United States v. Lupton

In the

United States Court of Appeals
For the Seventh Circuit

No. 09-2710

U NITED S TATES OF A MERICA,
Plaintiff-Appellee,
v.

L ARRY L UPTON,
Defendant-Appellant.

Appeal from the United States District Court
for the Eastern District of Wisconsin.
No. 07-CR-219—Lynn Adelman, Judge.

A RGUED JANUARY 13, 2010—D ECIDED S EPTEMBER 1, 2010

Before B AUER, M ANION, and T INDER, Circuit Judges.
T INDER, Circuit Judge. Larry Lupton was a real estate
broker assigned to facilitate the sale and leaseback of a
building owned by the State of Wisconsin. In the course
of soliciting bids for the sale, Lupton also solicited
kickback payments from the broker for one of the com-
peting prospective buyers—and claimed to have made
similar overtures to others. In return for the payments,
Lupton promised to crunch the numbers so that certain
2 No. 09-2710

proposals came out on top. The broker from whom
Lupton sought a kickback reported the incident to the
authorities and was outfitted with equipment to record
his future dealings with Lupton. After the informant
recorded several incriminating conversations with
Lupton, FBI agents twice interviewed Lupton, who cate-
gorically denied any involvement in illicit activity. Not-
withstanding Lupton’s denials, a grand jury indicted
him on four charges: corrupt solicitation, wire fraud, and
two counts of making false statements to government
officials. After a bench trial from which his proffered
expert testimony was excluded, Lupton was found
guilty of all four counts. He appeals both the exclusion
of his expert’s testimony and the validity of his convic-
tions. We affirm in all respects.

I. Background
When the State of Wisconsin decided to sell and re-lease
one of its buildings in early 2007, it entered into an exclu-
sive listing agreement with real estate firm UGL Equis
(“Equis”), with which it had a master contract dating
back to 2004. Under the terms of the listing agreement,
Wisconsin was to pay Equis a 4.3% commission on the
expected $20-$30 million sale price. Equis designated
one of its independent-contractor vice presidents, Larry
Lupton, as one of two point persons for the sale. Lupton
was tasked with soliciting proposals from parties inter-
ested in the deal, evaluating the bids, and recommending
the top few to the State, who would then decide which
proposal to accept. Under his contract with Equis, Lupton
No. 09-2710 3

would be paid a negotiable percentage—usually about
50%—of Equis’s commission if he closed the sale.
In February 2007, Lupton sent out a memorandum
soliciting proposals from prospective buyers and received
a number of responses. Using an evaluation matrix that
compared different features of the bids, Lupton
identified some of the top proposals. In March, he con-
tacted the bidders whose proposals rose to the top and
asked them to submit final letters of intent (“LOIs”)
containing more detailed bid information. To assist the
prospective buyers with the formulation of their LOIs,
Lupton provided them with a sample LOI. The sample
LOI contained a confidentiality clause, which most of
the contenders imported into their final LOIs verbatim.
The prospective buyers submitted their LOIs in
March, and on April 4, 2007, Lupton contacted Gabriel
Silverstein, the broker for one of the top contenders,
Chicago-based Zeller Realty Group. Lupton informed
Silverstein that Zeller was a particularly strong con-
tender for the purchase. He then told Silverstein that
brokers for two of the other top contenders had offered
to pay him a kickback in exchange for a strong recom-
mendation to the State that it accept their bids. Lupton
went on to explain that the proposed kickbacks were
about one-quarter to one-half of the fee that the brokers
expected to receive if the transaction went through,
roughly one percent of the building’s purchase price
(which Lupton was supposed to ensure was in the range of
$20-$30 million). Silverstein understood Lupton to be
seeking a kickback of about $75,000.
4 No. 09-2710

Silverstein promptly reported the April 4 conversation
to Wisconsin law enforcement authorities. Those authori-
ties in turn contacted the FBI, and the FBI outfitted
Silverstein and his telephone with recording devices
and instructed him to arrange a meeting with Lupton.
Silverstein met with Lupton on April 26, 2007, and told
him that he wanted to “revisit another conversation
that [Lupton] initiated about two weeks ago”—the April 4
conversation about kickbacks. Silverstein asked Lupton
what he was expecting from Silverstein, and Lupton
explained that he wasn’t “making much money” at
Equis, so he “talked to a couple of parties” who “already
agreed to pay [him] between a quarter and a half point.”
Lupton continued, “I just want to make assurance . . . that
if I could put you into that situation . . . that you guys
can get me a quarter point.”
Silverstein asked Lupton, “[H]ow would you envision
doing that?” Lupton replied, “Take the taxes out and
you . . . just give me . . . you know cash or check sort of
thing or you could just allocate it as a consulting fee to a
different company I have, which is NACO. North Ameri-
can Commercial Opportunities. . . . I mean, whatever
way is . . . you know way is easier, I guess, you know.”
Lupton then clarified that “obviously I don’t want any-
thing in writing you know, ‘cause you know, I don’t want
it leaked back to the State . . . or to Equis . . . .” Silverstein
asked Lupton if he should “just come back up here and
meet you or pay you separately? Is that what you’re
thinking?” to which Lupton responded, “Yeah. Yeah.”
He assured Silverstein that he was “not trying to get
greedy,” however. (Not greedy, perhaps, but self-inter-
No. 09-2710 5

ested all the same. Lupton expressed to Silverstein con-
cern about Equis’s—and thereby his own—take from
the sale potentially getting halved, and evidence intro-
duced at trial also showed that he had substantial gam-
bling losses and minimal income to offset them.)
As the conversation continued, Silverstein asked
Lupton how he planned to “make sure we’re going to
be your guys.” Lupton explained that he would “make
sure that you guys know the expectations of the State.
I mean I got to just make sure that you guys are in line to
be the top, you know, the top one or two . . . .” He
told Silverstein, “I run the analysis and basically back
you.” “I mean as long as you guys come back in the right
range . . . .” Lupton qualified his willingness to help
Silverstein, despite his expressed preference to award
the deal to a Midwestern firm like Zeller, informing him
that “I got to do technically the right thing for the
State.” Yet Lupton went on to assure Silverstein that he
would let him know if the other bidders’ offers changed
substantially so Zeller would have a chance to match or
undercut the bids: “you guys can ah come back in and . . .
match it.” Lupton then told Silverstein the identities of
the other bidders that remained in contention, as well as
some of their proposed contractual terms that Zeller
would have to match or beat. The two wrapped up their
conversation by discussing some of the provisions that
Zeller planned to include in its final proposal.
The next morning, Lupton telephoned Silverstein
unexpectedly. Lupton gave Silverstein the details of the
current best offer, a proposal submitted by a New Jersey
6 No. 09-2710

