Petition for Writ of Certiorari — LeDonne v. United States
Supreme Court brief1994
Ask Donna
What actually matters in this document.
Text
Supreme Court, U.8.
FILED
94 760 OCT 24 199%
OFFICE OF THE CLERK
No.
IN THE
Supreme Court of the United States
OcTOBER TERM, 1994
JAMES P. LeDONNE,
Petitioner,
UNITED STATES OF AMERICA,
Respondent.
On Petition for a Writ of Certiorari to the United
States Court of Appeals for the Seventh Circuit
PETITION FOR A WRIT OF CERTIORARI
SHELLY B. KULWIN
Counsel of Record
MICHAEL C. BENNETT
KULWIN & ASSOCIATES
333 West Wacker Drive
Suite 2860
Chicago, Illinois 60606
(312) 641-0300
Attorneys for Petitioner
Midwest Law Printing Co., Chicago 60611, (312) 321-0220
i
QUESTION PRESENTED
1. Whether the Seventh Circuit substantially departed
from the long established “totality of the circumstances”
standard it developed pursuant to McCarthy v. United
States in holding that James P. LeDonne knowingly and
voluntarily pled guilty to complex bank and wire fraud
charges on the grounds that he had a college education,
read the charges, spoke with his attorney outside of court
about the charges and answered “‘yes” when asked if he
was guilty of the charged crimes, while acknowledging
that the district court, the government and his attorney
inaccurately explained those charges to LeDonne and that
LeDonne never expressed any understanding during the
plea proceedings of those charged crimes?
ii
TABLE OF CONTENTS
PAGE
QUESTION PRESENTED .................6. i
TABLE OF AUTHORITIES ................. iv
Ce EE hok bad ama dcsinecatacaieatas 1
FUR OCG IG. NER ARIS 2
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED ................... 2
ST ATs hk oie Raa ewes URNS ree Hee
1. FRPRPUETROT c3 pbs ce cenncescceunceat
2. FACTUAL AND PROCEDURAL BACK-
CERIO 040 Ch nd dues devennke see enauks 5
(a) District Court Proceedings .......... 5
(b) Motion to Withdraw ................ 8
(c) The Decision Below ................ 9
REASONS FOR GRANTING
THE WRIT OF CERTIORARI ............... 10
A.
THIS CASE RAISES IMPORTANT QUESTIONS
ABOUT WHETHER A TRIAL COURT CAN
FIND THAT A DEFENDANT TRULY ENTERED
A KNOWING AND VOLUNTARY PLEA OF
GUILTY WHERE HE ADMITTEDLY WAS MIS-
INFORMED ABOUT THE NATURE OF THE
CHARGES AGAINST HIM AND NEVER EX-
PRESSED ANY UNDERSTANDING OF THOSE
CHARGES AT THE PLEA PROCEEDING .... 11
B.
THIS CASE RAISES IMPORTANT QUESTIONS
ABOUT THE EXTENT TO WHICH A DISTRICT
COURT CAN RELY UPON OTHER INDICIA TO
ESTABLISH A DEFENDANT’S UNDERSTAND-
ING OF CHARGES TO WHICH HE IS PLEAD-
ING GUILTY WHERE HE WAS MISINFORMED
ABOUT THE NATURE OF THOSE CHARGES
AND NEVER TESTIFIED TO HIS UNDERSTAND-
ING OF THOSE CHARGES .................
1. Reliance Upon A Government Proffer ...
2. Mere Reading Of The Charging Information .
3. Out-Of Court Proceedings ...............
I oe Lin waste sdscuesces
a 5
iv
TABLE OF AUTHORITIES
CASES PAGE
Key v. United States, 806 F.2d 133 (7th Cir. 1986). 14, 15
McCarthy v. United States, 394 U.S. 459, 89 S.Ct.
1166, 22 L.Ed.2d 418 (1969) ............... passim
United States v. Boatright, 588 F.2d 471 (5th Cir.
NOTE iia sooo 050 ce EER I 12, 13
United States v. Darling, 766 F.2d 1095 (7th Cir.
QOD kiki s 0b sos 8 NR een xiees Gee 19, 20
United States v. Fountain, 777 F.2d 351 (7th Cir.
FOIE envi ss ie vaensseieeneeee 4, 14, 15, 19, 20
United States v. Ivory, 11 F.3d 1411 (7th Cir.
MOE os ci ss cok oceadneveaeiea eee 16, 17
United States v. Leung, 783 F.Supp. 357 (N.D.II1.
WIND bois ei ccondebsbueene ere ees 14, 15
United States v. Musa, 946 F.2d 1297 (7th Cir.
BOOED kn ks cence ees bai ees 4, 16, 17
United States v. Ray, 828 F.2d 399 (7th Cir. 1987) .
9:6 wceesbnid aes Fk I AURA 6 cc 4, 16, 17, 18, 19
United States v. Seybold, 979 F.2d 582 (7th Cir.
WOO ig evie cc eh acee koe s enna aan 4
United States v. Syal, 963 F.2d 900 (6th Cir. 1992) . 12, 13
United States v. Wetterlin, 583 F.2d 350 (7th Cir.
ITS)... ok kn cdc cads OE BK eee
STATUTES
18 USS 8. or Ss ew 2, 3,5
18 USS BI 6 ici ikea 3, 5, 12
Federal Rule of Criminal Procedure 11(cX1) ...... 2
Federal Rule of Criminal Procedure 32(d) ........ 2
IN THE
Supreme Court of the United States
OcTOBER TERM, 1994
JAMES P. LeDONNE,
Petitioner,
UNITED STATES OF AMERICA,
Respondent.
On Petition for a Writ of Certiorari to the United
States Court of Appeals for the Seventh Circuit
PETITION FOR A WRIT OF CERTIORARI
The Petitioner, James P. LeDonne, respectfully requests
that a writ of certiorari issue to review the judgment and
opinion of the United States Court of Appeals for the
Seventh Circuit.
OPINION BELOW
The opinion of the United States Court of Appeals for
the Seventh Circuit (App. A, infra, at A-1 to 22), United
States v. LeDonne, is reported at 21 F.3d 1418 (7th Cir.
1994).
sels
JURISDICTION
The judgment of the United States Court of Appeals
for the Seventh Circuit was entered on April 22, 1994.
A timely petition for rehearing was denied on July 25,
1994. (App. B, infra at B-1). This Court has jurisdiction
pursuant to 28 U.S.C. § 1254(1).
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED
Federal Rule of Criminal Procedure 11(c)(1)
(cX1) Before accepting a plea of guilty or nolo con-
tendere, the court must address the defendant per-
sonally in open court and inform him of, and deter-
mine that he understands the following:
(1) the nature of the charges to which the plea
is offered, the mandatory minimum penalty pro-
vided by law, if any, and the maximum possible
penalty provided by law, including the effect of
any special parole term and, when applicable,
that the court may also order the defendant to
make restitution to any victim of the offense. . .
Federal Rule of Criminal Procedure 32(d)
(d) If a motion for withdrawal of a plea of guilty or
nolo contendere is made before sentence is imposed,
imposition of sentence is suspended, or disposition is
had under 18 U.S.C. § 420&(c), the court may permit
withdrawal of the plea upon a showing by the defen-
dant of any fair and just reason. At any later time,
a plea may be set aside only on a direct appeal or
by motion under 28 U.S.C. § 2255.
18 U.S.C. § 1343
Whoever, having devised or intending to devise any
scheme or artifice to defraud, or for obtaining money
olin
or property by means of false or fraudulent pre-
tenses, representations, or promises, transmits or
causes to be transmitted by means of wire, radio, or
television communication in interstate or foreign com-
merce, any writings, signs, signals, pictures, or
sounds for the purpose of executing such scheme or
artifice, shall be fined. . .
18 U.S.C. § 1344
Whoever knowingly executes, or attempts to execute,
a scheme or artifice:
(1) to defraud a financial institution; or,
(2) to obtain any of the moneys, funds, credits,
assets, securities, or other property owned by,
or under the custody or control of, a financial
institution, by means of false or fraudulent pre-
tenses, representations, or promises; ... .
STATEMENT
1. INTRODUCTION
This Court has long held that a district court must not
accept a defendant’s guilty plea without first establishing
that he is knowingly and voluntarily entering that plea.
McCarthy v. United States, 394 U.S. 459, 89 S.Ct. 1166,
22 L.Ed.2d 418 (1969). A defendant lacking an understand-
ing of the charges to which he is acknowledging guilt can-
not make such a knowing and voluntary plea. Jd. District
courts therefore must follow specific procedures to ensure
the defendants’ understanding of the crimes to which they
are pleading guilty. Jd.; Fep. R. Crim. P. 11, 18 U.S.C.
This case requires this Court to ensure that the Seventh
Circuit is not allowed to eradicate the McCarthy and Rule
11 safeguards with a new, heretofore unknown, expansion
of the “totality of circumstances” standard it employs. Up
sulin
to now, the Seventh Circuit, following McCarthy’s lead,
held that a district court should thoroughly question a
defendant to expose the extent of his understanding of
the charged crimes before accepting his guilty plea. United
States v. Fountain, 777 F.2d 351 (7th Cir. 1985); also see
United States v. Seybold, 979 F.2d 582 (7th Cir. 1992).
The court also held that the adequacy of this question-
ing, however, could be judged within the context of the
“totality of the circumstances” surrounding the plea pro-
ceedings: the complexity of the charges, the defendant’s
ability to understand the charges, whether the defendant
is represented by counsel, the court’s colloquy with the
defendant and the evidence proffered by the government.
United States v. Ray, 828 F.2d 399, 405 (7th Cir. 1987);
accord, United States v. Musa, 946 F.2d 1297 (7th Cir.
1991). But, even under this broader standard, the plea
proceedings must establish both that the legal charges to
which the defendant was pleading guilty were accurately
explained and that the defendant, in his own words, ex-
pressed understanding of those charges. Id.
Here, the Seventh Circuit broke new ground, substan-
tially departing from even its own broad “totality” test,
in holding that James P. LeDonne (“LeDonne’”’) entered
a knowing and voluntary guilty plea. For in this case, the
Seventh Circuit not only acknowledged in its opinion
below that the charges against LeDonne were complex,
but spent the majority of its opinion simply attempting
to accurately define those charges under the facts of this
case. Within that context, the Seventh Circuit also ac-
knowledged that the government’s proffer inaccurately
“blurred” the definitions of those charges. Further, the
court conceded that LeDonne’s counsel mis-stated the
charges to LeDonne when, acting at the district court’s
request and on its behalf, he questioned LeDonne about
—i-
his understanding of the charged crimes. And, as the ap-
pellate court also conceded, LeDonne himself never ex-
pressed in his own words any understanding of these
charges during the plea proceedings.
Extending its “totality” standard to previously un-
charted waters, however, the court held that LeDonne’s
college education, his admission that he had “read” the
charges and his out-of-court consultation with his attorney
about the charged crimes, showed LeDonne’s understand-
ing of the crimes to which he pled guilty, even in the face
of direct evidence that LeDonne was both misinformed
about the nature of those charges and the complete absence
of any testimony from LeDonne that he understood those
charges. In so doing, the Seventh Circuit did more than
give a reasonable gloss to this Court’s seminal McCarthy
holding, it essentially stripped it of its very meaning.
