ILNews

7th Circuit halts fraud restitution for ‘reckless’ Bank of America

Back to TopCommentsE-mailPrintBookmark and Share

Editor's note: This article has been corrected. In reversing a restitution order for Bank of America, the 7th Circuit urged a fine against the criminal defendants in this case.

Three defendants convicted of wire fraud in the purchase of 16 properties in Gary were clearly guilty of the crimes, but the 7th Circuit Court of Appeals Friday threw out a restitution order in favor of Bank of America and urged the district court in Hammond to consider fining the defendants instead.

“The bank was reckless,” Judge Richard Posner wrote in United States of America v. Minas Litos and Adrian and Daniela Tartareanu, 16-1384, -1385, 2248, 2249, 2330. The defendants were convicted of wire fraud, and the 7th Circuit affirmed those convictions, but reversed an order that they pay the bank restitution of $893,015, the amount it claimed was lost in the scheme.

The defendants were convicted on wire fraud charges filed in 2012 for a scheme in which home buyers were provided down payment kickbacks from the defendants after mortgages were secured on loan applications that provided false information. The defendants then walked away with the purchase price of the properties. But the 7th Circuit wrote Bank of America didn’t have clean hands, and there was little evidence that the bank would not have made the loans had it know the true source of the down payments — the defendants, not the buyers.   

Posner detailed the bank’s dubious mortgage-lending history during the real-estate bubble leading up to the Great Recession, noting for instance one woman to whom the bank issued six mortgages in a 10-day period. Posner noted that District Judge Philip Simon said during sentencing in this case, “Bank of America knew [what] was going on. They’re playing this dance and papering it. Everybody knows it is a sham because no one is assuming any risk. So what’s wrong with saying they’re [of] equal culpability?”

“Indeed,” Posner continued, “and we are puzzled that after saying this the judge awarded Bank of America restitution — and in the exact amount that the government had sought.”

“Restitution for a reckless bank? A dubious remedy indeed — which is not to say that the defendants should be allowed to retain the $893,015. That is stolen money,” he wrote. “We don’t understand why the district judge, given his skepticism concerning the entitlement of Bank of America to an award for its facilitating a massive fraud, did not levy on the defendants a fine of not more than the greater of twice the gross gain or the gross loss caused by an offense from which any of  $893,015. 18  U.S.C. § 3571(d) authorizes a fine of not more than the greater of twice the gross gain or the gross loss caused by an offense from which any person either derives pecuniary gain or suffers pecuniary loss.”

The 7th Circuit vacated the restitution order as to the Tartareanus and remanded for full resentencing with the alternative remedy of a heavy fine on the defendants. The panel remanded Litos’ sentencing for the limited purpose of reconsideration of the restitution order with direction to consider whether a fine is possible.
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. I will be filing a lawsuit in Tippecanoe County for so many violations in a case we became involved in, including failure to contact through mail, Violation of 4th Amendment rights, Violation of Civil Rights, and so on. Even the Indiana Ombudsmen Bureau found violations and I have now received the report and they are demanding further training in Tippecanoe County. I am going to make sure they follow through!!!

  2. ?????????? ???? ?????? ??? ?????? ???????! ??????? ??? ??? ?? ???????? ???? ?????? ????????? ??? ??????? ????? ??????? ? ????? ?? ??????, ?? ???????, ?? ???????, ?? ??????, ?? ???? ? ?? ????? ??????? ??? ????? ??????. ???? ???????? ????????????? ??? ??????? ?????? - ??? ?? ????? ?????? ????????. ???????? ????? ????? ???????, ?????????? ????????? ????????, ????????? >>>> ?????? ????? http://xurl.es/PR0DAWEZ

  3. I thought the purpose of the criminal justice center was to consolidate all the criminal services and get them out of downtown to clean up the place. Why in the HELL are the civil courts moving? What a burden to all the downtown law firms. Now we all get to work downtown, but then have to get in a car and COMMUTE to court? Who approved this idiocy?

  4. I drive through the neighborhood whenever I go to the City-County Building or the Federal Courthouse. The surrounding streets are all two way with only two lanes of traffic, and traffic is very slow during rush hour. I hope that enough money has been allocated to allow for improvement of the surrounding streets.

  5. I have had an ongoing custody case for 6 yrs. I should have been the sole legal custodial parent but was a victim of a vindictive ex and the system biasedly supported him. He is an alcoholic and doesn't even have a license for two yrs now after his 2nd DUI. Fast frwd 6 yrs later my kids are suffering poor nutritional health, psychological issues, failing in school, have NO MD and the GAL could care less, DCS doesn't care. The child isn't getting his ADHD med he needs and will not succeed in life living this way. NO one will HELP our family.I tried for over 6 yrs. The judge called me an idiot for not knowing how to enter evidence and the last hearing was 8 mths ago. That in itself is unjust! The kids want to be with their Mother! They are being alienated from her and fed lies by their Father! I was hit in a car accident 3 yrs ago and am declared handicapped myself. Poor poor way to treat the indigent in Indiana!

ADVERTISEMENT