In the
United States Court of Appeals
For the Seventh Circuit
Nos. 10-2140, 10-2181 & 10-2182
U NITED S TATES OF A MERICA,
Plaintiff-Appellee,
v.
W ANDA JOSHUA, A NN M ARIE K ARRAS,
and D OZIER T. A LLEN, JR.,
Defendants-Appellants.
Appeals from the United States District Court
for the Northern District of Indiana, Hammond Division.
Nos. 2:07 CR 132 & 2:08 CR 41—Philip P. Simon, Judge.
A RGUED N OVEMBER 1, 2010—D ECIDED A UGUST 8, 2011
Before R OVNER, W OOD , and T INDER, Circuit Judges.
W OOD , Circuit Judge. The Calumet Township Trustee’s
Office (“Trustee’s Office”) is a political subdivision of
Indiana that provides various social services to citizens
of Gary and Griffith. Defendants Wanda Joshua, Ann
Marie Karras, and Dozier T. Allen, Jr., ran the Office.
Unfortunately, they did not do so honorably; instead,
they engaged in a scheme to defraud the Office by
2 Nos. 10-2140, 10-2181 & 10-2182
taking substantial payments for work they did not per-
form. In particular, they commandeered checks made
out to the Office by the Indiana Department of Workforce
Development Services and, instead of using the funds
for their intended purpose, they deposited them into
their own personal bank accounts. This led to charges
and convictions on two counts of mail fraud, in violation
of 18 U.S.C. §§ 1341 and 1346. On appeal, the defendants
raise three issues: first, that the evidence was insufficient
on the mailing element of mail fraud, thereby requiring
their acquittal; second, that the decision in Skilling v.
United States, 130 S. Ct. 2896 (2010), requires us to set
aside their convictions; and finally, that the district
court improperly instructed the jury regarding their
advice-of-counsel defense. Although we find the evi-
dence of mailing thin, we conclude that it was
enough to send the case to the jury. As neither of the
other two points has merit, we therefore affirm.
I
The Trustee’s Office in Calumet Township is responsible
for providing help to residents facing economic diffi-
culties. The Office offers a variety of services, including
job training, employment assistance, and welfare pay-
ments. Allen was elected and served as Trustee; Joshua
served as Allen’s Deputy Trustee; and Karras served as
Deputy Finance Trustee. In 1998, the United States De-
partment of Labor began distributing grants for wel-
fare-to-work programs in an effort to reform welfare
programs around the country. As part of that effort, the
Nos. 10-2140, 10-2181 & 10-2182 3
Department offered Indiana a $15 million grant. As a
condition of the grant, Indiana had to demonstrate that
a certain amount of non-federal funds were already
being spent on programs aimed at helping people make
the transition from welfare to gainful employment. The
state realized that the funds distributed by the Trustee’s
Office would qualify as matching funds, and so it asked
the Office to compile and report its financial data. In
response, the Office entered into a contract in early 2000
with the Indiana Department of Workforce Develop-
ment Services (“IDWDS”) under which the latter would
provide a monthly report of all non-federal dollars
spent by the Office. In return, IDWDS was to pay the
Office for “salaries, fringe, travel, and all other
work-related expenses” in connection with that service.
The contract stated that IDWDS would pay the Office
no more than $50,000 for the first six months of the
year 2000, and no more than $4,167 each month there-
after. The Office could obtain payment by submitting to
IDWDS an invoice with supporting documentation
of allowable costs.
It turned out that providing this information to IDWDS
was a cinch for the Office. Winfo Data Systems, which
serviced the Township’s computer software needs, wrote
a program that would process the data entered as part
of the Office’s regular operations and, in less than a
minute, generate the desired financial report. Despite
this development, the Office submitted invoices to
IDWDS with each report in the maximum allowed
amount of $4,167; despite the lack of any documentation
of costs, IDWDS dutifully paid the invoices in full. Then,
4 Nos. 10-2140, 10-2181 & 10-2182
instead of directing this money to the Office, the defen-
dants pocketed the bounty themselves. Between
November 2000 and December 2002, a little over
$170,000 in IDWDS payments was deposited into a Fifth
Third Bank account. These funds were then disbursed
to the defendants as “administrative fees.” Altogether,
Allen received $28,000; Joshua received $51,000; and
Karras received $38,000.
