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United States v. Stochel

United States District Court, N.D. Indiana, Hammond Division

January 12, 2018

UNITED STATES OF AMERICA
v.
ROBERT E. STOCHEL

          OPINION AND ORDER

          JAMES T. MOODY UNITED STATES JUDGE

         Defendant Robert E. Stochel has filed a motion requesting that this court order him released pending his appeal. (DE # 170.) The Government filed a response in opposition. (DE # 173.) Defendant has not filed a reply. For the reasons that follow, his motion is denied.

         I. BACKGROUND

         Defendant was an attorney that was appointed as a receiver over a corporation, Tip Top Supermarket, Inc., in 1999. (DE #1 at ¶¶ 1-3.) The Government alleged that defendant opened a bank account for the receivership, and devised a scheme to defraud the receivership beneficiaries of monies. (DE # 1 at ¶¶ 4, 7.) The Government further alleged that defendant withdrew $331, 840 from the receivership estate for his own personal use and benefit until 2006, and prevented the parties and counsel in Tip Top litigation from learning of his scheme by lulling them into a false sense of security as to whether the account had sufficient funds. (DE # 1 at ¶ 8.)

         Eventually, the Tip Top litigation court appointed an accountant to audit the financial records. In response, defendant filed a “Receiver's Trial Rule 60 Motion for Relief, ” stating that untimely notice of the order prevented his compliance, but he assured the court that there were adequate funds to pay for the audit. Of course, this statement was false, and that Rule 60 motion, which was mailed March 13, 2012, formed the basis of a later charge of mail fraud under 18 U.S.C. § 1341. The indictment was filed on March 16, 2016. (DE # 1.)

         On May 3, 2017, after a three-day trial over which Judge Rudy Lozano presided, a jury returned a verdict of guilty against defendant. (DE # 140.) On December 5, 2017, defendant was sentenced by the undersigned to 24 months imprisonment plus 1 year of supervised release, and he was ordered to pay $229, 091.97 in restitution. (DE ## 163, 165.) The court ordered defendant to begin serving his term of imprisonment no later than January 19, 2018. (DE # 163.) Defendant appealed (DE # 166), and he now moves for release from custody pending the outcome of that appeal. (DE # 170.)

         II. LEGAL STANDARD

         Pursuant to 18 U.S.C. § 3143, a defendant can be released on bond pending appeal if a judicial officer finds: (1) by clear and convincing evidence that the defendant is not likely to flee or pose a danger to the community, and (2) that the appeal is “not for the purpose of delay and raises a substantial question of law or fact likely to result in” i) reversal, ii) an order for a new trial, iii) a sentence that does not include a term of imprisonment, or iv) “a reduced sentence to a term of imprisonment less than the total of the time already served plus the expected duration of the appeal process.” 18 U.S.C. § 3134(b).

         Under Seventh Circuit case law interpreting § 3143(b), a “substantial question” is one that can be described as “a toss up or nearly so, ” “a close question, ” or “one that could be decided the other way.” United States v. Shoffner, 791 F.2d 586, 589 (7th Cir. 1986); United States v. Greenberg, 772 F.2d 340, 341 (7th Cir. 1985); United States v. Inks, 670 F.Supp. 829, 830 (N.D. Ill. 1987). If the court finds that an argument raises a substantial question it must then decide whether the question is one that is “so integral to the merits” that if it were decided in the defendant's favor, the appellate court is more likely than not to reverse the conviction or order a new trial. United States v. Bilanzich, 771 F.2d 292, 298-99 (7th Cir. 1985) (“whether a question is ‘substantial' defines the level of merit required in the question presented and ‘likely to result in reversal or an order for a new trial' defines the type of question that must be presented”) (emphasis in original) (internal quotations omitted). In other words, this court does not have to find it likely that it has committed error; instead the question is how significant the substantial question (if one is raised) is to the ultimate disposition of the appeal. Id. at 299.

         III. ANALYSIS

         The Government does not argue that defendant presents a flight risk or a danger to the community. Indeed, defendant was not convicted of a violent crime, he has no criminal history, and there is ample evidence of his strong ties to his family and to the community. There has also not been any suggestion that defendant's appeal is for the purpose of delay. Accordingly, the focus of the analysis is whether defendant shows that his appeal will raise a substantial question of law or fact that is likely to result in a new trial, reversal, or reduced sentence. The court must first decide if a proposed argument raises a “substantial question” of law or fact.

         Defendant's primary argument is one he has raised numerous times throughout this case. Specifically, he argues that the mailing of the Rule 60 motion on March 13, 2012, cannot be punished due to the statute of limitations. The statute of limitations for mail fraud is five years, and begins running on the date of the mailing. 18 U.S.C. § 3282(a); United States v. Tadros, 310 F.3d 999, 1006 (7th Cir. 2002). Here, as Judge Lozano has explained numerous times, there is no statute of limitations issue because the mailing that provided the basis for the mail fraud charge occurred on March 13, 2012, within five years of the indictment, which was filed on March 16, 2016. See United States of America v. McGowan, No. 03 CR 350, 2004 WL 909745, at *1-2 (N.D. Ill. Apr. 23, 2004) (discussing similar situation, wire fraud).

         Defendant's real argument is that too much time lapsed between defendant's last withdrawal in 2006 and when defendant mailed the Rule 60 motion in 2012. This is not a statute of limitations argument at all; rather this is an argument that the indicted conduct was not part of the alleged scheme. However, legally speaking, a scheme to defraud includes actions that constitute lulling- that is, acts performed to provide victims with a false sense of security. United States v. Bach, 172 F.3d 520, 522 (7th Cir. 1999); United States v. Brocksmith, 991 F.2d 1363, 1367-68 (7th Cir. 1993) (“Use of the mails to lull victims into a false sense of security, we have held, violates the mail fraud statute, even if it occurs after the money has been fraudulently obtained.”).

         In this case, a jury could have (and apparently did) determine that defendant's March 13, 2012, mailing of the Rule 60 motion constituted lulling and was thus part of the original scheme. Thus, no substantial question is presented by defendant with regard to the timing of the indictment or the lapse of time between defendant's initial withdrawal of funds and his eventual filing of the Rule 60 motion. Because this proposed issue for appeal fails to raise a substantial question, ...


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