United States v. Edward Boliaux , 915 F.3d 493 ( 2019 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 18-1322
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
EDWARD BOLIAUX,
Defendant-Appellant.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 16 CR 115 — Manish S. Shah, Judge.
____________________
ARGUED FEBRUARY 4, 2019 — DECIDED FEBRUARY 12, 2019
____________________
Before WOOD, Chief Judge, and EASTERBROOK and ST. EVE,
Circuit Judges.
EASTERBROOK, Circuit Judge. Between 2002 and 2008 Ed-
ward Boliaux operated EMC Automotive, a used-car dealer-
ship, in Joliet, Illinois. He borrowed money from three lend-
ers, using inventory as security. Most loans were secured by
the cars’ certificates of title, a device called floorplanning.
Because there is supposed to be only one title certificate per
car, the dealer cannot transfer good title to a customer with-
2 No. 18-1322
out paying the lender. Although lenders may allow sales to
precede payment, they demand that the money be held in
trust until the loan is retired. But beginning in 2007 Boliaux
persuaded state officials to issue duplicate certificates of title
on the pretense that the originals had been lost. He used
these to obtain multiple loans against single vehicles, exceed-
ing the cars’ market value and leaving the lenders under-
secured. He also began to sell cars without using the pro-
ceeds to repay the loans. After one of the lenders detected
this and impounded the collateral, Boliaux persuaded the
custodian to release eight cars, which he sold for his own
benefit.
Deceit continued after EMC Automotive collapsed. In
September 2008 Cindy Boliaux, then Edward’s wife, incor-
porated Joliet Motors, which Edward operated from the
premises formerly occupied by EMC. Joliet Motors received
installment payments sent by the customers of EMC yet did
not remit them to lenders. Boliaux had trouble borrowing
against the inventory of his new dealership, and in 2008 and
2009 he turned to check kiting.
For these and related acts, a jury convicted him of four
counts of wire fraud and six of bank fraud. 18 U.S.C. §§ 1343,
1344. He has been sentenced to 48 months’ imprisonment
and three years’ supervised release.
Boliaux contends that the evidence was insufficient—on
the wire fraud counts principally because he did not trans-
mit anything by wire, and on the bank fraud counts princi-
pally because no one from the banks testified that the banks
lost money. The district court addressed these and other con-
tentions when denying Boliaux’s motion under Fed. R. Crim.
P. 29:
No. 18-1322 3
Viewed in the light most favorable to the prosecution, see United
States v. Washington, 184 F.3d 653, 657 (7th Cir. 1999), the evi-
dence demonstrated that Boliaux obtained financing from lend-
ers through materially false representations, and he perpetuated
his scheme through the concealment of material facts. Boliaux
argues that the evidence amounted to, at most, a disjointed se-
ries of immaterial breaches of contract. Neither the facts nor the
law support this argument. Obtaining money through a scheme
intended to cheat others is a crime whether or not it is also slop-
py business or breach of contract. It suffices to note that Boliaux
lied to obtain duplicate titles for cars that he knew were financed
by one lender, and used the duplicate titles to obtain additional
financing from a second lender—thereby compromising the se-
curity interests of both lenders. Later, he forged lien releases
purportedly from GMAC, and with those releases, obtained car
titles that he used to secure more financing—thereby cheating
those lenders by concealing GMAC’s interests. According to in-
dustry representatives, clear title to a vehicle that was part of
floorplan financing was material to lenders, even when liens
were not individually filed and notwithstanding the breadth of
the collateral securing financing. The evidence of defendant’s
control over the car dealerships was sufficient to prove his inten-
tional participation in the scheme. His intent to defraud was
manifest in his false statements and forgeries, and in his con-
cealment of facts associated with Joliet Motors. The charged wire
transmissions traveled across state lines—from Joliet Motors in
Illinois and routed through Pennsylvania or Ohio, and they ad-
vanced the scheme to defraud the lenders because they were
payments for a vehicle that had been sold to the detriment of the
lender’s interests. The evidence of Boliaux’s supervision of Joliet
Motors, and his involvement in the payment-processing system,
was sufficient to make the wire transmissions a foreseeable con-
sequence of his scheme.
