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7th Circuit affirms lower court in elaborate mortgage fraud case

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The 7th Circuit Court of Appeals has affirmed a District Court’s conviction and sentence for a man who defrauded buyers and lenders in northern Indiana.

In United States of America v. Michael Sheneman, No. 11-3161, Michael Sheneman and his son executed a scheme in which they sold more than 60 homes to four buyers with no real estate experience, two of whom were not United States citizens. The Shenemans falsified mortgage documents, misrepresenting citizenship status, income and employment, and forging signatures. They also deposited large sums of money into the buyers’ bank accounts to mislead lenders about the buyers’ assets.

Sheneman was subsequently convicted of four counts of wire fraud and sentenced to 97 months imprisonment. On appeal, he challenged the sufficiency of the evidence supporting his conviction, as well as the District Court’s application of two sentencing enhancements.

The 7th Circuit rejected Sheneman’s claim that he was an unwitting participant in the scheme, holding that he played a crucial role in every aspect of its execution from beginning to end.

Sheneman had argued that the District Court erred in applying a two-level enhancement because the scheme did not involve the use of sophisticated means. But the 7th Circuit held that the father and son used their knowledge of the real estate market and lending industry to avoid detection for several years and used other tactics to mislead buyers and lenders.

Sheneman also protested the sentence enhancements for a loss of more than $1 million and gaining more than $1 million in gross receipts from a financial institution, claiming his son’s conduct alone is what caused those losses. But the 7th Circuit held that Sheneman was involved in the overall scheme that caused those losses and could have reasonably foreseen that fraudulent funding was being secured for unqualified buyers. It therefore affirmed the District Court in all regards.

 

 

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  2. The practitioners and judges who hail E-filing as the Saviour of the West need to contain their respective excitements. E-filing is federal court requires the practitioner to cram his motion practice into pigeonholes created by IT people. Compound motions or those seeking alternative relief are effectively barred, unless the practitioner wants to receive a tart note from some functionary admonishing about the "problem". E-filing is just another method by which courts and judges transfer their burden to practitioners, who are the really the only powerless components of the system. Of COURSE it is easier for the court to require all of its imput to conform to certain formats, but this imposition does NOT improve the quality of the practice of law and does NOT improve the ability of the practitioner to advocate for his client or to fashion pleadings that exactly conform to his client's best interests. And we should be very wary of the disingenuous pablum about the costs. The courts will find a way to stick it to the practitioner. Lake County is a VERY good example of this rapaciousness. Any one who does not believe this is invited to review the various special fees that system imposes upon practitioners- as practitioners- and upon each case ON TOP of the court costs normal in every case manually filed. Jurisprudence according to Aldous Huxley.

  3. Any attorneys who practice in federal court should be able to say the same as I can ... efiling is great. I have been doing it in fed court since it started way back. Pacer has its drawbacks, but the ability to hit an e-docket and pull up anything and everything onscreen is a huge plus for a litigator, eps the sole practitioner, who lacks a filing clerk and the paralegal support of large firms. Were I an Indiana attorney I would welcome this great step forward.

  4. Can we get full disclosure on lobbyist's payments to legislatures such as Mr Buck? AS long as there are idiots that are disrespectful of neighbors and intent on shooting fireworks every night, some kind of regulations are needed.

  5. I am the mother of the child in this case. My silence on the matter was due to the fact that I filed, both in Illinois and Indiana, child support cases. I even filed supporting documentation with the Indiana family law court. Not sure whether this information was provided to the court of appeals or not. Wish the case was done before moving to Indiana, because no matter what, there is NO WAY the state of Illinois would have allowed an appeal on a child support case!

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