People v. Zaibak

2014 IL App (1st) 123332
FIRST DIVISION
December 8, 2014
No. 1-12-3332
THE PEOPLE OF THE STATE OF ILLINOIS, ) Appeal from the
) Circuit Court of
Plaintiff-Appellee, ) Cook County.
)
v. ) No.11 CR 2035-01
)
EMAD ZAIBAK, ) Honorable
) Stephen J. Connolly,
Defendant-Appellant. ) Judge Presiding.
JUSTICE HARRIS delivered the judgment of the court, with opinion.
Justices Cunningham and Connors concurred in the judgment and opinion.
OPINION
¶1 The circuit court convicted defendant, Emad Zaibak, after a bench trial of three counts of
organizing a continuing financial crimes enterprise. 720 ILCS 5/16H-55 (West 2006). Those
three counts, in turn, were based on defendant being convicted of the following predicate
convictions: three counts of theft by unauthorized control; three counts of theft by deception; and
three counts of loan fraud. Defendant raises the following issues for our review: (1) whether
the "organizer of a continuing financial crimes enterprise" statute (720 ILCS 5/16H-55 (West
2006)) is unconstitutionally vague; (2) whether the circuit court abused its discretion when it
admitted the contents of loan files from two banks, Washington Mutual and Harris Bank, as
business records; (3) whether the State provided sufficient evidence to convict him of loan fraud
(720 ILCS 5/16H-30 (West 2006)); and (4) whether the State provided sufficient evidence to
convict him of being an organizer of a continuing financial crimes enterprise (720 ILCS
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5/16H-55 (West 2006)). Additionally, the parties agree that defendant's conviction for being an
organizer of a continuing financial crimes enterprise based on the three predicate convictions of
theft by unauthorized control should be vacated. The parties, however, disagree on whether the
matter needs to be remanded for resentencing.
¶2 We hold defendant has not satisfied his burden of proving that the "organizer of a
continuing financial crimes enterprise" statute (720 ILCS 5/16H-55 (West 2006)) is
unconstitutionally vague as applied to him. Further, the circuit court did not abuse its discretion
when it admitted the contents of the respective loan files as business records, and the State
presented sufficient evidence showing defendant committed loan fraud (720 ILCS 5/16H-30
(West 2006)) and two counts of being an organizer of a continuing financial crimes enterprise
(720 ILCS 5/16H-55 (West 2006)). We agree with the parties that one of defendant's
convictions for being an organizer of a continuing financial crimes enterprise, and the three
predicate convictions of theft by unauthorized control that the conviction is based on, must be
vacated. Therefore, we vacate those convictions and remand the matter to the circuit court
solely for resentencing.
¶3 JURISDICTION
¶4 The circuit court sentenced defendant on October 19, 2012. Defendant timely filed his
notice of appeal on October 20, 2012. Accordingly, this court has jurisdiction pursuant to article
VI, section 6, of the Illinois Constitution and Illinois Supreme Court Rules 603 and 606, governing
appeals from a final judgment of conviction in a criminal case entered below. Ill. Const. 1970,
art. VI, § 6; Ill. S. Ct. Rs. 603, 606 (eff. Feb. 6, 2013).
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¶5 BACKGROUND
¶6 A grand jury charged defendant and others with 33 fraud-related counts involving 10 real
estate loans on 8 properties. Codefendants Ocie Johnson, John Bobak, and Omar Alzaibak
entered guilty pleas and executed cooperation agreements. After defendant waived his right to
a jury trial, the circuit court conducted a bench trial on 12 counts, based on three 2007 financial
transactions involving two properties: a mortgage and a home equity line of credit for property
located at 106 Forest Edge, in Palos Park, Illinois; and a mortgage for property located at 221
Sawgrass in Palos Heights, Illinois. Codefendants Sam Elayyan and Nate Morgan 1 were also
tried with defendant, although Elayyan had a jury trial. Relevant here, counts IX, XI, and XIII
of the indictment against defendant alleged theft by deception. Those counts served as the
predicate to count II, which alleged defendant was an organizer of a continuing financial crimes
enterprise. Counts XXVI through XXVIII alleged defendant committed loan fraud, and also
served as the predicate for count III, which contained another allegation against defendant for
being an organizer of a continuing financial crimes enterprise. 2
¶7 The Lending Center and Silver Key Lending and Investment Group
¶8 Around 2004, defendant and his colleague John Kocher opened a mortgage brokerage,
The Lending Center, as equal partners. Defendant became the president of the organization.
The Lending Center served as a loan originator, but did not underwrite loans. Eventually,
Kocher and defendant’s relationship deteriorated, and Kocher dissociated himself from The
Lending Center in the spring of 2007. Kocher maintained a formal interest in the company
until May 8, 2009.
1
Morgan was charged in a separate but similar indictment.
2
As discussed supra, the parties agree that counts I, VIII, IX, and X should be vacated, but
disagree on whether this court should remand the matter for resentencing.
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¶9 After defendant and Kocher’s relationship ended, defendant opened up Silver Key
Lending and Investment Group (Silver Key) with his childhood friend Youssef Allen.
Defendant and Allen set up Silver Key’s office at 744 North Wells Street, in Chicago, Illinois.
At first, Silver Key had four employees: defendant, Allen, Stella Brown, and defendant’s uncle
Aimen Rafati. Stella Brown had worked as a loan processor for The Lending Center.
Defendant later “started filling the office with people,” including Nate Morgan. Brown did not
remember what Morgan did, but recalls Rafati referred to Morgan as one of defendant’s “boys.”
¶ 10 106 Forest Edge Property
¶ 11 John Bobak, a builder doing business as J.B. Builders, purchased a lot at 106 Forest Edge
in Palos Park, Illinois, and built a home on it. He hired Laura Burns, a real estate agent, to sell
the home. Defendant told Burns that he was interested in the house for his parents. Bobak
showed defendant the house, which defendant liked. On May 5, 2007, defendant and Bobak
met at Burns' office and negotiated a contract for the purchase of the property for $2.2 million,
which included extras and improvements. Burns drafted the contract as a ministerial agent for
both parties. The contract lists Bobak as the seller and defendant’s father and codefendant,
Omar Alzaibak as the buyer. The defendant is not a buyer in the contract. Bobak signed the
contract and defendant, using his father’s initials, initialized each page of the contract. At that
time, Burns and Bobak had not met Alzaibak, and Alzaibak did not attend the meeting or provide
any input to Burns about what should go into the contract.
