United States v. Adetoro Adeniji, Ademola G. Allismith, and Abdul R. Adediran

Citations: 221 F.3d 1020; 2000 U.S. App. LEXIS 18024Docket: 97-3821, 97-3826 and 98-3885

Court: Court of Appeals for the Seventh Circuit; July 26, 2000; Federal Appellate Court

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A jury convicted defendants Adetoro Adeniji, Ademola Allismith, and Abdul Adediran of mail fraud related to fraudulent checks issued by Motorola Corporation. In 1991, Motorola issued five checks totaling $17,951.40 to two fictitious vendors, Better Communications Systems (BCS) and Michael Owonla Marketer's Inc. (MOM). The investigation revealed that Adeniji, an employee in the accounts payable department, orchestrated the issuance of these checks without any supporting invoices. She had established BCS and MOM through her co-defendants, Allismith and Adediran, who set up their mailing addresses and bank accounts.

Adeniji was hired in January 1990 and assigned to the accounts payable department a year later. The process for handling vendor invoices involved a review by a batch control person, who would group invoices for data entry clerks like Adeniji to process. Clerks entered invoice information into Motorola's computer system, which triggered the issuance of checks. Each clerk managed a high volume of invoices daily, and checks were issued to vendors thrice weekly based on their input. The court found the defendants' appeals against their convictions to be without merit.

A data entry clerk may encounter invoices from vendors not yet in the company database, requiring her to consult the vendor file maintenance person to assign a unique identification number after verifying the vendor's legitimacy. In June 1991, Judith Amerlan Johnson, a supervisor, began investigating five checks issued to vendors MOM and BCS due to discrepancies in invoice batch totals and missing invoices. Amerlan reviewed various records, including batch logs and accounting activity reports, which indicated that while clerks Linda Clark and Shirley Williams were logged off or occupied during the times in question, Adeniji was the actual clerk who entered the data for the checks.

Further examination revealed that none of the invoices for the first four checks could be located, and the batch for the fifth check was entirely missing. Notably, Adeniji entered data for this check six days after another clerk completed the related batch. On April 19, 1991, Adeniji inquired about an invoice from MOM on hold due to its unverified status and later provided a taxpayer identification number she claimed to have obtained from MOM. Despite not following proper protocol, the vendor maintenance person, Carol Rickman, entered this number into the system and established MOM as a vendor. Adeniji denied requesting this action, asserting that as part of a different group, she had no dealings with MOM. She resigned from Motorola on July 22, 1991.

Adeniji facilitated the issuance of checks, while Adediran and Allismith managed their receipt. In April 1991, Adediran, using aliases "Michael Owonla" and "Michael Olowanla," secured commercial mailboxes in Northbrook and Vernon Hills, Illinois, where three checks from Motorola to MOM were sent. He opened three checking accounts under variations of "Michael C. Owonla" across various locations, depositing one Motorola check into each. Adediran's fingerprint was found on one check, and all accounts were closed by May 1991 with negative balances. Bank tellers recognized Adediran as "Michael Owonla" during transactions.

Additionally, Adediran opened a fourth account at Uptown National Bank in Chicago for Beta Enterprises, listing himself as the authorized signer. A handwriting expert confirmed his signature on documents related to this account. On May 11, he issued a $3,000 check to Toro Williams, an alias for Adeniji, which was deposited into a joint account held by Adeniji and her husband at another bank.

Allismith engaged in similar activities, renting a post office box under the name "Steve T. Howard" for BCS in mid-May 1991, with his handwriting confirmed on the application. He also opened a checking account at Uptown National Bank under "Henry A. Smith." On the same day he opened this account, Adediran withdrew $3,000 from his account, which was then deposited into Allismith's account. In early June, Allismith opened a second account under "Henry A. Smith D/B/A Better Communication Systems," funded by a Motorola check. Handwriting analysis later linked him to documents associated with both accounts.

A postal inspector found no evidence of operational businesses for either BCS or MOM at the addresses associated with their mailboxes. Additionally, phone records displayed numerous calls between Adeniji and her co-defendants, coinciding with significant fraudulent activities, but no direct communication was recorded between Adediran and Allismith.

Adediran and Allismith challenged the sufficiency of the evidence supporting their convictions for mail fraud, asserting that without proof that MOM or BCS did not provide goods or services to Motorola, the jury could not reasonably find intent to defraud. The court, however, maintained a highly deferential standard of review, stating that a conviction should only be reversed if no reasonable jury could find guilt based on the evidence viewed favorably for the government. 

The jury had ample basis to find Adediran and Allismith guilty, despite the absence of direct confirmation from Motorola witnesses regarding MOM and BCS's legitimacy. Key evidence included the inability to locate invoices for five checks issued, suspicious data entry by Adeniji that obscured her connection to the transactions, her unauthorized intervention to approve MOM as a vendor, and the use of rented mailboxes under aliases. Additionally, invoices were dated before the establishment of mailing addresses or bank accounts for the vendors, and the bank accounts used for deposits were opened under aliases. An investigation revealed that the residential addresses linked to the rented mailboxes did not confirm the existence of either vendor as a legitimate business.

