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United States v. Dingle
Citations: 862 F.3d 607; 103 Fed. R. Serv. 1034; 2017 U.S. App. LEXIS 11996; 2017 WL 2859447Docket: Nos. 15-3871 & 16-1002
Court: Court of Appeals for the Seventh Circuit; July 5, 2017; Federal Appellate Court
The State of Illinois, through its Department of Public Health, allocated over $11 million in grants to the Broadcast Ministers Alliance of Chicago, Access Wellness and Racial Equity (AWARE), and the Medical Health Association (MHA) between 2004 and 2010. However, approximately $4.5 million of these funds were misappropriated by Leon and Karin Dingle, owners of Advance Health, Social Educational Associates (Advance), for personal luxuries rather than the intended health services, which included cancer care and emergency preparedness initiatives. The Dingles were indicted for mail fraud and money laundering, resulting in convictions that they are now appealing. The grants were facilitated through a network of relationships between the Dingles and officials within the Department, including Directors Eric Whitaker and Damon Arnold, and Chief of Staff Quinshaunta Golden, who had personal connections with Leon. The Dingles utilized phony contracts, false applications, and dishonest reports to divert funds to Advance, effectively using the three organizations as fronts for their scheme. The grants were described as straw grants, with substantial portions of the funds ultimately benefiting the Dingles personally. Grant funds were disbursed from the Department's Springfield offices to grantees in Chicago, accounting for approximately 88% of Advance’s income from 2007 to 2010. Leon and Karin Dingle, along with Kilpatrick and Clemons, received substantial portions of these funds while performing little to no work as required by the grants. They issued nearly $2.5 million in checks to themselves and used the funds for personal expenses exceeding $500,000, including tax payments, club memberships, and mortgage payments for personal properties. Karin, serving as Advance’s vice president and secretary, was involved in administrative tasks and was aware of the questionable source of the funds, even confronting Leon about his greed. From 2007 to 2010, she received $440,900 and signed 915 checks totaling $1.7 million for personal expenditures. In November 2012, a grand jury indicted both on multiple charges related to conspiracy, mail fraud, and money laundering. After an eight-week trial, the jury convicted them on all counts. The district court imposed below-guidelines sentences: Leon received 72 months (guideline range 78-97 months) and Karin received 36 months (guideline range 41-51 months), considering their ages (78 and 76, respectively). Both defendants appealed; Leon raised three issues regarding jury instructions, evidence admission related to his infidelity, and the reasonableness of his sentence. Karin contested the sufficiency of evidence for her convictions and the reasonableness of her sentence due to the loss amount. Leon specifically challenged the jury instructions he had proposed, which the district court followed, creating a contradiction in his appeal. Leon’s appeal relies on the principle established in In re Winship, which asserts that the Due Process Clause requires proof beyond a reasonable doubt for every element of the crime charged. However, Leon has waived this argument by affirmatively requesting the jury instruction at issue, as established by precedent indicating that such approval eliminates the right to appellate review of the instruction. Even if the argument were considered forfeited, past rulings have rejected claims that using "should" instead of "must" in jury instructions allows for wrongful conviction without proof beyond a reasonable doubt. The court emphasized that the jury would understand their duty to acquit if the prosecution failed to meet this burden, and the use of "should" is permissible. Notably, the strength of the evidence against Leon undermines any potential impact of this instruction on the jury's decision. Additionally, Leon contests the district court's admission of evidence regarding his relationships with Quinshaunta Golden and Claudia Johnson, which the government used to demonstrate his connections to co-conspirators involved in a fraudulent scheme. The court found this evidence relevant for establishing Leon’s leadership role and the structure of the conspiracy, determining it did not focus excessively on the sexual nature of these relationships. Under the Federal Rules of Evidence, evidence is admissible if it makes a fact more or less probable and is relevant unless specifically excluded. The only potential exclusionary rule, Rule 403, was deemed inapplicable as the probative value of the evidence was not substantially outweighed by any risk of unfair prejudice. The district court exercised its discretion under Rule 403 appropriately and did not exceed its authority. Leon's advisory sentencing range was set at 78 to 97 months based on an offense level of 28 and a criminal history category of I, primarily due to a loss amount between $1.5 million and $3 million, with upward adjustments for his role in the scheme. The court imposed a 72-month sentence and ordered $2.9 million in restitution, with $386,250 owed jointly with others. Leon argued that his sentence was procedurally flawed, claiming the court failed to consider his age, health, and prior restitution payments. However, the court actively sought to confirm that all arguments were addressed, and Leon's attorney affirmed this, waiving any procedural objection. The court explicitly considered Leon's mitigating factors, including