United States v. Kurt Johnson ( 2020 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 19-2718
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
KURT JOHNSON,
Defendant-Appellant.
____________________
Appeal from the United States District Court for the
Southern District of Illinois.
No. 18-cr-40043 — J. Phil Gilbert, Judge.
____________________
ARGUED SEPTEMBER 29, 2020 — DECIDED NOVEMBER 17, 2020
____________________
Before ROVNER, SCUDDER, and ST. EVE, Circuit Judges.
ST. EVE, Circuit Judge. Kurt Johnson elected to represent
himself at trial on federal fraud charges. In Johnson’s own tell-
ing, he fared at trial “like a bug under a hard-stomping pros-
ecution boot heel”—which is to say he lost. Johnson now ap-
peals his waiver of counsel. He says the district court failed to
confirm that his decision to waive counsel was knowing and
intelligent. We agree that the district court’s colloquy with
Johnson was lacking, but we nonetheless uphold Johnson’s
2 No. 19-2718
waiver of counsel. This was not Johnson’s first rodeo—as he
himself told the district court. In fact, Johnson had previously
represented himself at a federal fraud trial, lost, and then un-
successfully appealed that waiver of counsel. Given this his-
tory, and Johnson’s separate and more thorough colloquy
with the magistrate judge in this case, we cannot conclude
that Johnson’s decision to forgo counsel the second time
around was uninformed. We also reject Johnson’s challenge
to the district court’s sentencing explanation. We thus affirm
his conviction and sentence.
I. Background
Johnson, whom the Bureau of Prisons designates as a
“sovereign citizen,” has a long history of fraud, often target-
ing government employees. We confine our discussion to two
of his fraudulent schemes: (1) a 2005 mail-fraud conspiracy;
and (2) a 2018 bankruptcy-fraud scheme that Johnson carried
out while in prison for the mail-fraud conspiracy. This appeal
arises from the bankruptcy-fraud scheme, but Johnson’s ex-
perience in the mail-fraud case provides important context for
his decision to represent himself at his bankruptcy-fraud trial.
A. Mail-Fraud Case
In 2005, Johnson was indicted for mail fraud in the North-
ern District of California after he and others conspired to de-
fraud lending institutions of tens of millions of dollars
through a bogus mortgage-elimination scheme that also
harmed thousands of homeowners. Johnson and a codefend-
ant represented themselves at a month-long jury trial. At trial,
Johnson wore his prison garb in front of the jury and pre-
sented nonsensical defenses. Still, he showed himself capable
of basic trial tasks. He made an opening statement and a
No. 19-2718 3
closing argument, cross-examined witnesses, argued jury in-
structions, and testified on his own behalf.
The jury convicted Johnson on one count of mail-fraud
conspiracy and 34 counts of mail fraud. Johnson appealed his
conviction to the Ninth Circuit. Among other things, he
blamed the district court for letting him represent himself.
The Ninth Circuit was unpersuaded. It found that Johnson
was a “fool,” but he was not incompetent. As such, he had a
right to “go down in flames,” and it was “a right the district
court was required to respect.” United States v. Johnson, 610
F.3d 1138, 1140 (9th Cir. 2010). The district court had “exten-
sively advised” Johnson of his right to counsel and the disad-
vantages of self-representation—indeed, it had “practically
begged” him to accept counsel—so his waiver stood. Id.
Johnson received 300 months’ imprisonment for the mail-
fraud conviction. In 2014, he was transferred to a U.S. peni-
tentiary in the Southern District of Illinois.
B. Bankruptcy-Fraud Case
1. The Scheme
On January 8, 2018, while in prison for mail fraud, Johnson
caused involuntary bankruptcy petitions to be filed against
the warden and another employee of his prison unit. The pe-
titions alleged that both individuals owed Johnson $21 billion
pursuant to a judgment from the “World Court in Nether-
lands.” After filing the petitions, Johnson purportedly can-
celled $1 billion of the debt so that he could force 28 other vic-
tims, including more prison staff, to claim the $1 billion as in-
come. Johnson’s apparent purpose in filing the false bank-
ruptcy petitions was to publicize the victims’ personal infor-
mation and harm their credit.
