United States v. Thaddeus Bania , 787 F.3d 1168 ( 2015 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 14-2317
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
THADDEUS BANIA,
Defendant-Appellant.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 1:07-cr-00580-6 — Charles P. Kocoras, Judge.
____________________
ARGUED FEBRUARY 11, 2015 — DECIDED JUNE 4, 2015
____________________
Before FLAUM, WILLIAMS, and HAMILTON, Circuit Judges.
FLAUM, Circuit Judge. Four years after the imposition
of his sentence, Thaddeus Bania filed a motion with the
district court, challenging the propriety of the sentencing
judge’s restitution order. Because the district court lacked
jurisdiction to hear Bania’s motion and the time to appeal
his sentence has long passed, we affirm the court’s denial
of the motion.
2 No. 14-2317
I. Background
Thaddeus Bania stands convicted of eleven criminal
counts due to his part in an effort to rig a union election.
In 2004, Bania and several cohorts schemed to ensure the
reelection of two leaders of Local 743 of the International
Brotherhood of Teamsters—a labor organization com-
posed of 12,000 members working for roughly 150 em-
ployers in Northwest Indiana and the Chicago metro ar-
ea. Section 481 of the Labor-Management Reporting and
Disclosure Act, 29 U.S.C. § 481, requires local labor or-
ganizations at least once every three years to elect their
officers by secret ballot. The statute bestows the right to
vote for the candidate of his choice to every member of
the organization in good standing.
Local 743’s election for the 2005–2007 term was
scheduled to be held in October 2004. Beforehand, Bania
and Local 743’s president Robert Walston sought to ma-
nipulate the voting to ensure victory for Walston and in-
cumbent Recording Secretary Robert Lopez—both of
whom ran for office, along with five others, on the elec-
tion ticket referred to as the “Unity Slate.” To fix the elec-
tion, Bania and Walston diverted ballots from legitimate
union members (careful only to target members who had
not voted in the previous election) by changing members’
mailing addresses in the Local 743 database to addresses
supplied to them by fellow union employees and future
co-defendants David Rodriguez and Cassandra Mosley.
Bania and Walston then collected the misdirected ballots
and cast falsified votes for the Unity Slate. In total, they
diverted 150 ballots, 118 of which ultimately were cast
and counted.
No. 14-2317 3
Walston’s opponent in the presidential election, Rich-
ard Berg of the opposing ticket (known as the “New
Leadership Slate”), seems to have sensed foul play, be-
cause he lodged several protests with the Local 743 Exec-
utive Board during the course of the election. One such
protest concerned the fact that Bania had illegally ob-
tained a key to the union’s “undeliverable” mailbox at the
post office, prompting the election officer to quarantine
86 votes and halt the vote tally. An additional 188 ballots
had been challenged for a variety of reasons and, conse-
quently, also went uncounted. Prompted by the suspi-
cious voting activity, the Board voted to void the results
and re-run the election. Walston—who, despite his and
Bania’s efforts, was losing to Berg by 7 votes after all un-
challenged ballots had been tallied—sensed defeat for the
Unity Slate, and so he backed the decision to have a do-
over. The Board scheduled a new election to be held two
months later, in December 2004.
Undeterred, Bania and Walston employed the same
fraud scheme during the second election. This time, the
pair doubled back and corrected the addresses of the 150
members whose ballots they had diverted for the October
election, and instead redirected the ballots of 157 fresh
targets (again choosing union members with a history of
truancy at the polls). They also obtained an indetermi-
nate number of votes by providing to the election officer
false addresses for members whose ballots had been re-
turned undeliverable in the October election, and by
placing fake phone calls to the election officer in order to
obtain duplicate ballots at false addresses for certain un-
ion members. The entirety of Walston’s Unity Slate won
4 No. 14-2317
the December election, comfortably beating the New
Leadership Slate by 394 votes.
A grand jury indicted Bania and four others—
including Walston, Lopez and Rodriguez—for their
fraudulent activity. As to Bania, the March 6, 2008 super-
seding indictment comprised one count of conspiracy to
commit mail fraud and theft from a labor organization
(in violation of 18 U.S.C. § 371), four counts of mail fraud
(in violation of 13 U.S.C. § 1341 and 1346), and six counts
of embezzling, stealing, and unlawfully and willfully ab-
stracting and converting property and other assets of a
labor organization (in violation of 29 U.S.C. § 501(c)). Fol-
lowing an eighteen-day trial, a jury convicted Bania on
May 1, 2009.