¶ 12 The contract designated The Lending Center as the mortgage company. Defendant
arranged for Washington Mutual to provide $1.7 million in mortgage financing for Alzaibak.
Defendant had Alzaibak sign the mortgage application, which Alzaibak did not read or
understand. The application falsely stated that Alzaibak made $38,000 a month as the chairman
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of the board of Zaibak Center for Dentistry. Defendant’s brother, Zyad Zaibak, operated a
dental practice named Zaibak Center for Advanced Dentistry, but he did not employ or pay
Alzaibak. The application also falsely stated that Alzaibak made $30,000 a month as the
chairman of Lina Enterprises. Alzaibak did own a grocery store in 2005 named Lina
Enterprises, but he did not make $30,000 a month from operating it. The application also
falsely stated Alzaibak shared a Harris Bank account with his ex-wife that had a balance of
$855,322.81 on April 9, 2007, and $446,110.81 on May 9, 2007. Alzaibak admitted that the
information on the loan application was not true. According to the application, Alzaibak also
owned property at 14007 South 84th Street in Orland Park, Illinois, without encumbrance, which
was untrue as he relinquished his interest in the property in 2002 by conveying it in a quitclaim
deed to his ex-wife and defendant. Defendant falsely documented Alzaibak’s financial
condition with fabricated Harris Bank records showing the purchases of a $450,000 cashier’s
check; a remaining balance of $446,110, a false earnest money cashier’s check, and a letter from
Alzaibak’s former accountant, Adnan Elhaj, of HAJ Financial, Inc., falsely attesting to
Alzaibak’s employment. Elhaj testified that the documents submitted using HAJ Financial's
letterhead regarding Alzaibak's financial situation were false. He was never asked to prepare
any letters regarding Alzaibak's finances to Washington Mutual or Harris Bank.
¶ 13 On June 4, 2007, the closing occurred for the sale of the 106 Forest Edge property. The
closing was a “dry closing” in that legal documents were signed but no money changed hands.
Defendant, his parents, Rafati, Bobak, and Bobak’s attorney were in attendance. Defendant
directed Alzaibak what to sign and initial. Washington Mutual disbursed $1,767,853 to various
parties, including: $1,063,324 to Archer Bank to pay Bobak’s first mortgage; $611,598 to Bobak
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as seller’s proceeds; $61,250 to Bobak’s agent, Century 21; and $15,804 to The Lending Center.
The proceeds that went to The Lending Center were deposited into defendant’s personal account.
¶ 14 Bobak, as reflected in the contract and the settlement sheet at closing, was to receive
$450,000 in earnest money from Alzaibak. Defendant and Bobak agreed in advance that the
contract would falsely state that Alzaibak tendered the $450,000 in earnest money in order to
induce Washington Mutual into providing more funding than it typically would have done. The
Washington Mutual loan file included a Harris Bank cashier’s check that paid Bobak $450,000
earnest money that was used to apply for the mortgage at 106 Forest Edge. Bobak testified he
had never seen the check before. Defendant and Bobak had a side agreement whereby Bobak
would complete various improvements on the house for $100,000. Washington Mutual would
have denied financing had this been part of the sale agreement. Bobak subsequently tried to
collect from defendant and Alzaibak. He eventually placed an $80,000 lien on the house.
¶ 15 Home Equity Line of Credit
¶ 16 After the closing of 106 Forest Edge, defendant contacted Harris Bank manager Rami
Haleem to obtain a home equity line of credit on the property. Defendant told Haleem the
property was worth $2.65 million. Defendant explained in a June 7, 2007, email to Angel Ulan,
a banker managed by Haleem, that he needed the home equity line of credit to be obtained
quickly, stating: “My dad owns this house free and clear. However, we need [a home equity
line of credit] as soon as possible. I have an investment coming up on the 15th of June that I
will need close to million dollars for. Please help me in expediting this.” Defendant sent Ulan
a uniform residential loan application and other documents for the home equity line of credit.
¶ 17 The home equity line of credit loan application was submitted under a program that
extended credit based on credit history as opposed to documentation. The application falsely
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identified Alzaibak as the senior vice president of The Lending Center for the previous 4½ years.
It also indicated that he earned $66,000 a month and had $700,000 in liquid assets. Defendant
also sent Ulan a false settlement statement indicating that Alzaibak paid $1.75 million in cash
and $450,000 in earnest money at closing. When Harris Bank ran Alzaibak’s credit report on
June 7, 2007, it had not yet reflected the $1.75 million mortgage to Washington Mutual because
it usually takes about 30 days for a loan to appear on a credit report.
¶ 18 Harris Bank approved a $1.4 million home equity line of credit to Alzaibak on June 15,
2007. On June 29, 2007, defendant directed Alzaibak to complete paperwork at an Orland
Park, Illinois, branch of Harris Bank. Alzaibak, after completing the paperwork, authorized a
request from defendant to have the entire home equity line of credit placed in defendant’s Harris
Bank account. On July 7, 2007, Harris Bank disbursed $1.4 million directly into defendant’s
checking account.
¶ 19 Defendant, Alzaibak, and other family members moved into the home at 106 Forest
Edge. Alzaibak was under the impression that defendant was making the mortgage payments.
The mortgage went into default in less than a year.
¶ 20 221 Sawgrass Property
¶ 21 Ocie Johnson earned $8 an hour in early 2007 and lived at his mother’s house in Dolton,
Illinois. Johnson boasted to Eric Peoples, an auto shop owner, that he had a good credit score.
