In the
United States Court of Appeals
For the Seventh Circuit
No. 09-2520
U NITED S TATES OF A MERICA,
Plaintiff-Appellee,
v.
G ARI A LDRIDGE,
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 06 CR 767-1—James B. Zagel, Judge.
A RGUED S EPTEMBER 17, 2010—D ECIDED A PRIL 22, 2011
Before P OSNER, K ANNE, and W OOD , Circuit Judges.
W OOD , Circuit Judge. Gari Aldridge appeals his con-
victions for wire fraud and aiding and abetting wire
fraud, in violation of 18 U.S.C. §§ 1343 and 2. He offers
several reasons why we should rule in his favor: key
evidence, he contends, should have been suppressed
because it was procured through a warrantless search;
even apart from this, he urges that there was insuf-
ficient evidence to sustain his convictions; and finally,
2 No. 09-2520
he complains that his sentence was unreasonably long.
We find no error, however, that requires correction, and
we thus affirm the district court’s judgment.
I
Aldridge’s crimes involved financial misfeasance.
Along with his brother Tracy Aldridge (“Tracy”), his
wife Ilona Rivera, and James Casmay, he incorporated
Century Financial, Inc. (“CFI”); all four organizers then
served as CFI’s directors. CFI held itself out as providing
financial planning, investment, and mortgage brokerage
services, particularly for customers with sub-prime
credit histories. It raised its initial capital by selling pur-
ported certificates of deposit in 2002 and 2003 to investors
in the Chicago area. The problem, however, was that
contrary to CFI’s representations that the CDs were
fully insured by the FDIC and would provide a return of
6% interest quarterly, none of that was true. Instead,
they were nothing but a mechanism to enrich Aldridge
and his group. The proceeds from the sales, totaling
approximately $1.7 million, were transferred from an
Illinois bank to the Aldridges’ personal bank accounts
in Florida. Aldridge then spent much of the money on
personal expenses, including high-flying vacations and
luxurious shopping trips.
In 2003, Rivera resigned as CFI’s corporate secretary.
Several years later, in early May 2006, a lawyer from the
Securities and Exchange Commission (“SEC”) deposed
her as part of an investigation of CFI. Shortly after her
No. 09-2520 3
deposition, Rivera called the SEC lawyer to inform him
that she suspected Aldridge of insurance fraud. She
revealed that she had been collecting documents about
CFI since the summer of 2004. At the SEC’s request, she
turned the documents over to the agency.
Government agents told Rivera to let them know if she
found any other suspicious materials. Rivera did so,
sending two more batches of materials to the SEC in
July 2006 and November 2006. She took some of these
materials from a black plastic box that Aldridge had
given to her with the comment, “[T]hese are the CDs and
you need to destroy them.” Rivera testified that she
disregarded Aldridge’s instructions and instead sent the
documents to the government because she wanted to
exonerate her son, she feared Aldridge, and she thought
it was the “right thing” to do.
The government soon indicted Aldridge on six counts
of wire fraud and aiding and abetting wire fraud.
Before trial, Aldridge was released on bond and allowed
to attend a seminar in Hawaii. In an affidavit submitted
to the court, Aldridge stated that he planned to travel to
Hawaii as a “prospective employee” of the “Seoul Chris-
tian Assembly” to discuss serving “as a liaison in Cali-
fornia for a project to assist Korean immigrants with
cultural assimilation.” That story, too, was hogwash. In
a video of his meeting, Aldridge was shown making
a familiar pitch to potential investors in Hawaii. The
district court understandably revoked his bond.
At trial, Casmay and Tracy testified that it was Aldridge
who formed the plan to sell the supposedly risk-free,
4 No. 09-2520
FDIC-insured investment product. They further testified
that Aldridge directed Tracy to use the victims’ monies
for Aldridge’s personal expenses. One victim testified
that Aldridge made multiple excuses, such as computer
error and a mistake in the account from which the
checks were drawn, for not making timely payments
to him. Tracy also testified that CFI had given out only
three or four mortgage loans.
A jury convicted Aldridge on all counts, and the court
then ordered a presentence report (“PSR”). In that report,
the probation officer calculated his offense level at 33.
Turning to criminal history, the probation officer con-
cluded that Aldridge had accumulated four points, stem-
ming from prior convictions for theft, bigamy, and patron-
izing prostitution. This placed him in Criminal History
Category III. Based on those calculations, the PSR recom-
mended a guidelines range of 168-210 months. At sen-
tencing, the district court took the position that, although
the probation officer’s calculations were “technically”
correct, they reflected an analysis that overstated both
Aldridge’s degree of culpability and his criminal history.