firm, Roebling Investments. The Roebling bid hadn’t been
finalized; it was verbal and Lupton hadn’t even seen
the written proposal yet. Lupton explained that he
“wanted [Silverstein] to [have] a heads up” about the
bid, and he promised to “let [Silverstein] know” Roebling’s
final numbers once he got them in writing. Lupton fol-
lowed through on his promise on April 30, 2007, when
he called to let Silverstein “know where the best LOI
came back at.” Lupton then provided Silverstein with
the details of Roebling’s updated bid, notwithstanding
the confidentiality clause in Roebling’s proposal, and
told him that he would “call back here in a few hours”
once everything was fully finalized.
Again true to his word, Lupton called Silverstein back
later that evening. He confirmed that the Roebling bid
was, as Silverstein put it, “in the same spot as before.” He
then told Silverstein that a bid from a California
company, Arlen Capital, had come in via e-mail but that
he had been unable to open the document on his cell
phone. Lupton asked Silverstein to give him some time
to review the Arlen bid and ended the call. Roughly
twenty-five minutes later, Lupton called Silverstein
back and reached Silverstein’s voicemail. He left a
detailed message about Arlen Capital’s bid, and opined
that Zeller’s “only competition is really Roebling.” He
asked Silverstein to call him the next day so they could
talk about the Arlen Capital bid and Zeller’s final bid.
Silverstein didn’t wait until the next day; he called
Lupton back almost immediately. During this third
April 30 phone call, Lupton said that Arlen Capital’s bid
No. 09-2710 7

“doesn’t make a whole lot of sense,” and Silverstein
expressed relief that nothing had changed. He explained
to Lupton that it would have been “weird” if he had
needed to call Zeller to encourage it to rework its final
bid, which he stated he was only about fifteen minutes
away from submitting to Lupton. (There is some evi-
dence indicating that Zeller was given more time than
its competitors to complete its bid.)
The next day, May 1, 2007, Lupton told Silverstein that
he had presented his analysis of the bids to someone
from the State. He claimed that he had “made the recom-
mendations to . . . put your guys, you know, number one
and then put Roebling number two.” Lupton continued,
“So I think you guys are there unless they make for
drastic changes. . . . You should be okay.” Lupton
notified Silverstein that he would be meeting with
the Wisconsin Secretary of State in a few days, and the
Secretary would decide then which bid the State would
accept. Lupton indicated that he had already provided
Silverstein with the “transaction application forms” that
he would need to fill out if Zeller was chosen as the
buyer. Lupton also asked Silverstein to provide him
with some background information on Zeller so he
could “have it prepared” in case the Secretary of State
asked him for it.
On May 10, 2007, a little more than a week after Lupton’s
last recorded conversation with Silverstein, and after
state officials involved in the sale had been interviewed,
FBI and Wisconsin Department of Justice special agents
descended on Lupton’s office to execute a search
8 No. 09-2710

warrant they had procured. Before searching Lupton’s
office, the agents asked Lupton a number of questions
about his handling of the building sale. Lupton told
the agents that he had never disclosed confidential
bid information. He explained that bidders occasionally
asked him if there was anything they could do to
improve their chances, but that he always responded by
providing general information and advice. The agents
also asked Lupton about his expected compensation for
the sale, and Lupton told them that he expected Equis
alone to pay him; he did not mention any “commission
splits,” legitimate or otherwise. At the end of the inter-
view, the agents again asked Lupton if he had ever pro-
vided a potential buyer with specific details from a com-
petitor’s proposal. Lupton reiterated that he had never
done so. The agents advised Lupton not to contact
anyone else involved in the sale.
Immediately after the agents left,1 however, Lupton
telephoned Silverstein. Lupton asked Silverstein, “out of
curiosity,” whether “the FBI . . . contacted you at all? On
this . . . building?” Silverstein said, “FBI? Why?” Lupton
explained that he wasn’t sure what was going on but
that he “got a couple . . . calls from them” and wasn’t
sure “if it[’s] actually the FBI or who they you know state

1
Terry Sparacino, the FBI special agent who executed the
search warrant and interviewed Lupton, testified that before
he and Wisconsin agent Dennis Drazkowski had even reached
the parking lot of Lupton’s building, they had already received
a telephone call from Silverstein reporting that Lupton had
called to ask about an FBI investigation. Tr. 138, Mar. 2, 2009.
No. 09-2710 9

they are.” Silverstein asked what the callers had been
saying, and Lupton said the calls were about “deal struc-
tures that have been leaked out and you know so forth.”
Silverstein told Lupton he found that interesting.
Lupton continued, “Somehow it got leaked out at some-
place so I’m not sure from where.” Lupton then ended
the call so he could “check with some other parties to
see what’s going on.”
On May 18, 2007, agents again interviewed Lupton, this
time with his attorney present. Lupton again denied
providing potential buyers with specific details from
other bids. The agents also asked Lupton about seeking
payments from potential buyers, and Lupton stated
that it would be unusual for someone in his position
to receive a share of the buyer’s commission in the form
of cash. The agents then asked Lupton about any such
arrangement he might have had with Silverstein. Lupton
initially responded that he did not recall any arrange-
ment. Later on in the interview, however, he recalled
that Silverstein had offered to pay him part of the buyer
broker’s commission. He said that if a cash payment
had been mentioned, it had been by Silverstein. Lupton
did not recall any mention of payment in the form of
a check payable to NACO, his out-of-state shell corpora-
tion. Again, he asserted that if anything like that had
been discussed, Silverstein had broached the topic.
Lupton made no mention of Wisconsin’s brokerage stat-
utes, or his conception of his duties thereunder.
A grand jury issued a four-count indictment against
Lupton on August 14, 2007. Count I charged that between
10 No. 09-2710