Peoples introduced Johnson to Nate Morgan later that week. Morgan, Johnson, and Peoples
discussed his credit score and employment situation. Morgan told Johnson that they “could do
business” due to his good credit score. Morgan asked Johnson to send him a copy of his
driver’s license and social security information, which Johnson did. Several weeks later,
Morgan had Johnson open a credit card account at Home Depot. Morgan also had Johnson
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open an account up at J.P. Morgan Chase. When Johnson received his credit card in the mail,
he gave it to Morgan.
¶ 22 Several weeks later, Morgan drove Johnson to Silver Key’s office at 744 North Wells
Street in Chicago and met defendant. Defendant told Johnson that he helped people, including
professional athletes, purchase houses. He gave Johnson his Silver Key business card. After
Morgan and defendant talked with one another, defendant told Johnson that he had some papers
for him to sign and initial. Upon Johnson’s signing of the documents, Morgan turned them face
side down. Morgan handed all of the documents to defendant. Johnson did not read or
understand the documents he signed, but he was told by Morgan that the documents were for the
house they were “getting.” About a week later, Morgan called Johnson and informed him that a
driver would pick him up. The driver drove Johnson to defendant’s office, where Johnson met
defendant and Morgan. Johnson signed more documents given to him by defendant. Morgan
again collected the documents in the same manner as before and handed them to defendant.
¶ 23 On September 7, 2007, Morgan drove Johnson to defendant’s office. While driving,
Morgan told Johnson that they were “about to get the house.” After going to defendant’s office,
defendant, Johnson, Morgan, and one other person took a cab to what Johnson thought was the
upstairs room of a bank. Codefendant Sam Elayyan and several other people were there.
Morgan introduced Johnson to Elayyan as the owner of Dupont Motors and Fresh Wear clothing
store. A woman told Johnson she was his attorney and showed him where to initial and sign
several documents. Afterwards, Morgan told Johnson that he got “his money” and that he
would give Johnson his share.
¶ 24 Johnson had purchased a $2.45 million home from Elayyan located at 221 Sawgrass in
Palos Heights, Illinois. Silver Key prepared and submitted the mortgage loan application to
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Washington Mutual for Johnson. Defendant is listed as the interviewer who prepared Johnson’s
application. The application falsely lists Johnson as renting his residence at 1620 South
Michigan Avenue, No. 1107, in Chicago, Illinois for $4,700 a month. Defendant owned this
property, and Johnson never lived there. The application also falsely listed Johnson as a
manager at Dupont Motors. It stated he made $39,000 a month. It also stated he had a J.P.
Morgan Chase account with a balance of $665,000. The application also stated that Johnson
had paid $490,000 in earnest money and planned to use the property as his primary residence.
Silver Key documents falsely stated Johnson’s financial status with false bank statements from
J.P. Morgan Chase, a false earnest money check, false utility bills from 1620 South Michigan
Avenue, and false rent verification. The Washington Mutual file shows a fax from Dupont
Motors verifying Johnson’s employment from February of 2004.
¶ 25 Washington Mutual approved the loan and disbursed $1.96 million. Included in this
disbursement was $1,303,635 to pay Elayyan’s first mortgage; $94,255 to pay Elayyan's second
mortgage; $540,496 to Elayyan as seller’s proceeds; and $53,936 to Silver Key for being the
broker. Elayyan endorsed the $540,496 seller’s proceeds check to defendant. Defendant gave
$100,000 to Morgan. Defendant, by wire transfer from his personal Harris Bank account, paid
$330,500 to Elayyan's account. Morgan wrote Johnson a $7,000 check. Although he visited
the property at 221 Sawgrass two times, Johnson never lived there. Johnson thought Morgan
was making the mortgage payments because he lived there. In January of 2008, the property
went into foreclosure.
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¶ 26 Loan Files
¶ 27 Prior to trial, defendant objected to the admission of the loan files for the 221 Sawgrass
property and the 105 Forest Edge property under the business records rule. After argument, the
court allowed the loan files to be admitted as business records.
¶ 28 At trial, the State presented Washington Mutual's loan files through the testimony of
Brett Hellstrom. Hellstrom testified he was employed by J.P. Morgan Chase as a loan review
quality analyst, which he described as a "form of underwriting." He had been employed with
Washington Mutual as a senior mortgage underwriter before the federal government shut it
down. Once J.P. Morgan Chase bought Washington Mutual, Hellstrom began working for J.P.
Morgan Chase and authorized him as the keeper of the records for Washington Mutual's 2007
loan files. Hellstrom testified Washington Mutual kept the records in the ordinary course of
business. He reviewed the loan files before and at trial. The contents of the loan files were
admitted for the purchase of 221 Sawgrass and 105 Forest Edge as business records. The files
also documented the pay history and servicing of the loans. J.P. Morgan Chase also made
Hellstrom keeper of the records for records it kept in the ordinary course of business for
documents admitted into evidence including separate bank account statements for Elayyan and
Johnson.
¶ 29 Julie Krecji, who was authorized by Harris Bank as custodian of its records, supplied a
business records affidavit of certification for Harris Bank statements of defendant, defendant's
mother Aida Rafati, and Alzaibak. Krecji, in the certificate of authenticity of business records,
stated that the documents were original records made at or near the time of the occurrence and
were kept in the ordinary course of business.
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¶ 30 The circuit court found defendant guilty of all 12 counts at issue. Defendant filed a
motion for a new trial, which the circuit court denied. Relevant here, defendant again objected
to the admission of the business records as testified to by Brett Hellstrom and as attested to by
Julie Krecji. The circuit court sentenced defendant to concurrent 12-year prison terms for being
an organizer of a financial crime enterprise, theft and loan fraud. The State nol-prossed the
remaining 21 counts against defendant and also charges brought against him under case number
10 CR 15492. Defendant timely appealed.
¶ 31 ANALYSIS
¶ 32 Defendant first argues that the "organizer of a financial crimes enterprise" statute (720
ILCS 5/16H-55 (West 2006)) is unconstitutionally vague because it fails to define the following
terms contained therein: "organizer"; "supervisor"; "financier"; and "other position of
management." In response, the State maintains that the statute is constitutional and argues that
none of the authority defendant puts forth in his brief is relevant as cases defendant relies upon
deal with federal sentencing guidelines.