4 No. 19-2718
The filings led the U.S. Bankruptcy Court in the Southern
District of Illinois to open Chapter 7 involuntary bankruptcy
cases against the warden and the other prison employee. For-
tunately, federal prosecutors got the court to seal the petitions
the day after they were opened and then moved to dismiss
the petitions. The bankruptcy court dismissed the petitions on
February 21, 2018, after holding a hearing at which the war-
den and the other employee appeared. Johnson unsuccess-
fully appealed that dismissal to the district court. The warden
and other employee did not suffer financial or credit-related
harm, but they did receive numerous mailings related to hav-
ing bad credit and filing for bankruptcy. Johnson unsuccess-
fully sought the personal identifiers of the other 28 victims.
Johnson was charged in the Southern District of Illinois
with two counts of bankruptcy fraud, in violation of 18 U.S.C.
§ 157, and two counts of making a false declaration in a bank-
ruptcy proceeding, in violation of 18 U.S.C. § 152(3).
2. Initial Appearance
Johnson did not have counsel at his initial appearance. He
offered to “discharge” the indictment and repeatedly insisted
that he was not the defendant. After declining Johnson’s offer
to “discharge” the indictment, the magistrate judge informed
him of his right to a court-appointed attorney “in this matter,”
and asked, “I understand that you have made the decision
that you would like to represent yourself. Is that true?” John-
son responded, “Not myself, but somebody’s got to represent
the defendant, so.” The magistrate judge then asked Johnson
a series of questions to confirm his decision to proceed pro se.
The magistrate judge first asked Johnson if he had studied
law. Before answering, Johnson “cut to the chase” and told
No. 19-2718 5
the magistrate judge that his competency to represent himself
had “already been established and affirmed on appeal.” He
explained that he “[d]id a whole two-week trial in California
… and that became the subject matter of the appeal and it was
affirmed.” Circling back to the court’s question, he said he
was “not a student of the law.” The magistrate judge then con-
firmed that Johnson had not represented himself in any other
criminal cases. The magistrate judge proceeded to ask John-
son if he understood the charges against him; the statutory
maximums for the charged offenses; the possibility of consec-
utive sentences; the role of the sentencing Guidelines; that the
court could not advise him; and the existence and binding
character of the Federal Rules of Evidence and the Federal
Rules of Criminal Procedure. After Johnson confirmed his un-
derstanding of these things, the magistrate judge advised him
that a lawyer would represent him “far better” than he would
himself and that it was “unwise” to proceed pro se because of
his lack of familiarity with the law and procedural rules. The
magistrate judge “strongly urge[d]” him to accept counsel.
Still, Johnson confirmed that he wished to proceed pro se, and
that his decision was voluntary.
The magistrate judge found that Johnson had knowingly
and voluntarily waived his right to counsel for purposes of
the initial appearance.
3. Final Pretrial Conference
At the final pretrial conference, the district judge asked
Johnson if he wanted appointed counsel. Johnson replied,
“that ship has sailed.” The judge offered to revisit the issue
and appoint legal counsel or even standby counsel. Johnson
declined. The judge then asked Johnson a series of questions
about his decision to proceed pro se. The judge first asked
6 No. 19-2718
Johnson if he had any legal training. He said he did not. The
judge then asked why Johnson wanted to represent himself.
Johnson said he simply did not need an attorney. The judge
inquired whether Johnson had represented himself at trial be-
fore, and Johnson said he had a “half a dozen” times, includ-
ing in a jury trial. Johnson confirmed that he understood court
procedures and jury selection. As he had at the initial appear-
ance, Johnson told the judge that his “competency was af-
firmed on appeal, so I think we are all right on that.” In re-
sponse to further questions, Johnson told the judge that he
had a seventh-grade education; understood English; was 55
years-old; took no medications; and had been incarcerated for
14 years.
The judge found that Johnson was competent to represent
himself, and that he had validly waived his right to counsel.
The judge emphasized that Johnson had previous experience
with courtroom procedures and jury trials.