April 4 and May 10, 2007, Lupton “corruptly solicited,
demanded, and agreed to accept something of value from
[Silverstein], intending to be influenced and rewarded
in connection with a business, transaction, and series of
transactions” involving the State of Wisconsin. 18 U.S.C.
§ 666(a)(1)(B). Count II alleged that Lupton “knowingly
devised and participated in a scheme to defraud Equis
and the State of Wisconsin of both property and the
right of honest services,” and used a telephone to do so,
in violation of 18 U.S.C. §§ 1343 & 1346. Counts III and IV
alleged that Lupton knowingly and willfully made
false statements to the FBI agent who interviewed him.
See 18 U.S.C. § 1001. The statement alleged to be false
in Count III was Lupton’s May 10, 2007, assertion that
he had never provided prospective buyers with specific
details from bids submitted by competing prospective
buyers. The allegedly false statement cited in Count IV
was Lupton’s May 18, 2007, statement that he had never
suggested to Silverstein that he pay Lupton in cash or
by check payable to NACO.
Lupton did not take the charges sitting down. Over the
course of the next several months, he filed various
motions to dismiss the indictment, motions to suppress,
and motions in limine, all of which the district court
denied. Lupton also sought to present the testimony of
real estate broker, attorney, professor, author, and former
Wisconsin bureaucrat Martin Greenberg. Greenberg,
Lupton asserted, would testify about the industry stan-
dards of practice governing commercial real estate
brokers in Wisconsin, which Lupton claimed not only
permitted him to engage in a “commission split” with
No. 09-2710 11

Silverstein but also required him to disclose the bid
information he did.
After an evidentiary hearing concerning the propriety
of Greenberg’s testimony, the district court concluded
that Greenberg’s opinions were “based on his interpreta-
tion of state statutes and regulations and the contracts
in this case, not his knowledge of general broker prac-
tices.” United States v. Lupton, No. 07-CR-219, 2008 WL
2224399, at *1 (E.D. Wis. May 28, 2008). The district court
excluded Greenberg’s proposed testimony pursuant
to United States v. Caputo, 517 F.3d 935 (7th Cir. 2008),
explaining, “[T]he proposed testimony essentially
amounts to legal interpretation, which is the province
of the court . . . .” Lupton, 2008 WL 2224399, at *2; see also
id. at *4 (“I will not permit a third party legal expert to, in
effect, testify that defendant’s conduct was lawful.”).
The district court also determined that Lupton failed to
establish Greenberg’s “knowledge, skill, experience,
training, or education” in anything other than the law of
real estate, id. at *2, and that Lupton further failed to
demonstrate that Greenberg’s opinions were based on
sufficient facts and data and were the product of reliable
principles and methods. Id. Additionally, the district
court noted that the proffered testimony would likely
“confuse rather than enlighten the jury” on the corrupt
solicitation and wire fraud charges, id. at *3, and cited
United States v. Hasner, 340 F.3d 1261, 1270 n.4 (11th Cir.
2003), for the proposition that Lupton’s compliance with
state law would be immaterial to one of the key issues,
whether Lupton had the requisite intent to deprive
Equis or the State of his honest services, see id. at *4.
12 No. 09-2710

In response to the district court’s exclusion of
Greenberg’s testimony, Lupton petitioned this court for
a writ of mandamus. His petition was denied, and, after
renewing one of his motions to dismiss (it was again
denied), Lupton proceeded to a bench trial in early
March 2009. On March 16, 2009, the district court found
Lupton guilty on all four counts. In its findings of fact
and verdict, the court noted that “even considering
Greenberg’s testimony, the verdict would be the same.”
United States v. Lupton, No. 07-CR-219, 2009 WL 679649,
at *8 n.11 (E.D. Wis. Mar. 16, 2009). Lupton promptly
filed a motion for acquittal and a motion to arrest judg-
ment, both of which the district court denied.
The district court sentenced Lupton to 24 months’
imprisonment, concurrent on all counts. The district
court also ordered 24 months of supervised release and
a special assessment of $400.

II. Discussion
Lupton now challenges the district court’s exclusion
of his expert’s testimony as well as the validity of all
four of his convictions. (He does not contest his below-
Guidelines sentence.) With respect to Count I, he argues
that the evidence did not establish that he was an “agent”
for purposes of 18 U.S.C. § 666, the statute under which
he was convicted. Also with respect to Count I, he con-
tends that the district court erred in concluding that
the proposed payment was not a bona fide commission
split outside the purview of the statute. See 18 U.S.C.
§ 666(c). As for Count II, Lupton claims that his
No. 09-2710 13

information-sharing behavior cannot form the basis of a
federal offense because it was legal under state law.
He argues that his convictions under Counts III and IV
were improper because his statements to the FBI agent
were not knowingly and willfully made because he
thought the conduct underlying them was legal and
were not material because they had no real effect on
the FBI’s investigation.

A. Exclusion of Expert Testimony
Lupton contends that the district court erred in excluding
Greenberg’s testimony. His principal claim is that
Greenberg’s testimony, which was intended to illuminate
“broker conduct relative to ‘honest services fraud,’ ” was
“relevant opinion evidence by a qualified expert” that
should have been admitted. We are not persuaded that
the district court abused its discretion in concluding
otherwise.
Federal Rule of Evidence 702 governs the admissibility
of expert testimony, as does the Supreme Court’s seminal
case of Daubert v. Merrell Dow Pharmaceutials, Inc., 509 U.S.
579 (1993). Rule 702 by its terms allows the admission
of testimony by an “expert,” someone with the appro-
priate “knowledge, skill, experience, training, or educa-
tion” to help the trier of fact “understand the evidence
or determine a fact in issue.” Fed. R. Evid. 702. Experts
are only permitted to testify, however, when their testi-
mony is (1) “based upon sufficient facts or data, (2) the
testimony is the product of reliable principles and meth-
ods, and (3) the witness has applied the principles and
14 No. 09-2710