¶ 33 Challenges to the constitutionality of a statute are questions of law subject to de novo
review. People v. Masterson, 2011 IL 110072, ¶ 23. Statutes are presumed to be constitutional.
People v. Johnson, 225 Ill. 2d 573, 584 (2007). Whenever reasonably possible, courts of review
are to uphold the constitutionality of a statute. Masterson, 2011 IL 110072, ¶ 23. The
challenging party has the burden of proving the unconstitutionality of a statute. People v.
Molnar, 222 Ill. 2d 495, 509 (2006). Whenever reasonably possible, we have a duty to construe
a statute to uphold its validity and constitutionality. People v. Bailey, 167 Ill. 2d 210, 225 (1995).
When interpreting a statute in the face of a constitutional challenge, we must remember to
"ascertain and give effect to the legislature's intent in enacting the statute." Bailey, 167 Ill. 2d at
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225. Accordingly, "an interpretation that renders a statute valid is always presumed to have
been intended by the legislature." Id.
¶ 34 A statute is unconstitutionally vague, and violates due process, "only if the terms of the
statute are so ill-defined 'that the ultimate decision as to its meaning rests on the opinions and
whims of the trier of fact rather than any objective criteria or facts.' " People v. Molnar, 222
Ill. 2d 495, 524 (2006) (quoting People v. Burpo, 164 Ill. 2d 261, 265-66 (1995)). A vagueness
challenge fails, and due process is satisfied, where: "(1) the statute's prohibitions are sufficiently
definite, when measured by common understanding and practices, to give a person of ordinary
intelligence fair warning as to what conduct is prohibited; and (2) the statute provides
sufficiently definite standards for law enforcement and triers of fact that its applications do not
depend merely on their private conceptions." Molnar, 222 Ill. 2d at 524-25. "An act is not,
however, unconstitutionally vague simply because one can conjure up a hypothetical dispute
over the meaning of some of the act's terms." People v. Greco, 204 Ill. 2d 400, 416 (2003).
¶ 35 We note that defendant has not shown that his vagueness challenge implicates the first
amendment. Our supreme court has held that "[t]o prevail on a vagueness challenge to a statute
that does not implicate first amendment concerns, a party must demonstrate that the statute was
vague as applied to the conduct for which the party is being prosecuted." Bailey, 167 Ill. 2d at
228. As previously stated, it is defendant's burden to prove the unconstitutionality of a statute.
Molnar, 222 Ill. 2d at 509. Defendant here, however, has not shown how his challenge
implicates the first amendment. Accordingly, we will consider his challenge as applied to his
conduct for which he was prosecuted.
¶ 36 The "organizer of a financial crimes enterprise" statute, section 16H-55, part of the
Illinois Financial Crime Law, provides:
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"(a) A person commits the offense of being an organizer of a
continuing financial crimes enterprise when the person:
(1) with the intent to commit an offense under this
Article, or, if involving a financial institution, any other
felony offense established under this Code, agrees with
another person to the commission of that offense on 3 or
more separate occasions within an 18 month period, and
(2) with respect to the other persons within the
conspiracy, occupies a position of organizer, supervisor, or
financier or other position of management.
(b) The person with whom the accused agreed to commit the
3 or more offenses under this Article, or, if involving a financial
institution, any other felony offenses established under this Code,
need not be the same person or persons for each offense, as long as
the accused was a part of the common scheme or plan to engage in
each of the 3 or more alleged offenses." (Emphasis added.) 720
ILCS 5/16H-55 (West 2006).
¶ 37 The General Assembly, in its legislative declaration for the Illinois Financial Crime Law,
provided:
"It is the public policy of this State that the substantial burden
placed upon the economy of this State resulting from the rising
incidence of financial crime is a matter of grave concern to the
people of this State who have a right to be protected in their health,
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safety and welfare from the effects of this crime." 720 ILCS
5/16H-5 (West 2006).
¶ 38 After reviewing the statute, as applied to defendant's status as an organizer, supervisor, or
manager, we hold the statute's terms, i.e., whether a person "occupies a position of organizer,
supervisor, *** or other position of management," are sufficiently definite to give a person of
ordinary intelligence warning of what conduct is prohibited under the "organizer of a continuing
financial crimes enterprise" statute and provides definite standards for application by law
enforcement or a trier of fact. 720 ILCS 5/16H-55 (West 2006); Molnar, 222 Ill. 2d at 524-25.
The clear terms of the statute specify that the person has to be an organizer or supervisor or in
another position of management. We cannot say that an ordinary person would have any
difficulty determining whether someone organized, supervised, or managed a continuing
financial crimes enterprise. Defendant had the burden of proving that the statute's terms "are so
ill-defined 'that the ultimate decision as to [their] meaning rests on the opinions and whims of the
trier of fact rather than any objective criteria or facts." Molnar, 222 Ill. 2d at 524 (quoting Burpo,
164 Ill. 2d at 265-66). We hold that he has not carried that burden here as the terms of the
statute are not unconstitutionally vague as applied to him.
¶ 39 Business Records
¶ 40 Defendant next argues that the circuit court erred when it admitted the contents of the
loan files as business records because the State did not lay a proper foundation for them and they
contained multiple levels of hearsay. The State disputes defendant's contention and argues that
the circuit court did not abuse its discretion where it admitted the contents of the loan files for
purposes beyond the scope of hearsay.
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¶ 41 Rule 902 of the Illinois Rules of Evidence (eff. Jan. 1, 2011) provides a list of
self-authenticated evidence, where "[e]xtrinsic evidence of authenticity as a condition precedent
to admissibility is not required." Rule 902(11) provides, in relevant part:
"(11) Certified Records of Regularly Conducted Activity. The original or
a duplicate of a record of regularly conducted activity that would be admissible
under Rule 803(6) if accompanied by a written certification of its custodian or
other qualified person that the record
(A) was made at or near the time of the occurrence of the matters set
forth by, or from information transmitted by, a person with knowledge of these
matters;
(B) was kept in the course of the regularly conducted activity; and
(C) was made by the regularly conducted activity as a regular practice.
