire fraud, Thomas G. Kouttoulas began serving a two-year term of supervised release on October 24, 2014. However, the probation office believes that Mr. Kouttoulas committed multiple violations of the conditions of his supervision, including by committing new crimes and by misleading his probation officers of the status of his employment, so it petitioned to revoke Mr. Kouttoulas' supervision. [DE 65]. The Court held an evidentiary hearing on those alleged violations, during which the government and Mr. Kouttoulas, by counsel, presented witnesses and exhibits. Both parties have also submitted supplemental briefs presenting arguments based on the evidence offered at the hearing. The government asks the Court to revoke Mr. Kouttoulas' supervised release and to impose a new term of imprisonment of 24 months—the statutory maximum, and well above the advisory 4-to-10 month guideline range. Mr. Kouttoulas denies that he has committed any violations of the terms of his supervision, and asks that he be allowed to continue serving his existing term of supervised release.
A court may revoke a defendant's term of supervised release only if it "finds by a preponderance of the evidence that the defendant violated a condition of supervised release." 18 U.S.C. § 3583(e)(3). Although a revocation hearing is not a formal trial and the Federal Rules of Evidence do not apply, the evidence needs to be reliable. See United States v. Kelley , 446 F.3d 688 (7th Cir.2006) (citing United States v. Pratt , 52 F.3d 671 (7th Cir.1995) ); see United States v. Jordan , 742 F.3d 276, 280 (7th Cir.2014) (). Hearsay evidence presents an exception to that general rule, as it also requires a finding that the interest of justice does not require the witness to appear. United States v. Mosley , 759 F.3d 664, 667–68 (7th Cir.2014) ; Fed. R. Crim. P. 32.1(b)(2)(C). However, Mr. Kouttoulas did not raise any hearsay objections, and the Court does not rely on any hearsay evidence in making its findings, so that exception is not applicable here.
Mr. Kouttoulas is alleged to have violated three conditions of his supervised release, each in multiple instances. First, Mr. Kouttoulas is alleged to have violated the mandatory condition of supervision that he "not commit another federal, state, or local crime," by committing four new crimes: (1) criminal fraud under Indiana law, arising out of his sale of a used car; (2) false statements under federal law, in violation of 18 U.S.C. § 1001, by misrepresenting or failing to disclose his income to his probation officer; (3) misdemeanor battery under Indiana law, by bumping his chest against another person's; and (4) perjury under Indiana law, based on his testimony in a state small-claims trial. Second, Mr. Kouttoulas is alleged to have violated the condition that requires him to "answer truthfully all inquiries by the probation officer and follow the instructions of the probation officer" by submitting two monthly reports that contained untruthful information. Third, Mr. Kouttoulas is alleged to have violated the condition that requires him to "notify the probation officer within ten (10) days of any change of residence or employment" by failing to notify his probation officer of changes in employment on two dates.
The Court first addresses the allegations that Mr. Kouttoulas committed the crimes of fraud, battery, and perjury. The Court then considers each of the remaining alleged violations together, as they are each based on allegations that Mr. Kouttoulas misrepresented or failed to disclose his income or employment status.
Mr. Kouttoulas is first alleged to have committed the offense of fraud under Indiana law, in violation of Indiana Code § 35–43–5–4(8). Under that section, a person commits fraud, a Class 6 felony, when the person, "with intent to defraud the person's creditor or purchaser, conceals, encumbers, or transfers property." Ind. Code § 35–43–5–4(8). The elements of this offense, as applicable here, are that (1) the defendant transferred property; and (2) the defendant had the specific intent to defraud his purchaser.1 Klinker v. First Merchants Bank, N.A. , 964 N.E.2d 190, 193 (Ind.2012) ().The intent element is satisfied if the defendant's "conscious objective was to cause injury or loss to [his customer] by deceit." Id. at 194. The government alleges that Mr. Kouttoulas committed fraud in connection with his sale of a truck to Clarence Russell. There is no dispute that Mr. Kouttoulas transferred property from County Motors to Mr. Russell when he sold Mr. Russell the truck. Thus, the question is whether he did so with the specific intent to defraud Mr. Russell.
