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Sufficiency of Evidence

By: Derek Hawkins//October 13, 2020//

Sufficiency of Evidence

By: Derek Hawkins//October 13, 2020//

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7th Circuit Court of Appeals

Case Name: United States of America v. Scott Ginsberg

Case No.: 19-1305

Officials: FLAUM, MANION, and BARRETT, Circuit Judges.

Focus: Sufficiency of Evidence

A jury found Scott Ginsberg guilty of bank fraud. On appeal, he argues there was insufficient evidence that he knowingly defrauded the banks. He also argues the district court erred by allowing certain testimony by a closer. Ginsberg is the only defendant in this case. Whether or not there are other people who might have deserved blame, or other transactions that might have been illegal, they are not before us. We focus on Ginsberg.

Spring Hill Development, LLC, owned a 240-apartment complex in a Chicago suburb. In 2007, the owner converted the apartments into condominiums and attempted to sell them. The record is unclear about the seller’s motives. Ginsberg’s attorney intimated at trial that the seller desperately needed to get rid of the properties, so it would do almost anything to sell them. During closing arguments, he said he “imagine[d]” the interest rates the seller faced were “getting pretty high.”

Ginsberg made arrangements with the seller. He recruited several people to buy units in bulk, telling them they would not need to put their own money down, and telling them he would pay them after the closings. The scheme was a fraud, with Ginsberg at its center. The fraudulent scheme consisted of multiple components and false statements to trick financial institutions into loaning nearly $5,000,000 for these transactions. One key was that the seller made payments through Ginsberg that the buyers should have made, which meant that the stated sales prices were shams, the loans were undercollateralized, and the “buyers” had no skin in the game. The seller paid Ginsberg about $1,200,000. Of this money, he used nearly $600,000 to make payments the buyers should have made. He also paid over $200,000 to the buyers and their relatives. And he kept nearly $400,000 for himself. Through this scheme, the seller paid for the buyers. That is not the direction money should flow in these transactions, according to the financial institutions. The loans ultimately went into default, causing the financial institutions significant losses.

Affirmed

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Derek A Hawkins is trademark corporate counsel for Harley-Davidson. Hawkins oversees the prosecution and maintenance of the Harley-Davidson’s international trademark portfolio in emerging markets.

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