4. Trial
Before trial, Johnson filed a host of pretrial motions. Most
were frivolous, such as his motion for a mental examination
of the prosecutor. Johnson also moved to subpoena various
witnesses. The district court granted some of his requested
subpoenas and denied others. At trial, Johnson cross-exam-
ined the government’s witnesses, called his own witnesses,
testified on his own behalf, and offered exhibits that the court
admitted. He also made an opening statement and a closing
argument. True to form, Johnson’s trial arguments were gib-
berish, characterized by statements like, “the United States is
a figment of our imagination,” and “[i]f you can follow the
laws that really matter, the truth will set me free.” Following
No. 19-2718 7
his conviction on all counts, he unsuccessfully moved for a
new trial and judgment as a matter of law.
5. Sentencing
Johnson accepted counsel for sentencing. His advisory
Guidelines range was 240 months’ imprisonment (five years
for each of the four counts). It would have been much
higher—life imprisonment—if each count had not had a stat-
utory maximum of five years. The driving force behind the
high Guidelines range was the 30-level increase that resulted
from Johnson’s “intended loss” of $20 billion.
Johnson objected to the loss calculation on the ground that
$20 billion bore no relation to reality and there was no actual
loss. The government responded that the $20 billion loss cal-
culation was correct, while conceding that the court could
vary downward if it found that the offense level overstated
the seriousness of Johnson’s offense. The court overruled
Johnson’s intended-loss objection. Johnson also argued that
the government’s recommended sentence of 240 months was
tantamount to a life sentence for him, because he was 55 at the
time. According to actuarial tables, Johnson’s life expectancy
was 81. Yet the government’s proposed sentence (on top of
Johnson’s current mail-fraud sentence) would keep him in jail
until 88. Johnson argued that his fantastical scheme did not
warrant a de facto life sentence.
The court sentenced Johnson to 216 months’ imprison-
ment, to run consecutive to Johnson’s current sentence. The
court described its sentence as a nine-level downward vari-
ance from an offense level of 43 to 34. It found that the in-
tended loss was $20 billion, even if it would have been impos-
sible for Johnson to recover that amount. With respect to
8 No. 19-2718
Johnson’s life-sentence argument, the court explained that it
was not its job to decide how long Johnson would live. It de-
scribed Johnson as a “healthy individual” who could “easily
live to be in [his] 90s.” The court hoped that Johnson would
live long enough to get out of prison, but it also hoped that
when he got out, he would “abide by the rules and laws of
society.”
Johnson now appeals his conviction and sentence.
II. Discussion
Johnson makes two arguments on appeal. First, he sub-
mits that the district court should not have allowed him to
proceed pro se during pretrial proceedings and at trial. Next,
he claims that the court failed to adequately consider his lack
of intent to cause a $20 billion loss, the “unreality” of his
scheme, and the possibility that he would die in prison.
A. Self-Representation
We review a district court’s legal determination that a de-
fendant waived counsel de novo, while considering its predi-
cate factual findings for clear error. United States v. Balsiger,
910 F.3d 942, 951–52 (7th Cir. 2018).
Criminal defendants have a Sixth Amendment right to
self-representation. Faretta v. California, 422 U.S. 806 (1975). A
defendant’s waiver of counsel must be knowing and intelli-
gent. Id. at 835. “Although a defendant need not himself have
the skill and experience of a lawyer in order competently and
intelligently to choose self-representation, he should be made
aware of the dangers and disadvantages of self-representa-
tion, so that the record will establish that ‘he knows what he
is doing and his choice is made with eyes open.’” Id. (quoting
Adams v. U.S. ex rel. McCann, 317 U.S. 269, 279 (1942)).
No. 19-2718 9
“Because of the importance of the right to counsel in our con-
stitutional scheme, we do not lightly conclude that a defend-
ant has waived his right to counsel.” United States v. Sandles,
23 F.3d 1121, 1125–26 (7th Cir. 1994). We indulge every rea-
sonable presumption against waiver. Smith v. Grams, 565 F.3d
1037, 1044 (7th Cir. 2009).
We consider four factors to assess whether a defendant’s
waiver was knowing and intelligent: “(1) whether and to what
extent the district court conducted a formal hearing into the
defendant’s decision to represent himself; (2) other evidence
in the record that establishes whether the defendant under-
stood the dangers and disadvantages of self-representation;
(3) the background and experience of the defendant; and (4)
the context of the defendant’s decision to waive his right to
counsel.” United States v. Cooper, 591 F.3d 582, 587 (7th Cir.