methods reliably to the facts of the case.” Id. Daubert
requires the district court to act as an evidentiary gate-
keeper, ensuring that Rule 702’s requirements of
reliability and relevance are satisfied before allowing
the finder of fact to hear the testimony of a proffered
expert. See Daubert, 509 U.S. at 589; see also Kumho Tire
Co. v. Carmichael, 526 U.S. 137, 147-49 (1999); Jenkins v.
Bartlett, 487 F.3d 482, 488-89 (7th Cir. 2007). We give
district courts wide latitude to make their evidentiary
determinations: we review whether they applied the
Daubert framework de novo, but we review their
ultimate conclusions as to the admissibility of expert
testimony only for abuse of discretion. United States v.
Pansier, 576 F.3d 726, 737 (7th Cir. 2009).
There is no question that the district court adhered to
the Daubert framework here. It requested briefing on the
issue and held a two-and-a-half hour hearing to
determine whether Greenberg was “qualified to testify
in the case in question and whether his testimony is
scientifically reliable.” Gayton v. McCoy, 593 F.3d 610, 616
(7th Cir. 2010). At that hearing, Greenberg offered his
interpretations of various Wisconsin statutes and
Lupton’s contract with Equis. He opined that Lupton’s
sharing of proposal terms was “prescribed and
sanctioned by statute.” Tr. 28, Mar. 20, 2008. He also
characterized Lupton’s “commission splitting” conversa-
tion with Silverstein as “a proper conversation . . . one
that was normal with respect to the way brokers conduct
their business.” Id. at 44. On cross-examination, Greenberg
conceded that he had not held a real estate broker’s
license for thirty years, had never participated in a com-
No. 09-2710 15

petitive bid transaction like the one at issue here, and
had no personal experience with the statutes he was
interpreting. He also had the following exchange with
the district court:
Court: And your conclusions about Mr. Lupton’s
activity are based on your interpretation of the
statute, then, as filtered through these articles. Is
that a fair assessment or not?
Greenberg: I’ve made my conclusion based upon
what he did compared to what the statute permits
and requires him to do.
Court: So you’re saying that as you read the
statute what he did was legal under the statute.
Greenberg: That’s exactly what I’ve testified here
today.
Id. at 70.
After the hearing, the court issued a decision and
order excluding Greenberg’s testimony. The district court
rested its determination on Greenberg’s lack of relevant
expertise and experience, the absence of facts or data
underlying his opinions, the fact that what he was
really offering was legal interpretation, and the danger
that extensive testimony about the meaning of state
statutes would confuse the jury. (Lupton had not yet
waived his right to be tried by a jury.)
The first two rationales rest upon the firm ground of
Rule 702, which governs the admissibility of expert testi-
mony even in federal criminal trials. Cf. Taylor v. Illinois,
484 U.S. 400, 410 (1988) (“The accused does not have
16 No. 09-2710

an unfettered right to offer testimony that is incompetent,
privileged, or otherwise inadmissible under the
standard rules of evidence.”). Greenberg’s thirty-year
distance from the day-to-day goings-on in the brokerage
world and lack of experience with the statutes and
contract at issue in this case call into question the extent
to which his “knowledge, skill, experience, training, or
education” qualify him to render an opinion on what
constitute “innocent, normal, and acceptable practices,”
Appellant’s Br. 42, among real estate brokers. And
Greenberg’s lack of methodology—he simply read the
statutes and discussed how he thought they might
apply—as well as the absence of any data—such as how
Wisconsin courts have applied the statutes, or how
often situations such as Lupton’s arise—support the
district court’s second Rule 702 finding that Greenberg’s
testimony was insufficiently reliable to be admitted.
Even if Greenberg had been qualified as an expert,
however, the district court would still have been within
its discretion to exclude his legally interpretive testi-
mony under the third and fourth rationales it provided.
The court was correct in noting that the meaning of
statutes, regulations, and contract terms is “a subject
for the court, not for testimonial experts. The only legal
expert in a federal courtroom is the judge.”Caputo, 517
F.3d at 942 (citation omitted); see also United States v.
Stewart, 433 F.3d 273, 311 (2d Cir. 2006) (“Clearly,
an opinion that purports to explain the law to the jury
trespasses on the trial judge’s exclusive territory.”).
Greenberg’s exchange with the court demonstrates that
he was acting—and even saw himself as—nothing more
No. 09-2710 17

than a legal expert. Moreover, the legal interpretations
he was providing related not to the statutes Lupton was
charged with violating but rather to state statutes.
Those statutes were relevant to Lupton’s defense, that
what he did was legal under state law, but they were
tangential to the crucial questions the factfinder had to
answer, namely whether the government could prove
beyond a reasonable doubt the elements of 18 U.S.C.
§§ 666, 1343 & 1346. Testimony about them would have
been of limited value at best and unduly confusing at
worst; the district court did err in concluding that it
fell nearer the latter end of that spectrum. See Fed. R. Evid.
403.
Lupton’s other unsupported complaints about the
exclusion of Greenberg’s testimony do not merit discus-
sion.

B. Challenges to Convictions
1. Count I: Corrupt Solicitation
a. Lupton was an “Agent”
Lupton was indicted for violating 18 U.S.C.
§ 666(a)(1)(B), which prohibits “an agent of an organiza-
tion, or of a State, local, or Indian tribal government, or
any agency thereof” from “corruptly solicit[ing] or
demand[ing] for the benefit of any person, or accept[ing]
or agree[ing] to accept, anything of value from any
person, intending to be influenced or rewarded in con-
nection with any business, transaction, or series of transac-
tions of such organization, government or agency in-
18 No. 09-2710

volving any thing of value of $5,000 or more.” Section
666(d)(1) defines an “agent” as “a person authorized to
act on behalf of another person or a government and, in
the case of an organization or government, includes a
servant or employee, and a partner, director, officer,
manager, and representative.” Lupton argues that he
should not have been found guilty under 18 U.S.C. § 666
because he was not an “agent” as defined in sub-
section (d)(1). He contends that he does not meet the
definition of “agent” because there is a provision in the
contract between the State of Wisconsin and Equis
that explicitly denies Equis any authority to act on behalf
of the State. He also contends, apparently in the alterna-
tive, that the record was devoid of evidence that he
was authorized to act on behalf of the State of Wiscon-
sin. We find both these arguments wanting.
Lupton’s first contention starts out accurately enough:
the 2004 master contract between Equis and the State
of Wisconsin included the State’s “supplemental
standard terms and conditions for procurements,” one of
which stated that Equis “shall act in the capacity of an
independent contractor and not as an officer, employee,
or agent of the state.” This contractual requirement ex-
tended recursively to “each subcontractor of the con-
tractor, [who] will be deemed to be an independent
contractor and will not be considered or permitted to be
an agent . . . of the state.” Therefore, Lupton asserts, neither
he nor Equis could possibly be considered an “agent”
under § 666(d)(1). That is where his argument falls off
the rails. Whether Lupton is considered an “agent” for
purposes of 18 U.S.C. § 666 is determined by that statute,
No. 09-2710 19

