United States v. Schlyer, 17-cr-00030
| Decision Date | 30 January 2018 |
| Docket Number | No. 17-cr-00030,17-cr-00030 |
| Parties | UNITED STATES OF AMERICA, v. ROBERT JON SCHLYER |
| Court | U.S. District Court — Northern District of Illinois |
UNITED STATES OF AMERICA,
v.
ROBERT JON SCHLYER
No. 17-cr-00030
UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION
January 30, 2018
Judge Amy J. St. Eve
MEMORANDUM OPINION AND ORDER
Defendant Robert Schlyer has moved for a judgment of acquittal or, in the alternative, for a new trial. For the reasons explained below, the Court denies Defendant's motions.
On January 18, 2017, the government charged Schlyer in a three-count indictment (the "Indictment") with two counts of wire fraud and one count of bank fraud. (R. 1, Indictment.) Counts One and Two charged Schlyer with wire fraud for participating in a scheme to defraud and obtain money from individual victims and Amcore Bank in violation of 18 U.S.C. § 1343. Count Three charged Schlyer with bank fraud in connection with the scheme to defraud in violation of 18 U.S.C. § 1344. Essentially, the government alleged that Schlyer knowingly participated in a scheme with Kevin LeBeau and Brian Bodie to fraudulently acquire a $300,000 investment from Delores Palmquist and then use that money, as well as promises of further investments, to induce Amcore Bank ("Amcore") to enter into a forbearance agreement in relation to a property LeBeau and Bodie hoped to develop.
Schlyer pled not guilty to all the Counts. Subsequently, Schlyer proceeded to a four-day jury trial. (R. 81, R. 82, R. 85.) During the trial, the government called the following witnesses: Terry Bohr, Elaine and Preston Brinkman, Patrick Canning, Anne Gallagher, Fred Harbecke,
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Margaret Krusing, Robert Kuzma, David Maloney, Mark Oda, Delores Palmquist, Frank Saporito, Edward Seifert, Joseph Sitko, Roger Tepen, Mary Wagner, Ariel Weissberg, Bill Weit, and Douglas Wilson. Schlyer did not testify at trial, but he did call the following witnesses: Michael Ladin, Rhoda Bogardus, Phillipe DeBossu, Steve Hanson, Penny Schlyer, Andy Walzer, Richard Ashbeck, and Barbara Mizones.
On October 6, 2017, the jury returned a verdict of guilty against Schlyer on Counts One, Two, and Three of the Indictment. (R. 86.) Schlyer now moves for a judgment of acquittal or new trial on all the Counts for which he was convicted, pursuant to Federal Rules of Criminal Procedure 29 and 33, respectively.
I. Motion for a Judgment of Acquittal—Rule 29
Rule 29(a) provides that, "[a]fter the government closes its evidence or after the close of all the evidence, the court on the defendant's motion must enter a judgment of acquittal of any offense for which the evidence is insufficient to sustain a conviction." Fed. R. Crim. P. 29(a). When, as here, a defendant makes a Rule 29(a) motion at the close of the government's case, and the court reserves decision, the court "must decide the motion on the basis of the evidence at the time the ruling was reserved." Fed. R. Crim. P. 29(b).
"In challenging the sufficiency of the evidence, [a defendant] bears a heavy, indeed, nearly insurmountable, burden." United States v. Warren, 593 F.3d 540, 546 (7th Cir. 2010); see also United States v. Jones, 713 F.3d 336, 339-40 (7th Cir. 2013); United States v. Berg, 640 F.3d 239, 246 (7th Cir. 2011); United States v. Dinga, 609 F.3d 904, 907 (7th Cir. 2010); United States v. Morris, 576 F.3d 661, 665-66 (7th Cir. 2009). Indeed, a "defendant faces an uphill battle in challenging the sufficiency of the evidence." United States v. Orlando, 819 F.3d 1016,
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1021 (7th Cir. 2016). The reviewing court will view the "evidence in the light most favorable to the prosecution," and the defendant "'must convince' the court that, even in that light, 'no rational trier of fact could have found him guilty beyond a reasonable doubt.'" Warren, 593 F.3d at 546 (quoting United States v. Moore, 572 F.3d 334, 337 (7th Cir. 2009)); see also United States v. Rahman, 805 F.3d 822, 836 (7th Cir. 2015). In other words, a court will "set aside a jury's guilty verdict only if 'the record contains no evidence, regardless of how it is weighed,' from which a jury could have returned a conviction." United States v. Presbitero, 569 F.3d 691, 704 (7th Cir. 2009) (quoting United States v. Moses, 513 F.3d 727, 733 (7th Cir. 2008)); see also Warren, 593 F.3d at 546.