On August 27, 2009, the district court sentenced Bania
to concurrent 40-month terms of imprisonment on each
count (a departure from the low-end of the guidelines—
97 months), followed by a two-year term of supervised
release. In addition, the court ordered Bania to pay
$900,936 in restitution to Local 743, and to pay a special
assessment of $1,100. On the theory that Bania’s conduct
deprived the union of honest services, the restitution
amount reflected the salaries paid to Walston and Lopez
($864,924), 1 plus the expenses incurred by the union to
hold the December re-election ($36,012). The court im-
1 At sentencing, the government argued that Bania’s restitution
amount should reflect the salaries of all seven members of the Unity
Slate who won office. The court, however, rejected the government’s
position, finding that Bania only sought to have two of those mem-
bers—Walston and Lopez—elected and, thus, his conduct only de-
prived the union of the honest services of those two ticket members.
No. 14-2317 5
posed a concurrent forfeiture obligation on Bania in the
amount of salary and benefits paid to Walston and
Lopez. Bania and his co-defendants were held jointly and
severally liable for the payment of the restitution and for-
feiture amounts.
Bania did not appeal his sentence or conviction. But,
on July 2, 2010 (over ten months after the imposition of
his sentence), he did file a 28 U.S.C. § 2255 motion, alleg-
ing ineffective assistance of counsel and accusing his
lawyer of disregarding Bania’s instruction to file a timely
notice of appeal. The district court conducted an eviden-
tiary hearing and concluded that, contrary to Bania’s
claim, Bania knowingly declined to appeal after being
advised by his attorney of his right to do so.
On November 28, 2012, Bania completed his prison
term and began serving his term of supervised release.
Less than a year later, on October 13, 2013, Bania filed a
pro se motion for early termination of supervision pur-
suant to 18 U.S.C. § 3583(e)(1), arguing that his compli-
ance with the terms of his release warranted such relief.
The district court denied Bania’s motion in view of his
outstanding financial obligation. (At the time, more than
$635,000 of Bania’s restitution order remained unpaid.)
Bania appealed the district court’s denial of his mo-
tion for early termination of his supervised release. On
appeal, however, Bania did not actually challenge the dis-
trict court’s rationale for denying his motion. Instead, he
argued that at sentencing (which, at that point, had taken
place more than four years earlier) the district court im-
properly calculated the restitution amount that it ordered
him to pay. In Bania’s view, the district court arrived at its
6 No. 14-2317
restitution figure by improperly totaling the loss he in-
tended to cause the union, rather than the loss he actually
caused. Without oral argument, we issued an order con-
cerning Bania’s appeal on April 18, 2014. In it, we noted
that Bania’s challenge to the restitution amount was un-
timely—Federal Rule of Appellate Procedure 4(b) re-
quired Bania to file a notice of appeal within fourteen
days of the entry of judgment. And we affirmed the dis-
trict court’s decision not to prematurely terminate Bania’s
supervised release in order to ensure repayment to Ban-
ia’s victims. United States v. Bania, 562 F. App’x 528, 529
(7th Cir. 2014).
On January 15, 2014, while that appeal was pending,
Bania filed a motion with the district court captioned
“Motion to Terminate Order of Restitution and Order of
Forfeiture.” Bania again advanced the argument that the
district court erred by ordering the payment of restitu-
tion and the forfeiture of assets in an amount based on
intended rather than actual loss. In light of our April 18,
2014 order, the district court denied Bania’s motion. Bania
then appealed the district court’s decision to deny his
motion, and it is that appeal that is before us now.
II. Discussion
On appeal, Bania continues his quest to prove that the
district court ordered restitution without determining
whether Local 743 suffered any actual loss as a result of
the illegal voting scheme. But, as we pointed out in Ban-
ia’s first appeal, he embarked on this quest far too late.
Bania had just 14 days to file a notice of appeal if he
wished for us to review the district court’s restitution or-
der. Fed. R. App. P. 4(b). At oral argument, Bania was
No. 14-2317 7
questioned about his decision not to do so, and his re-
sponse was puzzling. Initially, he suggested that he re-
frained from appealing out of a fear that he would invoke
the ire of the sentencing judge and receive more incarcer-
ation than he otherwise would have. When pressed about
the illogic of that position (notices of appeal are, of
course, filed after the district judge’s issuance of final
judgment), Bania backtracked, acknowledging that he
made the decision not to appeal after he and his lawyer
discussed the potential merit of his restitution argument
and “how much it would cost” to bring the appeal. But
whatever his reasons, Bania consciously chose not to take
a direct appeal, and his time to do so has long passed.
