United States v. Seidling
| Decision Date | 16 December 2013 |
| Docket Number | No. 13–1854.,13–1854. |
| Citation | 737 F.3d 1155 |
| Parties | UNITED STATES of America, Plaintiff–Appellee, v. Bernard C. SEIDLING, Defendant–Appellant. |
| Court | U.S. Court of Appeals — Seventh Circuit |
OPINION TEXT STARTS HERE
John W. Vaudreuil, Attorney, Office of the United States Attorney, Madison, WI, for Plaintiff–Appellee.
Stephen J. Meyer, Attorney, Meyer Law Office, Madison, WI, for Defendant–Appellant.
Before WOOD, Chief Judge, and BAUER and KANNE, Circuit Judges.
Defendant–Appellant, Bernard C. Seidling (“Seidling”), was charged with creating and executing a scheme to defraud by knowingly mailing documents containing false information to small claims courts in Wisconsin and hiding the filings of the actions from the named defendants. Seidling stipulated to the facts of the charge and waived his right to a jury trial. Seidling then moved for a judgment of acquittal; he argued that the elements of the mail fraud statute could not be met because he never intended the false statements and misrepresentations to be communicated to the victims. On December 26, 2012, the United States District Court for the Western District of Wisconsin found Seidling guilty of fifty counts of mail fraud in violation of 18 U.S.C. § 1341. Seidling appeals the judgment of the district court on the grounds that there was no convergence between the victims' losses and the fraudulent statements. For the reasons that follow, we affirm the conviction and sentence.
From 2003 to 2009, Wisconsin operated small claims courts in order to resolve smaller disputes more quickly and efficiently. In general, the small claims courts operated in the following manner: individuals eighteen years of age or older were permitted, with or without a lawyer, to file a summons or complaint for small claims. The individuals could file the action in any county in which the defendant resided or did a substantial amount of business, where the claim arose, or as otherwise provided by law. Wis. Stat. § 801.50(2). The claimant was obligated to arrange for service of the documents on the defendant or, if the defendant could not be served, to pay to have the complaint published in a newspaper circulated in the area where the defendant resided. If the claimant was unable to locate a defendant to serve the lawsuit, or a defendant did not appear before the court, the case could be certified to the small claims court where a default judgment would be granted.
Once a default judgment was granted in the small claims action, the claimant could pay an additional fee to have the judgment docketed in the county where the claim was filed. The judgment against the defendant would then be added to the electronic Wisconsin Circuit Court Access System. After the electronic judgment was added to the system, the claimant could seek execution of the judgment against the defendant's nonexempt property in the county in which it was located. For property located in a different county, the claimant could request that the court issue an order directing the sheriff of that countyto collect the nonexempt property to satisfy the judgment.
Beginning in or about 2003 and ending on December 31, 2009, Seidling filed small claims actions against twenty-four individuals and one corporation. Seidling used fourteen fake business names to file the claims in ten counties in the Western District of Wisconsin, and typically sought judgments of no more than $5,000.1 Seidling's claims contained various false statements and misrepresentations, including: listing false addresses for the named defendants, falsifying facts concerning attempts to serve documents on the defendants, using fake business names, and falsely certifying to the courts that notice of the claims were published in the appropriate area's newspapers. Seidling knew that none of the defendants he listed in the complaints lived or did business at the addresses he provided. For this reason, none of them were served with the complaints, summons, or other pleadings; none of them were aware of any attempts to serve them; and none of them saw notice of the lawsuits published in the newspapers.
For each lawsuit, Seidling used the United States Postal Service to mail pleadings, proof of attempted service, and other case documents to the Wisconsin small claims courts. When the defendants did not appear, the small claims courts issued default judgments in each case. Seidling attempted to collect one judgment through garnishment; he was unsuccessful because the named defendant no longer worked for the garnishee. Seidling successfully obtained approximately five orders directing sheriffs to execute the collection of various defendants' property. Based on this conduct, the government indicted Seidling with fifty counts of mail fraud in violation of 18 U.S.C. § 1341.