The defendants did nothing to earn these spoils. Tell-
ingly, the budgets that the Office submitted to the Town-
ship Board never mentioned the IDWDS contract. Al-
though the Office hired financial consultant James
Bennett to prepare the budgets in consultation with
Karras, Karras never saw fit to disclose the Fifth Third
Bank account. When presenting the Office’s annual fi-
nances to the Board, Allen furnished a lengthy writ-
ten report that reflected the payments made to the de-
fendants, but he did not draw anyone’s attention to
these substantial payments at the meeting. Nor did the
defendants report these payments as they were required
to do by Indiana Law. IND. C ODE § 35-44-1-3.
Unfortunately for the defendants, the scheme
unraveled before too long. One Board member, Roosevelt
Allen, Jr. (Allen’s second cousin, as it happens), was
approached by a newspaper reporter inquiring about
the IDWDS contract. (Like the government, we refer to
him as “Roosevelt” to avoid confusion.) At the next
Board meeting, Roosevelt raised the issue, asking
whether Trustee Allen had the authority to pay him-
self from this particular program. The Office’s attorney,
Nos. 10-2140, 10-2181 & 10-2182 5
Frederick Work, expressed the opinion that the financial
arrangement was appropriate. Work would later testify
that he based his legal conclusion on Township Resolu-
tion No. 98-5a. This Resolution sought to obtain addi-
tional funds for the Office’s public welfare programs. It
stated that any such funds could be used to compensate
the Trustee and his staff for their service and expendi-
tures; it also called for proper financial reporting and
auditing procedures. Work testified that he advised
Dozier Allen that he could use these grant monies as
he saw fit, without seeking Board appropriation. Work
reasoned that since the work associated with these
grant monies was off-budget, Allen, Joshua, and Karras
could receive compensation beyond their budgeted
salary. Work conceded, however, that if the defendants
performed no work, they could not be paid.
It is this last point that is the root of defendants’
troubles, because, as we said, they did absolutely
nothing to earn these sums. Soon after Allen left office
as Trustee, the Indiana State Board of Accounts dis-
covered the checks written from the Fifth Third Bank
account. The Board of Accounts requested Allen, Joshua,
and Karras to produce documentation supporting the
payments, but naturally they could not do so. Conse-
quently, based on two of the checks mailed to the
Trustee’s Office by IDWDS, the defendants were
charged with two counts of mail fraud in violation of
18 U.S.C. §§ 1341 and 1346. The government argued
two separate theories of mail fraud: first, that the de-
fendants participated in a scheme to defraud the
Trustee’s Office of money and, second, that the
6 Nos. 10-2140, 10-2181 & 10-2182
defendants engaged in a scheme to defraud the Trustee’s
Office of the intangible right to honest services. Through
special verdicts, the jury indicated that it accepted
both of these theories, and it convicted the defendants.
This appeal followed.
II
A
We begin by addressing defendants’ argument that
the evidence on the mailing element was insufficient to
sustain the convictions on the mail fraud counts. We
review de novo the district court’s denial of a motion for
acquittal under Federal Rule of Criminal Procedure 29.
United States v. Chambers, 642 F.3d 588, 592 (7th Cir. 2011).
When reviewing a sufficiency claim, the court “consider[s]
the evidence in the light most favorable to the govern-
ment, drawing all reasonable inferences in its favor.”
United States v. Frazier, 213 F.3d 409, 416 (7th Cir. 2000). A
conviction will not be overturned unless “the record is
devoid of evidence from which a reasonable jury could
find guilt beyond a reasonable doubt.” United States v.
Curtis, 324 F.3d 501, 505 (7th Cir. 2003).
In order to convict someone of mail fraud, the govern-
ment must prove beyond a reasonable doubt that the
defendants participated in a scheme to defraud and that
they used the U.S. mail or knowingly caused another to
use the U.S. mail for the purpose of executing the
scheme. 18 U.S.C. § 1341; United States v. Brooks, 748 F.2d
1199, 1202 (7th Cir. 1984). The defendants take issue
Nos. 10-2140, 10-2181 & 10-2182 7
with the second element; they assert that there is insuffi-
cient evidence to show that the checks were actually
sent by mail from IDWDS to the Trustee’s Office,
rather than hand-delivered.
The government’s proof of mailing was for the most
part circumstantial, but there is nothing wrong with
that. It proffered the testimony of Angela Lewis, an
IDWDS senior fiscal accountant in charge of delivering
reimbursement checks. Lewis testified that IDWDS gen-
erally sent the checks to the Trustee’s Office by mail, but
sometimes they were picked up by an Office employee.
When sending checks through the mail, IDWDS’s office
practice was to put the checks in envelopes, run the
envelopes through the postage meter, and finally have
an IDWDS employee take the envelopes to the post
office. The government then presented the two
envelopes in which the checks were allegedly mailed.
