UNITED STATES OF AMERICA, Plаintiff-Appellee, v. JOSHUA W. EADEN, Defendant-Appellant.
No. 20-2763
United States Court of Appeals For the Seventh Circuit
ARGUED SEPTEMBER 27, 2021 — DECIDED JUNE 23, 2022
Before ROVNER, HAMILTON, and KIRSCH, Circuit Judges.
Appeal from the United States District Court for the Southern District of Indiana, Evansville Division. No. 3:17-cr-00025 — Richard L. Young, Judge.
I
From 2002 to 2016, Joshua Eaden worked for Best One Tire, a tire store owned by Southern Indiana Tire, Incorporated (SIT). He eventually became Best One‘s manager, but from 2014 to 2016 he abused that position by defrauding SIT and its businеss partners of more than $200,000. This fraud took two forms. First, Eaden falsely inflated the profits at his store (to obtain unearned performance-based bonuses) by billing SIT‘s largest customer—Gibson County Coal—for products it did not purchase. Second, Eaden submitted false claims to a rewards program sponsored by tire manufacturer Bridgestone Firestone, through which Best One‘s employees could claim gift сards and other prizes for selling Bridgestone tires.
In early 2016, a community member‘s tip alerted SIT‘s CEO to Eaden‘s misdeeds. Police and internal investigations
With his fraud now uncovered, Eaden faced a 23-count indictment alleging multiple fraudulent schemes, including those just describеd. Although he was eventually acquitted on six counts, the jury convicted him of the remaining seventeen. At sentencing, the district court imposed 46 months’ imprisonment, three years of supervised release, and ordered restitution of $244,673.00, as well as the forfeiture of all Eaden‘s bonuses from 2014 to 2016, which totaled $88,106.78. Eaden now appeals, contending that he is entitled to a new trial or, failing that, at least to reduced forfeiture and restitution obligations.
II
We note from the outset that Eaden has (at a minimum) forfeited his claims by failing to raise them with the district court. But we needn‘t decide whether he has crossed the line into waiver; the government concedes that two of Eaden‘s arguments merit relief, and the standard of review makes no difference for the others. We therefore assess Eaden‘s clаims for plain error, meaning he can obtain relief only by demonstrating: (1) an error (under whatever standard of review would apply had the issue been preserved); (2) that is plain;
A
Eaden contends that the district court deprived him of a fair trial in violation of the Fifth Amendment by informing prospective jurors during voir dire that a grand jury had issued Eaden‘s indictment based on probable cause, which the district court defined as meaning “it‘s probably true that [Eaden] had some connection with criminal activity[.]” In Eaden‘s view, this definition predisposed the petit jury to find him guilty and carried thе government halfway to the goal line in proving his guilt beyond a reasonable doubt. And so, he insists, retrial is necessary.
Yet this argument misses the mark. For starters, Eaden ignores the broader context of the district court‘s comments. Although the district court undeniably invoked the “probably true” language that Eaden challenges on appeal, it immediately dispelled any notion that the grand jury‘s finding had some beаring on Eaden‘s guilt or innocence. Just moments after that unfortunate utterance, the district court inquired of a potential juror: “the fact that Mr. Eaden has been indicted ... does that mean he‘s guilty?” When another potential juror replied that it did not, the district court confirmed—“[t]hat‘s exactly right. ... he‘s just exercising his rights to a trial by jury.” In an exchange with another venire member, the district court highlighted that “probably” wouldn‘t suffice for the petit jury‘s guilt-or-innocence determination:
COURT: I mentioned the word “probable cause.” That‘s a burden of proof as well, all right. The defendant probably had some connection to criminal activity. ... [I]f you come back, after listening to all the evidence in this case, and you think: Well I think the defendant probably committed this crime, is that enough to convict?
PROSPECTIVE JUROR: I would say no.
COURT: Right. Probably tells you whаt? What‘s the word “probably” tell you?
PROSPECTIVE JUROR: That there might be doubt that he didn‘t do it.
COURT: Could be, could not be, right? Do we convict people and take away their liberty based on could be, could not be?
PROSPECTIVE JUROR: I would hope not.
COURT: Right. Exactly. We don‘t do that ... .
