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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  1. I think the cops are doing a great job locking up criminals. The Murder rates in the inner cities are skyrocketing and you think that too any people are being incarcerated. Maybe we need to lock up more of them. We have the ACLU, BLM, NAACP, Civil right Division of the DOJ, the innocent Project etc. We have court system with an appeal process that can go on for years, with attorneys supplied by the government. I'm confused as to how that translates into the idea that the defendants are not being represented properly. Maybe the attorneys need to do more Pro-Bono work

  2. We do not have 10% of our population (which would mean about 32 million) incarcerated. It's closer to 2%.

  3. If a class action suit or other manner of retribution is possible, count me in. I have email and voicemail from the man. He colluded with opposing counsel, I am certain. My case was damaged so severely it nearly lost me everything and I am still paying dearly.

  4. There's probably a lot of blame that can be cast around for Indiana Tech's abysmal bar passage rate this last February. The folks who decided that Indiana, a state with roughly 16,000 to 18,000 attorneys, needs a fifth law school need to question the motives that drove their support of this project. Others, who have been "strong supporters" of the law school, should likewise ask themselves why they believe this institution should be supported. Is it because it fills some real need in the state? Or is it, instead, nothing more than a resume builder for those who teach there part-time? And others who make excuses for the students' poor performance, especially those who offer nothing more than conspiracy theories to back up their claims--who are they helping? What evidence do they have to support their posturing? Ultimately, though, like most everything in life, whether one succeeds or fails is entirely within one's own hands. At least one student from Indiana Tech proved this when he/she took and passed the February bar. A second Indiana Tech student proved this when they took the bar in another state and passed. As for the remaining 9 who took the bar and didn't pass (apparently, one of the students successfully appealed his/her original score), it's now up to them (and nobody else) to ensure that they pass on their second attempt. These folks should feel no shame; many currently successful practicing attorneys failed the bar exam on their first try. These same attorneys picked themselves up, dusted themselves off, and got back to the rigorous study needed to ensure they would pass on their second go 'round. This is what the Indiana Tech students who didn't pass the first time need to do. Of course, none of this answers such questions as whether Indiana Tech should be accredited by the ABA, whether the school should keep its doors open, or, most importantly, whether it should have even opened its doors in the first place. Those who promoted the idea of a fifth law school in Indiana need to do a lot of soul-searching regarding their decisions. These same people should never be allowed, again, to have a say about the future of legal education in this state or anywhere else. Indiana already has four law schools. That's probably one more than it really needs. But it's more than enough.

  5. This man Steve Hubbard goes on any online post or forum he can find and tries to push his company. He said court reporters would be obsolete a few years ago, yet here we are. How does he have time to search out every single post about court reporters and even spy in private court reporting forums if his company is so successful???? Dude, get a life. And back to what this post was about, I agree that some national firms cause a huge problem.