United States v. Brian Wilkozek , 822 F.3d 364 ( 2016 )


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  •                                 In the
    United States Court of Appeals
    For the Seventh Circuit
    ____________________
    No. 15-1537
    UNITED STATES OF AMERICA,
    Plaintiff-Appellee,
    v.
    BRIAN WILKOZEK,
    Defendant-Appellant.
    ____________________
    Appeal from the United States District Court
    for the Northern District of Illinois, Eastern Division.
    No. 02 CR 576 — Matthew F. Kennelly, Judge.
    ____________________
    ARGUED NOVEMBER 4, 2015 — DECIDED MAY 18, 2016
    ____________________
    Before KANNE, ROVNER, and SYKES, Circuit Judges.
    SYKES, Circuit Judge. In 2003 Brian Wilkozek pleaded
    guilty to one count of mail fraud for his participation in a
    mortgage-fraud scheme. The scheme was straightforward.
    Wilkozek drafted phony mortgage applications for in-the-
    know buyers to purchase properties from an in-the-know
    realtor at artificially high prices. He then submitted these
    applications to mortgage lenders, who approved them and
    2                                                 No. 15-1537
    distributed the funds to the buyers. The buyers divvied the
    funds between all of the schemers and then walked away
    from the underwater properties. As Wilkozek expected, the
    original mortgage lenders quickly sold the mortgages to
    third-party lenders on the strength of the same phony
    applications. By the time the third-party lenders uncovered
    the scheme, all they could do was foreclose and sell the
    properties. They suffered losses of more than $700,000.
    After Wilkozek was caught and pleaded guilty, he was
    ordered to pay restitution to the victims—namely, the third-
    party mortgage lenders. That restitution went unpaid, so the
    government asked the district judge to order Wilkozek’s
    employer to turn over part of his wages. Wilkozek chal-
    lenged the government’s request via petition for coram
    nobis—an ancient writ used to collaterally attack a criminal
    judgment. Wilkozek claimed to have “new evidence” that
    proves the third-party lenders were not actually victims
    entitled to restitution. He also argued that the government
    miscalculated the amount of unpaid restitution. The judge
    disagreed on both fronts and entered the turnover order.
    We affirm. The judge properly refused to grant the writ.
    Misclassifying a lender as a victim is not a fundamental error
    remediable by coram nobis, and even if it were, Wilkozek has
    not come close to proving that a misclassification occurred
    here. And the government has corrected its mistake in
    calculating the unpaid restitution, so no further action is
    necessary.
    I. Background
    Wilkozek worked as a loan officer for JVS, Inc., a mort-
    gage lender in the Chicago area. Beginning in 1997 he partic-
    No. 15-1537                                                 3
    ipated in a scheme to defraud third-party mortgage lenders
    like Bank of America. The scheme was devised by realtor
    Theresa Holt, with Wilkozek playing the role of inside man.
    Specifically, Holt solicited in-the-know buyers to purchase
    relatively inexpensive properties at artificially high prices.
    Wilkozek then drafted bogus mortgage applications for the
    buyers and submitted them to mortgage lenders for approv-
    al. These lenders approved the mortgages and then quickly
    resold them to various third-party lenders. Importantly, in
    the course of deciding whether to purchase the mortgages,
    the third-party lenders relied on the very same phony
    applications Wilkozek submitted to the original lenders.
    The scheme produced more than $1.4 million in mort-
    gage-loan proceeds, far in excess of the market value of the
    mortgaged properties. The schemers distributed the funds
    between themselves—with Wilkozek pocketing $28,000 for
    his efforts—and the buyers walked away from the underwa-
    ter properties. Once the third-party lenders caught on, they
    initiated foreclosure proceedings, suffering losses of about
    $713,400.
    The conspiracy was exposed in 2002, and Wilkozek
    struck a deal with the government to plead guilty to one
    count of mail fraud. See 18 U.S.C. §§ 1341–1342. His deal also
    contained an appeal waiver. At sentencing the judge ordered
    him to pay $713,400 in restitution to the third-party mort-
    gage lenders, jointly and severally with his coconspirators,
    and to serve a brief stint in prison.
    Fast-forward to 2014 when the events giving rise to this
    appeal begin. Wilkozek hasn’t satisfied the restitution judg-
    ment, and the government wants to collect. The government
    asked the district judge to order Wilkozek’s then-employer
    4                                                  No. 15-1537
