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United States v. Balsiger

United States District Court, E.D. Wisconsin

September 28, 2017




         On March 6, 2007, the government indicted International Outsourcing Services (“IOS”), a coupon clearinghouse, its CEO, Thomas C. Balsiger, and others on wire fraud offenses. The indictment alleged that the defendants devised and participated in a scheme to defraud manufacturers that issued coupons for consumer products, large retailers, and others by knowingly submitting fraudulent coupons to manufacturers for reimbursement. In a superseding indictment returned on December 5, 2007, the grand jury charged defendant Balsiger with 25 counts of wire fraud (counts 1-25), conspiracy to commit wire fraud (count 26), and conspiracy to obstruct justice (count 27).

         Following extensive pre-trial proceedings, defendant Balsiger proceeded, pro se, to a court trial before Judge Clevert, which lasted from October 5, 2016, to November 7, 2016. On December 5, 2016, Judge Clevert rendered his verdict, finding defendant not guilty as to counts 1-15 and guilty as to counts 16-27. On March 6, 2017, Judge Clevert sentenced defendant to a total of 120 months in prison. The judgment issued on March 24, 2017.

         On April 4, 2017, defendant filed a motion for a new trial pursuant to Fed. R. Crim. P. 33 based on “newly discovered evidence.”[1] The case was reassigned to me due to Judge Clevert's retirement, and I ordered the government to respond. In that response, the government argued, inter alia, that the evidence upon which defendant relied was not “new, ” as it had been produced in discovery in the case. On May 5, 2017, defendant filed a motion for leave to file a second motion for a new trial, this time relying on the “interest of justice.” The government opposed leave, arguing that the motion was untimely.

         I deny both motions. The government conclusively shows that the contract upon which defendant relies in his first motion is not new, and defendant fails to show that his failure to timely file the second motion was based on excusable neglect.

         I. RULE 33

         The district court “may vacate any judgment and grant a new trial if the interest of justice so requires.” Fed. R. Crim. P. 33(a). Motions based on “newly discovered evidence must be filed within 3 years after the verdict or finding of guilty.” Fed. R. Crim. P. 33(b)(1). Motions “grounded on any reason other than newly discovered evidence must be filed within 14 days after the verdict or finding of guilty.” Fed. R. Crim. P. 33(b)(2). The court may extend the 14-day period after its expiration “if the party failed to act because of excusable neglect.” Fed. R. Crim. P. 45(b)(1)(B).

         The district court may not grant a new trial while an appeal is pending. However, the court may entertain the motion and either deny it or, if inclined to grant a new trial, so certify to the court of appeals. United States v. Blankenship, 970 F.2d 283, 285 (7th Cir. 1992).


         In order to obtain a new trial based on newly discovered evidence, the defendant must show that the evidence (1) came to his knowledge only after trial; (2) could not have been discovered any sooner using due diligence; (3) is material and not merely impeaching or cumulative; and (4) probably would lead to an acquittal in the event of a new trial. United States v. Eads, 729 F.3d 769, 780 (7th Cir. 2013); United States v. Hodges, 315 F.3d 794, 801 (7th Cir. 2003). Defendant cannot satisfy the first element of this test.

         Defendant contends that at the March 6, 2017 sentencing hearing, specifically during the parties' argument concerning loss amount, he realized for the first time that the court relied on a 1996 contract in finding him guilty. He contends that the 1996 contract upon which the court relied was superseded by a 2001 agreement, which contains different terms and which had not been introduced into evidence at trial. After the hearing, he located a copy of the 2001 agreement, which, he contends, constitutes newly discovered evidence.

         The problem with defendant's argument is that he did not discover the 2001 agreement after trial. As the government shows, defendant executed this agreement on behalf of IOS in April 2001 (R. 1001 Ex. B at 18); he authorized its production to the government during the investigation (R. 1025 Ex. A, B, C); and he received copies of it as part of the discovery once the case was charged (R. 1025 at 9-10). Further, while the 2001 agreement was apparently not introduced as an exhibit at trial, it was referenced in admitted exhibits (Trial Ex. 236, 237, 238); defendant questioned witnesses about the “one-step” procedure it created (Trial Tr. at 1124-25, 1275-76, 1535-36, 1540, 1554-55); and he discussed the April 2001 contract during his own testimony (Trial Tr. at 2550-51). Indeed, at sentencing, defendant's counsel noted that during his trial testimony defendant testified that the 1996 contract was superseded by the one- step agreement.[2] (Sen. Tr. at 87.)

         Defendant disputes none of these facts. Instead, he argues that at the time of trial he did not understand the significance of the 2001 agreement. However, the Seventh Circuit has consistently held that a defendant cannot obtain relief under Rule 33 where the facts underlying his claim were known at the time of trial, even though he may not have then understood their legal significance. United States v. Gootee, 34 F.3d 475, 480-81 (7th Cir. 1994) (citing United States v. Ellison, 557 F.2d 128, 133 (7th Cir. 1977); Roach v. Stastny, 104 F.2d 559, 562 (7thCir.1939)). Defendant attempts to avoid this rule by noting the complexity of the case, the volume of discovery, the delay in getting the case to trial, his health issues, and his pro se status at trial. However, he cites no authority in support of his claim that a different rule should apply under these circumstances.[3]

         Because defendant was aware of the evidence upon which he now relies prior to and at trial, he cannot satisfy the first prong of the test and his motion must be denied. I accordingly ...

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