not by the terms of a private contract. Parties cannot
contract around definitions provided in criminal statutes;
even if Lupton could not be considered a common law
agent under Equis’s contract, it is nonetheless possible
for him to be an “agent” under the terms of 18 U.S.C.
§ 666(d)(1). Cf. United States v. Ortiz-Santiago, 211 F.3d
146, 152 (1st Cir. 2000) (noting that the sentencing
“safety valve” is a congressional directive that the gov-
ernment cannot use plea agreements to circumvent). The
statutory definition of “agent” is an expansive one. See
United States v. Sotomayor-Vázquez, 249 F.3d 1, 8 (1st Cir.
2001). As the Sixth Circuit put it, privately agreed upon
“employment labels,” like the “independent contractor”
one Lupton purportedly wore here, “may bring some
employment relationships within the sphere of agency
status but they do not necessarily squeeze all other em-
ployment relationships out of that sphere.” United States
v. Hudson, 491 F.3d 590, 595 (6th Cir. 2007); see also
United States v. Vitillo, 490 F.3d 314, 323 (3d Cir. 2007)
(noting that § 666(d)(1) “is, by its own plain language,
not exhaustive” and concluding that “independent con-
tractors” may well fall within its ambit). The question we
must answer, then, is the one implicated by Lupton’s
second argument: did the government provide enough
evidence at trial to support the factfinder’s conclusion
that Lupton was the State’s “agent” as defined in 18
U.S.C. § 666(d)(1)? See Hudson, 491 F.3d at 595.
We start off our exploration of this question by noting
that Lupton faces a steep uphill climb here. See, e.g., United
States v. Woods, 556 F.3d 616, 621 (7th Cir. 2009) (“A
defendant faces a ‘nearly insurmountable hurdle’ in
20 No. 09-2710

challenging the sufficiency of the evidence to sustain a
conviction.”). For Lupton to prevail, we must be con-
vinced, after viewing the evidence in the light most
favorable to the government, that no rational trier of fact
could have found the essential elements of the crime
beyond a reasonable doubt. Id. In making our inquiry,
we do not reweigh the evidence or second-guess the
factfinder’s credibility determinations. United States v.
Arthur, 582 F.3d 713, 717 (7th Cir. 2009).
The factfinder concluded that Lupton was authorized
to act on behalf of the State in connection with the sale
of the building and was therefore an “agent” for pur-
poses of 18 U.S.C. § 666. Ample evidence supports that
conclusion. Lupton sent out an offering memorandum
soliciting proposals from prospective buyers. His name
was on the cover page, right along with the State of Wis-
consin’s. The memorandum provided that “[a]ll requests
for additional information” were to be directed to
Lupton or another Equis vice president and warned
potential buyers that contacting the State through other
channels could result in the termination of any agree-
ment. Lupton was responsible for further communica-
tions with potential buyers, he knew the State’s expecta-
tions, and he kept the State apprised of his efforts to get
the bidders to make better offers. Like the defendant in
Hudson, Lupton was authorized “to perform all duties,
responsibilities, and necessary actions required to mar-
ket” the building, Hudson, 491 F.3d at 594, and served
as prospective buyers’ “primary contact” for negotia-
tions with the State, id. Perhaps most tellingly, Lupton
told Silverstein that he was obligated “to do technically
No. 09-2710 21

the right thing for the State.” On this record, a ra-
tional factfinder could readily conclude that Lupton
had authority to act on behalf of the State and was thus
an “agent” as defined in 18 U.S.C. § 666(d)(1).

b. The Proposed Transaction was not
a Bona Fide Transaction
Lupton also argues that even if he is considered
an “agent,” his conviction under 18 U.S.C. § 666 is
invalid for another reason: the discussions he had with
Silverstein were in his view proposals for a bona fide
business transaction. He rests this contention on 18 U.S.C.
§ 666(c), which states that § 666 “does not apply to bona
fide salary, wages, fees, or other compensation paid, or
expense paid or reimbursed, in the usual course of busi-
ness.” Lupton maintains that what he wanted to engage
in with Silverstein was legitimate “commission splitting”
permitted by Wisconsin law, and, moreover, that he
and Silverstein only discussed the “split” hypothetically.
The district court rejected this contention and found
that Lupton’s “unusual maneuvering” with Silverstein
“reveals that this was not to be a payment in the ordinary
course of business.” Lupton, 2009 WL 679649, at *5. The
evidence was sufficient to support the factfinder’s con-
clusion. See United States v. Williams, 507 F.3d 905, 909
(5th Cir. 2007) (“Whether wages are bona fide and
earned in the usual course of business is a question of
fact for the jury to decide.”).
Regardless of whether commission splitting is permissi-
ble under Wisconsin law, the record here is replete
22 No. 09-2710

with evidence supporting the finding that this particular
“split” was neither bona fide nor sought in the ordinary
course of business. Foremost, when discussing the pay-
ment with Silverstein, Lupton never referred to the
“hypothetical” payment as a “split,” and always em-
phasized that it was for him alone. For instance, he told
Silverstein, “I just want to make assurance . . . that if
I could put you into that situation . . . that you guys can
get me a quarter point.” He also stated that “a couple
of parties . . . already agreed to pay me between a quarter
and a half point.” Likewise, when Silverstein asked
Lupton how he envisioned the commission split hap-
pening, Lupton did not say that he would get consent
from Equis or the State in writing (which is required
by Wis. Stat. § 452.133(3)). To the contrary, he explicitly
told Silverstein that he didn’t “want it leaked back to the
State or you know, to Equis.” He also assured Silverstein
that he would be “close lipped” about the whole thing.
He proposed that Silverstein could “take the taxes out
and . . . just give me cash or check.” Lupton suggested
that Silverstein could alternatively “allocate it as a con-
sultant fee to a different company I have which is
NACO. North American Commercial Opportunities.”
As the government points out in its brief, “[c]ash pay-
ments, payments to sham companies, and mischarac-
terization of payments are hallmarks of concealment and
fraud.” Appellee’s Br. 18; cf. United States v. Boscarino, 437
F.3d 634, 636 (7th Cir. 2006) (“Corporate insiders don’t
keep half of bona fide referral fees, nor are such fees
paid from an insider’s personal account after such a
roundabout transaction.”). To be sure, Terry Sparacino, the
No. 09-2710 23