    Insight Global to periodically turn over a portion of his
    wages in partial satisfaction of the restitution judgment.
    Wilkozek’s response was two-fold. First, he petitioned for a
    writ of coram nobis, alleging that “new evidence” proves that
    the third-party lenders were not actually victims entitled to
    restitution. Second, he argued that the government failed to
    properly credit payments by his coconspirators to his re-
    maining unpaid restitution. The judge declined to issue the
    writ, adopted the government’s calculations, and issued the
    wage-turnover order.
    II. Discussion
    A. The Appeal Waiver
    We first address the effect of the appeal-waiver provision
    in Wilkozek’s plea agreement. It reads: “[T]he defendant
    knowingly waives the right to appeal any sentence imposed
    in accordance with paragraph 19 below [(relating to the
    prison term)] or the manner in which that sentence was
    determined.” The government argues that this waiver strips
    the court of jurisdiction to consider Wilkozek’s challenge.
    We disagree.
    Two components make up this appeal, neither of which
    implicates the appeal waiver. First and foremost is
    Wilkozek’s petition for a writ of coram nobis. This writ, like
    habeas corpus, is a collateral attack on a criminal judgment.
    See Chaidez v. United States, 
    133 S. Ct. 1103
    , 1106 n.1 (2013)
    (citing United States v. Morgan, 
    346 U.S. 502
    , 507, 510–11
    (1954)). To be sure, the right to collaterally attack a judgment
    can be waived. See Keller v. United States, 
    657 F.3d 675
    , 681
    (7th Cir. 2011). But such a waiver must be stated expressly.
    See 
    id. (“To bar
    collateral review, the plea agreement must
    No. 15-1537                                                   5
    clearly state that the defendant waives his right to collateral-
    ly attack … in addition to waiving his right to a direct ap-
    peal.”). That plainly wasn’t done here. Wilkozek’s petition
    for coram nobis is not barred by his appeal waiver.
    The second component of Wilkozek’s appeal is a chal-
    lenge to the government’s calculation of the outstanding
    restitution balance. This is merely a defense to the govern-
    ment’s motion to collect on the judgment. That is, Wilkozek
    is partially defending against the attempt to enforce the
    restitution judgment by arguing that the government is
    seeking to collect more than the amount authorized by the
    judgment. That plainly is not barred by the appeal waiver
    either.
    B. Coram Nobis
    Before we proceed to the merits, a word about jurisdic-
    tion, which is the subject of some confusion between the
    parties. Even though coram nobis is a collateral attack on a
    criminal judgment, a petition for the writ is considered
    simply another “step in the criminal case and not, like
    habeas corpus … , the beginning of a separate civil proceed-
    ing.” 
    Morgan, 346 U.S. at 505
    n.4; see also United States v.
    Denedo, 
    556 U.S. 904
    , 913 (2009). That means the district
    court’s power to hear a petition for the writ derives from the
    statute conferring subject-matter jurisdiction in the original
    criminal case. See 
    Denedo, 556 U.S. at 914
    . That statute here is
    18 U.S.C. § 3231, which confers on the district court original
    jurisdiction over “all offenses against the laws of the United
    States.” The government asserts that the district court’s
    power to hear Wilkozek’s petition flows from the All Writs
    Act, 28 U.S.C. § 1651. But the All Writs Act “is not a font of
    jurisdiction.” 
    Denedo, 556 U.S. at 914
    . Rather, the Act simply
    6                                                    No. 15-1537
    gives the district court the power to grant a writ of coram
    nobis when appropriate. See 
    Morgan, 346 U.S. at 511
    .
    Moving to the merits, “[t]he writ of coram nobis is an an-
    cient common-law remedy” originally “designed ‘to correct
    errors of fact.’” 
    Denedo, 556 U.S. at 910
    (quoting 
    Morgan, 346 U.S. at 507
    ). However, the scope of the writ has been
    broadened in modern times to claims of both legal and
    factual error, but only in criminal cases. See 
    id. at 912–13;
    FED. R. CIV. P. 60(e) (abolishing the writ of coram nobis in civil
    proceedings).
    In our circuit coram nobis relief is available when: (1) the
    error alleged is “of the most fundamental character” as to
    render the criminal conviction “invalid”; (2) there are
    “sound reasons” for the defendant’s “failure to seek earlier
    relief”; and (3) “the defendant continues to suffer from his
    conviction even though he is out of custody.” See United
    States v. Sloan, 
    505 F.3d 685
    , 697 (7th Cir. 2007) (quotation
    marks omitted); see also United States v. Keane, 