United States v. Rollins, 607 F.3d 500, 501 (7th Cir. 2010)
(Rule 4(b)’s 14-day time limit “is mandatory, and we must
enforce it when the appellee stands on its rights (as the
United States has done).”); Young v. United States, 489 F.3d
313, 315 (7th Cir. 2007) (“[A] criminal forfeiture is part of
the defendant’s sentence and must be challenged on di-
rect appeal or not at all.”); United States v. Hook, 471 F.3d
766, 771 n.1 (7th Cir. 2006) (“Because restitution was part
of his original sentence, any challenge to that order need-
ed to be made on direct appeal … .”).
Bania represented at oral argument that it was only
after he, years later, learned that his co-defendant Rodri-
guez successfully challenged his own restitution order—
a notion that we’ll revisit below—that he decided to take
action and file the motion at issue here. But that action,
too, was untimely. The government correctly points out
that the court lacked jurisdiction to entertain Bania’s mo-
8 No. 14-2317
tion, 2 and thus properly denied it. Although Bania’s pro
se motion did not invoke a specific procedural rule, Fed-
eral Rule of Criminal Procedure 35 governs motions—
like Bania’s—to correct or reduce an allegedly clear error
in a defendant’s sentence. Rule 35(a) dictates that
“[w]ithin 14 days after sentencing, [a district court] may
correct a sentence that resulted from arithmetical, tech-
nical, or other clear error.” Fed. R. Crim. P. 35(a). 3 This
“time limit is jurisdictional,” United States v. Wisch, 275
F.3d 620, 626 (7th Cir. 2001), and so the four-and-a-half
years Bania waited before acting rendered the district
court powerless to hear his Rule 35 motion. See United
States v. Baldwin, 414 F.3d 791, 797 (7th Cir. 2005) (“The
Supreme Court has held that [Rule 35] operate[s] to de-
prive the court of authority to act after the time period
specified in the rule has elapsed.”), overruled on other
grounds by United States v. Parker, 508 F.3d 434, 435 (7th
Cir. 2007).
At oral argument Bania urged us to alter his sentence
by invoking the Mandatory Victim’s Restitution Act
(“MVRA”). 4 But nothing in the MVRA permits the court
2We review the jurisdictional issue de novo. United States v. De la
Torre, 327 F.3d 605, 608 (7th Cir. 2003).
3 “Rule 35 was amended in 2002 as part of the general restyling and
revision of the Federal Rules of Criminal Procedure. Under the 2002
amendments, former Rule 35(c) is now Rule 35(a).” De la Torre, 327
F.3d at 608 n.1.
4 18 U.S.C. § 3663(d) dictates that “[a]n order of restitution made
pursuant to this section shall be issued and enforced in accordance
with section 3664.” Section 3664(o) then provides: “A sentence that
imposes an order of restitution is a final judgment notwithstanding
the fact that—
No. 14-2317 9
to revisit the restitution order now. Moreover, no other
statute or rule conferred jurisdiction on the district court
to entertain Bania’s belated motion. A 28 U.S.C. § 2255
motion, for instance, cannot be used as a vehicle for chal-
lenging the restitution component of a sentence. Barnickel
v. United States, 113 F.3d 704, 706 (7th Cir. 1997). And we
have been clear that such motions are no substitute for a
direct appeal. Id. Accordingly, the court’s denial of Bania’s
motion was appropriate, and we affirm the district
court’s ruling.
With the merits decidedly out of our reach, we could
end here. However, we feel that a certain amount of ex-
planation is needed to alleviate the confusion (and re-
sultant indignation) that Bania seemed to harbor at oral
argument with respect to his outstanding restitution ob-
ligation. As mentioned, Bania cited the successful appeal
of his co-defendant Rodriguez as the impetus for his
challenge to the district court’s order of restitution. Ro-
driguez advanced the same theory that Bania advocates
here—that is, that the sentencing judge failed to calculate
(1) such a sentence can subsequently be—
(A) Corrected under Rule 35 of the Federal Rules of
Criminal Procedure and section 3742 of chapter
235 of this title;
(B) Appealed and modified under section 3742;
(C) amended under subsection (d)(5); or
(D) adjusted under section 3664(k), 3572, or 3613A;
or
(2) the defendant may be resentenced under section 3565 or
3614.”
10 No. 14-2317
actual loss. And so, Bania believes that Rodriguez’s ap-
pellate win lends credence to Bania’s contention that his
fraud scheme did not cause or facilitate the Unity Slate’s
election. That view is mistaken.