FBI agent who interviewed Lupton, testified that Lupton
acknowledged that the receipt of cash (or payment to
a defunct corporation) would not generally be part of
a legitimate commission split. Tr. 139, Mar. 2, 2009.
Silverstein, whose testimony the district court credited
over Lupton’s, testified that commission splits between
brokers were common, but “[t]his situation was one
where it was made very clear to me from the onset
that commissions were not being shared,” and “I’ve never
in my career been approached that way.” Id. at 68-69.
Additionally, according to Sparacino, Lupton never
indicated that he was engaging in a commission split
with any buyer, nor did he inform Sparacino of his sup-
posed belief that what he had proposed was legal
under Wisconsin law. See id. at 136-40.

2. Count II: Wire Fraud
In Count II, the government alleged that Lupton
devised and participated in a scheme to defraud Equis
and the State of property and the right of honest services,
and that he transmitted a wire communication from
Wisconsin to Illinois in furtherance of that scheme. See
18 U.S.C. §§ 1343, 1346. The district court unambiguously
concluded that the government proved that Lupton
was guilty of wire fraud under both alternative
theories, deprivation of property and of honest services,
beyond a reasonable doubt. Lupton, 2009 WL 679649, at *6
(“The government in this case alleged both a scheme
to obtain money and to deprive Equis and the State of
24 No. 09-2710

honest services. The government proved the defendant
guilty beyond a reasonable doubt under both theories.”).
Lupton argues that he “cannot be convicted of ‘honest
services fraud’ (Count Two) under 18 U.S.C. § 1346 for
disclosing the terms of competing proposals to parties to
a real estate transaction because that conduct is ex-
pressly allowed,” or even required, by Wisconsin’s real
estate and open records statutory schemes. Appellant’s
Br. 17. He contends that his conviction therefore “vio-
lates fundamental principals [sic] of federalism and
impermissibly creates a federal common law crime.” Id.
at 18.
These arguments leave much to be desired, not least
some discussion of federal rather than state law, but it’s
not what Lupton argues that dooms him: it’s what
he doesn’t. The district court found Lupton guilty of
wire fraud under both theories posited by the govern-
ment: the traditional theory outlined in 18 U.S.C. § 1343,
which the government dubs “straight property,” Appel-
lee’s Br. 20, and the alternative theory defined by
§ 1346, honest services. Yet, as the government rightly
points out, Lupton’s arguments indisputably pertain
only to the latter type, not the former.2 Cf. United States

2
In his reply brief, Lupton claims that he has consistently
challenged both theories supporting his wire fraud conviction.
Reply Br. 7. An exiguous mention in one’s introductory
“statement of the case” does not a developed argument make,
however. See United States v. Dunkel, 927 F.2d 955, 956 (7th Cir.
(continued...)
No. 09-2710 25

v. Blagojevich, No. 10-2359, 2010 WL 2778838, at *1 (7th
Cir. July 12, 2010) (“[I]f you lose for two independent
reasons an appellate victory on one does not affect the
judgment.”). Lupton has therefore forfeited any chal-
lenge to his conviction for mine run wire fraud, United
States v. Boyle, 484 F.3d 943, 946 (7th Cir. 2007),
which would stand in any event because the evidence is
sufficient to support it, cf. United States v. Turner, 551
F.3d 657, 665-66 (7th Cir. 2008) (upholding a general
verdict of guilty for violations of 18 U.S.C. §§ 1343 & 1346
where evidence supporting the so-called “straight prop-
erty” variant was sufficient), cert. denied, 129 S. Ct. 2748
(2009). Specifically, the government’s evidence proved
(1) that Lupton participated in a scheme to defraud
Equis out of part of the commission it was legally due,
(2) acted with the intent to defraud Equis (“obviously
I don’t want anything in writing you know, ‘cause you
know, I don’t want it leaked back to the State . . . or to
Equis . . . .”), and (3) transmitted an interstate wire com-
munication in furtherance of his scheme. 18 U.S.C.
§ 1343; Turner, 551 F.3d at 664; Lupton, 2009 WL 679649,
at *6-*8. That would be adequate to support Lupton’s
wire fraud conviction even if the district court had
issued a general verdict. See Turner, 551 F.3d at 665-66.

2
(...continued)
1991) (“A skeletal ‘argument,’ really nothing more than an
assertion, does not preserve a claim.”); cf. Bradshaw v. Miners’
Bank, 77 F. 932, 933 (7th Cir. 1897) (expressing displeasure
with appellants’ brief because its “so-called ‘statement of the
case’ is burdened and confused with matter of argument”).
26 No. 09-2710

Lupton’s state-law-grounded arguments challenging
the honest services prong of his wire fraud conviction
get him no further.3 Lupton argues that he did not
commit what he terms “honest services fraud” because
Wisconsin real estate and open records laws permit or
require him to disclose the intimate details of prospec-
tive buyers’ bids to one another. As a threshold matter,
we note that we have some reservations about Lupton’s
characterization of the statutes to which he points.
For instance, he informs us that “Wis. Stat. § 452.139(1)
specifically provides that the provisions of Chapter 452
supercede [sic] any common law duties or obligations” of
real estate brokers. Appellant’s Br. 27. But a closer look
at the statute reveals that it goes on to limit its super-
seding reach “to the extent that those common law
duties or obligations are inconsistent with the duties
specified in this chapter or in rules promulgated

