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Government’s legal error requires another look at convictions

November 13, 2014

The United States government conceded on appeal that its treatment of vehicle titles and license plates as “property” from the perspective of Indiana in order to convict defendants of conspiracy to commit mail or wire fraud was a legal error. The 7th Circuit Court of Appeals reversed the convictions but did not foreclose the possibility of retrial.

The federal prosecutor in South Bend brought charges against Evelyn Rivera Borrero and four other defendants alleging their business of helping people use a federal employer identification number to obtain vehicle titles and license plates in Indiana defrauded the state. The defendants were charged with violating federal law by shielding unauthorized aliens from detection and encouraging them to reside in the United States. They were also charged with conspiring to commit mail or wire fraud.

For a flat fee, the defendants created business entities in their customers’ real names and submitted that information to the Bureau of Motor Vehicles to obtain titles and plates.

The defendants were all convicted and imprisoned, with sentences ranging from 24 months to 84 months.

At trial, the government did not emphasize Indiana’s financial loss to prove the fraud, but it instead argued that the titles and license plates are state property. The jury instructions allowed the jury to convict on the theory that title papers and licenses are “property” from the state’s perspective, with which the state parted because of false statements about insurance. The instructions also allowed the jury to convict on the theory that by misstating the selling prices, the defendants defrauded Indiana out of money that should have been paid as sales tax.

Cleveland v. United States, 531 U.S. 12 (2000), holds that state and municipal licenses and similar documents are not “property” in the hands of the public agency, so if the jury convicted the defendants of fraud based on the first theory, then defendants are entitled to acquittal. But if it was based on the second grounds, then the judgments should be confirmed, Judge Frank Easterbrook wrote in United States of America v. Evelyn Rivera Borrero, et al., 13-3430, 13-3468, 13-3516, 13-3517, 13-3559.

But the jury instructions didn’t require the jury to choose among the theories of culpability, so the judges remanded the case to the District Court for a new trial if the prosecutor so chooses.

As to the first count, Easterbrook pointed out multiple problems with the charges, not the least of which is that the prosecutor didn’t prove that the defendants knew their clients to be unauthorized aliens or recklessly disregarded that fact. He then went on to question what else would qualify as violating federal law if making it easier to own a car is enough to induce or encourage an alien to reside in the U.S. Would it be a grocery store owner who sells food to someone he or she knows who lacks a visa but needs food, or a doctor who treats a person who does not have a visa?

“These convictions can be sustained only if the provision of any sufficiently valuable service – food, medicine, transportation – to an unauthorized alien is a felony because it helps the alien ‘reside’ in the United States,” Easterbrook wrote. “That would take the statue beyond a sensible understanding; the Rule of Lenity, if nothing else, would forbid it.”

The judges ordered the lower court to enter a judgment of acquittal on this count.

 

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