Allismith further argued against the existence of joint participation in the fraud with Adeniji and Adediran, citing a lack of direct evidence of their connections. However, the court noted that a formal joint agreement is unnecessary for a mail fraud conviction. What matters is whether Allismith knowingly participated in the fraudulent scheme, regardless of whether he was aware of Adediran's identity or actions, thereby affirming the sufficiency of evidence for his conviction.

The jury concluded that Allismith was liable as a participant in a scheme to defraud Motorola, with Adeniji playing a central role by facilitating the issuance of five checks to MOM and BCS. Evidence indicated that Allismith maintained communication with Adeniji throughout the scheme and established a mailing address and bank account for BCS similarly to Adediran's setup for MOM. Allismith's actions, including setting up a post office box and bank account using aliases and negotiating a check from Motorola, demonstrated his knowing involvement in the fraudulent scheme. Notably, a $3,000 cash deposit by Allismith shortly after corresponding withdrawals by Adediran suggested a sharing of proceeds from the fraudulent checks issued to MOM. Allismith argued that the district court erred by not providing a jury instruction to disregard evidence against Adediran unless it proved that Allismith was involved in a common scheme with him. He claimed that the evidence regarding MOM was more compelling and prejudicial against him, particularly without proof that BCS was also not a legitimate venture and lacking direct evidence of collusion with Adediran.

The district court rejected the defense instruction on the basis that the evidence established a single scheme to defraud Motorola, regardless of Adediran and Allismith's knowledge of each other's actions. Mail fraud and conspiracy are distinct offenses, but evidence from one participant can be used against others in the same scheme. The court found that evidence related to Adediran was admissible against Allismith, and any claim of unfair prejudice against Allismith was unfounded. Significant evidence against Allismith included his use of aliases and fraudulent checks linked to BCS, demonstrating his active participation in the fraud.

During sentencing, the court calculated Allismith's loss amount not only from the two checks issued to BCS but also included three checks sent to Adediran, aligning with Section 1B1.3(a)(1)(B) of the Guidelines. This section states that loss should consider all reasonably foreseeable acts of co-participants in a joint criminal activity. Judge Moody affirmed that Allismith was part of a single scheme and that the actions leading to the three checks were foreseeable to him. Allismith argued that this assessment was erroneous due to a lack of direct evidence linking him to the MOM component, but these factual findings are subject to review only for clear error.

Allismith contends that the MOM aspect of the scheme exceeds the criminal agreement he entered into, relying on the multi-factor test from United States v. Studley. This test examines whether participants pooled resources, assisted in the scheme's design, and the roles they agreed to play. Allismith asserts there is no evidence of his involvement in designing the scheme, sharing profits, or agreeing to any role beyond activities related to BCS. However, the court has not adopted Studley as binding precedent and differentiates the facts in Allismith's case from those in Studley. The district court found sufficient evidence indicating that Allismith agreed to a broader joint undertaking beyond just BCS, with the scheme aimed at defrauding a single victim, Motorola. The evidence showed coordinated actions among Allismith, Adediran, and Adeniji, including setting up bank accounts and communication patterns. A particular transaction sequence involving cash deposits and withdrawals indicated potential sharing of proceeds from checks issued by Motorola, supporting the inference of joint participation. Allismith also argues that Adediran's actions were not foreseeable to him, as there is no evidence of discussions or contact between them regarding the scheme.

The court found sufficient evidence to establish a joint undertaking among Allismith, Adeniji, and Adediran, even in the absence of direct communication evidence between Allismith and Adediran. Their coordinated efforts, including establishing mailing addresses and bank accounts to receive funds, and sharing proceeds from MOM checks, made Adediran's actions foreseeable to Allismith. Consequently, the district court’s decision to hold Allismith liable for the total amount of $13,951.40, corresponding to the total of four checks sent to Adediran and Allismith, was upheld. Allismith's arguments against the restitution obligation were rejected, and the court clarified that his liability would be satisfied once the total of $13,951.40 was paid by any of the defendants, in line with the principles of joint and several liability for restitution in joint criminal activities. 

Adeniji's contention regarding improper remarks made by prosecutors during trial was addressed, but only one instance, to which she objected, was discussed. The court found that the prosecutors' inferences drawn from telephone records indicating contact between Adeniji and her co-defendants were reasonable, as the call records supported the inference of communication relevant to the criminal scheme. 

Ultimately, the convictions and sentences of the defendants were affirmed, with no need to separately address the denial of Adediran's Rule 29 motion for acquittal, as it was based on similar arguments.