Dec. 16, 2013 – A federal appeals court has upheld a 50-count mail fraud conviction against Bernard Seidling, who sent false documents to Wisconsin’s small claims courts to obtain default judgments against defendants who were never served.
Starting in 2003, Seidling used fake business names to file small claims actions against individuals in more than 60 suits, seeking judgments up to $5,000. The claims contained false statements and Seidling certified all defendants were properly served with notice.
In fact, none were served at all. Seidling falsified the addresses of defendants in his court documents, which were filed using the U.S. Postal Service. Then, Seidling started obtaining default judgments and orders for sheriffs to execute the judgments.
Authorities caught wind of this scheme, and charged Seidling with 50 counts of mail fraud in violation of federal law. Ultimately, the court convicted Seidling on all 50 counts.
Seidling was unsuccessful in obtaining money or property from the defendants, although the intended loss was more than $370,000. In addition, many of the defendants must now take steps to clear the lawsuits from the system.
The sentencing judge imposed a three-year prison sentence and a $10,000 fine. The judge refused to accept a downward departure from the federal sentencing guidelines, despite the prosecutor’s recommendation based on acceptance of responsibility.
Seidling appealed on two grounds. First, he said the government did not prove a “materiality” element of the mail fraud crime. Second, he argued that the sentencing judge committed a procedural error when he refused the sentencing departure.
In U.S. v. Seidling, No. 13-1854 (Dec. 16, 2013), a three-judge panel for the U.S. Court of Appeals for the Seventh Circuit affirmed the district court’s rulings.
The panel rejected Seidling’s argument that his actions did not influence the identified victims to give up money or property because he never communicated with them. He communicated with the court, he argued, so the materiality element was not met.
“Nothing in the statutory text of 18 U.S.C. § 1341 requires a scheme to defraud to involve deception of the same person or entity whose money or property is the intended object of the scheme,” wrote Judge William Bauer.
“Although Seidling never directly communicated with the victims that owned the money or property he sought, he deceived the Wisconsin small claims courts in an effort to defraud the individuals and one entity he named as defendants in the lawsuits.”
The panel also ruled that the district court judge was justified in disregarding the prosecutor’s recommendation that Seidling receive a lighter sentence.
“We find that the district court did not clearly err at sentencing and gave sufficient consideration to the issue before denying Seidling the downward adjustment for acceptance of responsibility,” Judge Bauer wrote.
Seidling kept denying that his actions caused damage to any victim and showed little remorse, the panel noted, upholding the judge’s sentence as warranted.
