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United States v. DeMarco

United States Court of Appeals, Seventh Circuit

April 24, 2015

UNITED STATES OF AMERICA, Plaintiff-Appellee,
v.
MICHAEL DEMARCO, Defendant-Appellant

Argued December 4, 2014

Page 389

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 12 CR 389 -- John W. Darrah, Judge.

For United States of America, Plaintiff - Appellee: Naana A. N. Frimpong, Attorney, Office of The United States Attorney, Chicago, IL.

For Michael Demarco, Defendant - Appellant: Claire Hollis Forster, Attorney, Chicago, IL.

Before BAUER, RIPPLE, and SYKES, Circuit Judges.

OPINION

Page 390

Bauer, Circuit Judge.

A jury convicted defendant-appellant, Michael DeMarco (" DeMarco" ), of one count of wire fraud, see 18 U.S.C. § 1343, and the district court sentenced him to

Page 391

forty-eight months' imprisonment. DeMarco appeals his conviction, arguing the district court made two erroneous evidentiary rulings which substantially prejudiced his defense. He also contests his sentence, claiming that the district court erred by applying a two-level increase to his base offense level for both abuse of a position of trust, see U.S.S.G. § 3B1.3, and the use of sophisticated means, see U.S.S.G. § 2B1.1(b)(1). For the reasons set forth below, we affirm.

I. BACKGROUND[1]

In January 2007, Michael Suarez (" Suarez" ), a seventy-five year old widower from Mexico, visited a JPMorgan Chase Bank located in Vernon Hills, Illinois, to open a checking account. Michael DeMarco, the bank branch manager and assistant vice president, approached Suarez and assisted him in opening the account. DeMarco and Suarez eventually became friends. They spoke with one another about personal matters every week or so when Suarez would go to the bank to withdraw cash. During one of these conversations, Suarez told DeMarco that he was trying to sell his three acre property in Lincolnshire, Illinois, then listed with Coldwell Banker for $1.8 million. DeMarco told Suarez that he was " in charge of a lot of very wealthy people's accounts" and that he could help Suarez sell the property.

DeMarco convinced Suarez to break his contract with Coldwell Banker, indicating that he had a buyer for the property. DeMarco told Suarez that he needed a home equity line of credit (" HELOC" ) on the property in order to complete the sale. After unsuccessfully submitting HELOC applications with Chase Bank and Wells Fargo, DeMarco obtained a HELOC, under Suarez's name and secured by Suarez's property, from Bank of America, in the amount of $250,000.

On June 8, 2007, DeMarco joined Suarez at a Bank of America branch located in Buffalo Grove, Illinois, to close on the HELOC. DeMarco provided the Bank of America representative who handled the closing, Dhara Patel, with his account details and requested that the $250,000 in HELOC proceeds be deposited directly into his personal account at Chase Bank. DeMarco also had his work address (325 Milwaukee Avenue, Vernon Hills, Illinois) listed as the " home address" of the borrower, even though Suarez was listed as the " borrower" on the HELOC.

On June 21, 2007, the HELOC proceeds were transferred via wire into DeMarco's personal account at Chase Bank. However, because the account holder (DeMarco) did not match the name of the borrower on the HELOC (Suarez), the wire transfer was reversed the following day. DeMarco then caused Bank of America to transfer the HELOC proceeds into a joint checking account, which he opened in both his and Suarez's name and which listed DeMarco's home address as the address of record on the account. After the HELOC proceeds were transferred to the joint account on June 27, 2007, DeMarco withdrew $245,000 of the $250,000 from the joint account and deposited the funds into his personal account at Chase Bank. After Chase Bank terminated his employment on August 22, 2007, DeMarco transferred the funds into two accounts he opened at National City Bank.

DeMarco spent the vast majority of the HELOC proceeds to pay off his credit card debt, make a down-payment on his home and on a Lexus SUV, pay off his two cars (a Mazda and Mercedes), finish his basement, and go on vacations to Hawaii,

Page 392

Mexico, and the Wisconsin Dells. He used a small fraction of the money to pay off various debts that Suarez had incurred.

In late July or early August 2007, Suarez went to a Chase Bank branch located in Libertyville, Illinois, to review copies of his Chase checking account statement. Upon doing so, he identified various irregularities with respect to his statement for July 2007. He brought this to the attention of a Libertyville Chase banker and was informed that he may have been the victim of some sort of fraud. Suarez then contacted Federal Bureau of Investigation (" FBI" ) Special Agent Daniel McCune to discuss his dealings with DeMarco. After speaking with Suarez, Agent McCune launched an investigation; as a result of this investigation, an ...


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