Markings on the envelopes indicated that they had
been run through the IDWDS postage meter, but they
did not bear any postal markings indicating that they
had actually been delivered through the postal service.
They did, however, bear notations indicating that the
Office had received them. One envelope, run through
IDWDS’s postage meter on November 27, 2002, had a
handwritten note “12/4/02/ak.” This note meant that the
envelope had been received at the Trustee’s Office on
December 4, 2002, apparently by defendant Ann Karras.
The other envelope, metered on December 19, 2002, was
stamped “RECEIVED” at 1:51 p.m. on December 20,
2002. Lewis testified unequivocally that the envelope
8 Nos. 10-2140, 10-2181 & 10-2182
metered on December 19, 2002—associated with Count 2—
had been mailed.
While it is easy to imagine stronger evidence, we are
satisfied that this was enough to permit the jury to con-
clude that the envelopes went through the U.S. mail. The
mailing element of mail fraud may be proven by direct
or circumstantial evidence. United States v. Brooks, 748
F.2d 1199, 1202 (7th Cir. 1984). Evidence of office
custom and practice often serves as circumstantial proof
of the fact of mailing. See United States v. Ratliff-White,
493 F.3d 812, 817-18 (7th Cir. 2007) (making the same
point with respect to wire transfers). The government
cannot rely on an office practice if there is evidence that
a party regularly deviated from the practice, id., but at
the same time, the government need not show that the
office practice was invariable. “[T]he absence of a recol-
lection of departure from that practice” is sufficient.
United States v. Keplinger, 776 F.2d 678, 691 (7th Cir. 1985).
Drawing the inferences in the government’s favor, as
we must, a reasonable understanding of Lewis’s testi-
mony is that when checks were mailed, they were put
through the metering process and delivered to the post
office, and when they were picked up, they never
touched the metering machine. Why should they, in the
latter case? IDWDS would incur the cost of postage as
soon as the envelopes were metered. If the envelopes
were metered, and then picked up by the Trustee’s
Office, IDWDS would needlessly be wasting postage.
We have no reason to assume that IDWDS took such
a cavalier attitude toward its funds. The envelopes
Nos. 10-2140, 10-2181 & 10-2182 9
here were metered; there is no evidence that the
agency hand-delivered any metered mail; and so the
jury was entitled to infer that they were mailed.
Defendants resist this conclusion by emphasizing the
lack of postal service markings on the envelopes; they
assert that this serves as evidence that these envelopes
were not mailed. The government, however, rebutted
this argument with the testimony of Postal Inspector
Mark Shaw. Shaw testified that the envelopes in ques-
tion were classified as flat, metered mail. In the postal
service’s jargon, flat mail refers to envelopes that are
larger than a normal letter-sized envelope. Metered mail
has meter marks, rather than stamps. The Post Office
processes flat, metered mail in a specialized ma-
chine. Shaw stated that these machines do not spray
any markings on the mail, because flat, metered mail
does not need to be canceled to prevent re-use. Meter
marks are dated, and metered mail is supposed to be
sent out on the same date as the one shown by the
meter mark. In fact, the Postal Service is authorized to
reject mail that is mailed on a date not corresponding
with the meter mark. This dating of the meter marks
adequately protects against those who might try to save
on postage by reusing envelopes with meter marks
on them. This testimony was enough to permit the jury
to decline to draw an inference in the defendants’
favor from the lack of postal markings.
Defendants then argue that the government cannot rely
on IDWDS’s office practice, because they contend that
Lewis admitted that there were deviations to the prac-
10 Nos. 10-2140, 10-2181 & 10-2182
tice—that is, sometimes checks were picked up. But the
defendants have targeted the wrong office practice. The
office practice that matters applies only to metered enve-
lopes. And as for that subset, the evidence showed that
IDWDS metered only the envelopes that were mailed,
and it metered all of that group. To be sure, Lewis’s
testimony leaves something to be desired on this point.
Neither the government nor the defense asked Lewis
in detail about what happened when envelopes were
picked up by the Trustee’s Office. (An answer to the
question, “Were metered envelopes ever picked up?”,
would have been useful on this point.) But as we said,
drawing the inferences in the government’s favor, it is
a reasonable interpretation of Lewis’s testimony that
the office practice was to meter all and only envelopes
that were mailed. There is no example of a deviation
from this practice. As the envelopes here were metered,
the jury was entitled to conclude that they were also
mailed.