The word 'certification' as used in this subsection means with respect to a
domestic record, a written declaration under oath subject to the penalty of perjury
***. A party intending to offer a record into evidence under this paragraph must
provide written notice of that intention to all adverse parties, and must make the
record and certification available for inspection sufficiently in advance of their
offer into evidence to provide an adverse party with a fair opportunity to
challenge them." Ill. R. Evid. R. 902 (11) (eff. Jan. 1, 2011).
¶ 42 Rule 803 of the Illinois Rules of Evidence (eff. Jan. 1, 2011) in turn, provides a list of
hearsay exceptions that are not excluded by the hearsay rule, even though the declarant is
unavailable. Rule 803(6) provides, in relevant part:
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"(6) Records of Regularly Conducted Activity. A memorandum, report,
record, or data compilation, in any form, of acts, events, conditions, opinions, or
diagnoses, made at or near the time by, or from information transmitted by, a
person with knowledge, if kept in the course of a regularly conducted business
activity, and if it was the regular practice of that business activity to make the
memorandum, report, record or data compilation, all as shown by the testimony of
the custodian or other qualified witness, or by certification that complies with
Rule 902(11), unless the source of information or the method or circumstances of
preparation indicate lack of trustworthiness, but not including in criminal cases
medical records." Ill. R. Evid. R. 803(6) (eff. Jan 1., 2011).
¶ 43 It is within the circuit court's discretion to admit evidence, and we will not reverse the
circuit court's decision absent an abuse of that discretion. People v. Becker, 239 Ill. 2d 215, 234
(2010). "An abuse of discretion occurs where the trial court's decision is arbitrary, fanciful or
unreasonable [citation] or where no reasonable person would agree with the position adopted by
the trial court [citations]." Id.
¶ 44 At trial, Washington Mutual's loan files were presented through the testimony of Brett
Hellstrom while Harris Bank's loan documents were entered into evidence through a Rule
902(11) business records affidavit of certification from Julie Krecji. Hellstrom testified he was
the authorized keeper of the records for Washington Mutual's mortgage underwriting files for the
year 2007. He described his position at Washington Mutual and his eventual employment with
J.P. Morgan Chase after Washington Mutual's demise. He testified that he had reviewed the
files, which were kept in the ordinary course of business. He had also been made keeper of the
record for J.P. Morgan Chase's records kept in the ordinary course of business regarding the bank
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accounts of Elayyan and Johnson. Krecji stated in her affidavit that the documents were
original records made at or near the time of the occurrence and kept in the normal course of
business.
¶ 45 Our review of the record shows that the circuit court did not abuse its discretion when it
admitted the relevant loan documents into evidence as attested to by the representatives of
Washington Mutual and Harris Bank. The State laid a proper foundation, as shown above, and
the circuit court admitted the documents, not to prove the truth of the matter asserted, but, rather,
they were introduced to show that they were contained in Washington Mutual's and Harris
Bank's files. Defendant does not dispute that he had the opportunity to review the documents or
that Hellstrom and Krecji were authorized as custodial record keepers by Washington Mutual
and Harris Bank. After reviewing Hellstrom's testimony and Krecji's affidavit, we cannot say
that the circuit court's decision to admit their respective testimony was arbitrary, fanciful, or
unreasonable. Becker, 239 Ill. 2d at 234. Accordingly, we hold the circuit court did not abuse
its discretion when it admitted loan documents contained in the files of the victims of this case,
Washington Mutual and Harris Bank.
¶ 46 Sufficiency of the Evidence
¶ 47 Defendant challenges the sufficiency of the evidence of his convictions for being an
organizer of a continuing financial crime and for loan fraud. Defendant does not contest his
convictions for theft by deception under counts IX, X, and XI; which served as the predicate
offenses for his conviction for being an organizer of a continuing financial crime under count II.
Accordingly, defendant challenges the sufficiency of the evidence for his convictions for being
an organizer of a continuing financial crime under counts II and III, and for loan fraud under
counts XXVI through XXVIII.
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¶ 48 Defendant argues that de novo review is appropriate here because he is not asking this
court to reweigh the evidence or make a credibility determination. Rather, he is asking this
court to analyze the elements of a criminal statute to determine its essential elements. The State
agrees that this court's review of what a statute proscribes is subject to de novo review, but
argues that defendant's challenge to the sufficiency of the evidence proving the elements of the
crime is subject to the standard of review put forth in Jackson v. Virginia, 443 U.S. 307 (1979),
i.e., "whether, after viewing the evidence in the light most favorable to the prosecution, any
rational trier of fact could have found the essential elements of the crime beyond a reasonable
doubt." (Emphasis in original.) Id. at 319. We agree with the State and will use de novo
review when determining matters of statutory construction, but will use the Jackson standard of
review to determine whether the State presented sufficient evidence to satisfy the elements of the
crime charged. Accordingly, we will first review the issues defendant raises that require
statutory interpretation before determining whether the State presented sufficient evidence to
convict defendant of loan fraud as alleged in counts XXVI through XXVIII and being an
organizer of a continuing financial crimes enterprise as alleged in counts II and III.
¶ 49 The interpretation of a statute's provisions is a question of law reviewed de novo.
People v. Davis, 199 Ill. 2d 130, 135 (2002). When construing a statute, we must determine the
legislature's intent by looking at the plain and ordinary meaning of the language of the statue.
Molnar, 222 Ill. 2d at 518. Statutory language that is clear and unambiguous will be applied
without reliance on aids of statutory construction. Id. at 518-19. We will view the statute as a
whole, and not isolate words and phrases. Id. at 519. We must also keep in mind the
legislature's objectives in enacting the statute. Davis, 199 Ill. 2d at 135. "Moreover, criminal
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or penal statutes are to be strictly construed in favor of the accused, and nothing should be taken
by intendment or implication beyond the obvious or literal meaning of the statute." Id.
¶ 50 Common Scheme of the Three Predicate Offenses
¶ 51 Defendant argues that section 16H-55 of the Illinois Financial Crimes Law requires that
the State prove that all three predicate offenses were part of the same common plan or scheme.