Absent review by this Court, therefore, plea proceedings
within the Seventh Circuit will lose the essential protec-
tion provided by McCarthy and Rule 11 of the Federal
Rules of Criminal Procedure. Moreover, this case will set
a dangerous precedent for other circuits.
2. FACTUAL AND PROCEDURAL BACKGROUND
(a) District Court Proceedings
James P. LeDonne was charged with the federal crimes
of wire and bank fraud. 18 U.S.C. §§ 1348, 1344 (1992).
LeDonne decided to plead guilty to both charges. On July
10, 1992, LeDonne’s plea hearing was held in the North-
ern District of Indiana, South Bend Division, the Honor-
able Judge Allen Sharp presiding. After advising the gov-
ernment that the two counts contained in the charging
information were “fairly complicated,” the court directed
the government to make its evidentiary proffer as to the
anil
factual and legal basis for LeDonne’s guilty plea. (Pl. Tr.
3-4).1 The government first proceeded with respect to
Count I. The government described a scheme in which
James P. LeDonne made fraudulent misrepresentations to
obtain and purchase vehicles from the related business en-
tities Walden Distributing and Walden Leasing (“Walden”’).
(Pl. Tr. p. 4). The government charged that LeDonne
would telephone Walden and tell them he had the funds
to pay for the vehicles he wanted to order from them.
(Pl. Tr. p. 6). LeDonne would then send Walden purchase
orders via facsimile transmission. (Pl. Tr. p. 7). The
government finally told the judge to read the informa-
tion to obtain further details of the scheme.? (Pl. Tr. p.
8). At no time did the government detail the elements
of the wire fraud charge contained in Count I.
The government then proffered the following evidence
relating to the bank fraud charge contained in Count II
of the information. LeDonne owed an Oklahoma automo-
bile dealership $148,000. (Pl. Tr. p. 8). On May 10, 1991,
LeDonne opened up a checking account at the Summit Bank
in Indianapolis, Indiana in the name of J.P. Distributing,
Inc. (Pl. Tr. p. 8). On May 15, 1991, LeDonne’s business
partner, Paul McClure, opened a checking account at Bank
One in Elkhart, Indiana, also in the name of J.P. Dis-
tributing, Inc. (Pl. Tr. p. 9). LeDonne wrote a $150,000
check on the Summit account, which McClure deposited
in another Bank One checking account held in the name
of McClure Enterprises. (Pl. Tr. p. 9). At that time, the
Summit: bank account did not have sufficient funds to
1 All citations to the Plea hearing transcript will be referred to
os “HL Tew ois.7'-
2 The government also described other alleged conduct by LeDonne
that the Court did not consider pertinent to Count I. Tr. p. 8).
pa
cover this check. (Pl. Tr. p. 9). Immediately thereafter,
a $150,000 check was issued from the McClure Distribu-
tors’ Bank One account for deposit to the J.P. Distributing
Bank One account. (Pl. Tr. p. 9).
LeDonne began issuing checks from the J.P. Distributing
Bank One account. (Pl. Tr. p. 9). Subsequently, Summit
Bank informed Bank One that LeDonne’s initial $150,000
check was backed by insufficient funds. (Pl. Tr. p. 9). Bank
One ultimately lost $98,000 as a result of the transactions.
(Pl. Tr. p. 9).
During its proffer, the government first stated that
LeDonne schemed to defraud Bank One, in violation of
18 U.S.C. § 1344(1). (Pl. Tr. p. 8). Later, the government
switched fields and stated that LeDonne schemed to ob-
tain money and funds by means of false pretenses, repre-
sentations and promises in violation of 18 U.S.C. § 1344(2).
(Pl. Tr. p. 9). The government never clarified which pro-
vision of the bank fraud statute it asserted LeDonne vio-
lated under Count II.
At the conclusion of the government’s proffer, the dis-
trict court briefly addressed LeDonne. (Pl. Tr. pp. 12-15).
The court never directly asked LeDonne if he understood
the nature of the charges against him or the factual bases
of the charges. Instead, the court had LeDonne’s counsel
question LeDonne about the factual bases of these charges
on its behalf. (Pl. Tr. pp. 15-16).
LeDonne responded to more than two-thirds of his attor-
ney’s questions with mere “yes” or “no” answers. (PI.
Tr. pp. 16-24, 26-35). Some of LeDonne’s counsel’s ques-
tions tracked matters described in the government’s proffer.
(Pl. Tr. pp. 16-24). However, many matters discussed in
the proffer were not covered in the colloquy between
LeDonne and his counsel. Critically, during this colloquy,
~-
LeDonne’s counsel misinformed LeDonne of one of the
elements of bank fraud charge against him contained in
Count II. (Pl. Tr. p. 21). Moreover, LeDonne’s counsel
never advised LeDonne of the elements of wire fraud nor
asked him if he intended to defraud Walden, as charged
in Count I.
After defense counsel finished, the court again addressed
LeDonne. (Pl. Tr. p. 24). The trial judge asked LeDonne
about his plea, without referencing any elements or facts
related to the charges against him. Again, LeDonne an-
swered these questions with mere affirmative or negative
responses. (Pl. Tr. p. 24). Following this brief inquiry, the
government supplemented its proffer with additional facts.
(Pl. Tr. p. 25). The court did not question LeDonne as
to these additional facts.
LeDonne did advise the court that he had read the in-
formation. (Pl. Tr. p. 12). LeDonne’s counsel advised the
district court that he discussed the charges with LeDonne
outside of court and that, in his opinion, LeDonne under-
stood them. (Pl. Tr. pp. 35-36). Based upon those two
facts, and the above-described plea proceedings, the dis-
trict court found that LeDonne had knowingly and volun-
tarily pled guilty to the bank and wire fraud charges con-
tained in the information. (Pl. Tr. pp. 35-36). The district
court later sentenced LeDonne to sixty-three months in
a federal correctional facility.
(b) Motion to Withdraw
On February 13, 1998, LeDonne moved to withdraw his
guilty plea on the grounds that he never understood the
nature of the charges against him. (App. A, pp. A-4, 5,
n. 1). The district court denied the motion, ruling that
<Q
LeDonne’s plea was both knowing and voluntary. (App.
D., pp. D-2, D-3).3
(c) The Decision Below
The Seventh Circuit affirmed, finding that the district
court did not abuse its discretion in denying LeDonne’s
motion to withdraw his guilty plea. In its opinion, the
Seventh Circuit detailed the preferred procedure for con-
ducting a Rule 11 plea hearing. (App. A, p. A-9). The pros-
ecutor in its proffer should identify the elements of the
charge. (App. A, p. A-9). Subsequently, the district court
should question the defendant to determine that he under-
stands the nature of the charge to which he pled guilty.
(App. A, p. A-9). The court noted that the district court’s
procedure here had potential “pitfalls.” (App. A., p. A-9).
The court also noted two instances in which LeDonne
could have been potentially confused as to the nature of
the charges against him. The first instance involved the
government’s failure to indicate the provision of the bank
fraud statute to which LeDonne was pleading guilty,
which, in turn, could have potentially blurred the nature
of those charges in LeDonne’s mind. (App. A, p. A-14).
The second instance occurred when LeDonne’s counsel in-
accurately implied that LeDonne’s purpose in issuing the
* The court noted that LeDonne’s testimony indicated he under-
stood the nature of the charges against him, quoting this passage:
Court: The long and short of it is, with all of this said
done, Mr. LeDonne, you’re still pleading guilty of Count
THE Court: Because you're, in fact, guilty?
DEFENDANT: That’s correct, Your Honor.
(Pl. Tr. p. 35).
=
insufficient funds checks constituted an element of the
crime of bank fraud. (App. A, pp. A-14-15).
The court, however, found that, despite these inac-
curacies and omissions, the totality of the circumstances
in the plea hearing record indicated that LeDonne under-
stood the nature of the charges against him. Specifically,
the court found that LeDonne’s monosyllabic testimony in
response to his attorney’s questioning, his reading of the
information, his counsel’s representations that LeDonne un-
derstood the charges, along with the government’s proffer,
established that LeDonne’s plea was voluntary and intel-
ligent. (App. A, pp. A-15, A-21-22).
REASONS FOR GRANTING
THE WRIT OF CERTIORARI
The McCarthy rule, set down by this Court over twenty
years ago, makes clear that a defendant cannot enter a
knowing and voluntary guilty plea without an adequate
understanding of the legal charges against him. And, while
district courts have long been allowed to look at the
“totality of the circumstances” surrounding a defendant’s
plea to establish the defendant’s understanding of the
charged crimes, the presence of such circumstances have
never been allowed to outweigh clear evidence that no
true understanding existed.
This case raises the important question of whether a
trial court can rely solely upon accepted indicia of a defen-
dant’s understanding of charged crimes to which he is
pleading guilty in the absence of plea proceeding testi-
mony from him that he had such an understanding and
in the presence of clear testimony that the charged crimes
were never accurately explained to him. Here, the Seventh
Circuit, in a substantial departure from McCarthy, its own
a
precedent and that of other circuits, has held that the ac-
cepted indicia of a defendant’s comprehension of the charged
crimes, alone, is enough to establish the defendant’s
requisite understanding to make his plea knowing and vol-
untary. And, the Seventh Circuit has further held that
the existence of such indicia outweighs the accepted fact
that the charged crimes were inaccurately explained to
the defendant and that the defendant himself never testi-
fied to any real understanding of those charges.
A.
THIS CASE RAISES IMPORTANT QUESTIONS ABOUT
WHETHER A TRIAL COURT CAN FIND THAT A DEFEN-
DANT TRULY ENTERED A KNOWING AND VOLUN-
TARY PLEA OF GUILTY WHERE HE ADMITTEDLY
WAS MISINFORMED ABOUT THE NATURE OF THE
CHARGES AGAINST HIM AND NEVER EXPRESSED
ANY UNDERSTANDING OF THOSE CHARGES AT THE
PLEA PROCEEDING.
A defendant’s plea is not voluntary if he does not under-
stand the law in relation to the facts. McCarthy, supra
at p. 466. Thus, pursuant to Rule 11, this Court has re-
quired that the district court fully advise the defendant
of all of the elements of the charges against him. Id. at
470-71.
In McCarthy, this Court found that the failure to inform
the defendant of the intent element of the crime to which
he pled guilty established that his plea was neither know-
ing nor voluntary. Jd. Since the defendant did not under-
stand the nature of the charges against him, the Court
held that Rule 11 was violated. Jd. at 463-71. Thus, the
defendant was allowed to withdraw his guilty plea. Jd.
Moreover, as specifically recognized by the Fifth Circuit,
there is essentially no difference between failing to advise
—12—
the defendant of one element of the charges and incorrect-
ly advising the defendant of the nature of the charges.
United States v. Boatright, 588 F.2d 471 (5th Cir. 1979).
In Boatright, although the defendant was pleading guilty
to a conspiracy charge, the court improperly advised him
that his crime was “intentionally engaging in the gun busi-
ness.” Id. at 474-75. At no point during the remainder
of the proceedings did the court correct this error. Jd.
The Fifth Circuit held that the trial court’s failure to
properly explain the charges precluded the defendant from
ever understanding the nature of the charges against him.
Id. Thus, the Fifth Circuit held that the defendant’s plea
was neither knowing nor voluntary and could be with-
drawn. Id.; accord United States v. Syal, 963 F.2d 900
(6th Cir. 1992).