Defendants finally suggest that it was possible that
the metered mail was picked up. The offices were only
three blocks apart and the envelope metered on Decem-
ber 19, 2002 was delivered within a day. The defendants
argue that this was more consistent with pick-up.
As an initial point, this argument does not implicate
Count 1. The envelope associated with Count 1 took
seven days to deliver, and by the defendants’ own rea-
soning this would be more consistent with mailing
than hand pick-up. With respect to Count 2, as we said
in Keplinger, the government need not show the office
Nos. 10-2140, 10-2181 & 10-2182 11
practice was invariable and that deviation was impos-
sible. Though hand delivery was possible, this by itself
is not enough for the defendants. Furthermore, the
claim that the one-day gap was more consistent with
hand delivery is pure speculation. Next-day service
with first-class mail is not uncommon when the
delivery and receipt locations are in less populated areas
or are in close geographical proximity. The jury was
entitled to weigh the delivery time against the other
evidence—including Lewis’s unequivocal statement
that the Count 2 envelope was mailed—and decide in
the government’s favor.
B
We next address defendants’ argument that Skilling
v. United States, 130 S. Ct. 2896 (2010), compels us to
reverse their convictions, because they were convicted
of honest services mail fraud. The defendants did not
raise this issue below, so we review for plain er-
ror. United States v. Harris, 230 F.3d 1054, 1058 (7th Cir.
2000). Before we can correct such an error, there must
be “(1) ‘error,’ (2) that is ‘plain,’ and (3) that ‘affect[s]
substantial rights.’ ” Johnson v. United States, 520 U.S. 461,
467 (1997) (quoting United States v. Olano, 507 U.S. 725,
732 (1993)). Even then, only if (4) the error “seriously
affects the fairness, integrity, or public reputation of
judicial proceedings” may we exercise our discretion to
address it. Id. (internal quotation marks omitted).
In Skilling, the Supreme Court pruned the scope of
the honest services mail fraud offense to clarify that it
12 Nos. 10-2140, 10-2181 & 10-2182
encompasses only bribery and kickback schemes, in
order to save 18 U.S.C. § 1346 from unconstitutional
vagueness. 130 S. Ct. at 2933. The government has con-
ceded that the defendants’ scheme in this case falls
outside the offense defined in Skilling. But that is not
the end of the matter. Here, the special verdicts unam-
biguously reveal that the jury accepted both of the pros-
ecution’s theories: honest services fraud, and a conven-
tional fraudulent scheme to obtain money. The latter
form of mail fraud is untouched by Skilling and
remains illegal. United States v. Segal, 2011 WL 1642831,
at *1 (7th Cir. May 3, 2011). Thus, even if honest
services fraud is erased from the picture, the jury
would have convicted on the monetary fraud theory.
The defendants riposte by claiming that the jury in-
structions did not properly indicate that there were
two separate theories to consider. A look at the language
of those instructions is enough to answer this point:
Instruction 9
Counts 1 and 2 of the indictment allege that [defen-
dants] devised and participated in a scheme and
artifice to (1) defraud the Calumet Township and its
citizens of their intangible right to honest services
of public servants, and (2) to obtain money from
Calumet Township by means of materially false and
fraudulent pretenses, representations, promises and
material omissions.
Instruction 16
Counts 1 and 2 of the indictment allege that the defen-
dants committed certain specific acts as part of the
Nos. 10-2140, 10-2181 & 10-2182 13
scheme to defraud. The government need not prove
that each and every specific alleged act was com-
mitted by a defendant. However, the government
must prove that a defendant committed at least one
of the specific acts which are alleged in that count.
In order to find that the government has proved a
defendant committed a specific act, the jury must
unanimously agree on which specific act the
defendant committed.
For example, if some of you find a defendant partici-
pated in a scheme to obtain money and the rest of you
find that same defendant participated in a scheme to
deprive the citizens of Calumet Township of honest
services, then there is no unanimous agreement on the
scheme. On the other hand, if all jurors find that a
defendant schemed to obtain money or schemed to
deprive the citizens of Calumet Township of honest
services, then there is unanimous agreement.
No one could miss the fact that two theories were in
play: the court said so directly in the first paragraph and
offered an additional explanation in the last.