Testimony from the victim banks was not necessary to support a
conviction on the bank fraud counts. The bank records, coupled
with the explanatory testimony of expert witness Wolverton
(who testified under Rule 702 without objection) and the evi-
dence of Boliaux’s control over the bank accounts, demonstrated
4 No. 18-1322
the risk of loss to the banks and Boliaux’s intent to deceive
through check kiting.
The evidence was not just sufficient, it was overwhelming, and
defendant’s motion for a judgment of acquijal under Rule 29 is
denied.
It is not necessary to say more about the sufficiency of the
evidence. Later we discuss the decision by Boliaux’s lawyer
to omit from his brief the district court’s analysis of this sub-
ject.
Boliaux asked the district judge to instruct the jury that it
had to agree, unanimously, how he carried out his scheme to
defraud. The judge properly declined. Each wire-fraud
count of the indictment charged a single scheme to defraud
implemented in 17 ways (obtaining duplicate titles by falsely
asserting that others had been lost, pledging the same car to
multiple lenders, selling cars without repaying the loans,
and so on). The means used to carry out a fraudulent scheme
are not separate elements requiring unanimity. See, e.g.,
Richardson v. United States, 526 U.S. 813, 817 (1999). Boliaux
seeks to avoid this rule by contending that the wire-fraud
charges are duplicitous—in other words, that each count re-
ally charges multiple crimes, rather than one crime com-
mijed through multiple acts. The district court addressed
this argument, too, in the order from which we have already
quoted:
Boliaux raises an untimely argument concerning duplicity, but
he never challenged the indictment under Rule 12(b)(3)(B)(i) and
offers no excuse for this failure. The claim is forfeited, but in any
event, there was no duplicity, much less prejudicial duplicity.
Each wire fraud count alleged one execution of a single scheme
to defraud with a variety of alleged means. No unanimity with
respect to those means was required. United States v. Daniel, 749
F.3d 608, 614 (7th Cir. 2014).
No. 18-1322 5
Thus Boliaux lost in the district court on two grounds: forfei-
ture and the merits. His opening brief on appeal ignores the
forfeiture. If you lose in the district court on multiple
grounds, you must contest all on appeal; prevailing on one
won’t suffice. After the prosecutor relied on the forfeiture
ruling, Boliaux finally addressed it in his reply brief. That’s
too late—and as it happens too lijle as well.
Federal Rule of Criminal Procedure 12(b)(3) lists more
than a dozen defenses or arguments that must be presented
before trial, so that any error may be corrected (and the
prosecutor can appeal an adverse decision without encoun-
tering a problem under the Double Jeopardy Clause). See
United States v. Nixon, 901 F.3d 918, 920–21 (7th Cir. 2018).
Duplicity is among them. There is an escape hatch: “If a par-
ty does not meet the deadline for making a Rule 12(b)(3) mo-
tion, the motion is untimely. But a court may consider the
defense, objection, or request if the party shows good
cause.” Fed. R. Crim. P. 12(c)(3). The district judge stated
that Boliaux has not offered an excuse for his delay. That
remains true. The reply brief does not contend that Boliaux
had “good cause”—or indeed any cause—for raising a du-
plicity argument only in mid-trial. The decision may well
have been strategic, deferring majers until it was too late for
the prosecutor either to amend the indictment or appeal
from an adverse decision. This is exactly the kind of strategy
that Rule 12(b)(3) is designed to block.
Not content with holding back a duplicity argument until
mid-trial, Boliaux withheld a multiplicity argument until his
opening appellate brief. Multiplicity means charging a single
crime in multiple counts. Boliaux tells us that he commijed
at most one bank fraud, no majer how many checks he
6 No. 18-1322
wrote against insufficient funds, making the six bank-fraud
counts multiplicitous. Yet multiplicity is among the majers
that must be raised before trial. Fed. R. Crim. P.
12(b)(3)(B)(ii). Consideration of the argument now depends
not only on a demonstration of plain error (the standard for
all contentions first presented on appeal) but also on a
demonstration of good cause. Boliaux does not argue that he
had good cause—or any cause at all—for delay in making
this argument. We therefore do not consider it.
