United States v. Thomas, s. 12–3919

• Decision Date: 14 August 2014
• Docket Number: 13–1515.,Nos. 12–3919,s. 12–3919
• Citation: 763 F.3d 689
• Parties: UNITED STATES of America, Plaintiff–Appellee, v. Donell A. THOMAS and Lamar Christopher Chapman III, Defendants–Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

763 F.3d 689

UNITED STATES of America, Plaintiff–Appellee,

v.Donell A. THOMAS and Lamar Christopher Chapman III, Defendants–Appellants.

Nos. 12–3919, 13–1515.

United States Court of Appeals,

Seventh Circuit.

Argued June 5, 2014.

Decided Aug. 14, 2014.

Rick D. Young, Attorney, Office of the United States Attorney, Chicago, IL, for Plaintiff–Appellee.

Cynthia L. Giacchetti, Attorney, Law Office of Cynthia Giacchetti, Chicago, IL, for Defendants–Appellants.

Before WOOD, Chief Judge, and EASTERBROOK and KANNE, Circuit Judges.

WOOD, Chief Judge.

Donell Thomas and Lamar Chapman III were convicted of multiple counts of wire fraud after a jury trial. The jury found that they were part of a scheme to fleece real estate lenders by concocting multiple false sales of the same homes and using the loan proceeds from the later transactions to pay off the earlier lenders. Thomas was also convicted of aggravated identity theft for using a real estate investor's identity without permission to craft a phony sale of a home that the victim never owned.

Thomas and Chapman both challenge the sufficiency of the evidence underlying their convictions, though neither disputes the government's general depiction of the scheme. Thomas claims only that the evidence was insufficient to convict him of aggravated identity theft because there was no proof that he created or used the falsified documents at issue. Chapman argues that there was no evidence that he—the defendant at the trial—was the Lamar Chapman identified by the evidence, because no courtroom witness testified to that effect. Chapman also raises due process challenges to his conviction: he asserts that his rights were violated when the government dropped a co-defendant from the indictment and that the government failed to turn over unspecified exculpatory evidence. We find that the evidence was sufficient to support the convictions of both defendants, and that Chapman's due process claims are without merit. We therefore affirm the district court in all respects.

I

The government introduced a substantial amount of evidence detailing the scheme, including testimony from several victims, an FBI investigator, an auditor, and an indicted co-defendant who had already pleaded guilty. As the precise details of the defendants' misdeeds are largely immaterial to this appeal, we paint their activities with a broad brush and delve into minutiae only when necessary.

The government initially charged Thomas, Chapman, Juan Orozco, and Eddie J. Cox, Jr., with wire fraud in July 2010. An indictment and superseding indictment followed and added Anthony Allen as a defendant; Orozco and Allen pleaded guilty to the charges against them in this latter indictment pursuant to plea agreements. A second superseding indictment charged Thomas with eight counts of wire fraud in violation of 18 U.S.C. § 1343, and Chapman with four counts of the same. It also charged Thomas with one count of aggravated identity theft in violation of 18 U.S.C. § 1028A. It was this indictment on which Thomas and Chapman went to trial. Cox, for his part, was dismissed from the case pursuant to a government motion shortly after the grand jury returned the second superseding indictment.

The trial evidence showed that Thomas and Allen were the ringleaders of the operation, which was run out of a business called Chicago Abstract and Title Company. The group targeted short-term real estate lenders, referred to as “transactional lenders” at trial. Those lenders provide funding for structured real estate transactions called “A to B, B to C” transactions: the property is first sold by the original owner (A) to a real estate investor or agent (B), and then resold (typically within 48 hours) to an end-purchaser (C). Critically, all aspects of the transaction are to be contemplated in advance. The transactional lenders provide the funds to finance the front-end (A to B) transaction, although it might be more accurate to say they provide the assurance of funds, as they generally require the second sale to be completed before they will release the funds for the first, in order to avoid taking on any risk. The defendants exploited this funding model by falsely representing to the lenders that they had completed back-end (B to C) sales of homes they acquired. This allowed them to secure release of the transactional lenders' funds and enabled them to take a cut for themselves. They then repaid the short-term loan money by falsifying another B–to–C transaction involving the same property with a different transactional lender, and used the loan proceeds from that “sale” to pay back the previous lender, in much the same manner that one would run a Ponzi scheme.