2010) (quoting United States v. Todd, 424 F.3d 525, 530 (7th Cir.
2005)). These factors are neither exhaustive nor inflexible; ra-
ther, they are “useful inquiries” that guide the ultimate deter-
mination of whether the defendant’s waiver was knowing
and intelligent. Cooper, 591 F.3d at 587; see Todd, 424 F.3d at
530; see also United States v. Eads, 729 F.3d 769, 775 (7th Cir.
2013) (“[O]ur task is to examine the record as a whole to see if
[the defendant] ‘knowingly and intelligently’ waived his right
to counsel.” (quoting Faretta, 422 U.S. at 835)).
Johnson contends that the district court’s abbreviated col-
loquy with him prior to trial was insufficient to produce a
knowing and intelligent waiver of counsel. To begin, we agree
with Johnson that the district court’s colloquy was lacking.
While a district court need not hold a separate hearing dedi-
cated to the issue of self-representation, it should engage in a
“thorough and formal inquiry” with a defendant that probes
10 No. 19-2718
his age, education level, and understanding of the criminal
charges and possible sentences. Sandles, 23 F.3d at 1126. The
court should also inform the defendant of the difficulties of
proceeding pro se. Id. In this case, the district court asked
Johnson about his age, education, legal training, and experi-
ence as a criminal defendant in past trials. Yet the judge failed
to confirm Johnson’s understanding of the charges against
him or the severe penalties that could flow from a conviction
on those charges. The judge also did not specifically discuss
the difficulties of proceeding pro se with Johnson. The district
court’s colloquy was deficient. We urge courts to do better.
Nevertheless, “failure to conduct a full inquiry is not nec-
essarily fatal,” Todd, 424 F.3d at 531, and these shortcomings
are immaterial here because the record leaves little doubt that
Johnson knew only too well the dangers of going pro se. John-
son had previously acted as his own counsel in a lengthy
mail-fraud trial in California. See id. at 533 (We consider “prior
experience with the legal system (including prior pro se rep-
resentation)”) (quoting Sandles, 23 F.3d at 1128)). The trial did
not go well, and Johnson paid a steep price for it—300 months
in prison. Following his conviction, Johnson unsuccessfully
appealed his waiver of counsel to the Ninth Circuit. Johnson
was still in prison for mail fraud when he decided to represent
himself at his bankruptcy-fraud trial. Against this backdrop,
we find it inconceivable that Johnson did not understand and
sufficiently appreciate the risks of proceeding pro se, espe-
cially when he himself touted his prior self-representation as
proof that he did not need counsel.
In Johnson’s view, his bad performance at the first fraud
trial only bolsters his argument that the district court should
not have let him serve as his own counsel the second time
No. 19-2718 11
around. Johnson’s argument misunderstands the nature of
our inquiry. We ask whether Johnson knowingly and intelli-
gently waived counsel—that is, whether he knew what he
was doing and made his choice “with eyes open.” Faretta, 422
U.S. at 835 (quoting Adams, 317 U.S. at 279). We do not probe
the defendant’s likelihood of success in self-representation.
Tatum v. Foster, 847 F.3d 459, 469 (7th Cir. 2017) (“[T]he Su-
preme Court’s Faretta line of cases focus only on competence
as it relates to mental functioning, and forbids the considera-
tion of competence in the sense of accomplishment.”). Both
savvy and foolish defendants have a constitutional right to
self-representation.
We find additional evidence of Johnson’s knowing and in-
telligent waiver in the magistrate judge’s more robust collo-
quy with him. The magistrate judge dutifully asked the perti-
nent questions, and strongly advised Johnson against pro-
ceeding pro se. The magistrate judge’s colloquy with Johnson
further satisfies us that Johnson made an informed decision
to proceed without counsel at trial. Johnson counters that the
magistrate judge’s colloquy only applied to the initial appear-
ance and did not extend to trial. Even so, the information that
the magistrate judge conveyed—including the nature of the
charges and the potential penalties—was relevant at all stages
of the proceedings. Indeed, the magistrate judge’s colloquy
was clearly still in Johnson’s mind at the final pretrial confer-
ence when Johnson told the district judge that the “ship ha[d]
sailed” on the self-representation issue.