Here, the record indicates that, as in McCarthy and
Boatright, the elements of the charges were not properly
explained to LeDonne. In fact, the Seventh Circuit noted
that two times during the plea hearing the elements of
bank fraud were improperly explained to LeDonne. (App.
A at pp. A-14-15). The first time occurred during the
government’s proffer.4 The bank fraud statute contains
two different provisions under which a person may be con-
victed, each provision requiring different proofs. 18 U.S.C.
§ 1344. The government first stated that LeDonne’s con-
duct violated the first provision. (Pl. Tr. p. 8). However,
the government stated later that LeDonne’s conduct vio-
lated the second provision. (Pl. Tr. p. 9). The record is
devoid of any attempts by the government or the court
7"
to clarify this “blurred” description of the nature of the
charges against LeDonne.
This mistake was compounded during the colloquy be-
tween LeDonne and his counsel. There, counsel’s ques-
tions gave LeDonne the impression that one element of
bank fraud involved the purpose for which he cashed the
insufficient funds checks. (Pl. Tr. p. 21). In its opinion
below, even the Seventh Circuit conceded this error created
a “potential [for] confusion” which might have prevented
LeDonne from understanding the nature of the bank fraud
charge to which he was pleading guilty. (App. A, pp.
A-14-15).
The Seventh Circuit’s finding that LeDonne had an ade-
quate understanding of the crime to which he was plead-
ing guilty, in the face of this evidence, is a significant
departure from this Court’s McCarthy decision, as well
as those of other circuits. McCarthy, supra; United States
v. Syal, supra; United States v. Boatright, supra.
Realizing the break it was making with McCarthy and
other established precedents, the Seventh Circuit attempted
to validate LeDonne’s invalid plea on the basis of his plea
proceeding testimony. Here again, however, LeDonne’s
testimony only serves to establish his requisite under-
standing of the charged crimes if the Seventh Circuit is
allowed to engage in yet another significant departure
from McCarthy and its progeny regarding the extent to
which a defendant’s testimony is required to establish his
comprehension of the charged crimes against him.
The Seventh Circuit, consistent with this Court’s rul-
ing in McCarthy, has long held that Rule 11 requires a
colloquy between the court and the defendant to expose
“the defendant’s state of mind on the record” i.e. a defen-
dant’s plea hearing testimony must estabiish that he un-
a
derstands the relevant legal and factual issues surround-
ing his guilty plea. McCarthy, supra; United States v.
Fountain, supra at 356. The Seventh Circuit has further
ruled that the defendant’s understanding must be estab-
lished from the defendant’s narrative responses to ques-
tions. Id.
In Fountain, the Seventh Circuit held that affirmative
or negative responses to the court’s questions do not es-
tablish on the record what the defendant understands. Jd.
Instead, the court found that affirmative or negative an-
swers merely denote the defendant’s ability to mimic the
information or indictment and cannot reveal if he compre-
hends the nature of the charges against him. Jd.
The Seventh Circuit reiterated this ruling in Key v.
United States, 806 F.2d 133 (7th Cir. 1986). There, the
court held that, ‘“‘simple affirmative or negative answers
to [the court’s] questioning are insufficient to fully eluci-
date the defendant’s state of mind.” Jd. at 138.
These holdings were most recently applied in United
States v. Leung, 783 F.Supp. 357 (N.D.IIl. 1992). In Leung,
the defendant’s plea hearing testimony was almost ex-
clusively comprised of yes or no answers. Jd. at 359. The
district court allowed the defendant to withdraw his plea,
since the plea hearing record failed to show that he under-
stood the nature of the charges against him. I/d.
Here, the Seventh Circuit relied upon LeDonne’s testi-
mony to establish his understanding of the nature of the
charges against him. (App. A at p. A-15). However, the
plea hearing record shows that LeDonne only gave six
answers that could be characterized as narrative re-
sponses. (Pl. Tr. p. 16-35). And, none of those responses
contained any indication that LeDonne had an understand-
ing of the charged crimes to which he was pleading guilty.
=~ =
Id. Mostly, these responses constituted nothing more than
LeDonne’s statement of some of the factual events that
occurred as he recalled them. Jd. Meanwhile, the re-
mainder of LeDonne’s testimony, over 45 answers in all,
consisted of affirmative or negative answers. (Pl. Tr. p.
16-35) The vast majority of LeDonne’s responses were
precisely the type of answers the Seventh Circuit held
were legally insufficient to determine if a defendant un-
derstands the nature of the charges against him. Key,
supra; Fountain, supra; Leung, supra. In sum, nothing
existed in LeDonne’s testimony which, up to now, was
viewed as legally sufficient to demonstrate his requisite
understanding of the crimes to which he was pleading
guilty. Id.
This Court’s review thus is necessary to prevent the
Seventh Circuit, in a manner which clearly departs from
the purpose of Rule 11, this Court’s McCarthy holding
and its own long established precedent, from allowing
defendants’ to plead guilty to serious offenses without
ever stating on the record their understanding of those
crimes.
B.
THIS CASE RAISES IMPORTANT QUESTIONS ABOUT
THE EXTENT TO WHICH A DISTRICT COURT CAN
RELY UPON OTHER INDICIA TO ESTABLISH A DE-
FENDANT’S UNDERSTANDING OF CHARGES TO
WHICH HE IS PLEADING GUILTY WHERE HE WAS
MISINFORMED ABOUT THE NATURE OF THOSE
CHARGES AND NEVER TESTIFIED TO HIS UNDER-
STANDING OF THOSE CHARGES.
Faced with the inaccurate explanation of the complex
crimes charged here and a record devoid of LeDonne’s
narrative explanation of his understanding of those charges,
=" ss
the Seventh Circuit sought to salvage the guilty plea by
looking at other indicia of LeDonne’s understanding of the
crimes to which he was pleading guilty. In so doing, the
Seventh Circuit departed significantly from its accepted
precedent as to the extent to which a trial court can rely
yn such indicia to save an otherwise clearly defective plea.
This Court must now accept this case to set an accepta-
ble limit on the use of such indicia in order to preclude
a complete emasculation of its McCarthy holding.
1. Reliance Upon A Government Proffer.
A government’s proffer may be considered by the dis-
trict court as one factor in reaching a decision that the
defendant’s guilty plea was entered into voluntarily and
intelligently. United States v. Musa, 946 F.2d 1297, 1302
(7th Cir. 1991); United States v. Ray, 828 F.2d 399, 422
(7th Cir. 1987). The Seventh Circuit, however, has long
held, and reaffirmed in this case, that the proffer is
valueless as an indicia of the defendant’s understanding
of the nature of the charges against him unless proper
procedures are followed in making that proffer at the plea
hearing. (App. A, p. A-9 and cases cited therein). First,
the government’s proffer should begin with a recitation
of the elements of the charges. (App. A, p. A-9). Then,
the district court should question the defendant to deter-
mine if the understood the charges as explained by the
government. Jd. This procedure insures that it is estab-
lished on the record that the defendant understood the
nature of the charges against him. Id.
Moreover, as past Seventh Circuit decisions have estab-
lished, the defendant must agree with the proffer before
it can be considered evidence that he understood the
nature of the charges against him. United States v. Ivory,
11 F.3d 1411 (7th Cir. 1993); United States v. Musa,
= 3m
supra; Ray, supra. For example, in Ray, the defendant
explicitly admitted that the contents of the government’s
proffer were true. United States v. Ray, supra at 406.
The court found that this admission indicated that the de-
fendant understood the nature of the charges as described
in the proffer. Zd.
Likewise, in Musa, the defendant stated on the record
that he understood the contents of the government’s proffer.
United States v. Musa, supra at 1304. Therefore, the
district court properly relied on the proffer to establish
that the defendant understood the nature of the charges
against him. Jd.
Finally, in Ivory, the government proffered the elements
of the charges against the defendant. United States v.
Ivory, supra at 1416-1417. The district court then spe-
cifically questioned the defendant about his understanding
about each of the charges against him, with each of the
district court’s questions beginning with the phrase “Do
you understand?” Jd. at 1417-1418. The defendant re-
sponded affirmatively to all of those questions and the
court thus held that the proffer was evidence that the
defendant’s guilty plea was voluntary and intelligent. Jd.
Here, the government failed to set forth each element
of the crimes charged in its proffer. Further, the govern-
ment mis-stated those elements in its proffer. It also added
facts to the proffer after LeDonne had already been fully
questioned about his understanding of the crimes to which
he was pleading guilty.
Moreover, the district court never directly questioned
LeDonne about his understanding of the proffer. The plea
proceedings are also wholly devoid of any indication that
LeDonne expressed any agreement to, or admitted the
truth of, any facts contained in that proffer. Nor was
—18—
LeDonne ever asked to even address the facts which the
government added to its proffer immediately before he
pled guilty. The proffer here thus represented a mere
reading of the government’s factual position in the case
and nothing more.
In holding to the contrary, the Seventh Circuit has sub-
stantially departed from its own precedent and has jeop-
ardized the safeguards McCarthy set in place concerning
acceptance of guilty pleas. This Court must now resolve
the issue as to when a district court may properly con-
sider a mere reading of a government proffer sufficient
evidence to outweigh a mis-statement of the charges to
a defendant who expressed no other understanding of the
nature of the charges against him during the plea pro-
ceedings.
2. Mere Reading Of The Charging Information.
The Seventh Circuit has long held that the defendant’s
representation that he read the information is not evi-
dence that the defendant understood the nature of the
charges against him. Ray, supra at 410; United States v.
Wetterlin, 583 F.2d 350, n.6 (7th Cir. 1978). “[RJeading
the indictment clearly does nothing to establish on the
record that the court personally determined that the
defendant understood the nature of the charges.” Id. A
mere reading of the information fails to set forth on the
record “what was [the defendant’s] understanding of the
charges.” Jd. at 350, n.7. Only in the “simplest of cases”’
will the Seventh Circuit allow a district court to ac-
cept the reading of the indictment or information as evi-
dence that the defendant understands the nature of the
Ali
charges. United States v. Ray, supra at 406.5 Moreover,
the Seventh Circuit has acknowledged that fraud crimes,
precisely such as those present here, must be explained
to the defendant. Jd. Here, the government charged
LeDonne with admittedly legally and factually complex
fraud crimes. In this context, the Seventh Circuit improp-
erly relied upon LeDonne’s mere reading of the informa-
tion to evidence his understanding of the charges against
him. United States v. Wetterlin, supra. Moreover, there
is nothing in the plea proceedings which establishes that
LeDonne gained any understanding of the nature of the
charges against him from reading the information. The
Seventh Circuit thus placed improper reliance on this
factor in finding that LeDonne understood the charges
against him. McCarthy, supra; United States v. Fountain,
supra. Here again, this Court must accept review to pre-
clude district court’s from allowing a mere reading of the
charge to outweigh clear evidence that the defendant
never had the charges correctly explained to him and
never expressed any understanding of those charges on
the record.
3. Out-Of Court Proceedings.
Finally, the Seventh Circuit also has held that the defen-
dant’s representations that he discussed the charges with
counsel provides no basis for establishing that the defen-
dant’s plea was knowing and voluntary. United States v.
Darling, 766 F.2d 1095, 1099 (7th Cir. 1985). “Rule 11(cX1)
is not satisfied by affirmative answers to the court’s in-
quiries whether the defendant has discussed the charges
5 Here, the district seta clearly did not consider either bank
fraud or wire fraud to eee ar ee nee ate
that “this looks fairly complicated.” (Pi. Tr. p. 3).