The district court reasoned that a more appropriate
sentencing calculation would be based on an offense
level of 29 and two criminal history points (Category
II), thereby producing a recommended guidelines range
of 97-121 months. The district court acknowledged,
however, that Aldridge’s behavior in Hawaii was dis-
turbing. In the end, the court sentenced Aldridge to
144 months.
No. 09-2520 5
II
As we noted, Aldridge raises three issues on appeal. We
begin with his argument that the evidence that Rivera
turned over to the government should have been sup-
pressed. Aldridge’s primary point is that Rivera was
acting as an agent of the government when she located
and turned over the incriminating documents. If she
was, then this was a warrantless search, and we would
need to consider whether the evidence that was
produced should have been suppressed. If Rivera was
acting on her own, however, then the analysis is different.
Until now, we have not definitively resolved what stan-
dard of review should apply when we consider a ruling
that a person acted as a private individual when con-
ducting a search. See United States v. Ginglen, 467 F.3d
1071, 1074 (7th Cir. 2006). But even under the most favor-
able standard we can offer, de novo review, Aldridge
cannot succeed.
As we interpret his brief, Aldridge is making two
distinct arguments in support of suppression. First, he
urges that Rivera was acting as a government agent and in
that capacity she engaged in a warrantless search and
seizure. Second, he suggests that even if Rivera was
acting privately, she had no authority to consent to the
government’s search of the materials she handed over.
Without valid consent, the government needed—and did
not have—a warrant to support its search.
The Fourth Amendment generally does not apply to
searches and seizures by private parties, but it does
apply if the private party is acting as a government
6 No. 09-2520
agent. United States v. Hall, 142 F.3d 988, 993 (7th Cir. 1998).
The defendant bears the burden of proving agency,
based on all the circumstances. United States v. Shahid, 117
F.3d 322, 325 (7th Cir. 1997). In Shahid, we identified two
lines of inquiry that assist in this analysis: “whether the
government knew of and acquiesced in the intrusive
conduct and whether the private party’s purpose in
conducting the search was to assist law enforcement
agents or to further [her] own ends.” Id. Looking at the
matter more generally, we see that the Restatement
(Third) of Agency defines agency as “the fiduciary rela-
tionship that arises when one person (a ‘principal’) mani-
fests assent to another person (an ‘agent’) that the
agent shall act on the principal’s behalf and subject to the
principal’s control, and the agent manifests assent or
otherwise consents so to act.” R ESTATEMENT (T HIRD ) OF
A GENCY § 1.01 (2006). Both sides must agree, in other
words, to the creation of the agency relationship. This
is why, in Shahid, we also considered the question
whether the private actor acted at the request of the
government and whether the government offered
the private actor a reward. Id. Although ratification
after the fact of an action taken by another is possible,
see R ESTATEMENT (T HIRD ) OF A GENCY § 4.01, something
more than approval is needed. A person ratifies an act
by “manifesting assent that the act shall affect the
person’s legal relations” or by “conduct that justifies a
reasonable assumption that the [principal] so consents.” Id.
The facts of this case point decisively away from a
finding of agency. Nothing suggests that the govern-
ment made Rivera its agent before she started collecting
No. 09-2520 7
the incriminating materials. Indeed, the government
had no idea that she was doing so. The SEC agents told
her to keep a lookout for suspicious materials and if
she found something, to secure it and let them know. There
is no indication that the agents realized that she had
already done anything. Because Rivera was married to
Aldridge, they may have assumed that she had joint
control with her husband over his records. Finally, there
is no evidence here of ratification: the government
simply took what Rivera unilaterally offered.
Rivera had a number of reasons why it was in her
personal interest to help the government investigate CFI.
She wanted to exonerate her son; she was afraid of her
husband; and it is a fair inference that she wanted to
exonerate herself. She said that she thought that assisting
the government’s inspection was the right thing to do.
None of this points to a finding that she was acting as
a government agent. As this court has stated before:
The social policies pursued by the government will
often coincide with the social ideals of many private
persons; the coincidence of these goals falls short
of establishing that the private persons are con-
trolled by the government. Quite the contrary, it
is a reflection of our democratic system in proper
working order, the government acting as agent of the
people. Private parties may, of their own accord,
pursue the same objectives they have set for their
elected officials without acquiring the legal status of
governmental agent.
United States v. Koenig, 856 F.2d 843, 850 (7th Cir. 1988).
8 No. 09-2520
None of the other considerations mentioned in Shahid
lends support to Aldridge’s contention either. The gov-
ernment was not directing Rivera. The agents suggested
that Rivera keep her eyes peeled and send them any
suspicious materials she might find, but they offered
her no reward for her cooperation. It was Rivera who
initiated the cooperation; the government’s involvement
began only after it started receiving materials from her.
