912 F.3d 422
7th Cir.2019Background
- William Corrigan, CEO of Embedded Control Systems (ECS), solicited additional investments in 2009 from Jason Neilitz and Rawah Partners, claiming funds were needed to pay ECS employees' health insurance to preserve a pending sale.
- Investors wired $50,000 each (and an additional $10,000 from Rawah Partners) to an account Corrigan provided; the account was Corrigan's personal account, not ECS's.
- Corrigan spent the funds on personal expenses (travel, payments to a romantic partner and associates, cash withdrawals) and continued to tell investors the money was used for insurance and ECS expenses.
- United Healthcare had already cancelled ECS's policy for nonpayment by January 2009, so the purported emergency basis for the solicitations was false and the funds were never used for insurance.
- Corrigan was indicted on four counts of wire fraud, tried in a bench trial, convicted, sentenced to 144 days (time served), and ordered to pay $110,000 restitution (the full amount investors paid).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Indictment adequacy / constructive amendment | Government: indictment properly alleged scheme, intent, and wire use | Corrigan: amended indictment changed victim (constructive amendment) and was raised only after trial | No constructive amendment; grand jury transcript and pretrial record showed correct victim and no prejudice |
| Multiplicity of Counts II–IV | Government: separate wire communications (solicitation and post-payment reassuring emails) constitute separate prosecutable acts | Corrigan: Counts II–IV impermissibly charge the same offense arising from the same investment | Not multiplicitous; different wire acts (solicitatory email and later reassuring emails) support separate counts |
| Sufficiency of evidence | Government: testimony, emails, subscription forms, bank records show scheme, intent, and use of wires | Corrigan: evidence insufficient; misstatements were immaterial or lacked intent to defraud | Evidence amply supported conviction; material misrepresentations and circumstantial proof of intent were sufficient |
| Restitution amount | Government: MVRA requires restitution in full amount of each victim's loss ($110,000) | Corrigan: should receive credit for funds actually used for ECS or value of ECS patents; restitution excessive | Restitution affirmed; defendant bore burden to rebut loss calculation and did not present contrary evidence |
Key Cases Cited
- Marcus v. United States, 560 U.S. 258 (describing plain-error review factors)
- United States v. McGowan, 590 F.3d 446 (7th Cir.) (wire-fraud elements and wires that lull victims may suffice)
- Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639 (false statements can be material even absent direct reliance)
- United States v. Moose, 893 F.3d 951 (7th Cir.) (MVRA requires restitution in full amount of each victim's loss)
- United States v. Penaloza, 648 F.3d 539 (7th Cir.) (purpose of rule against constructive amendment is to provide notice)