United States v. John Sullivan
2014 U.S. App. LEXIS 16676
| 7th Cir. | 2014Background
- Defendants Daniel Sullivan and John Sullivan ran a remodeling business group that operated a fraudulent refinancing scheme against homeowners in Chicago, taking loan proceeds for work not performed or abandoned.
- They used telemarketers to target elderly/unsophisticated homeowners, urging rapid refinancing and directing funds to the defendants’ companies.
- Homeowners were asked to sign blank contracts and to direct loan proceeds to the defendants before any remodeling began.
- From 2002–2006, the scheme netted over $1.2 million from more than forty victims.
- A jury convicted each Sullivan brother of two counts of wire fraud; sentencing involved loss calculations and multiple offense enhancements.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Loss calculation method validity | Sullivan loss was overestimated by treating all refi as fraudulent | Not all refis were bad; costs/labor should be allocated | Loss reasonably estimated; district court not error |
| Vulnerable victim enhancement | Victims were financially desperate and vulnerable | No victim identification of vulnerability | Enhancement supported by evidence of vulnerable victims |
| Prior injunction enhancement | John violated injunction; model shows control by defendants | Only John implicated by injunction | Enhancement properly applied to both defendants |
| Sophisticated means enhancement | Scheme involved coordinated actions and deception | Not unusually sophisticated | Enhancement warranted given coordination and deception |
| Mass-marketing enhancement | Cold-calling, mass mailings, and canvassing fit mass-marketing | Ordinary marketing methods | Enhancement properly applied |
Key Cases Cited
- United States v. Schroeder, 536 F.3d 746 (7th Cir. 2008) (pre-sentence burden and standard of review for relevant conduct)
- United States v. Love, 680 F.3d 994 (7th Cir. 2012) (clear error review of sentencing findings)
- United States v. Radziszewski, 474 F.3d 480 (7th Cir. 2007) (evidentiary standard for loss calculations)
- United States v. Christiansen, 594 F.3d 571 (7th Cir. 2010) (mass-marketing and targeted fraud guidance)
- United States v. Knox, 624 F.3d 865 (7th Cir. 2010) (sophisticated means in real estate fraud context)
- United States v. Tai, 41 F.3d 1170 (7th Cir. 1994) (extensive activity for organizer/leader analysis)
- United States v. Johns, 686 F.3d 438 (7th Cir. 2012) (vulnerable victim as financial desperation example)
- United States v. Heckel, 570 F.3d 791 (7th Cir. 2009) (assessing mass-marketing and related enhancements)