—20—
with his attorney and whether the defendant understands
the charges.” United States v. Wetterlin, supra at 350.
The Seventh Circuit’s rulings in Wetterlin and Darling
both comport with this Court’s ruling that the defendant’s
understanding of the nature of the charges against him
must be based upon the plea hearing record. McCarthy,
supra. Assuredly, any prior out of court discussions be-
tween the defendant and his counsel are not part of the
record and are not particularly helpful in determining if
a defendant’s guilty plea was knowing and voluntary. Id.
Here, the Seventh Circuit improperly relied upon
LeDonne’s counsel’s representation that he discussed the
charges with LeDonne and that he understood the nature
of the charges against him to establish LeDonne’s re-
quisite understanding under Rule 11. (Pl. Tr. 35-36). Such
reliance runs directly against the Seventh Circuit’s own
policy to expose the defendant’s state of mind, on the plea
proceeding record. United States v. Fountain, supra.®
Moreover, under no circumstances should such unreliable
out of court, off the record consultations be allowed to
establish a defendant’s understanding of the charged
crimes where, as here, he was misinformed as to the
nature of these charges in court and on the record. This
is especially so where, again as here, the defendant ex-
pressed nothing on the record to indicate that he under-
stood the charges to which he was pleading guilty.
By holding to the contrary below, the Seventh Circuit
expanded its ever growing “totality of circumstances”
standard well beyond this Court’s McCarthy ruling, its
® Particularly in this case, where the Seventh Circuit noted that
LeDonne’s counsel improperly advised LeDonne of the nature of
the charges against him.
=
own precedent and those of other federal circuits. And,
left unreviewed, the opinion below sets a dangerous prece-
dent that essentially strips the McCarthy and Rule 11
safeguards previously applied to ensure that no defendant
pleads guilty to serious offenses, and subjects himself to
serious punishment, without a full understanding of the
crimes to which he is pleading guilty. For these reasons,
as well, this Court should accept review of this case to
correct this significant departure from McCarthy and its
progeny.
CONCLUSION
For the above reasons, this petition for a writ of certiorari
must be granted.
Respectfully submitted,
SHELLY B. KULWIN
Counsel of Record
MICHAEL C. BENNETT
KULWIN & ASSOCIATES
333 West Wacker Drive
Suite 2860
Chicago, Illinois 60606
(312) 641-0300
Attorneys for Petitioner
October 1994
APPENDICES
A-1l
APPENDIX A
IN THE UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
No. 93-1548
UNITED STATES OF AMERICA,
Piaintiff-Appellee,
Vv.
JAMES P. LEDONNE,
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of Indiana, South Bend Division.
No. 92 CR 52—Allen Sharp, Chief Judge.
ARGUED OcToBER 5, 19983—DeEcIDED APRIL 22, 1994
Before CorrEY, FLAUM, and KANNE, Circuit Judges.
KANNE, Circuit Judge. James P. LeDonne appeals from
the denial of his motion to withdraw his plea of guilty
to wire fraud and bank fraud. LeDonne contends that the
district court failed to inform him of the elements of either
offense to which he pleaded guilty and that the record
demonstrates an inadequate factual basis which cannot
support his convictions. In essence, he argues that he
pleaded guilty under the misconception that knowingly
drafting on insufficient funds was enough to estab-
lish a scheme to obtain money or property by means of
Siar Bowens Rte tae be pine
under 18 U.S.C. § 1343 and § 1344 and therefore his plea
was not knowingly and voluntarily made.
A-2
I. BACKGROUND
A. The Charges
Count I of the two-count information charged that LeDonne
had “knowingly devised and intended to devise a scheme
and artifice to defraud Walden Leasing and Walden Fleet
Group and other dealerships, leasing companies and indi-
vidual purchasers, of money and property by means of
false and fraudulent pretenses, representations, and prom-
ises, while knowing that the pretenses, representations
and promises were false when made” and executed
the scheme by use of telephone and telefax in violation
of 18 U.S.C. § 1343. Count II charged LeDonne with hav-
ing “knowingly devised a scheme and artifice to defraud
Bank One, a financial institution, and to obtain monies
and funds owned by and under the custody and control
of Bank One by means of false and fraudulent pretenses,
oe and promises” in violation of 18 U.S.C.
1344.
B. The Facts
The facts as summarized by the government at the plea
hearing encompass two separate but related fraudulent
schemes. Together these transactions formed the basis of
the two-count information. LeDonne, a thirty-nine year
old businessman, was the incorporator and manager of a
number of distributing and leasing companies engaged in
the business of buying and selling wholesale and retail
vehicles to various leasing companies, dealers, and rental
car companies. His position with the various companies
authorized him to make deposits in and write checks on
several bank accounts in order to manage the financial
transactions involved in p ing and distribu vehi-
rocuring
cles. Between the months of February and July of 1991,
LeDonne contacted various companies from his Elkhart,
Indiana office, via telephone or telefax to place purchase
orders for vehicles. Knowing that thére were insufficient
funds to pay for the vehicles, he would assure the sellers
that he would provide cash payment in compliance with
A-3
the purchase agreement. He would then submit payment
in the form of an overdraft check and arrange to have
the vehicles picked up on a Friday afternoon in order to
prevent the seller from confirming whether sufficient funds
were available before completing the transaction. When
the sellers contacted LeDonne after discovering they had
received insufficient funds checks, LeDonne provided ready
excuses for the overdraft. He would then sell the vehicles
to generate cash knowing, however, that he could not de-
liver title as the vehicles were not paid for because they
had been purchased with overdraft checks. This scheme
formed the basis of the charge of wire fraud.
As it became increasingly difficult to support this method
of doing business, LeDonne devised a check kiting scheme
utilizing various bank accounts throughout Indiana and
Michigan. On one occasion, LeDonne owed an automobile
dealership approximately $148,000. In an effort to cover
the deficit, LeDonne opened an account with the Summit
Bank in Indianapolis on May 10, 1991, and had an asso-
ciate open an account with Bank One in Elkhart, Indiana
on May 15, 1991. LeDonne then wrote a $150,000 check
on the Summit account to his associate for deposit in a
separate pre-existing account at Bank One. His associate
then transferred the funds to the new Bank One account
and immediately began issuing checks from that account.
By the time the check came back from Bank One there
were insufficient funds in the Summit account to cover
it. As a result of this scheme Bank One suffered a $98,000
loss and LeDonne was charged with bank fraud.
C. The Entry of the Plea ae
Pursuant to a written plea agreement, LeDonne entered
a plea of guilty to the charges of bank fraud and wire
fraud. At the plea hearing, the government proffered the
evidence it would have produced on the statutory require-
ment for each count had the case proceeded to trial. The
judge questioned the assistant U.S. Attorney during the
presentation, focusing on elements of the offenses. The
A-4
judge then asked defense counsel to question LeDonne,
under oath, regarding the factual basis of the charges. Af-
ter counsel finished his examination, the judge directly
inquired of LeDonne whether he wished to plead guilty to
both counts because of his admission that he committed
the acts outlined in the information and orally recounted
by the government. LeDonne assured the court that this
was correct. The government then briefly summarized some
additional facts relating to each count. Reading from the
written plea agreement which LeDonne acknowledged hav-
ing understood and signed, the court advised LeDonne
again of the rights he was waiving by his plea, including
the right to trial, the right to confront witnesses against
him, and the right against self-incrimination. LeDonne re-
sponded affirmatively when asked whether he understood
that he was waiving these rights by pleading guilty. He
acknowledged having been informed of the maximum pos-
sible penalties for the specific charges to which he entered
his plea and about the process of sentencing under the
Guidelines. After determining that no threats or promises
were made to induce his plea, the court again asked LeDonne
whether he wished to persist in his plea because he was
in fact guilty of the conduct alleged. LeDonne responded
affirmatively, and the court accepted the guilty plea and
set the date for sentencing.
D. The Motion to Withdraw the Plea
Prior to the sentencing hearing, LeDonne acquired new
counsel and moved to withdraw his plea as not knowing-
ly and voluntarily made. Among other issues raised in his
motion, LeDonne claimed that there was not a sufficient
factual basis to establish that he intended to defraud either
Walden Leasing Company or the bank and that the court
failed to adequately advise him of the essential elements
of both offenses.? Despite acknowledging that his plea of
1 The government argues that these grounds were raised only
in a conclusory manner before the district court and therefore are
(Footnote continued on following page)
A-5
guilty was a tactical decision made in order to avoid more
severe consequences, LeDonne argued that he did not har-
bor the intent to defraud as charged. The district court
rejected this argument relying on the defendant’s affirma-
tive responses at the plea hearing that he was pleading
guilty because he was in fact guilty, and denied the motion
to withdraw. Memorandum and Order of Feb. 25, 1993,
at 2-3. The court then proceeded to sentence LeDonne
to sixty-three months’ imprisonment to run consecutively
to any state sentence. LeDonne appeals only the district
court’s denial of his motion to withdraw the plea.
II. DISCUSSION
We review the denial of a motion to withdraw a guilty
plea within the framework of Federal Rules of Criminal
Procedure 11 and 32. Rule 32(d) provides that “if a mo-
tion for withdrawal of a plea of guilty . . . is made before
sentence is imposed, the court may permit withdrawal of
the plea upon a showing by the defendant of any fair and
just reason.” A defendant, however, does not have an ab-
solute right to withdraw his plea of guilty prior to sen-
tencing. United States v. Groll, 992 F.2d 755, 758 (7th Cir.
1993). Rather, the decision whether to allow withdrawal
of a guilty plea is a matter within the sound discretion
1 continued
waived absent plain error. Fed. R. Crim. P. 52(b); see, e.g., United
States v. Quintanilla, 2 F.3d 1469, 1476 (7th Cir. 1993). The core
of LeDonne’s motion was that his plea was not knowing and volun-
tary. One reason clearly presented in his motion was that he did
not intentionally defraud Walden Leasing or Bank One. Defense
counsel also argued, during the hearing on the motion to withdraw,
that there was an insufficient factual basis to support the crimes
charged because there was no discussion of intent, an element of
both wire fraud and bank fraud. Moreover, the district court’s
Memorandum and Order of February 25, 1993, identifies the defen-
dant’s challenge to the factual basis as one of the issues raised
in of withdrawal. There is therefore ample support in the
record to conclude that both Rule 11 challenges were sufficiently
preserved for appeal.
A-6
of the district court and we will reverse that decision only
for an abuse of discretion. Jd.; United States v. Saenz,
969 F.2d 294, 296 (7th Cir. 1992). In reviewing the district
court’s decision, findings regarding whether the defendant
has demonstrated a “fair and just reason” will be upheld
unless they are clearly erroneous. Saenz, 969 F.2d at 296;
United States v. Ray, 828 F.2d 399, 422 (7th Cir. 1987),
cert. denied, 485 U.S. 964 (1988).
