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United States v. Terzakis

United States Court of Appeals, Seventh Circuit

April 27, 2017

United States of America, Plaintiff-Appellee,
v.
John D. Terzakis, Defendant-Appellant.

          Argued April 5, 2017

         Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 13 CR 339 - Rebecca R. Pallmeyer, Judge.

          Before Wood, Chief Judge, and Flaum and Hamilton, Circuit Judges.

          FLAUM, CIRCUIT JUDGE.

         John D. Terzakis was indicted for transporting stolen goods. After the government conceded that its key witness would be unavailable to testify at trial, it moved to dismiss the case. Terzakis then filed a motion under the Hyde Amendment seeking attorney's fees, which the district court denied. For the following reasons, we affirm.

         I. Background

         In the early 1990s, Terzakis met Berenice Ventrella, the trustee for a family trust with extensive real-estate holdings. Terzakis ran a company that managed and developed real estate and eventually managed some of Berenice's property. In March 2007, Berenice and Terzakis created an LLC to hold one of Berenice's properties in Buffalo Grove, Illinois. The LLC purchased the property from Berenice using a $15 million loan.

         Shortly before her death in January 2008, Berenice appointed her son Nick, who had Asperger syndrome, to be the successor trustee of the Ventrella trust. Soon after Berenice passed away, Terzakis opened an account in the name of the "Estate of Berenice Ventrella." Terzakis allegedly took Nick to various banks and had him transfer funds from accounts that had belonged to Berenice into this new estate account. Subsequently, between March and September 2008, Terzakis transferred about $4.2 million from the estate account to the account for the LLC he had opened with Berenice and which he now controlled. Terzakis then transferred at least $3.9 million from the LLC account to different personal accounts of his that were unrelated to the Ventrella family. He later proffered that this money was a loan from Berenice's estate for "working capital"; however, the Buffalo Grove property held by the LLC was never developed, and there are no documents memorializing a loan from Berenice's estate to Terzakis.

         Thereafter, the government investigated these transfers. Law enforcement officers reviewed Terzakis's ledgers detailing some of the above transactions and other records from various banks and members of the Ventrella family. However, Nick was the only witness with personal knowledge of Terzakis's allegedly fraudulent statements about the purpose of the transfers.

         During the investigation, Nick's relatives disclosed to the government an August 2009 psychological report authored by Dr. Karen F. Levin regarding Nick. It noted that Nick "had a very poor grasp of time/' that he "had difficulty with simple questions about the present/' and that he showed "a lack of organized thought." The report also remarked on Nick's "excellent recall of very old events with fine details of numbers/' and that "[h]e was very good with calculations." Dr. Levin ultimately opined that Nick "clearly has a longstanding cognitive disability that would likely fall upon the autism spectrum/' and needed assistance managing his finances and other aspects of life. Between 2010 and 2013, the government held several interviews with Nick and questioned him about the bank transfers. Nick told the government that Terzakis had expressed to Nick that the transfers were for developing the Buffalo Grove property held by Terzakis's LLC.

         In April 2013, the government brought the case before a grand jury. Nick did not testify at the proceeding; however, the indictment indicates that the government informed the grand jury that Nick had cognitive problems. On April 25, 2013, several days before the limitations period was to lapse for four of the underlying transfers, the grand jury returned a five-count indictment for transmitting stolen money, in violation of 18 U.S.C. § 2314. The case proceeded without resolution for two years. Then, in October 2015, the government learned that Nick had been diagnosed with brain cancer, with a prognosis of six months. The government informed Terzakis of the diagnosis, and the parties resumed plea negotiations. On December 23, 2015, Terzakis rejected the government's plea offer and demanded a speedy trial. On January 8, 2016, the government moved to dismiss the case, citing Nick's unavailability, and the court entered a dismissal order later that day. Nick passed away several months later.

         On February 5, 2016, Terzakis moved to recover attorney fees under the Hyde Amendment, Pub. L. No. 105-119, § 617, 111 Stat. 2440, 2519 (1997) (reprinted in 18 U.S.C. § 3006A, historical and statutory notes). On August 19, the district court denied Terzakis' motion. This appeal followed.

         II. Discussion

         This Court has not explicitly stated the standard of review for appeals of Hyde Amendment cases. All other circuits to address the question have reviewed the district courts' decisions for abuses of discretion. See United States v. Manzo,712 F.3d 805, 809 (3d Cir. 2013) (collecting cases). We agree and review the district court's decision on Terzakis's motion for attorney's fees for abuse of discretion. A district court abuses its discretion by applying an incorrect legal standard, or by reaching an ...


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