77 F.4th 565
7th Cir.2023Background
- Bruce Lee conspired with two Chicago White Sox box‑office employees (Costello and O’Neil) from 2016–2019 to obtain thousands of discounted and complimentary promotional/rain‑replacement tickets without proper vouchers and resell them on StubHub for profit.
- Lee sold roughly 34,846 tickets on StubHub and received about $867,269 in gross receipts; he paid the White Sox $74,650 for certain $5 outfield tickets and paid insiders fees (≈$100,000).
- A federal indictment charged Lee with wire fraud and money laundering and sought forfeiture of illicit proceeds; co‑defendants pleaded guilty to related charges.
- A jury convicted Lee on wire‑fraud counts; the district court granted a Rule 29 acquittal on money‑laundering counts, denied post‑trial relief, and sentenced Lee to 18 months’ imprisonment.
- At sentencing the district court orally ordered forfeiture in the amount Lee sought ($455,229.23) but failed to enter the Rule 32.2(b)(2) preliminary forfeiture order and omitted forfeiture from the written judgment. The court later refused to amend the judgment, prompting the government’s cross‑appeal.
- The Seventh Circuit affirmed the convictions and sentence but held the omission was a correctable clerical error under Rule 36, reversing the district court’s refusal to amend and remanding to include the $455,229.23 forfeiture in the written judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1) Whether the indictment was duplicitous (two schemes vs one). | Single continuing scheme: obtaining tickets and reselling them were integrated steps to profit, so one scheme supported by the indictment. | There were two separate schemes: illegally obtaining tickets vs legal resale; resale wires did not further a fraud. | Affirmed: obtaining and reselling were part of one continuing fraud; indictment not duplicitous. |
| 2) Sufficiency of evidence that interstate wires furthered the fraud and that fraud was material. | StubHub emails/transfers and Lee’s use of StubHub to conceal source furthered the scheme; insiders’ deceptive practices were material to the fraud. | Sales on the secondary market were lawful transactions and did not injure the White Sox; misrepresentations were immaterial because team didn’t track vouchers. | Affirmed: a reasonable jury could find wires furthered the scheme and misrepresentations were material. |
| 3) Sentencing loss calculation (market value vs defendant’s net gain). | Government: loss should be measured by market value of fraudulently obtained tickets (supporting higher guidelines). | Lee: loss should be limited to what the White Sox were willing to part with (the small outlay) or else use his net gain. | Affirmed: market‑price approach and/or using Lee’s gain as alternate measure are reasonable; district court’s guideline application not clearly erroneous. |
| 4) Whether the district court may correct the omission of a preliminary forfeiture order / include forfeiture in written judgment after sentencing. | Government: omission was a clerical error; Rule 36 permits correction to conform written judgment to the unambiguous oral forfeiture announced at sentencing. | Lee: Rule 32.2 requires a preliminary order before sentencing; failure is a substantive error not correctable after Rule 35 deadlines. | Reversed district court: missing preliminary order is a time‑related directive (harmless here); because the court orally imposed forfeiture and parties had notice/opportunity to contest, Rule 36 permits amending the written judgment to add forfeiture ($455,229.23). |
Key Cases Cited
- Dolan v. United States, 560 U.S. 605 (2010) (distinguishes jurisdictional rules from claims‑processing rules and time‑related directives; governs consequences of missed statutory timing).
- United States v. Quintero, 572 F.3d 351 (7th Cir. 2009) (failure to include an intended forfeiture in the written judgment is a clerical error correctable under Rule 36).
- United States v. Martin, 662 F.3d 301 (4th Cir. 2011) (preliminary forfeiture timing is a time‑related directive; omission may be harmless where defendant had notice and opportunity to contest).
- United States v. Shakur, 691 F.3d 979 (8th Cir. 2012) (treats failure to enter a preliminary forfeiture order as a non‑curable claims‑processing violation when procedures and notice are not afforded).
- United States v. McIntosh, 58 F.4th 606 (2d Cir. 2023) (preliminary‑order requirement is time‑related; omission harmless where defendant knew of forfeiture and had opportunity to contest).
- United States v. Mattux, 37 F.4th 1170 (6th Cir. 2022) (treats Rule 32.2(b) requirements as claims‑processing rules and reverses where defendants lacked proper notice/hearing).
- United States v. Mount, 966 F.2d 262 (7th Cir. 1992) (vendor’s choice and market‑price difference are relevant to loss in ticket fraud cases).
- Schmuck v. United States, 489 U.S. 705 (1989) (wires that assist avoidance of detection or are incident to essential parts of the scheme can further a fraud).