United States v. Schneider

959 F. Supp. 2d 1036, 2013 WL 4047495, 2013 U.S. Dist. LEXIS 115333
CourtDistrict Court, E.D. Michigan
DecidedAugust 9, 2013
DocketCase No. 10-20392
StatusPublished

This text of 959 F. Supp. 2d 1036 (United States v. Schneider) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Schneider, 959 F. Supp. 2d 1036, 2013 WL 4047495, 2013 U.S. Dist. LEXIS 115333 (E.D. Mich. 2013).

Opinion

OPINION AND ORDER DENYING MOTION FOR JUDGMENT OF ACQUITTAL ON COUNT 7 OF THE THIRD SUPERSEDING INDICTMENT

DAVID M. LAWSON, District Judge.

This matter is before the Court on defendant Edward Schneider’s post-trial [1038]*1038motion for judgment of acquittal on count seven of the third superseding indictment. The indictment charged Schneider in three counts: (1) conspiracy to defraud Fifth Third Bank (count one); (2) corruptly giving an employee of Fifth Third Bank money in connection with bank transactions (count three); and (3) conspiracy to defraud Standard Federal Bank (count seven). At the close of the government’s case, Schneider moved for a judgment of acquittal under Federal Rule of Criminal Procedure 29, arguing that the only evidence adduced at trial on count seven showed acts by Schneider that predated the date range of the conspiracy alleged in that count of the indictment by eleven months. On March 26, 2013, a jury found Schneider guilty as charged on counts one and seven and guilty of a lesser included offense on count three. After the jury returned its verdict, Schneider renewed his motion for judgment of acquittal, arguing that there was an unlawful variance between the indictment and the proofs at trial amounting to a constructive amendment of the indictment. There is no constructive amendment, because the evidence of Schneider’s pre-conspiracy conduct concerned acts that actually were charged in the indictment, and the jury instructions did not invite the jury to convict the defendant of a crime not charged. The government has not offered evidence that Schneider participated in the conspiracy charged in count seven during the time period alleged in the third superseding indictment, but precedent from other circuits holds that a variance in the dates is not fatal, as long as the government proves the offense occurred before the statute of limitations expired, which it did here. Therefore, the Court will deny the motion for judgment of acquittal on count seven of the superseding indictment.

I.

Count seven of the third superseding indictment charged Schneider with conspiring to defraud Standard Federal Bank: “From December 2005 to September 2009 ... defendants Hussein ‘Sam’ Nazzal (D-2) and Edward Schneider (D-6) did ... conspire and agree together to commit the crime of bank fraud.” Third Superseding Indictment [dkt. # 93] ¶ 73. As to the “means and manner of the conspiracy,” the indictment alleged that

76. In May 2004, [Farouk Harajli] met with Nazzal and Schneider because FH was interested in borrowing money from Nazzal. Nazzal loaned FH $100,000.
77. It was part of the conspiracy that Nazzal, Schneider and FH agreed that FH should have a Power of Attorney so that FH could sign [his wife’s] name to documents so FH could enter into financial transactions with Nazzal without JH’s permission. Schneider prepared the Power of Attorney document. At Nazzal’s direction, FH forged JH’s name and had the Power of Attorney document notarized.
78. FH entered into two mortgages with Nazzal on October 7, 2004 and January 5, 2005, totaling $750,000. The collateral on these transactions was the 8 Mile gas station that was the collateral for the Standard Federal mortgage. FH signed JH’s name, relying on the fraudulent Power of Attorney that Schneider had previously prepared at Nazzal’s direction.

Id. at ¶¶ 76-78. In its brief, the government concedes that the date range stated in the indictment is incorrect, ascribing it to a drafting error, and that the indictment should have alleged a conspiracy ranging from May 2004 to September 2009.

At trial, Farouk Harajli testified that on May 20, 2004, Schneider prepared a blank power of attorney form for Harajli, and [1039]*1039that Harajli forged his wife’s and witnesses’ signatures on the form, giving him the purported power to convey mortgages to defendant Nazzal and his companies on jointly owned property. On October 7, 2004, Schneider prepared a mortgage for $350,000 which Harajli conveyed to Nazzal’s G & S Development company on certain property referenced at trial as the Eight Mile Road Gas Station property. On January 5, 2005, Schneider prepared a similar mortgage on the same property in the amount of $400,000.

