United States v. Joshua
648 F.3d 547
7th Cir.2011Background
- The Calumet Township Trustee's Office provides social services and was run by Allen as Trustee, Joshua as Deputy Trustee, and Karras as Deputy Finance Trustee.
- From 2000 to 2002, IDWDS paid the Office monthly invoices for non-federal costs under a grant-matching program, totaling about $170,000.
- The Office submitted inflated invoices ($4,167 monthly post-2000) with no supporting cost documentation, and the defendants diverted the funds as personal ‘administrative fees.’
- Allen, Joshua, and Karras deposited the funds into a Fifth Third Bank account and distributed them to themselves, without performing work or reporting them as required by Indiana law.
- The scheme was uncovered after a Board member questioned the authority to pay from the grant program; counsel advised that the payments could be off-budget, but only if work was performed.
- Two checks were mailed by IDWDS and alleged to have been mailed to the Trustee's Office, forming the basis for two counts of mail fraud; the government argued two theories: monetary fraud and honest services fraud.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of mailing element for mail fraud | Government contends envelopes were mailed per IDWDS practice. | Defendants claim lack of postal markings shows no mailing. | Sufficient evidence supported mailing; envelopes metered as flat, metered mail and properly mailed. |
| Skilling 2010 plain error in honest-services theory | Honest-services theory supported convictions. | Skilling requires reversal of honest-services charge. | No reversible plain error; monetary-fraud theory remains valid and supports conviction. |
| Proper jury instruction on dual theories (honest services and money) | Instructions permitted consideration of both theories. | Instructions did not clearly separate theories. | Instructions adequately directed jury to consider and unanimity on each theory; no error. |
| Advice-of-counsel defense and burden-shifting | Instructions properly framed good-faith/advice-of-counsel defense. | Burden on defendants or misled jury regarding counsel's testimony. | Court-approved Van Allen framework; burden clarified by surrounding instructions; no reversible error. |
Key Cases Cited
- United States v. Brooks, 748 F.2d 1199 (7th Cir. 1984) (mailing element proven by direct or circumstantial evidence)
- United States v. Keplinger, 776 F.2d 678 (7th Cir. 1985) (office practice in mailing may be inferred from lack of deviation)
- United States v. Ratliff-White, 493 F.3d 812 (7th Cir. 2007) (office practice evidence supported mailing inference)
- United States v. Chambers, 642 F.3d 588 (7th Cir. 2011) (de novo review of sufficiency; standard of review)
- United States v. Segal, 644 F.3d 364 (7th Cir. 2011) (Skilling's limits on honest-services fraud; two theories still viable)
- United States v. Van Allen, 524 F.3d 814 (7th Cir. 2008) (advice of counsel defense can negate intent to defraud)
- United States v. Roti, 484 F.3d 934 (7th Cir. 2007) (application of advice-of-counsel defense to fraud cases)
- Skilling v. United States, 130 S. Ct. 2896 (2010) (limits honest-services fraud to bribery/kickbacks)
- United States v. Clarke, 227 F.3d 874 (7th Cir. 2000) (jury must follow properly given instructions)
- Quintero v. United States, 618 F.3d 746 (7th Cir. 2010) (de novo review of jury instructions)
- United States v. Harris, 230 F.3d 1054 (7th Cir. 2000) (plain-error standard for reviewing undisclosed errors)