    852 F.2d 199
    (7th Cir. 1988) (discussing elements in more detail). In
    considering a district judge’s denial of the writ, we review
    conclusions of law de novo and findings of fact for clear
    error. See Chaidez v. United States, 
    655 F.3d 684
    , 687 (7th Cir.
    2011) aff’d 
    133 S. Ct. 1103
    (2013); accord United States v.
    George, 
    676 F.3d 249
    , 256 (1st Cir. 2012).
    We begin and end our analysis with the first element. A
    fundamental error that invalidates a criminal proceeding is
    one that undermines our confidence that the defendant is
    actually guilty. See 
    Morgan, 346 U.S. at 511
    . Only errors of
    this magnitude justify the cost of putting aside the interest in
    finality. See 
    Keane, 852 F.2d at 206
    (“At some point the judi-
    cial system must close old files and turn to the future, regret-
    No. 15-1537                                                   7
    fully accepting the risk of error lest the quest for perfect
    justice become the enemy of adequate justice.”). An obvious
    example is deprivation of counsel. See 
    Morgan, 346 U.S. at 511
    –12.
    Wilkozek has not argued that he is not guilty of mail
    fraud. His claims of error relate only to the restitution com-
    ponent of his criminal sentence. Restitution to a victim must
    be ordered when a defendant commits a property offense by
    fraud. See 18 U.S.C. § 3663A(a)(1), (c)(1)(A)(ii). As relevant
    here, a “victim” is defined as “a person directly and proxi-
    mately harmed as a result of” the defendant’s fraud. 
    Id. § 3663A(a)(2).
    We have said that a person must actually rely
    on the defendant’s fraudulent statements to his detriment in
    order to be a victim under this definition. See United States v.
    Farano, 
    749 F.3d 658
    , 666 (7th Cir. 2014). (“There is as yet no
    evidence … of such reliance by the refinancing banks, and in
    its absence those banks cannot be counted as ‘victims’ for
    restitution purposes, though their loss is loss” for sentencing
    purposes.). Here Wilkozek primarily argues that new evi-
    dence uncovered after the 2008 financial crisis proves that
    the third-party lenders did not rely upon his fraudulent
    statements and were therefore not victims entitled to restitu-
    tion.
    An error of this type is not of the “most fundamental
    character” as to render the conviction invalid. 
    Sloan, 505 F.3d at 697
    ; accord 
    id. (“Restitution orders
    that sweep too much
    conduct into their calculations … do not rise to the level of a
    constitutional violation.”). Misclassifying a third-party
    lender as a victim results in a windfall to that lender in that
    it will recover money it lost due to the defendant’s criminal
    behavior that was otherwise unrecoverable as restitution.
    8                                                 No. 15-1537
    This kind of error doesn’t cast doubt on Wilkozek’s guilt. So
    even assuming the district judge misclassified the lenders as
    victims here, there is no fundamental injustice to Wilkozek
    because all of the money received from the mortgage-fraud
    scheme was ill-gotten, regardless of whether the lenders
    actually relied on the bogus mortgage applications he draft-
    ed. Cf. § 1341 (defining elements of mail fraud).
    But even if misclassifying a lender as a victim were a
    fundamental error, Wilkozek has not shown that such an
    error occurred here. In his plea agreement, Wilkozek admit-
    ted that the third-party lenders actually relied on the fraudu-
    lent applications he prepared. To prove that a misclassifica-
    tion error occurred, he must have evidence to overcome this
    admission. He has none. The only “evidence” he submitted
    were news articles and press releases describing troubling
    behavior by mortgage lenders (including some of the third-
    party lenders here) leading up to the 2008 financial crisis.
    This “evidence” doesn’t overcome Wilkozek’s admission
    that the third-party lenders actually relied on his fraudulent
    mortgage applications. Accordingly, the judge properly
    declined to issue the extraordinary writ of coram nobis.
    C. Miscalculation of the Outstanding Restitution Balance
    Wilkozek also argues that the government did not
    properly credit him for restitution payments made by his
    coconspirators. The government admits that it failed to
    credit Wilkozek for $51,851.49 in payments made by Theresa
    Holt (the realtor) and has reduced Wilkozek’s outstanding
    restitution balance by that amount. No more need be done.
    AFFIRMED.
    

Document Info

Docket Number: 15-1537

Citation Numbers: 822 F.3d 364, 2016 U.S. App. LEXIS 9097, 2016 WL 2909225

Judges: Kanne, Rovner, Sykes

Filed Date: 5/18/2016

Precedential Status: Precedential

Modified Date: 10/19/2024