Rule 11 is designed to address the issues the district
court must review in determining whether “a defendant’s
guilty plea is a voluntary and intelligent choice among the
alternative courses of action open to him.” Saenz, 969 F.2d
at 296. A guilty plea taken without attention being given
to the matters set forth in Rule 11 could constitute a “fair
and just” reason justifying the request for withdrawal of
a plea, and the denial of a motion to withdraw under such
a circumstance would be an abuse of discretion. Jd. Fol-
lowing the format of Rule 11 tends to ensure the accuracy
of the plea and to enable a meaningful and expeditious
review. See, e.g., United States v. Price, 988 F.2d 712, 719
(7th Cir. 1993); Ray, 828 F.2d at 404. Yet the failure to
comply with the strictures of the Rule is not necessarily
fatal. United States v. DeCicco, 899 F.2d 1531, 1534 (7th
Cir. 1990) (citing United States v. Frazier, 705 F.2d 903,
906 (7th Cir. 1983) (per curiam)). Rule 11(h) specifically
provides: “Any variance from the procedures required by
this rule which does not affect substantial rights shall be
disregarded.” Thus, “in reviewing Rule 11 proceedings,
rast of reality, and not mere ritual should control,”
Saenz, 969 F.2d at 296, and “we should not give Rule
11 such a crabbed interpretation that ceremony is exalted
over substance.” Ray, F.2d at 404 (citations omitted).
We need only satisfy ourselves, by considering the total
circumstances surrounding the plea, that the defendant was
informed of his rights and understood the co
pre) cemtcetiatibon Secaeh Pag long gy 89 F 2d
at 1534.
A-7
A. Nature of the Offense and Factual Basis for the Plea
Unless the defendant understands the elements of the
crime he is admitting, his plea cannot be said to have been
knowingly and voluntarily entered. United States v. Musa,
946 F.2d 1297, 1303 (7th Cir. 1991). To ensure that the
defendant’s guilty plea is knowing, Rule 11(c) requires that
a federal court “inform the defendant of, and determine
that the defendant understands, . . . the nature of the
charge to which the plea is offered.” See United States
v. Seybold, 979 F.2d 582, 586 (7th Cir. 1992), cert. denied,
113 S. Ct. 2980 (1993). As we have stated in earlier cases
the preferred—but not the required—method of satisfying
Rule 11(cX1) is for “the judge to explain the nature of
the charge to the defendant either generally or with re-
gard to the specific facts of the case.” Ray, 828 F.2d at
405. There are, however, a number of techniques utilized
by federal district judges to establish that the defendant
understands the nature of the charge against him. Thus,
rather than require literal compliance with Rule 11(c\1)
this court has adopted a totality of the circumstances ap-
proach to determine whether the defendant understood
the charges to which he pled. Jd. Under this approach,
we consider the complexity of the charge, the defendant’s
level of intelligence, age and education, whether the defen-
dant was represented by counsel, the judge’s inquiry dur-
ing the plea hearing and the defendant’s statements, as
well as the evidence proffered by the government. /d.;
Musa, 946 F.2d at 1304.
We have also adopted a similar approach in reviewing
the sufficiency of the factual basis for a guilty plea. See
Musa, 946 F.2d at 1302. To ensure that the guilty plea
has a basis in fact sufficient to constitute the alleged crime,
Rule 11(f) provides: “Notwithstanding the acceptance of
a plea of guilty, the court should not enter a judgment
upon such plea without making such inquiry as shall sat-
isfy it that there is a factual basis for the plea.” Although
the factual basis is y supplied by the defendant’s
admissions, United v. Frye, 738 F.2d 196, 199 (7th
Cir. 1984), “Rule 11(f) does not require the district judge
A-8
to engage in a colloquy with the defendant to establish
a factual basis for a guilty plea. A judge may find the
factual basis from anything that appears on the record,
which includes the government’s proffer.” Musa, 946 F. 2d
at 1302 (citation omitted); see also United States v. Ivory,
11 F.3d 1411, 1415 (7th Cir. 1998) (“Rule 11 does not dis-
tinguish between factual material supplied by the defen-
dant and that supplied by the prosecutor’’). “Thus a suf-
ficient factual basis can be found even when the court
engages in the most rudimentary questioning of the defen-
dant if the indictment and statement of the prosecution’s
evidence are sufficiently specific to make clear to the de-
fendant exactly what is being admitted.” Ray, 828 F.2d
at 406 (citations omitted).
The district court did engage LeDonne in a limited col-
loquy regarding his admission of relevant facts. The court
also inquired and received LeDonne’s acknowledgment that
he had read the information and discussed it with his at-
torney. When asked by the court whether he had any dif-
ficulty understanding the charges, LeDonne responded that
he did not. Generally a defendant’s independent prior read-
ing of the charges is considered inadequate to ascertain
whether he understood the nature of the charges except
in the simplest cases, Ray, 828 F.2d at 410, but)the ef-
fort to determine whether LeDonne’s plea was knowing
was not so limited in this case. The district court directed
the assistant U.S. Attorney to explain the government’s
theory as to each count and to state the evidence it would
offer to support those charges. Instead of directly ques-
tioning LeDonne to determine if he agreed with the facts
as proffered by the government, the court requested that
defense counsel examine LeDonne about the facts which
formed the basis of his criminal conduct.
District judges throughout this circuit—and indeed through-
out the federal system—have used their experience and the
guidance of Rule 11 in developing methods to insure that
guilty pleas tendered to them are voluntarily and know-
ingly and intelligently made. With regard to the matters
under discussion here, two procedures have proved par-_
A-9
ticularly successful in achieving the requisite degree of
certainty required. Utilizing the prosecutor at a plea hear-
ing to identify for the defendant the elements of the of-
fense charged, followed by inquiry of the defendant by
the judge confirming the defendant’s understanding of the
elements is an effective method for determining that the
defendant understands “the nature of the charge to which
the plea is offered.” Further requiring the government’s
prosecutor at a plea hearing to orally recount in relevant
detail the facts which satisfy the elements of the offense
charged, followed by questions from the judge posed to
the defendant to confirm the defendant’s admission of those
facts also is a highly useful method to establish that the
defendant has committed a charge to which defendant has
pled guilty.
The procedure used in this case to inform the defendant
of the elements of the offenses charged and the presen-
tation of the relevant facts supporting those charged of-
fenses was somewhat similar to the procedure outlined
above. Here, however, the government did not separate-
ly describe the statutory elements and then proceed with
a proffer of the facts. Rather, the facts which constituted
the elements of the offense were presented by the govern-
ment with an occasional clarification and highlighting by
the judge. With regard to the procedure used for obtain-
ing the defendant’s admission of the relevant facts, that
task was delegated to defense counsel. The defendant was
placed under oath and examined by his counsel regarding
the facts relevant to the charged offenses. Both proce-
dures utilized in this case have potential pitfalls, but as
the following discussion indicates, we believe that the dis-
trict court judge’s efforts, when coupled with LeDonne’s
ability to understand the nature of the charges, renders
the district court’s practice sufficient under Rule 11(c).
B. Bank Fraud
LeDonne — that the court erred in accepting his
plea because
factual basis presented at the plea hear-
A-10
ing which suggested that he had obtained money or prop-
erty by means of false or fraudulent pretenses by engag-
ing in check kiting? is legally insufficient. The bank fraud
statute under which LeDonne was convicted prohibits two
distinct but related types of conduct:
Whoever knowingly executes, or attempts to execute,
a scheme or artifice—
(1) to defraud a financial institution; or
(2) to obtain any of the moneys, funds, credits, as-
sets, securities, or other property owned by, or
under the custody or control of, a financial insti-
tution, by means of false or fraudulent pretenses,
representation, or promises;
shall be fined not more than $1,000,000 or imprisoned
not more than 30 years, or both.
18 U.S.C. § 1344 (Supp. 1993). Although largely overlap-
ping, a scheme to defraud and a scheme to obtain money
by false or fraudulent pretenses are defined in the dis-
junctive, and thus are separate offenses. See, e.g., United
States v. Doherty, 969 F.2d 425, 427 (7th Cir.), cert. de-
nied, 113 S. Ct. 607 (1992). In applying the disjunctive
analysis to bank fraud, courts have required proof of a
misrepresentation only to convict for a violation of § 1344(2).
E.g., United States v. Ragosta, 970 F.2d 1085, 1089 (2d
Cir.) (collecting cases), cert. denied, 113 S. Ct. 608 (1992).
2 Check kiting involves the knowing drafting and eens of
a series of overdraft checks between two or more fede insured
banks with the purpose of artificially inflating bank balances so
that checks can be drawn on accounts that actually have negative
funds. United States v. Doherty, 969 F.2d 425, 428 (7th Cir.), cert.
denied, 113 S. Ct. 607 (1992). If timed correctly, the bank will be
prevented from discovering that the accounts are overdrawn and
will be tricked into honoring checks drawn on accounts with in-
sufficient funds. Id.; see also United States v. Frydenlund, 990
F.2d 822, 824 (5th Cir.), cert. denied, 114 S. Ct. 337 (1993). By
repeating this scheme over a period of time a person in essence
may obtain an interest-free loan.
A-11
A conviction under subsection (1), on the other hand, re-
quires proof only of a recognizable scheme formed with
the intent to defraud a financial institution. Jd.; United
States v. Frankel, 721 F.2d 917, 920 (3d Cir. 1983).
The information charged LeDonne with violations of both
§ 1344(1) and (2), but described a fraudulent scheme con-
sisting of a bare check kiting operation unembellished by
other acts or communications, which offended only subsec-
tion (1). In its proffer, however, the government stated
that ““LeDonne executed the scheme and artifice in order
to defraud and to obtain muney and funds by means of
false pretenses, representations and promises, when he
was the maker of check number 2002 . . . a check that he
knew was drawn on insufficient funds.” (Emphasis added).
By stating a factual premise that he had obtained money
by means of false pretenses, LeDonne claims he was er-
roneously led to believe that merely drafting insufficient
fund checks constitutes a fraudulent representation. We
agree that such a belief is clearly wrong. See Doherty,
969 F.2d 427-29. According to LeDonne there is no indica-
tion in the record that he understood the charge to be
otherwise, nor any admission of intent to defraud. Although
LeDonne does not appear to dispute that he engaged in
check kiting, he argues that merely presenting worthless
checks does not constitute a false representation and thus
cannot form the basis of bank fraud as charged.
We know from Williams v. United States, 458 U.S. 279,
284-85, 102 S. Ct. 3088, 3091-92 (1982), and its progeny that
the drafting and deposit of an overdraft check does not
constitute a “false statement” because technically speak-
ing a check does not “make any representation as to the
state of an account holder’s bank balance.” Doherty, 969
F.2d at 427. Rather, it is merely “an order to the drawee
bank to pay a sum certain to the holder.” Jd. It follows
therefore that absent other acts or communications of mis-
representation, knowingly drafting and depositing overdraft
checks is not an offense under § 1344(2), which prohibits
schemes accomplished “by means of false or fraudulent
pretenses, representation, or promises.” Id. at 428. If no
A-12
misrepresentation is made under § 1344(2) merely by pass-
ing worthless checks then, LeDonne argues, there is noth-
ing left in a bare check kiting operation to establish the
fraudulent intent necessary for a scheme to defraud in vio-
lation of § 1344(1). Implicit in this argument is that proof
of a misrepresentation or false pretense is an element in-
herent to establishing a “scheme to defraud.” However,
this argument is clearly foreclosed by Doherty. Doherty
had engaged in a check kiting scheme to raise capital to
invest in the stock market. The investment proved risky
and resulted in a loss of over $96,000 to the bank and crim-
inal charges under 18 U.S.C. § 1344 for Doherty. Premised
on Williams, Doherty argued that one cannot execute a
scheme to defraud without making a false statement or
misrepresentation of fact because “‘a false representation
or bmp y is the sine qua non of a ‘scheme to defraud’
under § 1344(1); [and thus], under Williams, check kiting is
no more a crime under § 1344(1) than it is under § 1344(2).”