It follows that under Rule 29, courts "do not reassess the weight of the evidence or second-guess the trier of fact's credibility determinations." United States v. Arthur, 582 F.3d 713, 717 (7th Cir. 2009); see also United States v. Severson, 569 F.3d 683, 688 (7th Cir. 2009). This strict standard recognizes that "[s]orting the facts and inferences is a task for the jury." Warren, 593 F.3d at 547. The Seventh Circuit teaches that:
[t]he critical inquiry on review of the sufficiency of the evidence to support a criminal conviction must be not simply to determine whether the jury was properly instructed, but to determine whether the record evidence could reasonably support a finding of guilt beyond a reasonable doubt. But this inquiry does not require a court to ask itself whether it believes that the evidence at the trial established guilt beyond a reasonable doubt. Instead, the relevant question is whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.
Moore, 572 F.3d at 337 (quoting Jackson v. Virginia, 443 U.S. 307, 318-19, 99 S. Ct. 2781, 61 L. Ed. 2d 560 (1979)).
II. Motion for a New Trial—Rule 33
Rule 33 of the Federal Rules of Criminal Procedure provides that, "[u]pon the defendant's motion, the court may vacate any judgment and grant a new trial if the interest of
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justice so requires." Fed. R. Crim. P. 33(a); see also United States v. Berg, 714 F.3d 490, 500 (7th Cir. 2013); United States v. Smith, 674 F.3d 722, 728 (7th Cir. 2012) (reviewing a district court's order on a Rule 33 motion for abuse of discretion); United States v. McGee, 408 F.3d 966, 979 (7th Cir. 2005). "'[C]ourts have interpreted [Rule 33] to require a new trial in the interests of justice in a variety of situations in which the substantial rights of the defendant have been jeopardized by errors or omissions during trial.'" United States v. Eberhart, 388 F.3d 1043, 1048 (7th Cir. 2004) (quoting United States v. Kuzniar, 881 F.2d 466, 470 (7th Cir. 1989)), overruled on other grounds, 546 U.S. 12 (2005).
"'A . . . verdict in a criminal case is not to be overturned lightly,'" however, "'and therefore a Rule 33 motion is not to be granted lightly.'" Eberhart, 388 F.3d at 1048 (quoting United States v. Santos, 20 F.3d 280, 285 (7th Cir. 1994)). The court "may grant a new trial if the jury's verdict is 'so contrary to the weight of the evidence that a new trial is required in the interest of justice.'" United States v. Washington, 184 F.3d 653, 657 (7th Cir. 1999) ("The focus in a motion for a new trial is not on whether the testimony is so incredible that it should have been excluded. Rather, the court considers whether the verdict is against the manifest weight of the evidence, taking into account the credibility of the witnesses."); see also United States v. Chambers, 642 F.3d 588, 592 (7th Cir. 2011). In other words, "[t]he court should grant a motion for a new trial only if the evidence 'preponderate[s] heavily against the verdict, such that it would be a miscarriage of justice to let the verdict stand.'" United States v. Swan, 486 F.3d 260, 266 (7th Cir. 2007) (quoting United States v. Reed, 875 F.2d 107, 113 (7th Cir. 1989)); see also Presbitero, 569 F.3d at 706.
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I. Motion for a Judgment of Acquittal
Schlyer first argues that the Court should issue a judgment of acquittal for Counts One, Two, and Three. In order to prove Schlyer guilty of violating 18 U.S.C. § 1343 (Counts One and Two), the government had to prove the following elements beyond a reasonable doubt: (1) that Schlyer knowingly devised or participated in a scheme to defraud; (2) with the intent to defraud; (3) that the scheme involved a materially false or fraudulent pretense, representation or promise; (4) that the scheme affected a financial institution; and (5) that Schlyer used or caused interstate wire communications to take place for the purpose of carrying out the scheme. United States v. Marr, 760 F.3d 733, 744 (7th Cir. 2014); (R. 84, Jury Instructions 17.) Similarly, in order to prove Schlyer guilty of violating 18 U.S.C. § 1344, the government had to prove the following elements beyond a reasonable doubt: (1) there was a scheme to defraud a bank; (2) the defendant knowingly executed or attempted to execute the scheme; (3) the defendant acted with an intent to defraud; and (4) at the time of the charged offense, the Federal Deposit Insurance Corporation ("FDIC") insured the deposits of the bank. United States v. Ajayi, 808 F.3d 1113, 1119 (7th Cir. 2015) (quoting United States v. Parker, 716 F.3d 999, 1008 (7th Cir. 2013)); (R. 84, Jury Instructions 25.)
With regard to Counts One and Two, Schlyer first argues that the evidence was insufficient to prove beyond a reasonable doubt that he knowingly participated in a scheme with the intent to defraud the Palmquists. With regard to all the Counts, Schlyer argues that there was insufficient evidence to prove that Schlyer knew any of the representations he made to Amcore Bank were false or that Amcore Bank was exposed to a new or increased risk of loss as a result of Schlyer and his co-conspirators alleged scheme. Schlyer does not dispute that the FDIC
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insured Amcore's deposits, that the alleged misrepresentations he made were material, or that he used interstate wire communications in the alleged scheme. The Court addresses each argument in turn.
A. Intent Fraud to Defraud the Palmquists—Counts One and Two
Schlyer first argues that the government failed to prove that he had an intent to defraud or that he knowingly participated in a scheme to defraud the Palmquists.
"A scheme to defraud requires 'the making of a false...
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