In light of all of this, we are confident that Rivera acted
as a private citizen pursuing her own interests when
she decided to help the government prosecute her
husband for his misdeeds. The Fourth Amendment was
therefore not implicated in her searches of the records
that she and her husband had retained, and there was
no reason to suppress this material.
Aldridge’s second argument assumes that Rivera was a
private actor. Even so, he says, because she was not
authorized to consent to the government’s de facto
search and seizure of the materials, this should still be
regarded as an impermissible warrantless search. In so
arguing, he implicitly concedes that the Fourth Amend-
ment’s warrant requirement is subject to exceptions,
including as relevant here an exception when govern-
ment agents obtain consent for a search. United States v.
Matlock, 415 U.S. 164, 170-71 (1974) (recognizing that no
warrant is required when a defendant or an authorized
third party consents to a search or seizure). Aldridge
argues that under the rule of United States v. Basinski, 226
F.3d 829 (7th Cir. 2000), Rivera had no authority to hand
over materials to the government and consent to their
search. As there was no valid consent, he says, the
No. 09-2520 9
search violated the Fourth Amendment. For this part of
the case, both parties focus on the materials taken from
the black box that Aldridge gave to Rivera, and so we
follow suit.
The first problem with Aldridge’s argument is that it
fails to grapple with the Supreme Court’s holding in
United States v. Payner, 447 U.S. 727 (1980). In Payner, the
Court held that a federal court is not required “to
suppress otherwise admissible evidence on the ground
that it was seized unlawfully from a third party not
before the court.” Id. at 735. Read broadly, this would
suggest that it makes no difference whether Rivera
herself obtained the documents lawfully or by theft: as
long as the government was faultless, it may use them
in its case. There is, we acknowledge, a factual distinc-
tion between Aldridge’s case and Payner: in Aldridge’s
case, the theft was from Aldridge himself, not a third
party. We have no need here to decide whether that is
enough to take him outside Payner’s rule, because even
if Rivera’s right to take the documents mattered,
Aldridge cannot prevail.
Basinski concerned a defendant charged with stealing
jewels; he gave his best friend a locked briefcase,
without informing the friend of the contents of the case,
and told him to destroy it. 226 F.3d at 832. The friend
gave the briefcase to FBI agents, who—without a war-
rant—then broke it open. Id. at 832-33. The search
revealed documents containing names of wholesale
jewelers and combinations for locks belonging to the
jewelers. Id. at 833. The defendant moved to suppress
10 No. 09-2520
the contents of the briefcase. Id. The government
argued, among other things, that it had the friend’s
consent to search the briefcase and so no warrant was
required. Id. at 834. We rejected this argument, finding
on those facts that the friend had neither actual
nor apparent authority to consent to the search. Id. In
particular, the briefcase was locked, the friend was not
informed of the contents of the case, and the friend had
no possessory interest in either the case or its contents.
Id. at 835. As there was no valid consent, we held that
the government’s warrantless search violated the
Fourth Amendment and suppression of the evidence
was necessary. Id. at 838-39.
There are critical differences between Basinski and
Aldridge’s case. The black box that Aldridge gave to
Rivera was not locked, and Aldridge told Rivera what
was in the box—the CDs pertaining to CFI’s dealings.
Furthermore, Rivera was no stranger or casual friend;
she was a former employee of CFI and Aldridge’s wife.
As Matlock instructs, “[Common] authority . . . rests []
on mutual use of the property by persons generally
having joint access or control for most purposes, so that
it is reasonable to recognize that any of the [joint users]
has the right to permit the inspection in his own right
and that the others have assumed the risk that one of
their number might permit the [effects] to be searched.”
415 U.S. at 172 n.7. When Aldridge transferred the box to
his wife, there is nothing to refute the conclusion that
he had conferred joint custody over the box and its con-
tents. This in turn means that Rivera had authority to
hand over the materials and consent to their search
No. 09-2520 11
and seizure. Id. at 171. The fact that Rivera was CFI’s
corporate secretary and Aldridge’s wife reinforces that
conclusion. Basinski, 226 F.3d at 834 (“Under the apparent
authority type of third-party consent, the government
must show that a reasonable person, with the same knowl-
edge of the situation as that possessed by the gov-
ernment agent to whom consent was given, would rea-
sonably believe that the third party had authority over
[the material] searched [or seized].”). Because Rivera
had authority to consent, and did consent, to the govern-
ment’s acquisition of the materials, the government
required no warrant for its search.