Doherty, 969 F.2d at 429.
The term scheme to defraud, however, was broadly con-
ceived to include conduct designed to deceive in order to
obtain something of value, which contrary to the defen-
dant’s position, may or may not include conduct involv-
ing false statements or misrepresentations of fact. Id.;
United States v. Hammen, 977 F.2d 379, 383 (7th Cir.
1992); Ray, 828 F.2d at 408 n.8. The aim of the stat-
ute is “to punish the scheme to defraud rather than
the end result.” United States v. Sanders, 893 F.2d 133,
138 (7th Cir.), cert. denied, 496 U.S. 907 (1990). Put an-
other way, the focus of the offense of a “scheme to de-
fraud” is on the “intended end result, not on whether a
false representation was necessary to effect the result.”
United States v. Cronic, 900 F.2d 1511, 1513 (10th Cir.
1990). Thus it matters not whether the fraudulent scheme
was accomplished by an affirmative misrepresentation nor
whether the fraud succeeded and the victim deceived. See
Sanders, 893 F.2d at 138; accord United States v. Gold-
blatt, 813 F.2d 619, 624 (3d Cir. 1987); United States v.
Solomonson, 908 F.2d 358, 364 (8th Cir. 1990). As long
A-13
Co., 806 F.2d 1393, 1400 (9th Cir. 1986) (citing United
States v. Green, 745 F.2d 1205, 1207 (9th Cir. 1984), cert.
denied, 474 U.S. 925 (1985)); United States v. Clausen, 792
F.2d 102, 105 (8th Cir.), cert. denied, 479 U.S. 858 (1986).
As such, the execution of the scheme may be relevant
to establishing the defendant’s specific intent to defraud.
Focusing on whether the execution of a scheme to de-
fraud exhibited an intent to defraud rather than on false
statements or misrepresentations of fact, we held in Do-
herty that § 1344(1) “unambiguously encompasses bare
check kiting schemes.” 969 F.2d at 429. In so holding we
joined a number of circuits that have interpreted § 1344(1)
to incorporate bare check kiting as a form of bank fraud.
Id.; United States v. Stone, 954 F.2d 1187, 1189-91 (6th
(Ist Cir. 1991); United States v. Celesia, 945 F.2d 756,
758-59 (4th Cir. 1991); United States v. Schwartz, 899 F.2d
Here the information which charged LeDonne tracked
the language of both provisions of the bank fraud statute,
as did the government’s identification of the offense dur.
ing its er. Because proof of an affirmative misrepre-
sentation is an element necessary only to convict under
§ 1344(2) use of the false pretenses language by the gov-
A-14
ernment might have blurred the elements of the offense,
and possibly confused LeDonne’s understanding of the
charge. However, where a statute defines two or more
ways in which an offense may be committed, all may be
alleged in the conjunctive in one count in order to ade-
quately apprise the defendant of the government’s inten-
tion to charge him under either prong of the statute. E..,
Fontana, 948 F.2d at 801. And proof of any one of those
acts conjunctively charged may support a conviction. Stone,
954 F.2d at 1192; Celesia, 945 F.2d at 758-59; United States
v. Bonanno, 852 F.2d 434, 441 (9th Cir. 1988), cert. denied,
488 U.S. 1016 (1989); Clausen, 792 F.2d at 104-05. The
government’s case rested entirely on the passing of worth-
less checks rather than on separate acts of misrepresen-
tation. Thus, even though both subsections of the statute
were identified, the government was not required to prove
the elements of both sections to support a conviction for
bank fraud.? Any reference to false or fraudulent pre-
tenses, representations, or promises was therefore unnec-
essary since the evidence supported a bare check kiting
scheme prohibited under § 1344(1).
Another point of potential confusion arose during de-
fense counsel’s questioning regarding bank fraud when he
asked LeDonne whether the overdraft checks issued from
the Bank One account “allowed [him] to obtain either titles
or pay for cars that [he] had in [his] possession or had
in [his] possession previously.” However, what the checks
were being used for is irrelevant. Rather, for purposes
of bank fraud under subsection (i), only proof that they
were knowingly drafted on insufficient funds is required to
establish fraudulent intent. Notwithstanding this, LeDonne
admitted full knowledge of the check kiting scheme. When
3 The government insists that it was clear to all at the time of the
plea hearing that LeDonne did not violate § 1344(2). Any reference
to misrepresentations, the government es, was proffered only
to provide a b und in order to “sufficiently explain’ the cir-
a behind LeDonne’s scheme to defraud the bank under
1344(1).
A-15
viewed in the totality of the circumstances these discrep-
ancies in defining the elements of the bank fraud charge
had relatively minor impact.
As a college graduate, who held a responsible position
requiring considerable sophistication, LeDonne’s ability to
comprehend the nature of the charges does not appear
to be in doubt. By signing the written plea agreement,
LeDonne acknowledged that he had read a copy of the
information, discussed it with his lawyer, and “‘under-
stood every accusation made against [him] in the case.”
LeDonne’s admissions coupled with the government’s prof-
fer and his apparent ability to understand the charges he
faced is persuasive support for finding that LeDonne was
adequately advised of the nature of the offense.
LeDonne next contends that the factual basis is inade-
quate because there was no evidence that he admitted
an intent to defraud. According to LeDonne, even if check
kiting can form the basis of bank fraud, the use of an
overdraft check still does not constitute a false represen-
tation, and thus mere reliance on the passing of a worth-
less check is not alone sufficient to establish an intent to
defraud. Had the evidence showed only the simple presen-
tation of an insufficient funds check, this might be true.
But a scheme to defraud based on a check kiting opera-
tion is distinguishable from inadvertently passing a check
drawn on insufficient funds. LeDonne has not disputed
that he engaged in the practice of floating checks, and
so appears to have conceded the sufficiency of the fac-
tual basis to support a conviction under § 1344(1). Even
absent a concession, there is clear support in the record
that a sufficient factual basis was established in compli-
ance with Rule 11(f).
To sustain a conviction for bank fraud under § 1344(1)
based on a check kiting scheme, the government is re-
uired to prove beyond a reasonable doubt that the defen-
t engaged in or attempted to engage in a pattern or
course of conduct designed to deceive a financial institu-
tion with intent to cause actual or potential loss. Ragosta,
A-16
970 F.2d at 1089. The facts established at the plea hear-
ing meet this requirement. LeDonne engaged in a scheme
in which he deposited a check drawn on insufficient funds
into a separate account, thereby artificially inflating the
balance, and then wrote checks on that account when he
knew there were insufficient funds to cover them. Spe-
cifically, the government’s proffer detailed that LeDonne
opened an account with Summit Bank in Indianapolis on
May 10, 1991, and drafted a $150,000 check (LeDonne re-
called a check of between $148,000-$150,000) to be deposited
into a pre-existing account at Bank One in Elkhart. On
May 15, 1991, LeDonne had an associate, Paul McClure,
open a new account at Bank One in the name of J.P. Dis-
tributing and transfer the $150,000 to the new Bank One
account. LeDonne began issuing checks on the new ac-
count almost immediately, knowing that the account had
been artificially inflated because there were insufficient
funds in the Summit Bank account to cover the $150,000
check. By the time the $150,000 check was presented for
payment at Summit Bank there were, in fact, insufficient
funds and Bank One lost approximately $98,000.
When asked directly by counsel, LeDonne responded
that he knowingly deposited an insufficient funds check
with the intent of artificially inflating the balance in the
Bank One account and immediately wrote overdraft checks
from that account before the original deposit cleared the
Summit Bank.4 When entering a guilty plea, a defendant’s
“ Counsel: At the time you wrote that check, Mr. LeDonne, you
were aware there were insufficient funds in that account; am I
correct?
LeDonne: That’s correct.
Counsel: And you gave this check to Mr. McClure knowing there
was insufficient funds and Mr. McClure then addressed other obli-
gations of the entity from a Bank One account; is that correct?
LeDonne: That’s correct.
a aA (Footnote continued on following page)
OS DET a eet
A-17
voluntary responses made under oath in open court carry
a strong presumption of veracity. Seybold, 979 F.2d at
587-89 (citing United States v. McFarland, 839 F.2d 1239,
1242 (7th Cir.), cert. denied, 486 U.S. 1014 (1988), and
United States v. Darling, 766 F.2d 1095, 1101 (7th Cir.),
cert. denied, 474 U.S. 1024 (1985)). In fact, “[tJhe only ra-
tional manner in which a judge may determine whether
a plea is knowingly and voluntarily made, is to observe
the defendant’s demeanor and responses to the court’s
questions and to rely on the defendant’s sworn answers.”
Id. at 587 (quoting United States v. Ellison, 835 F.2d 687,
693 (7th Cir. 1987)). We may infer from LeDonne’s re-
sponses to counsel’s questions, combined with the govern-
ment’s statement of the evidence, that LeDonne knew the
checks were not backed with sufficient funds. Coupled
with the manner in which the banking transactions were
carried out—utilizing three different accounts with checks
issued immediately upon deposit—there is enough to es-
tablish an intent to trick the bank into honoring checks
drawn on an artificially inflated account. The execution
of the scheme therefore provides sufficient evidence to
establish an adequate factual basis of LeDonne’s intent
to defraud.
C. Wire Fraud
With respect to the charge of wire fraud, LeDonne ar-
gues that he was operating under “the misconception that
* continued
Counsel: Again you and Mr. McClure, or at least speaking from
your point of view, knew that the checks were not going to clear
the Summit Bank and, as a consequence, the Bank One account?
LeDonne: I would like to confer with my counsel.
The Court: All right.
Counsel: Mr. LeDonne, at the time you issued the check to Mr.
McClure, you knew that that check was not going to clear Summit
Bank, is that correct, there was insufficient funds in that account?
LeDonne: At that particular time, that’s correct.
A-18
the nature of the offense of wire fraud necessarily in-
cluded an element that at the time he used the telefax
there was insufficient funds in his checking account.” He
argues that there is no other indication in the record that
he admitted to use of a wire transmission to obtain money
or property by means of false or fraudulent pretenses,
as is required to prove wire fraud.
The wire fraud statute under which LeDonne was charged
states:
Whoever, having devised or intending to devise any
scheme or artifice to defraud, or for obtaining money
or property by means of false or fraudulent pretenses,
representations, or promises, transmits or causes to
be transmitted by means of wire, radio, or television
communication in interstate or foreign commerce, any
writing, signs, signals, pictures, or sounds for the pur-
pose of executing such scheme or artifice, shall be
fined not more than $1,000 or imprisoned not more
than five years, or both.
18 U.S.C. § 1348. Like bank fraud, it requires proof of
an intent to defraud, which likewise, may be established
by circumstantial evidence and by inferences drawn from
the facts and circumstances surrounding the scheme. See,
e.g., Clausen, 792 F.2d at 105; cf. Ragosta, 970 F.2d at
1090 (bank fraud). See generally United States v. Draiman,
784 F.2d 248, 254 (7th Cir. 1986) (wire fraud is a specific
intent crime).
