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United States v. Stoller

United States Court of Appeals, Seventh Circuit

June 27, 2016

United States of America, Plaintiff-Appellee,
Leo Stoller, Defendant-Appellant.

          Argued December 7, 2015

         Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 10 CR 1052 - Virginia M. Kendall, Judge.

          Before Flaum, Williams, and Sykes, Circuit Judges.

          Williams, Circuit Judge.

         Leo Stoller filed for bankruptcy. In that proceeding, he was asked to list all property that he controlled but did not own. He answered "none, " even though he controlled a trust that owned property. He was convicted-after a guilty plea-of bankruptcy fraud, and he was sentenced to 20 months' imprisonment. On appeal, he attacks the validity of his guilty plea on several grounds. But because he was competent to plead guilty, his plea was not coerced, and the plea colloquy included most of the basics (and Stoller was not prejudiced by any deficiency), we reject his arguments and affirm.

         I. BACKGROUND

         A. Bankruptcy Proceedings

         Stoller's mother lived in a house in River Forest, Illinois. The property was owned by a trust; Stoller's mother was the beneficiary. When his mother died, Stoller became the sole beneficiary. The next day, he assigned his beneficial interest to his daughter but reserved a "power of direction" for himself. The "power of direction" gave Stoller certain rights, including one he exercised three times: the right to obtain loans for himself that were secured by the property. 765 Ill. Comp. Stat. § 435/10 (defining "power of direction"). He also directed the trust to rent out the property, and he received the rental income.

         In December 2005, Stoller filed for bankruptcy. None of his filings mentioned the River Forest property. A question on one of the forms specifically asked him to "[l]ist all property owned by another person that [he] [held] or control[led]." Under penalty of perjury, he answered "none."

         B. Fraud Prosecution

         Stoller was charged with two counts of knowingly and fraudulently concealing property that belonged to a bankruptcy estate, see 18 U.S.C. § 152(1), and seven counts of knowingly and fraudulently making a false statement, under penalty of perjury, in a bankruptcy proceeding, see 18 U.S.C. § 152(3). Represented by an appointed lawyer, he pled guilty to one count of making a false statement (and the government dismissed the remaining counts).

         Shortly before sentencing, Stoller considered moving to withdraw his plea on the ground that he was not mentally competent when he entered it. His lawyer-who had counseled him through that plea-withdrew, and a new lawyer was appointed. Sentencing was postponed and Stoller was examined by Dr. Robert Heilbronner, a board-certified neuropsychologist affiliated with Northwestern University and the University of Chicago. Dr. Heilbronner concluded that Stoller was competent to plead guilty. After providing the district judge with the doctor's report, Stoller's lawyer told the judge that he would not move to withdraw Stoller's plea on competency grounds. He did, however, move to withdraw the plea based on alleged defects in the plea colloquy. That motion was denied and Stoller was sentenced to 20 months' imprisonment.

         II. ANALYSIS

         Represented by a new lawyer on appeal, Stoller repeatedly urges his view that, under bankruptcy law, the River Forest property was not part of his estate. So, he argues, some of the conduct charged in the indictment-namely, failing to disclose the River Forest property-is not a crime, and the indictment should have been dismissed as defective. That argument has an obvious flaw. Stoller answered "none" to a question that asked him about "all property, " not "all property that is part of your bankruptcy estate." The indictment charged him with knowingly and fraudulently making that false statement under penalty of perjury, which is a federal offense. See 18 U.S.C. § 152(3).

         We set that flaw aside because Stoller attacks the indictment on other grounds too, arguing the indictment was impermissibly brought to punish him for his vexatious trademark litigation. See United States v. Batchelder, 442 U.S. 114, 125 (1979) (discretion regarding which cases to prosecute is "subject to constitutional constraints"). But Stoller pled guilty. As his lawyer conceded at oral argument, Stoller's guilty plea, if valid, waived his current arguments. Gomez v. Berge, 434 F.3d 940, 942 (7th Cir. 2006) (guilty plea waives "all formal defects in the proceedings, including any constitutional violations that occurred before the plea was entered"); United States v. George, 403 ...

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