At the sentencing of Bania and Rodriguez, the gov-
ernment conceded that it only was able to attribute 157
falsified votes from the December election to Bania and
his co-defendants. For that reason, Bania argues that he
was at most responsible for a 314-vote swing in the re-
sults, and thus, that his fraud scheme did not dictate the
outcome of the December election. As Bania rightly
notes, restitution must be based on actual—not intend-
ed—loss. See 18 U.S.C. §§ 3663(a)(1)(B)(i)(I) and 3664(e).5
Therefore, Bania contends that the district court’s valua-
tion of the honest services of which the election of Wal-
ston and Lopez deprived Local 743 reflects the loss that
Bania intended to cause the union, since the government
lacks proof that his conduct actually enabled their victory.
By Bania’s lights, $864,924 of his restitution order (the
portion reflecting the salaries paid to Walston and Lopez
during the 2005–2007 term) was imposed illegally. That
view, however, ignores that Bania’s actions spurred the
abrogation of the October election—an election which
Walston, at least, believed after one day of vote tallying
5 “While for sentencing purposes ‘loss’ is defined as the greater of
either the ‘actual’ or the ‘intended’ amount lost due to the fraud, for
restitution purposes the [Mandatory Victims Restitution Act of 1996,
18 U.S.C. § 3663] implicitly requires that the restitution award be
based on the amount of loss actually caused by the defendant's of-
fense.” United States v. Rhodes, 330 F.3d 949, 953 (7th Cir. 2003) (em-
phases in original) (internal citations omitted).
No. 14-2317 11
spelled doom for him and Lopez. Bania’s conduct trig-
gered the December re-run, from which the Unity Slate
emerged victorious. And so, even if we could reach the
merits in this case, Bania’s causation argument is not
convincing.
Rodriguez’s success on appeal does not alter that con-
clusion. The appellate docket in Rodriguez’s case reflects
that he (unlike Bania) timely appealed the imposition of
his sentence on September 8, 2009. See United States v. Ro-
driguez, 10-2816, Dkt. No. 1-1. And, because of the nature
of Rodriguez’s role in the fraudulent scheme, his chal-
lenge to the restitution order had greater merit than Ban-
ia’s. In Rodriguez’s case, the government conceded what
Bania makes much of here—that the district court did not
make the necessary and appropriate findings concerning
actual loss for restitution purposes at Rodriguez’s (and
thus Bania’s) sentencing hearing. Instead, the government
acknowledged, the district court focused its loss inquiry
exclusively on the appropriate loss amount for sentenc-
ing enhancement purposes pursuant to Guideline
§ 2B1.1(b)(1)(I). The government therefore requested a
limited remand to allow the district court to determine
the actual loss (if any) caused by the defendants’ scheme.
Accordingly, we vacated Rodriguez’s restitution order
and remanded the case for additional findings. See Dkt.
No. 39. That procedural defect at sentencing, however,
has no bearing on whether, as a factual matter, the fraud
scheme enabled the election of Walston and Lopez.
On remand (and this is a critical fact that Bania
seemed not to fully appreciate at oral argument in this
case), the government remained steadfast in its position
12 No. 14-2317
that the defendants caused the Unity Slate’s election by
virtue of their misconduct surrounding the October elec-
tion. Yet, in an exercise of prosecutorial discretion, the
government recommended that Rodriguez’s new restitu-
tion order be limited to the amount which he had already
paid—$3,217.80. In the government’s view, this reduc-
tion—from his original restitution order of $864,924—
was appropriate, among other reasons, because of Rodri-
guez’s minimal role in the scheme. The court adopted the
government’s position and issued the new order.
All of this is to say that the reduction in Rodriguez’s
restitution order does not support Bania’s view that his
conduct did not cause the election of Walston and Lopez.
The government’s position all along has been that Bania
and his co-defendants enabled the Unity Slate’s victory. It
only recommended a restitution reduction for Rodriguez
because of his minor role in the fraud—a role so minor
with respect to the October election, we note, that his ini-
tial restitution order (unlike Bania’s) did not include the
cost to the union of re-running the election. Different
from Rodriguez, Bania was one of the scheme’s kingpins,
whose personal actions prompted the Board to halt the
vote count, vacate the results, and conduct the re-run that
ordained the Unity Slate’s victory. For that reason, Bania’s
position that he did not divert enough votes in the De-
cember re-run to dictate the result of that election would
not carry the day, even if the merits were within our pur-
view.
No. 14-2317 13
III. Conclusion
For the foregoing reasons, we AFFIRM the judgment of
the district court.