The government’s proffer began with: “Mr. LeDonne
knowingly devised and intended to devise a scheme and
artifice to defraud not only Walden Leasing and Walden
Fleet Group but also other dealerships, leasing companies
and individual purchasers of money and property by means
of false and fraudulent pretenses, representations and prom-
ises, knowing that those pretenses, representations and
promises were false when made.” The fraudulent repre-
sentation shown was the ordering of vehicles knowing that
the representation made regarding payment was false.
Specifically, the government stated that in furtherance of
SI ent I EARP ten AO OSE ts SE aw OA Beer,
A-19
the scheme, LeDonne would assure the sellers that there
were sufficient funds to pay for the vehicles by agreeing
to send cash or a certified check in compliance with the
purchase agreement.5 However, instead he would dispatch
drivers to pick up the vehicles on a Friday, sending along
as payment a check knowingly drawn on insufficient funds.
The late Friday pick-up was critical to the scheme because
it prevented the seller from verifying the sufficiency of
the funds with the bank before completing the transac-
tion. Use of the “knowing” and “in furtherance” language
by the prosecution refers to LeDonne’s attempt to gain
the sellers’ confidence in order to induce the release of
vehicles. Language of this type is considered sufficient to
explain the intent element of the offense to the defendant.
See Ray, 828 F.2d at 409.
Evidence that LeDonne understood the element of in-
tent is clear from his response during his examination by
counsel. LeDonne admitted under oath that he faxed the
purchase orders with the intent to induce Walden Leas-
ing to provide vehicles, knowing at the time that he did
not have sufficient funds to satisfy payment.® In fact be-
5 The government proffered: “{I}Jn furtherance of the scheme,
Your Honor, on or about March 21st, Mr. LeDonne, operating
under the name J.P. Distributing, and for the purpose of executing
this scheme, caused to be transmitted in interstate commerce by
means of a wire and telephone communication, in other words, the
facsimile, between Elkhart, Indiana, and the facsimile machine of
Walden Leasing in Florida.” Plea Tr. at 7. “Mr. LeDonne, dur-
ing this scheme, would indicate that he had funds to pay for these
vehicles; he was generally indicating he had cash funds and would
be paying for them by certified check.” Id. at 6.
6 Counsel: What sort of documents would you use the facsimile
. machine for specifically with Walden Leasing in Florida?
LeDonne: Walden ing would fax me on one side of a docu-
ment a list of vehicles with VIN numbers, colors, mileage and con-
dition and price, and that list of vehicles would be shipped as soon
as the v as soon as that purchase order was signed and
faxed back to Walden Leasing.
(Footnote continued on following page)
A-20
cause he knew he could not comply with the terms of the
purchase agreement, he arranged to have the vehicles
picked up on Friday afternoons in order to conceal the
fact that an overdraft check had been submitted as pay-
ment. Misrepresenting his financial ability to pay for the
vehicles at the time of receipt was fraud. Proof that there
were insufficient funds at the time of transmitting the pur-
chase orders and prearranging to take possession of the
vehicles when the seller would be unable to verify pay-
ment is key to establishing knowledge of his financial
wherewithal, which in turn is essential to establishing de-
liberate misrepresentation. See, e.g., Bontkowski v. United
States, 850 F.2d 306, 314 (7th Cir. 1988) (discussing United
States v. Bruun, 809 F.2d 397 (7th Cir. 1987) for the prop-
osition that proof of knowledge is a necessary element
of the offense of bank fraud). But it is not the fact of
insufficient funds nor the giving of an overdraft check
which constitutes a fraudulent misrepresentation. Rather
the fraud lies in intentionally misrepresenting his finan-
6 continued
Counsel: And you knew at that time on some occasions, in some
instances, that you did not have the funds to pay for those vehicles
that were being released; is that correct?
LeDonne: That’s correct.
Counsel: And you utilized the facsimile machine not only to No
thorize purchase agreements or transmit purchase agreements, but
you also utilized the facsimile machine is a kno and inten-
tional manner to induce Walden Leasing to release vehicles to you
and your corporations?
LeDonne: That’s correct.
Counsel: And at that time you, again, were aware that there
were insufficient monies to pay for those vehicles at the time of
your signing the purchase agreements; is that correct?
LeDonne: Let me confer.
The Court: Certainly.
LeDonne: My answer to his question is yes, that’s correct.
a ae eee
ee eee
A-21
cial ability, and was furthered by elaborate efforts to con-
ceal awareness of the insufficiency.
After unsuccessfully negotiating the checks, the sellers
contacted LeDonne, who he to their concerns with
ready excuses for the over . Communications which
occur after the defendant has obtained the victims’ money
or property are in furtherance of the fraudulent scheme
if they facilitate concealment or postpone investigation of
the scheme. Sanders, 893 F.2d at 138; United States v.
O’Connor, 874 F.2d 483, 486 (7th Cir. 1989). Avoidance of
detection is often a material part of a fraudulent scheme;
for an illegal scheme would hardly be undertaken were
there to be no profit to the plotters. O’Connor, 874 F.2d
at 486 (citing United States v. Riedel, 126 F.2d 81, 83 (7th
Cir. 1942)). Attempting to lull the sellers by offering vari-
ous false explanations for the overdraft is evidence of
LeDonne’s effort to prevent detection of his scheme and
provides further support of his fraudulent intent. In sum,
LeDonne’s plan, the success of which required carefully
orchestrated execution, provides persuasive evidence of
his knowledge of wrongdoing, and permits finding a suf-
ficient factual basis for intent to commit wire fraud.
Finally, the court inquired of LeDonne whether he still
wished to plead guilty following the government’s prof-
fer and after direct questioning by defense counsel. The
judge inquired: “You are pleading guilty here after con-
ferring thoroughly and carefully with your lawyer; is that
correct?” LeDonne responded: “That’s correct, your Hon-
or.” The judge further queried: “Your pleading guilty to
both counts use you’re, in fact, guilty of doing... .
the essential facts that are alleged in that case?” Again
LeDonne responded: “That is very correct, your Honor.”
Later the court again asked: “{TJhe long and short of it
is, with all of this said and done, Mr. LeDonne, you’re
still pleading guilty of Count I and II of this information?
. . . Because you're, in fact, guilty?” To this the defen-
dant responded: “That’s correct, Your Honor.” Turning
to defense counsel, the judge inquired if counsel could
A-22
state to the court that the defendant understood the na-
ture of the charges and the penalties, and was freely, vol-
untarily, and intelligently entering his plea of guilty to
the charges. Assuring the court that he had conferred at
some length with LeDonne, counsel represented that the
plea was knowing and voluntary. Although a limited ex-
change with the court, when taken with the government’s
proffer and LeDonne’s responses to counsel’s questioning,
we think the record provides a sufficient basis to conclude
that the requirements of Rule 11(c) were met and that
LeDonne was adequately advised of the nature of the of-
fenses of bank fraud and wire fraud and that the factual
basis established adequately demonstrates his intent to
defraud as to both counts.
III. CONCLUSION
Because we find no abuse of discretion in denying
LeDonne’s motion to withdraw his plea, the judgment
of the district court is
AFFIRMED.
A true Copy:
Teste:
Clerk of the United States Court of
Appeals for the Seventh Circuit
B-1
APPENDIX B
UNITED STATES COURT OF APPEALS
For the Seventh Circuit
Chicago, Illinois 60604
July 25, 1994
Before
Hon. JouHN L. Correy, Circuit Judge
Hon. JOEL M. FLAuM, Circuit Judge
Hon. MICHAEL S. KANNE, Circuit Judge
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
No. 93-1548 VS.
JAMES P. LeDONNE, Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of Indiana, South Bend Division.
No. 92 CR 52—Allen Sharp, Chief Judge.
ORDER
On consideration of the petition for rehearing filed in
the above-captioned case, all of the judges on the original
panel have voted to deny a rehearing.
IT IS ORDERED that the petition for rehearing is
hereby DENIED.
C-1
APPENDIX C
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
JUDGMENT IN A CRIMINAL CASE
UNITED STATES OF AMERICA
v. Cause No. SCR. 92-00052(01)
JAMES P. LEDONNE Gregory K. Blanford
(Name of Defendant) Defendant’s Attorney
THE DEFENDANT:
x pleaded guilty to count(s) 1 and 2.
Accordingly, the defendant is adjudged guilty of such
count(s), which involve the following offenses:
Title Nature Date Offense Count
& Section of Offense Concluded No(s).
18:1343 Wire Fraud 7/1/92 1
18:1344 Bank Fraud 5/31/91 2
Defendant is sentenced as provided in pages 2 through
4 of this Judgment. The sentence is imposed pursuant to
the Sentencing Reform Act of 1984.
x It is ordered that defendant shall pay to the United
States a special assessment of $100.00, for Count(s) 1 and
2 which shall be due with 30 days of this ju nt as
follows: le to Clerk, U.S. District Court, 102 Federal
Bldg., S. Main St., South Bend, Indiana 46601.
It is further ordered that the defendant shall notify
eet i He daa of coe change of tems, reskience
ct name, residence
or address until all 1 fines, restitution, costs, and
Le
C-2
February 24, 1993
Date of Imposition of Sentence
/s/_ Allen Sharp
Chief Judge
United States District Court
February 25, 1993
Date
Defendant’s Soc. Sec. Number:
309-64-0427
Defendant’s Date of Birth:
September 20, 1954
Defendant’s Mailing Address:
Elkhart County Jail
_ Elkhart, Indiana
Defendant’s Residence Address:
50845 Fox Trail Drive
Granger, Indiana 46530
Judgment — Page 2 of 4
IMPRISONMENT
The defendant is hereby committed to the custody of
the United States Bureau of Prisons to be imprisoned for
a term of Sixty Three (63) Months Imprisonment — To
run consecutive to any state sentence. This defendant is
to receive credit for time served from December 14, 1992
‘up to the day this defendant is released to state custody.
x The defendant is remanded to the custody of the
U.S. Marshal.
RETURN —
[Omitted in Printing.]
C-3
Judgment — Page 3 of 4
SUPERVISED RELEASE
Upon release from imprisonment, the defendant shall
be on supervised release for a term of Three (3) Years.
While on supervised release, the defendant shall not
commit another federal, state, or local crime and shall not
illegally possess a controlled substance. The defendant
shall comply with the standard conditions that have been
adopted by this court. If this judgment imposes a restitu-
tion obligation, it shall be a condition of supervised release
that the defendant pay any such restitution that remains
unpaid at the commencement of the term of supervised
release. The defendant shall comply with the following ad-
ditional conditions:
x The defendant shall report in person to the proba-
tion office in the district to which the defendant is re-
leased within 72 hours of release from the custody of the
Bureau of Prisons.
Judgment — Page 4 of 4
STANDARD CONDITIONS OF SUPERVISION
[Omitted in Printing.]
D-1
APPENDIX D
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
UNITED STATES OF AMERICA )
)
Vv. ) SCR-92-52-1
)
JAMES P. LeDONNE )
MEMORANDUM AND ORDER
I.
On July 10, 1992, the defendant, James P. LeDonne,
entered a plea of guilty to a two-count Information. Mr.
LeDonne filed a motion to withdraw this plea of guilty
on February 12, 1993. This motion was heard at the time
previously scheduled for his sentencing hearing on Feb-
ruary 24, 1993.