Before borrowing money from Nazzal, Harajli obtained a loan from Standard Federal Bank and gave a mortgage on the same property to the Bank. That mortgage would have had priority, but apparently a Bank employee, asleep at the switch, failed to record the mortgage until several months later. Harajli testified that he told Nazzal about the Standard Federal mortgage, but when Nazzal saw that no one had recorded it, he recorded the G & S mortgages on October 8, 2004 and January 11, 2005, before Standard Federal recorded its prior mortgage on the Eight Mile Road property.

Litigation ensued between Standard Federal Bank and Nazzal’s company over the mortgages. Nazzal testified — falsely — that he did not have actual knowledge of the Standard Federal mortgage when he made his loans and received the mortgages from Harajli. Harajli gave depositions in that case where he testified— again, falsely — that Nazzal had no actual knowledge of the prior mortgage.

The government asserts that Harajli testified at trial in this case that Schneider was present at depositions leading up to the 2009 bench trial involving Standard Federal Bank when Harajli testified falsely about power of attorney and mortgage documents that Schneider had prepared. It is true that Harajli testified that

at a deposition, Ed was there and during the break we would go into another room and we would basically talk about, you know, what’s going on in the deposition. And he [referring to Hussein Nazzal] would tell — he would talk freely in front of Ed. He never had a problem talking freely in front of Ed.

Trial Tr. Vol. 10 Excerpt, test, of Farouk Harajli at 68. But there is no testimony about when that deposition occurred or the contents of the conversation. And it could not have been Harajli’s depositions in the Standard Federal case on December 5, 2007 or February 7, 2008, because Schneider is not identified as being present at those proceedings. Defi’s Reply Br., Ex. A, B. Harajli also testified that he, Nazzal, and Schneider met more than once at Schneider’s law office at unspecified times, that Nazzal “spoke freely” in front of Schneider, and that Nazzal behaved in Schneider’s law office “as if he owned the place.”

The government asserts that Ross Carey testified that he accepted a back-dated check from Nazzal as part of the scheme to defraud Standard Federal Bank, and that check was used to make it appear that G & S Development, Inc., a real estate investment company used by Nazzal and Schneider, had purchased $750,000 in mortgage insurance for the falsely inflated loans they claimed to have made against Harajli’s gas station. Carey further testified that he provided false sworn testimony in depositions and at the 2009 bench trial, and Nazzal and G & S Development prevailed in that litigation.

The government asserts that Kristen Dankert testified that her company, Stewart Title Agency, and Standard Federal Bank had to pay $750,000 to G & S Development in September 2009. The government asserts that the cashier’s check for this payment was deposited on September

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Jackson v. Virginia
443 U.S. 307 (Supreme Court, 1979)
United States v. Siemaszko
612 F.3d 450 (Sixth Circuit, 2010)
United States v. Henderson
179 F. App'x 535 (Tenth Circuit, 2006)
United States v. Graham
622 F.3d 445 (Sixth Circuit, 2010)
United States v. Warshak
631 F.3d 266 (Sixth Circuit, 2010)
United States v. Wells
646 F.3d 1097 (Eighth Circuit, 2011)
United States v. Samuel Lee Martin
375 F.2d 956 (Sixth Circuit, 1967)
McKinley Brown v. Herman C. Davis, Warden
752 F.2d 1142 (Sixth Circuit, 1985)
United States v. Kevin Thomas Ford
872 F.2d 1231 (Sixth Circuit, 1989)
United States v. Marketing Warehouse, Inc.
51 F.3d 287 (Tenth Circuit, 1995)
United States v. Sheila Kaye Cantrell
278 F.3d 543 (Sixth Circuit, 2001)
United States v. Elton Nance
481 F.3d 882 (Sixth Circuit, 2007)
United States v. Don S. McAuliffe
490 F.3d 526 (Sixth Circuit, 2007)
United States v. Ronda Nixon
694 F.3d 623 (Sixth Circuit, 2012)
United States v. Kurt Scheuneman
712 F.3d 372 (Seventh Circuit, 2013)
United States v. Benson
591 F.3d 491 (Sixth Circuit, 2010)
United States v. Berger
224 F.3d 107 (Second Circuit, 2000)

Cite This Page — Counsel Stack

Bluebook (online)
959 F. Supp. 2d 1036, 2013 WL 4047495, 2013 U.S. Dist. LEXIS 115333, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-schneider-mied-2013.