The Court finds as follows. In August 2015, Mr. Russell visited County Motors, a used car lot where Mr. Kouttoulas acted as a salesman. Mr. Russell was looking to buy a truck that could tow a trailer from Indiana to Florida, as he was moving to Florida. Mr. Kouttoulas told him that he had a 1999 Chevy S-10 pickup truck for sale. The truck was inside the garage at the time and had its hood up. Mr. Kouttoulas stated that there was a leak in the brake lines, but that he was going to fix it. Mr. Kouttoulas also stated that the truck was in good condition. Mr. Russell returned to the lot some time later, at which time Mr. Kouttoulas told him that he had fixed the brakes. Mr. Russell took the car for a test drive, and it appeared to be in good working order. Mr. Russell later purchased the truck for $2,900.
After Mr. Russell purchased the truck, he took it to a mechanic for an inspection. He then began to discover that the truck was not in as good a condition as he thought. A mechanic first advised him that the timing belt needed to be replaced, as it was about to break. Then, after an oil change, the truck began to run roughly. After further investigation, Mr. Russell learned that one of the cylinders in the engine had lost compression, meaning the engine would need to be rebuilt or replaced. Other parts, such as the water pump, thermostat, and ignition coils, needed to be replaced as well. In addition, the brake line on the front passenger side was severely rusted, and had likely never been replaced. However, the brake line on the driver's side had been replaced with a new hard line. That new line was connected to the brake line by a compression fitting, though, which is not supposed to be used in a brake system.
The government offers two bases for finding that Mr. Kouttoulas committed fraud. First, that Mr. Kouttoulas said that the truck was in good condition and just needed a tune-up, when the truck actually needed its engine rebuilt and a variety of other repairs. Second, that Mr. Kouttoulas said that the brake lines had been repaired or replaced when they had not been. The first basis cannot support a conclusion that Mr. Kouttoulas had the specific intent to defraud, though, because there is no evidence that Mr. Kouttoulas was aware of those various defects. As Mr. Russell testified, the truck was running well at the time he test drove it and at the time he bought it. It was not until after the oil was changed that the truck began to run roughly and it became apparent that more extensive repairs would be needed. Thus, Mr. Kouttoulas had reason to state that it was in good condition (which also had to be a relative term, given the age of the vehicle) at the time of the sale. There was testimony at the hearing that the problem with the engine could be temporarily masked by using improperly thick oil, which is a ploy that might be used by a dishonest seller. However, it would require pure speculation to conclude on this record that Mr. Kouttoulas did so. Thus, without evidence that Mr. Kouttoulas knew his statement that the truck was in good condition was false, the Court cannot conclude on that basis that he had the specific intent to defraud Mr. Russell.
The representation about the brake lines presents a closer question, as the Court finds that Mr. Kouttoulas did represent that he had made a repair to the brakes, but the brake lines were still deficient when he sold the truck. However, the evidence showed that the driver's side brake line had been replaced. And Mr. Russell's testimony was not entirely consistent as to whether Mr. Kouttoulas stated merely that he made a repair to the brakes, or whether he stated that he had replaced all of the brake lines. In response to a leading question from the government, Mr. Russell testified that Mr. Kouttoulas told him that the brake lines had all been replaced. But other times, Mr. Russell characterized Mr. Kouttoulas' representation as that the brakes were working now, or that the brakes had been fixed. In addition, in the state small-claims trial over the sale of the truck, Mr. Russell testified that Mr. Kouttoulas "said he was replacing a brake line 'cause it was broke." (Government Ex. 13 p. 26 (emphasis added)). The evidence suggests that Mr. Kouttoulas (or someone) did exactly that—replaced a brake line, the hard line on the driver's side. Granted, Mr. Russell's mechanic also testified that the repair was shoddy, as it used an improper fitting. But that is not enough for the Court to conclude that Mr. Kouttoulas had the specific intent to defraud, as a repair had been made and the brakes were working at the time of the sale. Therefore, the Court cannot...
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