Accordingly, defendant contends the State failed to show any linkage or connection between the
predicate offenses. Defendant also argues that the State failed to show how the parties involved
in the predicate offenses were at all connected to each other. The State disputes defendant’s
contention and argues that defendant fails to recognize the plain language of subsection (b) of
section 16H-55 of the Illinois Financial Crimes Law.
¶ 52 A person is an organizer of a continuing financial crimes enterprise when he or she
commits three or more predicate offenses within an 18-month period; and occupies a position of
organizer, supervisor, financier, or other management position with respect to the other persons
in the conspiracy. 720 ILCS 5/16H-55 (West 2006). Subsection (b) of the statute provides
that “[t]he person with whom the accused agreed to commit the 3 or more offenses *** need not
be the same person or persons for each offense, as long as the accused was a part of the common
scheme or plan to engage in each of the 3 or more alleged offenses.” 720 ILCS 5/16H-55(b)
(West 2006).
¶ 53 We disagree with defendant’s interpretation of the language of section 16H-55 of the
Illinois Financial Crimes Law. Specifically, defendant contends that each of the predicate
offenses must be linked in a common scheme. Our review of the plain language of section
16H-55, and specifically subsection (b), shows that the common element is whether the
defendant is part of a common scheme of each of the predicate offenses. Absent from
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subsection (b) is any language indicating that all of the predicate offenses and people, other than
the accused, needed to be linked to a common scheme. Rather, subsection (b) specifies that the
other people involved in the predicate offenses need not be the same people “as long as the
accused was a part of the common scheme or plan to engage in each of the 3 or more alleged
offenses.” (Emphasis added.) 720 ILCS 5/16H-55(b) (West 2006). Accordingly, we reject
defendant’s interpretation of section 16H-55. We hold that this section specifically requires
only that the accused be part of the common scheme for each of the predicate offenses. It
follows that defendant can commit the offense of being an organizer of a continuing financial
crimes enterprise by agreeing to commit each of the three predicate offenses with three different
people.
¶ 54 As applied to the facts of this case, count II alleged defendant organized a continuing
financial crimes enterprise for committing the three predicate offenses of theft by deception in
counts IX, XI, and XIII. In count IX, he committed the predicate crime with Alzaibak and
Bobak; while in count XI he did so with only Alzaibak; and in count XIII he committed theft by
deception with Elayyan and Johnson. Similarly, in count III, the State alleged defendant
committed loan fraud in counts XXVI through XXVIII. In count XXVI, he committed the
predicate crime with Alzaibak and Bobak; while in count XXVII he did so with only Alzaibak;
and in count XXVIII he committed loan fraud with Elayyan and Johnson. In this case, as
alleged in the indictment, defendant was part of the common scheme in each of the three
predicate offenses of theft by deception as alleged in count II. Defendant was also part of the
common scheme in each of the three predicate offenses of loan fraud as alleged in count III.
Defendant is the linkage between the three predicate crimes for both counts of being an organizer
of a continuing financial enterprise. This is consistent with subsection (b) of section 16H-55
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which allows other people to be involved in the predicate offenses “as long as the accused was a
part of the common scheme or plan to engage in each of the 3 or more alleged offenses.”
(Emphasis added.) 720 ILCS 5/16H-55(b) (West 2006).
¶ 55 Enterprise or Common Scheme Apart from the Predicate Offenses
¶ 56 Defendant next argues that the State failed to prove the existence of an enterprise,
common scheme, or plan apart from the predicate offenses. Similar to his argument regarding a
common scheme or plan for the three predicate offenses, defendant again argues that the State
did not show that any of defendant’s codefendants operated as a structured unit or worked
together for a common purpose. Defendant again argues that the State failed to show that the
properties involved were linked. The State disputes defendant’s contention and again argues
that defendant fails to recognize the plain language of subsection (b) of section 16H-55 of the
Illinois Financial Crime Law.
¶ 57 We disagree with defendant's contention that the State needed to show that defendant's
codefendants were part of a structured unit or worked together for a common purpose as it
conflicts with the plain language of subsection (b) of section 16H-55 of the Illinois Financial
Crime Law. Subsection (b) of section 16H-55 specifically provides that "[t]he person with
whom the accused agreed to commit the 3 or more offenses *** need not be the same person or
persons for each offense, as long as the accused was a part of the common scheme or plan to
engage in each of the 3 or more alleged offenses." 720 ILCS 5/16H-55 (West 2006). As
previously stated, the accused only has to be a part of the common scheme of each of the three
predicate offenses, even if the other people involved are different. Furthermore, defendant's
argument overlooks that the enterprises or common scheme as alleged in the indictment was theft
by deception for count II and loan fraud for count III. Specifically, defendant, as the organizer,
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No. 1-12-3332
manager, or supervisor, was part of the common scheme or plan of three predicate offenses that
showed he was an organizer of a continuing financial crimes enterprise. Under count II, the
continuing financial crimes enterprise was theft by deception. Under count III, the continuing
financial crimes enterprise was loan fraud.
¶ 58 Defendant as an Organizer, Supervisor, Financier, or Manager
¶ 59 Defendant next argues that the State had to show that defendant had both a leadership
role and control over every other person in the conspiracy. The State responds that defendant
fails to recognize that the evidence only had to show he occupied one of the roles proscribed by
the statute because the terms of the statute are used disjunctively. Specifically, the State argues
it only had to show that defendant was an organizer, supervisor, or financier, or in another
position of management.
¶ 60 The first part of section 16H-55 provides that the offense of being an organizer of a
continuing financial crimes enterprise occurs when three or more separate predicate offenses
within an 18-month time period are committed by a defendant. 720 ILCS 5/16H-55(a)(1)
(West 2006). Subsection (a)(2) of section 16H-55, however, requires that "with respect to the
other persons within the conspiracy, occupies a position of organizer, supervisor, or financier or
other position of management." (Emphases added.) 720 ILCS 5/16H-55(a)(2) (West 2006).