his age, family importance, community contributions, and prior restitution payments. It recognized that while Leon was in his late seventies, the seriousness of the crime warranted the sentence imposed. The court also accounted for Leon's ability to pay restitution and noted that despite paying $1 million before sentencing, he still owed $1.9 million. The court's brief acknowledgment of these factors was deemed sufficient and did not constitute procedural error. Leon argues that his sentence is substantively unreasonable, but the court has not previously granted relief on such grounds for below-guidelines sentences. He embezzled $4.5 million intended for public health initiatives in Illinois, effectively acting as a "reverse-Robin Hood." The court views his potential mid-80s release as not constituting a de facto life sentence. Karin's appeal centers on whether she intentionally committed her alleged crimes. The court emphasizes the difficulty of overturning a jury's guilty verdict based on intent. Karin was charged with conspiracy to commit mail fraud, mail fraud, and money laundering. For the conspiracy, the government needed to prove a conspiracy existed, her intent to further it, and an overt act by a conspirator. For mail fraud, they had to show a scheme to defraud, use of the mails, and her participation with intent to defraud. The money laundering charge required proof that she knew the transactions involved criminally derived property. The court finds that a reasonable juror could conclude Karin intended to further the conspiracy and participated in the fraudulent scheme. Despite her claims of limited involvement in administrative tasks, the jury found evidence of her significant participation, including confronting Leon about grant funds, signing checks, purchasing a luxury car with grant money, diverting funds, and conspiring to avoid tax payments. The jury was instructed appropriately on intent, and given the evidence viewed favorably to the prosecution, it was reasonable for the jury to conclude her actions were intentional. Karin's long tenure at Advance distinguishes her case from others where defendants had minimal involvement in fraud. Karin was sentenced to 36 months in prison, significantly below the advisory guidelines range of 41 to 51 months, due to her minimal role in a fraudulent scheme involving losses between $1.5 million and $3 million. The court granted her a four-level downward adjustment for her minimal participation but rejected her request for probation based on her lack of a prior criminal record, age, and limited involvement. Karin contends that the loss amount used to calculate her guidelines overstated her culpability, arguing she was merely a passive recipient of the fraud's proceeds. However, the court found her culpable, noting that she shared in the illicit gains and was a part of the scheme, stating that consequences for her actions were justified. The Dingles lived luxuriously at the expense of individuals the Department of Public Health aimed to assist. The court affirmed their convictions and sentences, emphasizing the responsibility of the Dingles despite their age at the time of conviction. The scheme involved the misappropriation of state funds intended for healthcare improvements, with key individuals connected to the Department and the for-profit corporation Advance, led by Leon Dingle, facilitating the fraudulent activities. Leon, along with associates including Claudia Johnson and Ronald Hickombottom, exploited a network of organizations, including AWARE and MHA, to secure 42 grants exceeding $11 million from the Department between 2004 and 2010. Johnson, who had a personal relationship with Leon, played a pivotal role in Leon's grant work and was instrumental in establishing AWARE. The grants, while awarded to these organizations, were effectively straw grantees, with significant funds diverted to Leon and his partner, Karin, often through fraudulent means such as fake contracts and dishonest reports. Approximately 88% of Advance's income from 2007 to 2010 stemmed from these grants, which were misappropriated for personal expenses including luxury memberships and property maintenance. Karin, serving as Advance's vice president and secretary, was also complicit, having signed numerous checks for personal expenditures. Both Leon and Karin faced indictments in November 2012, with charges including conspiracy and mail fraud, ultimately resulting in convictions on all counts after an eight-week trial. The district court sentenced Leon, aged 78, to 72 months and Karin, aged 76, to 36 months, both below the guidelines due to their advanced ages. Both defendants appealed their sentences. Leon's appeal includes three arguments: 1) the jury instructions violated his Fifth Amendment rights by making acquittal optional upon a finding of reasonable doubt; 2) the district court abused its discretion by allowing evidence of his marital infidelity; and 3) his sentence was both procedurally and substantively unreasonable. Karin's appeal presents two points: 1) insufficient evidence supported her convictions; and 2) her sentence was unreasonable due to an inflated loss amount. Regarding Leon's appeal, he requested specific jury instructions consistent with the Seventh Circuit's Pattern Criminal Federal Jury Instructions. Although the district court complied, Leon's challenge to the instruction is complicated by his prior approval, which typically waives the right to appeal. The court noted that the use of "should" instead of "must" in the instructions does not violate due process, as established in previous rulings. The court acknowledged that while other circuits