7th Circuit modifies restitution, forfeiture for fraudster

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An Indiana tire store manager who defrauded his company out of hundreds of thousands of dollars has been granted some financial relief but will not get the new trial he’d hoped for.

From 2002 to 2016, Joshua Eaden worked for Best One Tire, a tire store owned by Southern Indiana Tire, Incorporated. Eaden eventually became Best One’s manager, but from 2014 to 2016, he abused that position by defrauding SIT and its business partners out of more than $200,000.

The fraud took two forms. First, Eaden falsely inflated the profits at his store, billing SIT’s largest customer, Gibson County Coal, for products it did not purchase. Second, Eaden submitted false claims to a rewards program sponsored by tire manufacturer Bridgestone Firestone, through which Best One’s employees could claim gift cards and other prizes for selling Bridgestone tires.

In early 2016, a community member’s tip alerted the CEO of SIT to Eaden’s conduct.

An internal investigation, done by the accounting forensic firm BKD, produced a report concluding Eaden had billed Gibson County Coal for more than $180,000 in never‐received products, netting Eaden more than $47,000 in unearned bonuses. Additionally, SIT forwarded Eaden’s Bridgestone rewards program records to Bridgestone representative Don Anderson, who upon review found that more than 75% of Eaden’s submitted claims contained false information.

Eaden faced a 23‐count indictment alleging multiple fraudulent schemes.

Although he was eventually acquitted on six counts, the jury convicted him of the remaining 17. He was sentenced to almost four years in prison, three years of supervised release and ordered to pay restitution in the amount of $244,673. He also had to forfeit his bonuses from 2014 to 2016, which totaled $88,106.78.

On appeal, Eaden argued he was entitled to a new trial for two reasons. First, he contended that the Southern Indiana District Court deprived him of a fair trial by making prejudicial comments to prospective jurors during voir dire. Second, he argued the district court wrongly admitted a lay witness’s opinion testimony regarding a subset of his fraud charges.

If not granted a new trial, Eaden sought at minimum a reduction of his forfeiture and restitution obligations, which he contended were miscalculated.

While the 7th Circuit ruled against Eaden on most his claims, the government conceded that two of his arguments merited relief, so the court reduced his financial obligation on those claims.

“Eaden argues — and the government concedes — that the $189,709 (in restitution) was not a loss to SIT,” Judge Thomas Kirsch wrote. “Instead, SIT merely repaid unearned funds that it had obtained from Gibson County Coal solely by reason of Eaden’s fraud. The government has never argued, either at trial or on appeal, that this amount was a loss to SIT, and so it appears that the district court had no basis for ordering this amount as restitution. Consequently, we accept the government’s concession on this issue and modify the restitution order to reduce Eaden’s financial obligations by $189,709.

“… BKD’s forensic accounting report attributed $47,288.97 in bonuses to Eaden’s overbilling scheme yet said nothing about the remaining $40,817.81,” Kirsch continued. “Because none of the evidence presented at trial or sentencing attacked the validity of Eaden’s bonuses beyond the $47,288.97 indicated in BKD’s report, the government concedes that Eaden’s forfeiture obligation should be reduced by $40,817.81. As with Eaden’s restitution arguments, we accept the government’s concession on this point and reduce Eaden’s forfeiture order by $40,817.8.”

The case is United States of America v. Joshua W. Eaden, 20‐2763.

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