¶ 61 After reading the plain language of subsection (a)(2) of section 16H-55, we hold the
statute does not make any mention that a defendant had to have had both a leadership role and
control over every other person in the conspiracy. Rather, a defendant only has to have
occupied one of the following roles: organizer, supervisor, or financier, or be in another position
of management. Defendant's interpretation of the requirements of subsection (a)(2) of section
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No. 1-12-3332
16H-55 is inconsistent with the statute's plain language. In construing a statute, we must look
to the statutory terms according to their plain and ordinary meaning. Molnar, 222 Ill. 2d at 518.
¶ 62 Sufficiency of the Evidence
¶ 63 The due process clause of the fourteenth amendment to the United States Constitution
ensures that an accused defendant is not convicted of a crime "except upon proof beyond a
reasonable doubt of every fact necessary to constitute the crime with which he is charged." In
re Winship, 397 U.S. 358, 364 (1970); People v. Carpenter, 228 Ill. 2d 250, 264 (2008); People
v. Brown, 2013 IL 114196, ¶ 52 ("the State bears the burden of proving beyond a reasonable
doubt each element of a charged offense and the defendant's guilt"). It is not, however, the
function of this court to retry a defendant when reviewing whether the evidence at trial was
sufficient to sustain a conviction. People v. Hall, 194 Ill. 2d 305, 329-30 (2000). Rather, our
review is focused on "whether, after viewing the evidence in the light most favorable to the
prosecution, any rational trier of fact could have found the essential elements of the offense
beyond a reasonable doubt." People v. Baskerville, 2012 IL 111056, ¶ 31. This standard applies
to both circumstantial and direct evidence as well as to both jury and bench trials. People v.
Ehlert, 211 Ill. 2d 192, 202 (2004); Brown, 2013 IL 114196, ¶ 48.
¶ 64 "The testimony of a single witness, if it is positive and the witness credible, is sufficient
to convict." People v. Smith, 185 Ill. 2d 532, 541 (1999). Circumstantial evidence alone can
support a criminal conviction. Brown, 2013 IL 114196, ¶ 49. Although the trier of fact is
accorded great deference, its decision is not binding or conclusive. People v. Wheeler, 226 Ill.
2d 92, 115 (2007). As such, a conviction will be reversed where the evidence is so
unsatisfactory, unreasonable, or improbable that it raises a reasonable doubt as to defendant's
guilt. People v. Evans, 209 Ill. 2d 194, 209 (2004).
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No. 1-12-3332
¶ 65 Loan Fraud
¶ 66 We will first discuss defendant's challenge to his conviction for loan fraud under counts
XXVI through XXVIII as they served as predicate offenses for his conviction for being the
organizer of a continuing financial crimes enterprise under count III. Defendant argues the
State failed to introduce competent proof that the victims of the loan fraud, i.e., Washington
Mutual and Harris Bank, as alleged in counts XXVI through XXVIII were financial institutions.
In response, the State argues that at all relevant times in 2007, Washington Mutual and Harris
Bank were banks and, therefore, financial institutions.
¶ 67 The Illinois Financial Crime Law defines the offense of loan fraud as follows:
"A person commits the offense of loan fraud when the person knowingly, with
intent to defraud, makes any false statement or report, or willfully overvalues any
land, property or security, for the purpose of influencing in any way the action of
a financial institution to act upon any application, advance, discount, purchase,
purchase agreement, repurchase agreement, commitment, or loan, or any change
or extension of any of the same, by renewal, deferment of action or otherwise, or
the acceptance, release, or substitution of security." (Emphasis added.) 720
ILCS 5/16H-30 (West 2006).
The Illinois Financial Crime Law defines the term "financial institution," as follows:
" 'Financial institution' means any bank, savings bank, savings and loan
association, credit union, trust company, currency exchange, or a depository of
money, or medium of savings and collective investment." 720 ILCS
5/16H-10(b) (West 2006).
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No. 1-12-3332
¶ 68 After reviewing the record, we hold the State presented sufficient evidence that
Washington Mutual and Harris Bank were financial institutions as defined by the Illinois
Financial Crime Law. 720 ILCS 5/16H-10 (West 2006). We remind defendant that
circumstantial evidence alone can support a criminal conviction. Brown, 2013 IL 114196, ¶ 49.
The major part of the testimony of several witnesses involved financial transactions that either
Washington Mutual or Harris Bank performed. For example, Rami Haleem testified he was a
"bank manager" with Harris Bank in 2007. He supervised Angel Ulan, whom Haleem
described as "one of my bankers." Haleem then described the circumstances of the home equity
line of credit that Harris extended to Alzaibak after discussion with defendant. Harris Bank
even includes the term "Bank" in its name, lending further support to the State's position that it
was in fact a bank in 2007. Regarding Washington Mutual, Brett Hellstrom provided testimony
describing underwriting, which he described as making "loan decisions." He testified further
that he performed underwriting functions for Washington Mutual in 2007, and he described those
functions. Those financial transactions, mortgages from Washington Mutual and a home equity
line of credit from Harris Bank, are transactions typically performed by banks. The State
presented evidence that Washington Mutual provided the mortgages for both of the properties at
issue here and that Harris Bank provided the home equity line of credit for the property at 106
Forest Home Edge. We are of the opinion that a reasonable trier of fact could conclude, based
on the abundance of evidence that Washington Mutual and Harris Bank performed transactions
that banks commonly perform, i.e., mortgages and home equity lines of credit, that Washington
Mutual and Harris Bank were both financial institutions as defined by the Illinois Financial
Crime Law during the year 2007 when the transactions occurred.
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¶ 69 We note that defendant has not provided any argument addressing any of the other
elements of loan fraud. See Ill. S. Ct. R. 341(h)(7) (eff. Feb. 6, 2013) ("Points not argued are
waived and shall not be raised in the reply brief, in oral argument, or on petition for rehearing.").
Accordingly, since we reject defendant's argument that the State failed to prove that Washington
Mutual and Harris Bank were financial institutions as defined by the Illinois Financial Crime
Law, we hold that the State presented sufficient evidence that defendant committed loan fraud as
stated in counts XXVI through XXVIII of the indictment.
¶ 70 Organizer of a Continuing Financial Crimes Enterprise.