Thomas and Allen recruited Orozco, a closing agent at Chicago Abstract, to process the transactions, release the short-term lenders' funds, and pay back the lenders with proceeds from a different lender. Chapman, who has never been licensed to practice law, became involved as the operation's putative attorney, corresponding with transactional lenders to discuss funding for the deals and putting them off the scent of the rotten transactions lying behind the deals.

Though Thomas proved adept at using fake names to avoid detection, the conspirators generally used real homes in connection with their fraudulent transactions; that is, the “A–to–B” portion of the structured sale was real, and only the “B–to–C” sale was a fake. In at least one case, however, Thomas concocted a “sale” that was a fiction from the start; this was the basis for his aggravated identity theft charge. Among the documents found at Chicago Abstract's office when it was finally audited at the request of a jilted lender was an agreement to sell a home on South Langley Avenue in Chicago, signed by purported homeowner Oscar Corona with Thomas listed as the buyer. This documentwas accompanied by a HUD–1 statement for the “sale” dated October 8, 2008. Further documents included a letter from the lender about the disbursement of the $1,050,000 paid for the property and documents related to the back-end of the “sale,” including an agreement signed by Thomas to sell to an endbuyer.

Corona is an actual person and real estate investor with whom Thomas had worked previously. There is no indication that he was involved with the scheme or knew about the fraud Thomas was engineering at the back end of the transaction. Corona testified at trial that he never owned the home on South Langley and had no idea that Thomas was using his name for the sale. He stated that he never signed or initialed the sales documents; to the contrary, he testified, the signature on the document “looked like” Thomas's, and the buyer listed on the documents was a corporation that Thomas had used when actually buying property from him.

The defendants were caught when a targeted lender discovered that a person named “Chad Marks” who had requested transactional funding was not an employee of the title company he claimed to be. The lender contacted law enforcement and cooperated in an investigation, and Thomas was arrested immediately after completing the purported closing. The others' involvement came to light from there.

Thomas was ultimately convicted of eight counts of wire fraud and sentenced to serve 70 months in prison on each, to run concurrently, as well as one count of aggravated identity theft for which he was sentenced to 24 months' imprisonment, to run consecutively to the other counts. Chapman was convicted of four counts of wire fraud and sentenced to serve 65–month concurrent terms of imprisonment.

II

On appeal, Thomas urges that the evidence was insufficient to support his conviction for aggravated identity theft. When a defendant challenges the sufficiency of the evidence underlying a conviction, we will reverse only if no rational trier of fact, viewing the evidence in the light most favorable to the government, could have found the defendant guilty beyond a reasonable doubt. United States v. Chapman, 692 F.3d 822, 825 (7th Cir.2012). This is an “extremely deferential” standard that presents a “nearly insurmountable hurdle” for a defendant. United States v. Teague, 956 F.2d 1427, 1433 (7th Cir.1992).

The aggravated identity theft statute, 18 U.S.C. § 1028A(a)(1), reads:

Whoever, during and in relation to any felony violation enumerated in subsection (c), knowingly transfers, possesses, or uses, without lawful authority, a means of identification of another person shall, in addition to the punishment provided for such felony, be sentenced to a term of imprisonment of 2 years.

To prove aggravated identity theft, the government must establish beyond a reasonable doubt that the defendant: 1) knowingly transferred, possessed, or used; 2) a “means of identification”; 3) that he knew belonged to another person, see Flores–Figueroa v. United States, 556 U.S. 646, 657, 129 S.Ct. 1886, 173 L.Ed.2d 853 (2009); 4) with knowledge that such use was without lawful authority; 5) in connection with a qualifying felony.

Thomas challenges the sufficiency of the government's evidence only with respect to the first of these elements: knowing transfer, possession, or use. He was prudent to limit his appeal in this way, as the evidence easily supports the other elements. Forging someone's name on a document is surely a knowing use of that name without lawful authority, and a name is a “means of identification” within the meaning of the statute. See United States v. Spears, 729 F.3d 753, 755 (7th Cir.2013) (en banc). Thomas knew that Corona was a real person because they had done over a dozen property deals together. And wire fraud is a qualifying felony under 18 U.S.C. § 1028A(c)(5).

That leaves the “knowing use” element, which breaks down into two parts: whether Thomas was the person who filled out the false sales documents with Corona's name, and whether those documents were ever used or if the plan was abandoned before he did something with them. On...