Assuming that the magistrate judge’s colloquy with John-
son produced a valid waiver, he argues that changed circum-
stances between the initial appearance and the final pretrial
conference—such as the denial of his frivolous pretrial
12 No. 19-2718
motions and new discovery from the government showing its
strong case against him—required the district court to ensure
that Johnson wished to persist in his earlier waiver of counsel.
See United States v. Fazzini, 871 F.2d 635, 643 (7th Cir. 1989).
This argument gets Johnson nowhere. As we have already ex-
plained, the district court did revisit Johnson’s waiver. To the
extent the district court’s colloquy was deficient (which it
was), other aspects of the record, including Johnson’s back-
ground and experience, as well as the magistrate judge’s col-
loquy with him, compensate for those deficiencies.
Nor do we find that Johnson’s minimal education and lack
of formal training rendered his waiver invalid. Johnson re-
minds us that he has only a seventh-grade education and no
legal training. But “[t]his Court examines the background and
experience of the defendant merely to gauge whether he ap-
preciated the gravity of his waiver, not in the hopes of finding
adequate legal training.” United States v. England, 507 F.3d
581, 587 (7th Cir. 2007). Johnson does not suggest that his lack
of education and training prevented him from appreciating
the gravity of his waiver. Moreover, while Johnson had mini-
mal formal education, he had extensive experience in the ju-
dicial system, including courtroom advocacy experience from
his earlier pro se trial. See Todd, 424 F.3d at 533. On these facts,
Johnson’s minimal education did not prevent him from acting
as his own counsel.
At bottom, Johnson seems to believe that the district court
should not have let him represent himself because he was
committed to presenting frivolous legal theories. But Johnson
does not contend that he was incompetent. He concedes that
he was of sound mind. Johnson knew the risks of proceeding
No. 19-2718 13
pro se, so his knowing and informed decision to waive coun-
sel stands.
B. Adequacy of Sentencing Explanation
Shifting gears, Johnson argues that the district court pro-
cedurally erred at sentencing by failing to adequately con-
sider three of his mitigation arguments: (1) his perception of
the facts was so irrational that he cannot be said to have in-
tended the $20 billion loss; (2) the unrealistic nature of his
scheme makes it unfair to hold him accountable for the full
$20 billion intended loss; and (3) the court should not impose
a de facto life sentence.
We review questions of procedural error at sentencing de
novo. United States v. Courtland, 642 F.3d 545, 550 (7th Cir.
2011). A judge’s “fail[ure] to adequately explain the chosen
sentence” is a procedural error. Gall v. United States, 552 U.S.
38, 51 (2007). At sentencing, a judge must address a defend-
ant’s principal mitigation arguments, provided they have a
legal and factual basis. United States v. Vidal, 705 F.3d 742, 744
(7th Cir. 2013). “We have required resentencing both when the
district court is silent about the defendant’s principal argu-
ment in mitigation, and when the district court’s discussion is
so cursory that we are unable to discern the court’s reasons
for rejecting the argument.” Id. (internal citations omitted); see
also Gall, 552 U.S. at 50 (explaining that a sentencing judge
“must adequately explain the chosen sentence to allow for
meaningful appellate review and to promote the perception
of fair sentencing”).
1. Lack of Intent
First, relying on the fanciful nature of his quest for $20 bil-
lion, Johnson argues that the district court should have
14 No. 19-2718
considered his lack of intent. The sole legal basis for Johnson’s
argument is dicta from the Sixth Circuit’s decision in United
States v. McBride, 362 F.3d 360 (6th Cir. 2004). There, the Sixth
Circuit opined that “there is surely some point at which a per-
petrator’s misperception of the facts may become so irrational
that the words ‘intended loss’ can no longer reasonably ap-
ply.” Id. at 374. “For instance, if someone vandalized a federal
building by spray painting an incantation that all government
gold shall disappear, the ‘intended loss’ would presumably
not be the value of all the gold in Fort Knox, even if the vandal
genuinely believed that all the gold would disappear.” Id.