¶ 71 Defendant challenges the sufficiency of the evidence against him for his convictions of
being an organizer of a continuing financial crimes enterprise. The State argues that it
presented sufficient evidence showing that defendant committed the offense of being an
organizer of a continuing financial crimes enterprise under counts II and III of defendant's
indictment.
¶ 72 The offense of being an organizer of a continuing financial crimes enterprise is
committed when a person agrees with another person in committing three or more predicate
offenses within an 18-month time period, and "with respect to the other persons within the
conspiracy, occupies a position of organizer, supervisor, or financier or other position of
management." 720 ILCS 5/16H-55(a)(1), (2) (West 2006). As previously discussed, "[t]he
person with whom the accused agreed to commit the 3 or more offenses *** need not be the
same person or persons for each offense, as long as the accused was a part of the common
scheme or plan to engage in each of the 3 or more alleged offenses." 720 ILCS 5/16H-55(b)
(West 2006).
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No. 1-12-3332
¶ 73 Count II
¶ 74 Count II of the indictment against defendant alleged he committed the offense of being an
organizer of a continuing financial crimes enterprise for committing three predicate offenses of
committing theft by deception as alleged in counts IX, XI, and XIII of the indictment.
Defendant does not challenge the three predicate offenses of theft by deception before this court,
only that the State failed to prove count II of the indictment. As defendant concedes the
sufficiency of the evidence of the three predicate offenses of theft by deception as alleged in
counts IX, XI, and XIII, we need only address whether the State presented sufficient evidence
showing that those three predicate offenses showed that defendant organized a continuing
financial crimes enterprise under count II of the indictment.
¶ 75 We hold the State presented sufficient evidence under count II of the indictment to prove
defendant organized a continuing financial crimes enterprise. Under count IX, defendant
agreed with Bobak and Alzaibak to commit theft by deception regarding the mortgage with
Washington Mutual for the property located at 106 Forest Edge. Defendant and Bobak had
agreements regarding the earnest money and various house improvements not disclosed to
Washington Mutual, the victim. In relation to Bobak, defendant performed the role of
organizer because he organized the purchase of the property by deceiving Washington Mutual.
Defendant occupied the role of both organizer and supervisor in regard to Alzaibak, as the
evidence showed he directed Alzaibak to sign the various documents in order to deceive
Washington Mutual. Under count XI, defendant again occupied the role of organizer and
supervisor to Alzaibak as he organized the home equity loan with Harris Bank and directed
Alzaibak where to sign the relevant paperwork and to eventually transfer the money to him.
Under count XIII, defendant occupied the role of organizer and supervisor by again organizing
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No. 1-12-3332
the preparation of the various documents needed to deceive Washington Mutual. The evidence
showed one of defendant's "boys," Morgan, recruited Johnson. Defendant directed Johnson
regarding what documents to sign. It is undisputed that the offenses in question occurred within
an 18-month time period. Accordingly, the State presented sufficient evidence showing that on
three separate occasions within an 18-month time period, defendant committed a predicate
offense where he occupied the role of organizer or supervisor. We hold the State presented
sufficient evidence showing defendant organized a continuing financial crimes enterprise by
committing three separate thefts by deception within an 18-month time period and occupied the
role of organizer or supervisor.
¶ 76 Count III
¶ 77 Count III of the indictment against defendant alleged he committed the offense of being
an organizer of a continuing financial crimes enterprise for committing three predicate offense of
loan fraud as alleged in counts XXVI through XXVIII of the indictment. As we have already
held that the State presented sufficient evidence that defendant committed the predicate offenses
of loan fraud as alleged in counts XXVI through XXVIII, we need only address whether the
State presented sufficient evidence showing that those three predicate offenses showed that
defendant organized a continuing financial crimes enterprise under count III of the indictment.
¶ 78 Similar to count II above, we also hold the State presented sufficient evidence showing
defendant organized a continuing financial crimes enterprise for committing three incidents of
loan fraud within an 18-month period. The evidence showed that defendant, through his
association with The Lending Center and Silver Key, served as the organizer of the three
separate incidents of loan fraud as alleged in counts XXVI through XXVIII. Through his
direction, he obtained the mortgage and home equity line of credit at 106 Forest Edge and the
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No. 1-12-3332
mortgage at 221 Sawgrass. His role in procuring the required documentation, as well as
directing both Alzaibak and Johnson where to sign the relevant documents, resulted in
Washington Mutual providing mortgages at the properties and for Harris Bank to supply a home
equity line of credit. As in count II, it is undisputed that the three occurrences occurred within
an 18-month time period. Accordingly, we also hold the State presented sufficient evidence
showing defendant organized a continuing financial crimes enterprise for committing three
incidents of loan fraud within an 18-month period under count III of the indictment.
¶ 79 Counts I, VIII, X, and XII.
¶ 80 The parties agree that Counts I, VIII, X, and XII need to be vacated. Count I of the
indictment alleged defendant organized a continuing financial crimes enterprise by committing
three instances of theft based on unauthorized control as alleged in counts VIII, X, and XII of the
indictment. The parties disagree, however, on whether the matter should be remanded for
resentencing. The State argues, in the interest of judicial economy, that this court should vacate
the convictions in counts I, VIII, X, and XII, and correct the mittimus, but not remand the matter
for resentencing because defendant received concurrent sentences on the remaining counts.
Defendant argues that we should remand the matter for resentencing because one third of the
counts against him need to be vacated. Alternatively, he asks that we reduce his overall
sentence by 33%.
¶ 81 Due to the number of counts to be vacated, and the circuit court being in the better
position to determine sentencing in this matter, we are of the opinion that the appropriate remedy
in this instance is to remand the matter to the circuit court for resentencing. Accordingly, we
vacate defendant's convictions under counts, VIII, X, and XII; we affirm the judgment of the
circuit court in all other respects; and remand the matter for resentencing.
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No. 1-12-3332
¶ 82 CONCLUSION
¶ 83 The judgment of the circuit court of Cook County is affirmed in part, vacated in part, and
the matter is remanded with directions.
¶ 84 Affirmed in part and vacated in part. Cause remanded with directions.
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