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Disbarred attorney loses mail fraud conviction appeal

August 28, 2018

A disbarred Indiana attorney who was convicted of mail fraud and sentenced to two years in federal prison after stealing more than $330,000 from a grocery store receivership has lost his appeal of both his conviction and sentence.

A 7th Circuit Court of Appeals panel unanimously upheld Robert Stochel’s conviction and sentence stemming from his mishandling of funds for the receivership of Tip Top Supermarkets, Inc., on Monday in United States of America v. Robert E. Stochel, 17-3576. The former Lake County attorney was indicted in 2016 after a court-ordered independent audit uncovered that he had drained the receivership of $331,840 for personal use.

Stochel had been appointed successor receiver for Tip Top Supermarkets in 2000 after brothers and co-owners Maurice and Alan Schwarz ended their business collaboration in 1987. By March 2004, the receivership had a zero balance, so Stochel began transferring outside funds into the receivership to cover its expenses.

Stochel also continuously lied to the court about the status of the receivership, going so far as to file a false accounting in September 2010 that claimed the receivership had nearly $230,000 in assets. He also requested $93,000 as compensation for his service, a request the court granted.

Then, when the court ordered the independent audit in November 2011 and ordered Stochel to turn over all receivership files, he falsely claimed the receivership had $8,000 to pay the auditor and requested under Trial Rule 60(B) more time to assemble the files. The judge partially granted the order, but later removed Stochel as receiver when he continued to fail to comply with court orders.

Meanwhile, the Indiana Supreme Court suspended Stochel in 2015 and eventually disbarred him. Additionally, Tip Top owners Maurice and Alan Schwarz began to raise questions about why Stochel had not been criminally charged for his fraudulent conduct, and he was eventually convicted in federal court of mail fraud in 2017.

Indiana Northern District Judge James T. Moody sentenced Stochel to two years in December 2017 after denying credit for acceptance of responsibility, imposing a two-level enhancement for violating a judicial order and calculating the loss amount at $331,840, the full amount that was drained. Stochel challenged those three sentencing provisions on appeal, but the 7th Circuit upheld his sentence in all respects.

After finding the indictment against Stochel was timely filed because his Trial Rule 60(B) motion was an attempt “to delay the investigation and discovery of the fraud,” Judge Diane Sykes said Stochel was not entitled to an acceptance-of-responsibility credit because of his challenge to the argument that his Trial Rule 60(B) motion was part of his fraudulent scheme.

“Whether the use of the mails was ‘in furtherance of the scheme’ is the third element of the crime,” Sykes wrote. “… Stochel’s decision to pick that fight is fatal to his claim for acceptance-of-responsibility credit; defendants don’t get credit for two-thirds of a contrite heart.”

The court then found the $216,000 Stochel paid into the receivership were not “legitimate payments” that could reduce his loss amount because those funds were paid only to cover his tracks. Finally, the panel determined that because Stochel failed to “report his actions to the (c)ourt” and “remain subject to the further order and directions of the (c)ourt” when he drained the receivership, the two-point offense level enhancement was appropriate.

“If nothing else, that required Stochel to notify the court when he withdrew funds from the receivership,” Sykes said. “(H)e obviously did not comply.”

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