Moreover, the district court took great pains to impress upon the jurors—both prospective and actual—that the government bears the full burden of proof at trial, notwithstanding the issuance of an indictment. It stated during voir dire, for instance, that “the fact that someone‘s been charged with a crime ... [is] not evidence of their guilt,” and admonished the venire that Eaden maintained a “cloak of innocence” despite his indictment. An exchange with one prospective juror is illustrative:
COURT: [W]hat does [Eaden] have to do in this case to prove to you that he is innocent of these charges?
PROSPECTIVE JUROR: He really doesn‘t have to prove his innocence. ...
COURT: You mean that [Eaden] can sit here throughout the entire trial, not say one thing, not present any evidence, not do one darn thing ... ?
PROSPECTIVE JUROR: Yes.
COURT: You‘re exactly right.
Finally, the district court‘s end-of-trial instructions were unimpeachable. They reminded the jury that an indictment is not evidence, that it “does not even raise a suspicion of guilt,” and that Eaden was presumеd innocent until proven guilty.
Trial judges have substantial discretion in conducting voir dire, and we interfere only where there has been “a clear abuse of that discretion[.]” United States v. Betts-Gaston, 860 F.3d 525, 530–31 (7th Cir. 2017). One of our prior decisions illustrates that the district court did not abuse its discretion in this case. In United States v. Garcia, the defendant challenged the district court‘s jury instructions, which described the grand jury as the “first screening process” in the criminal justice system. 562 F.2d 411, 417 (7th Cir. 1977). Yеt we required only that the instructions, “taken as a whole, fairly and adequately stated the law pertinent to the case.” Id. at 416. Because the instructions, viewed holistically, “ma[d]e manifest the jury‘s duty to decide the case on the basis of the evidence presented at trial,” we held in Garcia that the district court had not erred. Id. at 417.
Although we are confident the jury understood its duty in this case, we nonetheless take this opportunity to remind district courts that comments about the grand jury are usually unnecessary and should be avoided. “[T]he fact of the indictment has some emphasis” in virtually аny criminal case, id., but that fact warrants no comment in the ordinary case beyond the typical admonition that the indictment is not evidence of guilt or of anything else, as the district judge rightly stated. The grand jury‘s finding of probable cause and decision to return an indictment is meaningless at trial and need not be mentioned by the court. In fact, the safer course is to redact any reference to the grand jury‘s role, as is commonly done. But that the district court did not take that course in this case is not a basis for a new trial.
B
If denied retrial for all counts, Eaden seeks a redo at least as to counts 17–23 (those related to the Bridgestone rewards program) because he believes that the district court erred by admitting unhelpful witness testimony from Bridgestone
Anderson‘s testimony focused on Eaden‘s submissions to the Bridgestone rewards program‘s online claims system. This system enabled salespersons like Eaden to obtain points redeemable for gift cards and other rewards by inputting certain required information, such as the quantity and type of tire sold, the purchaser‘s identity, the date of sale, and the relеvant invoice number. At trial, Anderson testified that, in reviewing over 200 such submissions from Eaden, he discovered factual inaccuracies in more than 75 percent. Along the way, Anderson described these inaccuracies as “fraudulent,” meaning (in his view) that they could not have resulted from “simple clerical errors.” Eaden homes in on the term “fraudulent,” contending that Anderson‘s testimony provided only the bаre legal conclusion of “fraud” without being helpful as
Our precedents have repeatedly upheld a witness‘s use of the term “fraudulent” when testifying in fraud cases. In United States v. Locke, for instance, we upheld lay witness testimony that the defendant‘s submissions to a loan provider (the witness‘s employer) had been “fraudulent,” in the sense that they would have been denied had they been accurate. 643 F.3d 235, 237–38 (7th Cir. 2011). We viewed such testimony as
Locke and Owens show why Anderson‘s testimony was properly admitted. In describing Eaden‘s submissions as fraudulent, Anderson was not addressing Eaden‘s mental state or the ultimate question of fraud. Instead, he was expressing with a layperson‘s vernacular that those submissions were false, with the further indication that, in his view, that falsity could not have resulted from mere negligence. This testimony was helpful under
Eaden‘s final arguments all pertain to the restitution and forfeiture amounts assessed by the district court. The government concedes that two of these arguments are meritorious, and we reduce Eaden‘s financial obligations accordingly. But fоr the remainder we find that any error is not plain and therefore affirm. We consider each argument in turn.