may prefer "must," using "should" does not render the instruction incorrect. The document addresses several legal issues related to Leon's case. First, it asserts that the use of "should" instead of "must" in jury instructions does not constitute plain error, as the jury was adequately instructed on the reasonable-doubt standard and the evidence against Leon was strong enough to negate any potential impact of this wording on their decision. Second, it discusses the admissibility of evidence regarding Leon's relationships with Quinshaunta Golden and Claudia Johnson, emphasizing that this evidence was relevant to demonstrating Leon's connections to co-conspirators and the fraudulent scheme. The court found that the district court acted within its discretion in admitting this evidence, which was not unduly prejudicial under Rule 403. Finally, regarding Leon's sentencing, the advisory range was set between 78 to 97 months due to significant loss amounts and adjustments for his role in the scheme. The district court imposed a sentence of 72 months and ordered $2.9 million in restitution. Leon argued that the court failed to consider his age, health, and prior restitution payments. However, the court had not overlooked these arguments, as it had engaged Leon and his attorney about whether all sentencing concerns were addressed, to which they affirmed. Thus, the court's actions were deemed proper and justified. Leon’s procedural objections regarding the court's handling of his sentencing arguments are dismissed, asserting that even if his arguments were not waived, they lack merit. The court emphasized the seriousness of Leon's offense, which was driven by greed and involved substantial sums of money over several years, supported by overwhelming evidence. It considered various mitigating factors, including Leon’s familial importance, contributions to the minority community, financial capacity, faith, character references, age, and health, specifically noting his late seventies. The court balanced these factors against the need for general deterrence and the crime's severity, concluding that age alone does not justify a reduced sentence. Leon’s argument regarding the court's treatment of his pre-payment of nearly $1 million in restitution is deemed insignificant, as he still owed $1.9 million. His claim of substantive unreasonableness of the sentence is also rejected, as the court highlighted his theft of $4.5 million in public funds meant for health initiatives, likening him to a reverse-Robin Hood. Karin Dingle argues that the evidence did not establish her intentionality in the crimes charged, but such a defense is challenging after a jury's guilty verdict. The relevant legal standard requires viewing the evidence favorably for the prosecution to determine if a rational trier of fact could find the essential elements of the crime beyond a reasonable doubt. Karin faces charges including conspiracy to commit mail fraud, requiring proof of an actual conspiracy. Karin was implicated in a conspiracy requiring proof of her intent to further the agreement and the commission of an overt act by at least one conspirator. For the mail fraud charges, the government needed to demonstrate a scheme to defraud, use of the mails, and Karin's intent to participate in the scheme. Additionally, for the money laundering charge, it had to be shown that Karin knew the transactions involved criminally derived property from unlawful activities, specifically mail fraud. The jury concluded that Karin intended to further the conspiracy and participate in the fraudulent scheme, despite her claims of limited involvement in administrative tasks. Her actions, including confronting a co-conspirator about excessive grant money, signing over $1.7 million in checks, purchasing a luxury vehicle with the funds, diverting $15,000 for her son's mortgage, and agreeing not to pay owed state taxes, indicated her conscious involvement in the scheme. The court provided the jury with both basic intent and "ostrich" instructions to ensure proper consideration of her knowledge. Ultimately, the jury found sufficient evidence of her intent and participation in the crimes, leading to a 36-month prison sentence based on an advisory range of 41 to 51 months for an offense level of 22 and criminal history category I. This situation contrasted sharply with a prior case where the defendant’s involvement was minimal. The offense level for Karin was established based on losses exceeding $1.5 million but less than $3 million. She received a four-level downward adjustment due to her minimal role in the offense. The court denied her request for probation, despite her arguments citing her lack of a prior criminal record, minimal participation, and age. Karin contended that the loss amount overstated her culpability; however, the court acknowledged her lesser role by granting a minimal-participant adjustment under U.S.S.G. 3B1.2a. Although the court could have provided further leniency under section 3553(a), it chose to sentence her below the guidelines range, which was not required. Karin claimed that as a passive recipient of the fraud's proceeds, it was unreasonable to hold her accountable for the total amount stolen. Nonetheless, the district court considered her shared involvement in the illicit gains, stating she had a “direct connection” to the losses, despite not being the leader. The court concluded that accountability for her actions was necessary, emphasizing that Karin and her co-defendant Leon had lived luxuriously at the expense of those the Department of Public Health aimed to assist. The court affirmed their convictions and sentences, finding no errors.