In a last-ditch effort to make use of Skilling, the defen-
dants argue that the evidence on monetary fraud was so
thin that the jury would not have accepted that theory
unless it was influenced by the improper honest-
services part of the case. The government, they say, made
things worse by failing to indicate clearly which evi-
dence pertained to what. In this respect, however, we
do not find the case to be a close one. The jury found
that the defendants took over $100,000 that IDWDS sent
14 Nos. 10-2140, 10-2181 & 10-2182
to the Trustee’s Office. (Since the true amount to which
the Office was entitled under the program was far less
than that, it seems that IDWDS was also a victim of the
fraud. The fact remains, however, that the immediate
victim was the Office. We offer no comment about the
question whether the Office has a duty to reimburse
IDWDS from any funds that it receives by way of restitu-
tion.) There was substantial evidence supporting that
finding, including checks mailed to the Office, deposits
of those checks in a private bank account, and distribu-
tion of the monies to the defendants. There is nothing
objectionable about the potential use of this evidence
for more than one purpose. Once the district court in-
structed the jury properly, as we have found that it did,
the jury was capable of considering the evidence
relevant to each theory. We presume that the jury
follows the district court’s instructions. United States v.
Clarke, 227 F.3d 874, 883 (7th Cir. 2000). In summary, we
see no reversible error here, much less plain error.
C
Finally, we turn to the defendants’ complaint about
the way the court instructed the jury on their advice-of-
counsel defense. We review jury instructions de novo,
but we will reverse a conviction only if the instructions
as a whole misled the jury as to the applicable law.
United States v. Quintero, 618 F.3d 746, 753 (7th Cir. 2010).
Defendants offer two criticisms of the instructions
given by the district court. First, they assert that they
were not relying on an advice-of-counsel defense at all.
Nos. 10-2140, 10-2181 & 10-2182 15
Instead, they say that they were using Attorney Work’s
testimony to negate the mental state required for mail
fraud—that is, intent to defraud. The defendants claim
that because of this misunderstanding, the district
court’s instruction misled the jury about the relevance
of Attorney Work’s testimony. Second, the defendants
argue that the instruction improperly shifted the burden
of persuasion from the government onto them.
Once again, the actual instructions the court gave
on good faith and advice of counsel provide our starting
point:
Instruction 22
Good faith on the part of a defendant is inconsistent
with intent to defraud, an element of both of the
charges in this case. The burden is not on any of the
defendants to prove his or her good faith; rather, the
government must prove beyond a reasonable doubt
that the defendants acted with intent to defraud.
Instruction 22A
You may consider the advice given by counsel to a
defendant in deciding whether the defendant pos-
sessed the requisite intent to defraud if you find
that before taking action, the defendant in good faith
sought the advice of an attorney whom the defendant
considered competent for the purpose of securing
advice on the lawfulness of the defendant’s possible
future conduct, and made a full and accurate report
to the attorney of all material facts which the
defendant knew, and acted strictly in accordance
16 Nos. 10-2140, 10-2181 & 10-2182
with the advice of the attorney who had been given
a full report.
A closer look at the defendants’ first argument shows
why it is misconceived. They say that they were using
the testimony of Attorney Work about the legal advice
he gave to them in an effort to show that they acted
in good faith and thus not with the intent to defraud.
But this is exactly what the advice-of-counsel defense
does. It is not a stand-alone defense; rather, information
about advice of counsel sheds light on the question
whether the defendants had the required intent to
defraud. United States v. Van Allen, 524 F.3d 814, 823 (7th
Cir. 2008). That is, “a lawyer’s fully informed opinion
that certain conduct is lawful (followed by conduct
strictly in compliance with that opinion) can negate the
mental state required for some crimes, including fraud.”
Id. (quoting United States v. Roti, 484 F.3d 934, 935 (7th
Cir. 2007)). Thus, according to the defendants’ own charac-
terization of their defense, they were in fact relying pre-
cisely on the advice-of-counsel defense as described in
Van Allen (and the jury instructions). This is exactly
what the district court told the jury; indeed, its instruc-
tions come almost verbatim from Van Allen, 524 F.3d at 824.
Defendants’ argument regarding the burden of persua-
sion is similarly unavailing. It is true that Instruction 22A
itself is silent on burdens. But there was a good reason
for that. When describing the good faith defense in the
directly preceding Instruction 22, the district court
stated that the burden to disprove the defendants’ good
faith was the government’s. Furthermore, in Instruc-
Nos. 10-2140, 10-2181 & 10-2182 17
tion 10, the district court explained that “[t]he govern-
ment has the burden of proving the guilt of the
defendants beyond a reasonable doubt”; that “[t]he
burden of proof stays with the government throughout
the case”; and that “[t]he defendants are never required
to prove their innocence or to produce any evidence at
all.” The instructions as a whole thus leave no doubt
that the government bore the burden at all times.
* * *
Finding no merit in any of the defendants’ challenges
to their convictions, we A FFIRM the judgment of the
district court.
8-8-11