1
Eaden asserts that the district court erred in ordering him to pay $189,709 in restitution to SIT—the same amount that SIT repaid to Gibson County Coal to remedy Eaden‘s overbilling. In fraud cases like Eaden‘s, restitution is required by the Mandatory Victim Restitution Act for any victim “directly harmed by the defendant‘s criminal conduct.”
Eaden argues—and the government concedes—that the $189,709 was not a loss to SIT. Instead, SIT merely repaid unearned funds that it had obtained from Gibson County Coal solely by reason of Eaden‘s fraud. The government has never argued, either at trial or on appeаl, that this amount was a loss to SIT, and so it appears that the district court had no basis for ordering this amount as restitution. Consequently, we accept the government‘s concession on this issue and modify the restitution order to reduce Eaden‘s financial obligations by $189,709. See, e.g., United States v. Oliver, 873 F.3d 601, 609 (7th Cir. 2017) (directly modifying district court‘s restitution order).
Eaden also contends that the district court erred in ordering him to forfeit all the performance-based bonuses he was awarded from 2014 to 2016, which totaled $88,106.78. Civil forfeiture, like restitution, is authorized by statute and is limited to “the gross receipts obtained [by mail or wire fraud].”
3
Eaden asks us to further reduce his forfeiture and restitution amounts as they relate to his bonus payments, which in his view BKD attributed excessively to fraud. The size оf Eaden‘s bonuses depended, in part, on his store‘s net profits; BKD determined that, because of Eaden‘s fraud, those profits had been inflated by $332,803.68, netting Eaden $47,288.97 in unearned bonuses. But Eaden contends that this calculation is an overestimate because it takes into account profits that, although deemed fraudulent by BKD, were not attributable to the overbilling scheme for which he was convicted, instead being associated with other schemes for which he was either acquitted or never charged. In support, Eaden points to other portions of BKD‘s forensic accounting report, which
We‘ve said that an error is plain where it is “clear” or “obviоus.” United States v. Burns, 843 F.3d 679, 687 (7th Cir. 2016). Yet this definition leaves unanswered a key question: Plain to whom? The answer, although not always explicit in our precedents, is that the error must be plain to us on appeal, rather than to those involved in the trial process. See id. (“We have never required ... that the error be obvious to the district court[.]“) This answer has important implications in this case. As an appellate cоurt, legal errors are in our wheelhouse, and so we‘ve reversed where an error was “obvious under the law” although not obvious below. Id.; see also United States v. Jenkins, 772 F.3d 1092, 1098 (7th Cir. 2014) (plain error where district court, relying on PSR, calculated Guidelines sentencing range by factoring in prior conviction under statute that had been deemed unconstitutional). Factual errors, by contrast, tend to be more obscure on appeаl. See, e.g., Gall v. United States, 552 U.S. 38, 51–52 (2007) (noting that the district judge “is in a superior position to find facts and judge their import [for sentencing purposes]“, and that district courts “have an institutional advantage over appellate courts in making these sorts of determinations“). For that reason, we‘ve held that an error is not plain where it is “subtle, arcane, debatable, or factually complicated.” United States v. Pierson, 925 F.3d 913, 922 (7th Cir. 2019), cert. granted, judgment vacated on other grounds, 140 S. Ct. 1291 (2020).
4
Last, Eaden argues that the district court erred in ordering him to repay the entire $7,676 he obtained from the Bridgestone rewards program. In making this argument, Eaden once again attacks the testimony of Don Anderson, who indicated that he reviewed more than 200 of Eaden‘s submissions to the Bridgestone rewards program and found that, of those, more than 75 percent contained inaccurаcies. Eaden faults this testimony in two respects: first because Anderson testified that “more than” 75 percent of the entries contained inaccuracies, rather than 100 percent, and second because Anderson reviewed only roughly half of Eaden‘s submissions to the rewards program. As Eaden sees it, this evidence is too thin to deem all of his rewards restitution-worthy.
* * *
We accept the government‘s concessions on Eaden‘s restitution and civil forfeiture arguments, and so modify the district court‘s judgment, reducing those obligations by $189,709 and $40,817.81, respectively. The judgment is otherwise AFFIRMED as modified.