On December 6, 2011, Seidling pleaded not guilty to all charges and a trial schedule was set for May 2012. On March 26, 2012, Seidling moved to dismiss the indictment. He argued that the facts were insufficient to establish the materiality requirement, since the false statements and misrepresentations contained in the complaints were not made directly to the victims of the fraud. The magistrate judge recommended that the district court deny Seidling's motion; the district court adopted the magistrate's recommendation and denied Seidling's motion to dismiss on July 25, 2012.
On April 12, 2012, the parties filed a joint motion to resolve the case through a bench trial on the stipulated facts; the district court granted the motion. On October 17, 2012, Seidling filed a motion of acquittal pursuant to Fed.R.Crim.P. 29. Again, Seidling argued that the government failed to satisfy the materiality element of bank fraud because any false statements and misrepresentations were made to the small claims court and not to the victims. Seidling contended that his misrepresentations had no tendency or ability to influence the victims to give up their money or property. The parties briefed the issue, and on December 26, 2012, the district court denied Seidling's motion for acquittal; the court ultimately found Seidling guilty on all fifty charges in the indictment.
The intended loss set out in the indictment was in the amount of $75,000. However, the government discovered fifty-eight additional lawsuits that had been filed by Seidling with approximately sixty victims and an intended loss of $295,220. The combined total intended loss amount was calculated to be $370,220. Although none of the targeted defendants suffered immediate pecuniary harm, many of them experienced, and continue to experience, challenges in reopening the lawsuits, getting them dismissed, clearing their credit, and removing the fraudulent lawsuits from the Wisconsin Circuit Court Access System.
A presentencing investigation report (“PSR”) filed with the district court on February 25, 2013, provided an advisory Sentencing Guidelines calculation of an offense level of nineteen: a base level of seven plus an increase by twelve levels for the intended loss of $370,220. The PSR recommended a three-level reduction under U.S.S.G. § 3E1.1 for acceptance of responsibility, which would result in an adjusted offense level of sixteen. The probation office calculated Seidling's criminal history category to be II, resulting in an advisory Guidelines range of twenty-four to thirty months. The United States Attorney's Office agreed with the PSR recommendation for a three-level reduction for acceptance of responsibility, but recommended a sentence at the top of the Guidelines range based on Seidling's history of fraud, the large number of victims, and the intended loss amount.
At sentencing on April 11, 2013, the district court judge declined to apply the three-level reduction on the basis of acceptance of responsibility for Seidling, stating, “I am not persuaded that you qualify for the three-level downward departure ... you have done nothing else to suggest ... that you feel any responsibility for the harm you caused your victims.” The court sentenced Seidling to thirty-six months in prison for each of the fifty counts in the indictment to run concurrently, followed by three years of supervised release. No restitution was ordered, but Seidling was fined $10,000 and ordered to pay a $100 criminal assessment for each count. The court made clear that it would have imposed the same sentence even if it had granted Seidling a three-level reduction for acceptance of responsibility due to the victims' “emotional trauma” caused by Seidling's fraudulently obtained judgments. Seidling filed a timely notice of appeal on April 23, 2013.
First, Seidling argues that this Court should adopt the theory of convergence and find that, because Seidling never communicated with nor intended to communicate with the victims of the fraud, the government did not prove the materiality element of a mail fraud scheme. Second, Seidling contends that at his sentencing, the district court's denial of a downward departure for acceptance of responsibility resulted in procedural error that was not harmless.
A district court's denial of a motion for judgment of acquittal is reviewed de novo in the light most favorable to the government to determine whether any rational trier of fact could have found the essential elements of the charged offense beyond a reasonable doubt. United States v. Johns, 686 F.3d 438, 446 (7th Cir.2012); United States v. Reynolds, 801 F.2d 952, 954 (7th Cir.1986). A conviction of mail fraud under 18 U.S.C. § 1341 requires three essential elements: (1) a scheme or artifice to defraud, (2) the use of the mailing system for the purpose of executing the scheme, and (3) the defendant's participation in the scheme with the intent to defraud. United States v. Stockheimer, 157 F.3d 1082, 1087 (7th...
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