One evidentiary contention requires a few words. John
Brincat appeared for the prosecution as an expert witness on
the topic of floorplanning. He explained to the jury how
these loans are made and why lenders’ risk is increased by
the existence of multiple title certificates and multiple loans
against a single vehicle. The district judge found this testi-
mony proper under Fed. R. Evid. 702. Still, Boliaux contends
that the testimony should have been barred because Brincat
acted as both an expert witness and a fact witness, a dual
role that may leave the jury confused about how to treat the
testimony. See, e.g., United States v. Je@, 908 F.3d 252, 267–68
(7th Cir. 2018). The district court disagreed, stating: “The tes-
timony elicited by the government from witness Brincat was
limited to his role as an industry expert and did not stray
into fact-witness territory”. Boliaux contests this by observ-
ing that Brincat testified about how the whole floorplan-
lending industry works, and Boliaux insists that because
Brincat is employed by Automotive Finance Corp. (AFC),
one of the defrauded lenders, the jury likely would have un-
derstood him to be a fact witness.
The district judge did not abuse his discretion by per-
mijing Brincat to testify. He did not describe any special fea-
No. 18-1322 7
tures of AFC’s practices or any of the dealings between AFC
and Boliaux. The jury surely understood Brincat to be testi-
fying exclusively as an expert. We are surprised that the
prosecutor would present Brincat as an expert, enabling the
defense to paint a vital witness as biased, but puzzling deci-
sions do not make evidence inadmissible.
Boliaux presents a few additional arguments, which do
not require discussion. They have been considered and are
rejected.
We promised earlier to return to how Boliaux has treated
the district court’s explanations for its decisions. Circuit Rule
30(b)(1) requires every appellant to include, in an appendix
to the brief, “[c]opies of any … opinions, orders, or oral rul-
ings in the case that address the issues sought to be raised.”
Circuit Rule 30(d) adds: “The appendix to each appellant’s
brief shall contain a statement that all of the materials re-
quired by parts (a) and (b) of this rule are included.”
Boliaux’s brief, signed by Andrew S. Gable of Chicago, con-
tains the required certification. But it is false. The appendix
omits the district court’s statement of its reasons for finding
the evidence sufficient, finding the duplicity argument (and
the proposed unanimity instruction) forfeited under Rule
12(b), and permijing Brincat to testify. (The opinion ad-
dresses other topics as well.) The appendix also omits sub-
stantial parts of the district judge’s mid-trial discussions of
these and other issues. Was Gable hoping that we would not
discover those rulings?
False representations to the court of appeals have conse-
quences. In civil litigation a false certificate of compliance
with Circuit Rule 30(a) and (b) leads to summary affirmance
or dismissal of the appeal. See, e.g., Urso v. United States, 72
8 No. 18-1322
F.3d 59, 61–62 (7th Cir. 1995); Mortell v. Mortell Co., 887 F.2d
1322, 1327 (7th Cir. 1989); Teitelbaum v. Curtis Publishing Co.,
314 F.2d 94, 95–96 (7th Cir. 1963); Sparrow v. Yellow Cab Co.,
273 F.2d 1, 4 (7th Cir. 1959); Chicago & Eastern Illinois Ry. v.
Southern Ry., 261 F.2d 394, 400 n.7 (7th Cir. 1958). The client
then may be able to recover from counsel for malpractice.
We concluded in United States v. Smith, 953 F.2d 1060, 1068
(7th Cir. 1992), that this would not be appropriate in criminal
cases, where defendants have difficulty monitoring their
lawyers’ performance—and where dismissal of the appeal or
summary affirmance would lead straight to a decision find-
ing that counsel had furnished ineffective assistance, which
would authorize a new appeal. It is best in criminal cases to
give the defendant plenary appellate review, as we have
done, and penalize the lawyer directly. See In re Galvan, 92
F.3d 582 (7th Cir. 1996). See also Guentchev v. INS, 77 F.3d
1036 (7th Cir. 1996) (same approach in immigration law).
Galvan established $1,000 as the presumptive fine for a
violation of Circuit Rule 30 in a criminal case. 92 F.3d at 584–
85. See also, e.g., United States v. Evans, 270 F.3d 1076, 1085
(7th Cir. 2001). Adjusting for inflation, $1,000 in 1996 is
equivalent to $1,597 today. This implies that the presumptive
fine should become $1,600.
Counsel has 14 days to show cause why he should not be
fined $1,600, and reprimanded, for his violation of Circuit
Rule 30(b) and his false statement under Circuit Rule 30(d).
The judgment is affirmed, and an order to show cause
will be issued.