3
The same is true of his Fed. R. App. P. 28(j) submission
regarding the recent Supreme Court companion cases Skilling v.
United States, 561 U.S. ___, No. 08-1384, 2010 WL 2518587
(June 24, 2010), and Black v. United States, 561 U.S. ___, No. 08-
876, 2010 WL 2518593 (June 24, 2010). We have carefully
reviewed those cases and conclude that they do not change
the outcome of this one. Specifically, we conclude (a) that
Lupton’s scheme constitutes not a mere failure to disclose a
conflict of interest, see Skilling, 2010 WL 2518587, at *28, but
rather the “paradigmatic kickback fact pattern,” id. at *27, that
remains within the ambit of § 1346, see United States v.
Cantrell, ___ F.3d ___, No. 09-1856, 2010 WL 3155912, at *1 (7th
Cir. Aug. 11, 2010), and (b) that Black is inapposite to this case,
which involved neither a general verdict nor jury instructions.
No. 09-2710 27

under this chapter.” Wis. Stat. § 452.139(1). Likewise, the
Wisconsin Supreme Court has explicitly undermined
Lupton’s interpretation of Wisconsin’s open records
law, Wis. Stat. §§ 19.31-19.39, explaining that the statutes
“clearly envision[ ] a public entity, a quasi-govern-
mental corporation, or a governmental entity, not an
independent contractor hired by such a public or gov-
ernmental entity, as being the ‘authority’ [from whom
information may be requested] for purposes of the open
records law.” WIREdata, Inc. v. Vill. of Sussex, 2008 WI 69
¶ 74, 310 Wis.2d 397, 438, 751 N.W.2d 736, 755-56.
Even if the state laws read as Lupton says, though,
his arguments misapprehend the nature of his convic-
tion. They speak only to the alleged propriety of his
information-sharing with Silverstein and do not address
the elements of wire fraud. Lupton was convicted of
scheming (with the aid of a wire communication) to
deprive Equis and the State of Wisconsin of his honest
services. 18 U.S.C. §§ 1343 & 1346. That is, he solicited a
kickback from Silverstein to advance Zeller’s interests
in the bidding process and harmed Equis and Wis-
consin intangibly by doing so. See Skilling v. United
States, 561 U.S. ___, No. 08-1384, 2010 WL 2518587, at *24,
*28 (June 24, 2010). Whether he was allowed to share
the information he shared with Silverstein is not the
guiding consideration; one can perform a perfectly legal
act in a corrupt way or as a means to achieve a more
sinister goal. Indeed, the information divulged to
Silverstein was a pawn in Lupton’s broader scheme,
the quo Lupton exchanged for Silverstein’s quid; the
information sharing was not, as he would have it, the
28 No. 09-2710

basis of his conviction. See Lupton, 2009 WL 679649, at *7
(“Further, defendant’s disclosure of specific bid infor-
mation did not occur in a vacuum—defendant disclosed
Roebling’s LOI terms to the same broker from whom
he sought a monetary kickback.”). What supports Lupton’s
conviction is substantial evidence showing the ex-
istence, intent, and advancement of his scheme, not
the precise means by which he planned to carry it out.
It is likewise unimportant that this case comes on the
heels of another case out of the Eastern District of Wis-
consin, United States v. Thompson, 484 F.3d 877 (7th Cir.
2007), in which we reversed the federal bribery and mail
fraud convictions of a Wisconsin bureaucrat because
the proof at trial demonstrated, at worst, minor devia-
tions from Wisconsin’s administrative procedure rather
than federal crimes. There, the government’s entire
case rested on the premise that “any politically
motivated departure from state administrative rules is
a federal crime, when either the mails or federal funds
are involved.” Thompson, 484 F.3d at 878. “Neither Thomp-
son nor anyone else in state government was accused
of taking a bribe or receiving a kickback.” Id. at 881.
Here, the government alleged and proved the elements
of the federal crime of wire fraud as described in
§§ 1343 & 1346; it did not make a federal case out of a
minor dereliction of state-imposed duties. And, more
importantly, Lupton’s conduct, unlike Thompson’s,
placed him squarely within even the recently narrowed
parameters of § 1346. See Skilling, 2010 WL 2518587, at *27-
*28. Lupton’s attempt to liken the two cases—rooted in
his argument about federal common law crimes—conse-
quently proves unsuccessful.
No. 09-2710 29

We also note that any attempt to minimize the “bribe-
and-kickback” nature, Skilling, 2010 WL 2518587, at *28,
of Lupton’s scheme by emphasizing its lack of comple-
tion is equally unavailing. The wire fraud statutes
criminalize the fraudulent acts undertaken to secure illicit
gains, not their ultimate successes. See United States v.
Capoccia, 503 F.3d 103, 112 (2d Cir. 2007) (noting that
some “criminal statutes . . . define offenses either as
actions taken pursuant to a scheme to defraud or as
such schemes themselves” and including among these
18 U.S.C. §§ 1341 & 1343); cf. United States v. White, 610
F.3d 956, 960 (7th Cir. 2010) (discussing the inchoate
crime of solicitation). So it’s not pertinent that the plot
was foiled long before Lupton received any kickback,
nor that Lupton recommended Roebling’s bid, not
Zeller’s, to a member of Wisconsin’s Department of
Administration. (There is evidence in the record in-
dicating that Lupton “unexpectedly and ‘out of the
blue’ made a pitch for” Roebling to this individual, Peter
Maternowski, and Lupton’s counsel gave us the same
information at oral argument.) In any event, it’s not
necessarily the case that Lupton failed to live up to his
promises to Silverstein. The recommendation he made
was not to the final decisionmaker, and he himself indi-
cated that he had similar deals with other bidders—he
may have been recommending different bids at different
points to satisfy the terms of these other alleged deals or
to mitigate any appearance of inappropriately favoring
one bidder over the others. While the fact that Lupton
recommended Roebling may pique the interest of law
enforcement officials, it does nothing to alter the validity
of his wire fraud conviction in this case.
30 No. 09-2710

