United States v. Corrigan

912 F.3d 422 (2019) United States Court of Appeals for the Seventh Circuit 2019-01-03

criminal appeal from bench-trial conviction on four counts of wire fraud (18 U.S.C. ยง 1343); challenges to the indictment (unpreserved, plain error), sufficiency of the evidence and restitution rejected; affirmed (result: claimant-won)

Facts

  1. 1 Scheme or artifice to defraud satisfied proved
    By March 2009, United Healthcare had terminated ECS's policy for non-payment and there were no other looming deadlines that required a cash infusion.
  2. 1 Scheme or artifice to defraud satisfied proved
    Instead the funds were spent by Corrigan personally to, inter alia , travel and support his girlfriend.
  3. 1 Scheme or artifice to defraud satisfied proved
    Documents showed Corrigan misled investors as to where the funds would be sent, the Stock Subscription Agreements indicated that the funds would be sent to ECS, but Corrigan provided his personal account number instead.
  4. 1 Scheme or artifice to defraud satisfied proved
    In sum, there was ample evidence to support the district judge's conclusion that Corrigan had perpetrated a scheme to defraud investors.
  5. 3 Material deception satisfied proved
    At trial, Duncan and Neilitz testified that Corrigan solicited the second round of investments by representing that it was necessary to cover ECS's health insurance costs; that if he was unable to raise the required revenue before the end of March 2009, its health insurer would cancel its policy; and that if Neilitz and Rawah Partners, respectively, were not interested he would have to solicit funds from other investors.
  6. 3 Material deception satisfied proved
    But, "a false statement is material if it has a natural tendency to influence or [is] capable of influencing, the decision of the decisionmaking body to which it was addressed."
  7. 3 Material deception satisfied proved
    Here, Corrigan explicitly told the investors that the funds were necessary to cover the impending health insurance premiums and that if ECS lost its insurance coverage it would jeopardize the then-pending sale.
  8. 3 Material deception satisfied proved
    Accordingly, we agree with the district court; the evidence at trial supports the conclusion that Corrigan made material misrepresentations about the need for investor funds and what those funds would be used for.