Johnson’s argument fails for a simple reason: he did not
make this argument in the district court, or even cite McBride.
To be sure, he made related arguments. He challenged the in-
tended-loss calculation and asked for a downward departure
based on the economic-reality principle (an argument we dis-
cuss below). He also argued, in passing, that he only intended
to harass the victims—not get $20 billion. But now, Johnson
makes a new argument. He argues, relying exclusively on
McBride, that the district court failed to adequately consider
whether he so misperceived the facts that he did not actually
intend the $20 billion loss. In his appellate briefing, Johnson
takes pains to distinguish this new argument from his eco-
nomic-reality argument and the miscalculation-of-loss argu-
ment that he made in the district court. The district court had
to address Johnson’s main mitigation arguments, but it cer-
tainly did not have to address arguments that Johnson did not
make, especially one based solely on dicta from a non-binding
jurisdiction.
No. 19-2718 15
2. Economic-Reality Argument
Second, Johnson argues that the court failed to adequately
address his economic-reality argument. The federal sentenc-
ing Guidelines provide, for economic offenses, that “[t]here
may be cases in which the offense level … substantially over-
states the seriousness of the offense. In such cases, a down-
ward departure may be warranted.” USSG § 2B.1.1, comment.
(n.21(C)). Consistent with that principle, we have recognized
an “economic reality” doctrine that allows a sentencing court
to depart downward if intended losses bear no relation to eco-
nomic reality. United States v. Stockheimer, 157 F.3d 1082, 1089
(7th Cir. 1998).
This argument also fails. Johnson’s economic-reality argu-
ment has a legitimate legal and factual basis. Still, we cannot
conclude that the district court failed to adequately consider
it. The judge’s discussion of the argument with the parties
spans six pages of the sentencing transcript. The court accu-
rately summarized the argument, asked both parties ques-
tions about it, and let both parties make oral arguments. The
parties argued—and the court acknowledged—that the court
could vary downward if the intended loss substantially over-
stated the seriousness of the offense. Relying on the Guide-
lines, the court explained why the intended-loss calculation
was accurate, even if it was impossible for Johnson to recover
the $20 billion. At the same time, it recognized that Johnson’s
argument “may be a matter for the Court to consider in deter-
mining the sentence.” And then, when imposing its sentence,
the court said: “The Court is considering the arguments of
counsel and recognizing the Court can vary downward.” Sure
enough, the court varied down nine offense levels. The record
shows that the court thoroughly considered Johnson’s
16 No. 19-2718
economic-reality argument, and apparently varied down-
ward because of it. We find no procedural error here.
3. De Facto Life Sentence
Johnson’s final argument is that the district court inade-
quately considered whether its 216-month sentence would
likely lead him to die in prison. We have observed that
“[t]here is a worthy tradition that death in prison is not to be
ordered lightly, and the probability that a convict will not live
out his sentence should certainly give pause to a sentencing
court.” United States v. Wurzinger, 467 F.3d 649, 652 (7th Cir.
2006). Armed with actuarial tables showing the life expec-
tancy for a 55-year-old white man, Johnson’s counsel argued
that the court should not give Johnson a de facto life sentence.
The court addressed Johnson’s life-sentence argument by
commenting that it had no control over how long Johnson
would live. It hoped that Johnson, a seemingly healthy indi-
vidual, would outlive his sentence, but it could not determine
whether he would. It added: “I hope when you get out of
prison that you have the mental state that you’re going to
abide by the rules and laws of society.” In other words, the
court considered Johnson’s argument and rejected it. This was
not a case where the court failed to appreciate that it was im-
posing a potential life sentence. Cf. United States v. Patrick, 707
F.3d 815, 820 (7th Cir. 2013). The court acted within its discre-
tion in rejecting Johnson’s argument. Johnson does not sub-
stantively challenge his sentence, so we will not consider the
reasonableness of the court’s treatment of his argument.
No. 19-2718 17
III. Conclusion
Johnson knowingly and intelligently waived his right to
counsel before trial, and the district court adequately ad-
dressed his mitigation arguments at sentencing.
AFFIRMED.