3. Counts III & IV: False Statements to FBI Agent
Lupton’s third and fourth convictions both stemmed
from 18 U.S.C. § 1001, which makes it a crime to
knowingly and willfully make a materially false state-
ment in connection with a matter within the jurisdiction
of a federal agency, here, the FBI. See United States v.
Ringer, 300 F.3d 788, 791 (7th Cir. 2002). Count III was
predicated upon Lupton’s May 10, 2007, assertion to FBI
Agent Sparacino that he had never provided prospec-
tive buyers with specific details from bids submitted by
competing prospective buyers. Count IV rested on
Lupton’s May 18, 2007, claim to FBI Agent Sparacino
that he had never suggested to Silverstein that he be
paid in cash or by check payable to any company other
than Equis. The district court found that Lupton
knowingly and willfully made both these statements in
the course of a matter within the jurisdiction of the
United States, and that the statements were false and
material. Lupton claims the statements were not “know-
ingly” and “willfully” made because he had a good faith
belief that the conduct he was denying was legal. Lupton
also claims that the district court erred in its determina-
tion that the statements were “material,” because the
statements had no actual effect on the investigation: FBI
agents already had in their possession the tapes of
Lupton and Silverstein’s conversations when they ques-
tioned Lupton. In his reply brief, he also argues that
his statements constituted an “exculpatory no” and thus
could not serve as a basis for liability.
Lupton contends that his statements could not have
been made knowingly or willfully because he believed
No. 09-2710 31

in good faith that he was obligated to disclose bid details
to competing bidders and that he was engaging in legiti-
mate commission splitting negotiations. But the “know-
ingly and willfully” requirement in 18 U.S.C. § 1001 relates
only to the defendant’s knowledge and intent that the
statements he made to a government entity were false
or were made with the conscious purpose of evading
the truth. United States v. Dick, 744 F.2d 546, 553 (7th Cir.
1984). It has nothing to do with the legality of the under-
lying conduct about which the defendant spoke. Lupton
told the agents that he never disclosed specific informa-
tion from prospective buyers’ bids to other prospective
buyers. That statement did not concern his ability or lack
thereof to disclose the information; the issue was
whether he disclosed it. Like the agent to whom he was
speaking, Lupton knew he had disclosed specific infor-
mation from Roebling’s proposal to Silverstein and there-
fore had to know that his statement to the contrary
was false. Similarly, Lupton knew that his statement
about never having discussed payments made directly to
him or to NACO was false when he made it, for he had
recently engaged in a lengthy, in-person conversation
with Silverstein about that very topic. Lupton never told
the agents about his alleged beliefs that his conduct was
legal. He didn’t say something like, “Yes, I shared those
details, but I thought I was required to by Wisconsin
law.” To the contrary, he flatly denied ever sharing bid
information or discussing payments to NACO. And
given the ample evidence that he was aware he had in
fact done those very things, we cannot conclude that the
district court clearly erred.
32 No. 09-2710

We likewise hold that district court did not clearly err
in concluding that both of Lupton’s statements filled
the materiality bill. To be “material” for purposes of 18
U.S.C. § 1001, a statement “must have a natural tendency
to influence, or be capable of influencing, the decision of
the decisionmaking body to which it was addressed.”
Turner, 551 F.3d at 663 (quotation omitted). We do not
require the statement to actually influence the agency to
which it was directed, or even that the agency rely on
the statement in any way. See id.; United States v. Burke,
425 F.3d 400, 409 (7th Cir. 2005) (“That the prosecutors
knew (or thought they knew) the answers to the ques-
tions they asked Burke does not make the information
less material.”); United States v. Ranum, 96 F.3d 1020,
1028 n.12 (7th Cir. 1996) (“[I]t is not necessary for an
allegedly false statement to have any ill effect at all, as
long as it is capable of having such an effect.”). Instead,
we have recognized, like many of our sister circuits, that
a frequent aim of false statements made to federal inves-
tigators is to cast suspicion away from the declarant,
“which in the ordinary course would have an intrinsic
capability . . . to influence an FBI investigation.” Turner,
551 F.3d at 664.; see id. at 663-64 (collecting cases).
When statements are aimed at misdirecting agents and
their investigation, even if they miss spectacularly or
stand absolutely no chance of succeeding, they satisfy
the materiality requirement of 18 U.S.C. § 1001.
Lupton’s May 10 statement that he never shared
specific bid details from prospective buyers with other
prospective buyers could only have been designed to
cast suspicion away from him, with respect to both his
No. 09-2710 33

relationship with Silverstein and any similar arrange-
ments he might have had with other prospective buyers.
If the agents hadn’t had the tapes of Lupton divulging
the contents of Roebling’s and Arlen’s bids to Silverstein,
Lupton’s statement might reasonably have caused them
to turn their attention away from him. That is enough
for a factfinder to conclude that the statement was mate-
rial; it is of no moment that the agents did have the
tapes and that the statement thus had no actual impact
on the investigation. And the May 18 statement, in
which Lupton denied ever suggesting that Silverstein
pay him in cash or pay NACO by check, was also of the
type that would naturally tend to influence the course
of the agents’ investigation. Indeed, Agent Sparacino
testified that he came away from the interview with a
sense that Lupton was trying to deflect the agents’ focus
from him. Tr. 141, Mar. 2, 2009.
Lupton forfeited his “exculpatory no” argument by
raising it for the first time in his reply brief. See Boyle, 484
F.3d at 946. But even if he hadn’t, the argument
would be without traction because the Supreme Court
has clearly held that “the plain language of § 1001 admits
of no exception for an ‘exculpatory no.’ ” Brogan v. United
States, 522 U.S. 398, 408 (1998); United States v. Brandt,
546 F.3d 912, 917 (7th Cir. 2008) (“In Brogan, the
Supreme Court explicitly and unequivocally rejected the
‘exculpatory no’ doctrine as a defense to criminal
liability under § 1001.”). And in any event, Lupton said
much more than “no” during his two interviews with the
FBI, so this isn’t a situation in which one could even rea-
sonably advocate for the resurrection of the defunct
34 No. 09-2710

“exculpatory no” doctrine. Lupton chose to lie to Agent
Sparacino, and he must live with the consequences of
that choice. Burke, 425 F.3d at 409.

III. Conclusion
For the foregoing reasons, we A FFIRM the challenged
evidentiary ruling, findings, and verdicts of the district
court.

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