We note, for completeness, that this conclusion sup-
ports our rejection of Aldridge’s argument that
Rivera acted as a government agent. Even if Rivera
was acting as a government agent, this would not auto-
matically direct suppression; it would simply trigger
a Fourth Amendment analysis. In conducting that
analysis, we would need to ask whether the govern-
ment’s warrantless searches and seizures fit within an
exception to the warrant requirement. Since Rivera
had authority to consent to a search or seizure of the
materials and did so consent, the government’s searches
and seizures fall within the consent exception to the
warrant requirement. Matlock, 415 U.S. at 171. Thus,
there is no violation of the Fourth Amendment.
Aldridge’s remaining argument with respect to his
conviction deals with the sufficiency of the evidence. We
review de novo the district court’s denial of a motion
for acquittal under Federal Rule of Criminal Procedure 29.
12 No. 09-2520
United States v. Hach, 162 F.3d 937, 942 (7th Cir. 1998).
When reviewing a sufficiency claim, the court “con-
sider[s] the evidence in light most favorable to the gov-
ernment, drawing all reasonable inferences in its favor.”
United States v. Frazier, 213 F.3d 409, 416 (7th Cir. 2000).
As long as a rational trier of fact could have returned
a guilty verdict, the verdict will be affirmed. United
States v. Pribble, 127 F.3d 583, 590 (7th Cir. 1997).
There was more than enough evidence in this record
for a reasonable jury to find that Aldridge intended to
defraud his victims. Casmay’s and Tracy’s testimony
established that Aldridge formed and directed CFI’s
scheme. The jury was not required to believe Aldridge’s
weak excuses for CFI’s inability to pay and CFI’s lack of
home mortgage business; it could instead have inferred
that CFI and Aldridge were trying to defraud their
“investors.”
Last, we consider Aldridge’s assertion that his
sentence was unreasonable. We review a district court’s
sentencing decision solely for abuse of discretion. United
States v. Carter, 538 F.3d 784, 789 (7th Cir. 2008); Rita v.
United States, 551 U.S. 338, 351 (2007). We “will uphold
an above-guidelines sentence so long as the district
court offered an adequate statement of its reasons, con-
sistent with 18 U.S.C. § 3553(a), for imposing such a
sentence.” United States v. McIntyre, 531 F.3d 481, 483
(7th Cir. 2008). There is no presumption that a sen-
tence outside the guidelines’ range is unreasonable. Gall
v. United States, 552 U.S. 38, 51 (2007).
No. 09-2520 13
Aldridge chiefly argues that the district court erred
because it enhanced the sentence beyond the guideline
range that the court ultimately used, based only on “the
normal incidents of the offense”—namely, financial
harm to the victims and the character trait of dishonesty.
These points, he says, were already taken into account
by the guidelines. See Carter, 538 F.3d at 790. But Carter
further observes that “[e]ven if a judge . . . considers
‘normal incidents’ of an offense, [] if such a considera-
tion is ‘just one of many reasons the judge gave for
[his] below-guidelines sentence,’ the sentence will be
affirmed.” Id. (internal citations omitted). Here the
district court indicated that part of the reason it
lengthened the sentence was because of Aldridge’s
conduct in Hawaii. His financial presentation there was
a strong sign that he was starting down the path to
future fraud. This is not a normal incident of the offense
for which he was convicted. The district court reasonably
determined that the sentence had to be increased to
deter Aldridge from re-offending.
There is a different problem with the district court’s
approach, however, that we must mention. The district
court acknowledged that the probation officer had cor-
rectly identified both the offense level and the criminal
history category applicable to Aldridge’s advisory guide-
lines range. What the court should have done at that
point was not to re-jigger the advisory guidelines range,
but instead to have gone on to apply the § 3553(a) factors
to determine the appropriate sentence for Aldridge. Gall,
552 U.S. at 49-50. In the course of its consideration of the
§ 3553(a) factors, the court could have discussed any
14 No. 09-2520
reasons why it thought that Aldridge’s degree of culpabil-
ity and criminal history dictated a sentence outside the
guidelines range. See 18 U.S.C. § 3553(a)(1) (directing
district courts in sentencing to consider “the nature and
circumstances of the offense and the history and charac-
teristics of the defendant”). The court here committed
a procedural error when it attempted to “correct” a
presentencing report that it acknowledged had “techni-
cally” come to the right offense level and criminal
history category. Our review of the court’s explanation
for its sentence, however, convinces us that this error
was harmless. United States v. Anderson, 517 F.3d 953, 965
(7th Cir. 2008) (applying harmless-error analysis to sen-
tencing).
* * *
We therefore A FFIRM the judgment of the district court.
4-22-11