Mr. LeDonne and his retained counsel, Gregory K. Blan-
ford, raised as issues 1) invalidity of guilty pleas which
the defendant entered in Elkhart County, Indiana, on
charges which he argues are inextricably tied to the
charges against him here; 2) disparity in the government’s
original sentence calculation with the final sentence recom-
mended in the presentence report; and 3) the “tactical”
nature of his guilty plea prevented a full factual basis for
the plea.
This court sees Mr. LeDonne’s disputes with Elkhart
County as matters properly before the Elkhart Superior
D-2
Court and not properly addressed here. Therefore, the
court will not allow the defendant to withdraw his guilty
plea on the basis of this argument. It will, however, omit
the Elkhart County convictions from the defendant’s crim-
inal history category when determining his sentence.
A defendant has no right to be promised a certain sen-
tence before he pleads guilty. In fact, most written plea
agreements, including the one in this case, include lan-
guage explicitly stating that sentencing determinations are
made by the court after the probation office completes
its investigation. Mr. LeDonne was properly informed of
the maximum sentence he could face on these two counts.
He has no basis for withdrawing his guilty plea on this
argument, either.
Rule 11 of the Federal Rules of Criminal Procedure re-
quires a judge to make specific inquiries of a defendant
in open court to determine whether he knowingly and vol-
untarily pleads guilty. A very thorough and instructive
discussion of the mandates of Rule 11 is found in United
States v. Seybold, 979 F.2d 582 (7th Cir. 1992). Mindful
of Boykin v. Alabama, 395 U.S. 238 (1969), this court con-
ducted a very careful examination of James P. LeDonne
at his plea hearing on July 10, 1992. See also Parke v.
Raley, __. U.S. ___., 118 S.Ct. 517 (1992). His answers,
given under oath, several times expressed his voluntary
intention to enter a plea of guilty. The court particularly
looks to page 35 of the transcript of the July 10, 1992,
hearing:
THE COURT: The long and short of it is, with all
of this said and done, Mr. LeDonne, you're still plead-
ing guilty of Count I and II of the information?
THE DEFENDANT: That’s correct, Your Honor.
THE COURT: Because you’re, in fact, guilty?
THE DEFENDANT: That’s correct, Your Honor.
D-3
Judge Ripple’s opinion in Seybold, supra at 587, cites
United States v. Ellison, 835 F.2d 687, 693 (7th Cir. 1987):
“The only rational manner in which a judge may deter-
mine whether a plea is knowingly and voluntarily made,
is to observe the defendant’s demeanor and responses to
the court’s questions and to rely on the defendant’s sworn
answers.”
This defendant spoke directly to the court at the time
of sentencing although he chose not to testify under oath
in the hearing on the motion to withdraw his plea. Thus
the only evidence from this defendant under oath is in
the plea proceedings on July 10, 1992. To the extent that
his oral unverified statement of fact in court on February
24, 1993 is at odds with his sworn testimony this court
will credit the former and not the latter. On the basis
of direct observation of the defendant on February 24,
1993, this court has serious reservations as to his credi-
bility and has great difficulty in crediting his most recent
statements to this court.
For each and all of the above reasons, the defendant’s
motion to withdraw his plea of guilty in this court is
DENIED.
II.
Count I of the Information against him charged the de-
fendant with wire fraud in violation of 18 U.S.C. § 1343.
Count II charged him with bank fraud in violation of 18
U.S.C. § 1344. Since the offenses occurred after November
1, 1987, the Sentencing Reform Act of 1984 and the
United States Sentencing Commission Guidelines (“Guide-
lines”), as amended November 1, 1992, apply to this sen-
tencing.
D-4
The defendant, defense counsel, and the government
have reviewed the presentence report and the addendum
and supplemental addendum thereto, as has the court. The ~
government has no objection. The defendant’s numerous
objections will be addressed individually.
The government and the defendant have entered into
an agreement which provides that the defendant shall be
given the minimum sentence available under the Guide-
lines.
The two counts of conviction are grouped for the pur-
poses of sentencing pursuant to U.S.S.G. § 3D1.2(d). The
defendant’s base offense level of 6 is found in Guidelines
§ 2F1.1. This level must be increased by 11 because the
losses incurred exceed $800,000.00 (specifically, they total
$902,914.75). U.S.S.G. § 2F1.1(bX1XJ). The defendant objects
to the computations which yielded this sum; however, the
court has examined the probation officer’s calculations and
finds them to be reasonable. Two more levels are added
under § 2F1.1(2XB) because the defendant schemed to de-
fraud more than one victim.
The presentence report includes a 4level adjustment un-
der § 3B1.1(a) for the defendant’s organizing a criminal
activity involving five or more participants or that was
otherwise extensive. The defendant objects to this adjust-
ment. “Otherwise extensive” as defined in Application
Note 2 to this secticn can mean that the defendant “used
the unknowing services of many outsiders.” In United
States v. Miller, 962 F.2d 739 (7th Cir. 1992), the court
elaborated:
But there is no prescribed minimum number of per-
sons needed to permit an enhancement under § 3B1.1.
All that is required to find that a scheme if “other-
wise extensive” is that the defendant directed at least
‘one criminal participant. United States v. DeCicco,
D-5
899 F.2d 1531 (7th Cir. 1990). The involvement of sev-
eral other knowing and unknowing individuals was
a sufficient ground for the district court to find that
the scheme was extensive.
962 F.2d at 745. This court finds that Mr. LeDonne did
direct another criminal participant, Paul McClure, who
was sentenced in this court on October 16, 1992. In addi-
tion, he somehow persuaded at least three other people
to aid his schemes by opening bank accounts, applying
for loans, or making excuses for him to his creditors. The
court finds that the defendant used other people sufficient-
ly to qualify his scheme as “otherwise extensive” for sen-
tencing purposes. The four-level increase for role in the
offense is imposed.
The presentence report also provides for an increase for
obstruction of justice, to which the defendant objects. Ac-
cording to the probation officer, Mr. LeDonne provided
materially false information during her presentence in-
vestigation of him. See U.S.S.G. § 3C1.1, Application Note
3(h). He gave her a financial statement, supported by
copies of payroll ledgers, which falsely showed him to
have earned $5,000.00 with his father’s business. He later
admitted that his father had simply given him this money.
He asserted in open court that he was told by someone
in his father’s company that the only way to document
this loan (the term used by the defendant in court) was
with the type of document he presented to the probation
officer.
Care must always be taken to avoid confusing obstruc-
tion of justice with a defendant’s simple exercise of his
rights to not incriminate himself. Obstruction of justice
is also more than a defendant’s putting up hurdles which
merely slow or inconvenience government personnel.
Here, however, the defendant took affirmative steps to
D-6
mislead the probation officer about the source of his in-
come, forcing her to investigate further in order not only
to find the real source but to discredit his information.
This court does indeed need accurate financial informa-
tion in order to sentence the defendant appropriately, and
“embarrassment” over taking money from a parent is no
excuse for hiding the truth from the probation officer or
the court. The court is aware of an opinion which argu-
ably favors this defendant, United States v. DeFelippis,
930 F.2d 444 (7th Cir. 1991). There, the defendant claimed
to have been employed by a brokerage firm for several
months prior to his arrest. In fact, he had been in a train-
ing program with the firm and apparently had not been
compensated. The Court of Appeals considered the defen-
dant’s assertions to be false but not material, as they
would not have affected his sentence even if true. This
court sees Mr. LeDonne’s actions as far more serious than
Mr. DeFilippis’s. See United States v. Ojo, 916 F.2d 388
(7th Cir. 1990). The court finds that Mr. LeDonne has ob-
structed justice and deserves a 2-point enhancement.
The defendant also objects to the presentence report’s
failure to award him a reduction for acceptance of respon-
sibility. In fact, he asserts that he should receive the new
3-point reduction available under the 1992 amendments
to the Guidelines. Besides his guilty plea, this court has
not read anything in the presentence report nor seen any-
thing in the defendant’s courtroom demeanor which indi-
cates that he acknowledges the extent of his criminal con-
duct. In fact, the court observed that the defendant con-
tinued to both argue with the charges against him and
place blame everywhere but on himself. This court has
sentenced many, many defendants and generally grants
the 2-level reduction for acceptance of responsibility when
there has been a guilty plea. That is not to say that the
D-7
court has always been impressed by the sincerity in those
defendants’ expressions of remorse. “Sorry” is apparently
not even in Mr. LeDonne’s extensive vocabulary. His of-
fense level will not be reduced for acceptance of respon-
sibility. In so deciding, this court_does not take into ac-
count the defendant’s motion and arguments to withdraw
his guilty plea.
The defendant has stated other objections which do not
directly affect his offense level calculations. First, he pro-
tests the paragraphs of the presentence report which tell
of his financial dealings with Peggy Miller. Further, he
opposes the mention of a current FBI investigation of
him. He also objects to his ex-wife’s characterization of
him. Neither is the defendant happy with the presentence
report’s explanation of why no home visits have been
made by the probation officer. Finally, he objects to the
inclusion of victim impact statements as prejudicial.
All of the information objected to by the defendant is
either required to be included in the presentence report
or is routinely made a part of it. A sentencing court is
not restricted to evidence which would be admissible at
trial. It may consider any information which has “suffi-
cient indicia of reliability to support its probable accuracy.”
See United States v. Marshall, 719 F.2d 887 (7th Cir.
1983); 18 U.S.C. § 3661, and the Commentary to U.S.S.G.
§6A1.3. Because the rules on admissible evidence are
relaxed, and because there is no jury here, the court over-
rules Mr. LeDonne’s objections and considers this infor-
mation along with all the rest, giving it whatever weight
it deserves.
All paragraphs of the presentence report not specifically
addressed above are adopted by the court as findings of
fact and statements of reasons for imposition of sentence
in this case.
D-8
The defendant’s adjusted offense level is a 25, with a
criminal history category of II and an applicable sentence
range of 63 to 78 months. This court adopts the agree-
ment of the parties and sentences the defendant to the
minimum applicable sentence, a term of 67 months of im-
prisonment. This term is to be served consecutively to
the defendant’s state sentences. He is now remanded to
the custody of the United States Marshal, who will return
him to the custody of the Elkhart County Sheriff. The
defendant shall receive credit to his federal sentence for
the time he has served in Elkhart County (under a federal
detainer). In addition, the defendant shall be on super-
vised release for a term of 3 years from the date of his
release from prison. The court finds that this sentence
sufficiently punishes this defendant for his criminal con-
duct and therefore satisfies the purposes of sentencing as
set forth in 18 U.S.C. §3553(a).
The conditions of supervised release shall include the
thirteen standard conditions as listed under §5B1.4(a) of
the Guidelines.
The applicable fine range is from $10,000.00 to
$1,250,000.00. Based on the defendant’s financial informa-
tion, the court imposes no fine. The court must impose
a special assessment fee of $50.00 for each count, here
totalling $100.00. The court makes no order for restitution.
The clerk shall prepare judgment. The clerk shall also
provide a copy of this Sentencing Memorandum to the
United States Probation Department for forwarding to the
United States Sentencing Commission and to the Federal
Bureau of Prisons. The defendant was advised in open
court of his right to appeal. IT IS SO ORDERED.
-DATED: February 25, 1993
COPY TO:
USA
USM
USP
Blanford
Order Book
D-9
/s/ Allen Sharp
Chief Judge
Northern District of Indiana
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.