Judges: Flaum
Filed: Oct. 22, 2013
Latest Update: Mar. 02, 2020
Summary: In the United States Court of Appeals For the Seventh Circuit _ No. 13-1465 UNITED STATES OF AMERICA, Plaintiff-Appellee, v. THOMAS R. PHILPOT, Defendant-Appellant. _ Appeal from the United States District Court for the Northern District of Indiana, Hammond Division. No. 2:11-cr-00133 — James T. Moody, Judge. _ ARGUED SEPTEMBER 13, 2013 — DECIDED OCTOBER 22, 2013 _ Before BAUER, FLAUM, and ROVNER, Circuit Judges. FLAUM, Circuit Judge. Thomas Philpot, the former Clerk of Lake County, Indiana, too
Summary: In the United States Court of Appeals For the Seventh Circuit _ No. 13-1465 UNITED STATES OF AMERICA, Plaintiff-Appellee, v. THOMAS R. PHILPOT, Defendant-Appellant. _ Appeal from the United States District Court for the Northern District of Indiana, Hammond Division. No. 2:11-cr-00133 — James T. Moody, Judge. _ ARGUED SEPTEMBER 13, 2013 — DECIDED OCTOBER 22, 2013 _ Before BAUER, FLAUM, and ROVNER, Circuit Judges. FLAUM, Circuit Judge. Thomas Philpot, the former Clerk of Lake County, Indiana, took..
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In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 13‐1465
UNITED STATES OF AMERICA,
Plaintiff‐Appellee,
v.
THOMAS R. PHILPOT,
Defendant‐Appellant.
____________________
Appeal from the United States District Court for the
Northern District of Indiana, Hammond Division.
No. 2:11‐cr‐00133 — James T. Moody, Judge.
____________________
ARGUED SEPTEMBER 13, 2013 — DECIDED OCTOBER 22, 2013
____________________
Before BAUER, FLAUM, and ROVNER, Circuit Judges.
FLAUM, Circuit Judge. Thomas Philpot, the former Clerk of
Lake County, Indiana, took approximately $25,000 in incen‐
tive payments from a federally funded child‐support fund
without the required approval of the county fiscal body. He
was charged with three counts of mail fraud and two counts
of theft from a federally funded program. A jury convicted
Philpot on all counts—although the district court later ac‐
quitted him on two of them—and the court sentenced Phil‐
2 No. 13‐1465
pot to eighteen months in prison. Philpot now appeals his
conviction and his sentence, arguing that he should be ac‐
quitted on the remaining counts. In the alternative, he argues
that he is entitled to a new trial, and that the district court
improperly assessed the loss amount in his sentencing. We
affirm the district court on all grounds.
I. Background
Title IV‐D of the Social Security Act regulates certain as‐
pects of child‐support systems. One provision orders the
federal government to “make an incentive payment to each
State for each fiscal year” based on how effectively their in‐
dividual child‐support systems are functioning. 42 U.S.C.
§ 658a(a). The federal government disburses Indiana’s incen‐
tive payment to the Indiana Department of Child Services,
which disburses the federal funds to the counties (a portion
of the money goes to a county incentive fund, another to the
operating fund of the county prosecutor, and the rest to the
operating fund of the county clerk). Ind. Code § 31‐25‐4‐
23(a). Indiana chooses to give its counties a relatively free
hand in directing their Title IV‐D money once the payments
have been distributed, with one important caveat: “amounts
received as incentive payments may not, without the ap‐
proval of the county fiscal body, be used to increase or sup‐
plement the salary of an elected official.” Id. § 31‐25‐4‐23(c).
Thomas Philpot, a licensed attorney, was elected Lake
County Clerk in 2004, and served until the end of 2009. Dur‐
ing many of these years, he and two of his subordinates in
the Clerk’s Office received thousand‐dollar incentive pay‐
ments from the Clerk’s share of the IV‐D funds. (Personnel
who worked on child‐support matters full‐time also received
IV‐D bonuses, although in much smaller amounts.) Philpot
No. 13‐1465 3
learned of the IV‐D incentive fund—and the possibility that
it might be used to pay bonuses to heads of the Clerk’s Of‐
fice—from a 2004 conversation with Rochelle Vandenburgh,
the Director of Child Support for Lake County.1
In 2004, Philpot received a $3,101 bonus; in 2005, he re‐
ceived $3,146; in 2006, $4,249. The Lake County Council nev‐
er approved these payments. Thus, in each of these years
Philpot’s bonuses violated the Indiana statute.
In March 2007 a government official suggested that some
recipients of bonus money might not be eligible because it
was not clear that they consistently spent time on child‐
support matters. This inquiry did not appear to be connected
to Indiana’s approval requirement for elected officials, how‐
ever, since it concerned Philpot’s non‐elected subordinates,
too. In any event, Philpot did not take a bonus in 2007—
although he was scheduled to receive one, his deputy di‐
rected the Clerk’s financial manager to strike the request—
nor in 2008. His bonuses resumed in 2009. He received
$9,101 in January and another $5,105 in October—both times
without Council approval. Shortly thereafter, he resigned as
Clerk to take up a new post.
Word of Philpot’s IV‐D bonuses got out to the media in
2010, and after consulting with an attorney, he ultimately de‐
cided to return the payments (with interest) to Lake County.
He was later charged with three counts of mail fraud in vio‐
lation of 18 U.S.C. § 1341 and two counts of theft from a fed‐
erally funded program in violation of 18 U.S.C.
1 At trial, Vandenburgh testified that she did not discuss any re‐
quirement that Philpot get approval from the county fiscal body before
taking a bonus.
4 No. 13‐1465
§ 666(a)(1)(A). Philpot filed a pretrial motion to transfer ven‐
ue to the Northern District of Illinois, arguing that pretrial
publicity prevented him from receiving a fair trial in Indi‐
ana, but it was denied. He also filed a motion to dismiss the
indictment, alleging that the government submitted false
and misleading evidence to the grand jury. The district court
postponed consideration of the motion until the close of tri‐
al, at which time the court denied it as well.
Both mail fraud and theft from a federally funded pro‐
gram contain a mens rea requirement of knowledge and in‐
tent to defraud. Thus, while Philpot conceded at trial that his
bonuses did not comply with Ind. Code § 31‐25‐4‐23, he ar‐
gued that he had acted in good faith in taking them.
A key issue at trial was the significance of a legal opinion
Philpot requested from his longtime acquaintance, David
Saks, who Philpot had hired as the Clerk’s contract attorney.
Saks testified that Philpot approached him in November
2008 about a situation that “fell through the cracks” the pre‐
vious year. Philpot asked if it was “too late to act on this sit‐
uation,” handed Saks a scrap of paper with a citation to Ind.
Code § 31‐25‐4‐23, and asked Saks to analyze the statute and
get back to him as quickly as possible. Saks testified that he
was unclear on the precise scope of the assignment and that
this was a tighter timeline than he was used to.
After looking at the statute, Saks said he determined that
Philpot was asking him “whether or not you had to take [the
IV‐D money] in the year … the federal money was received,
whether or not it could be encumbered and taken in a sub‐
sequent year.” On November 19, he wrote to Philpot that he
No. 13‐1465 5
was in “complete compliance” with § 31‐25‐4‐23.2 At trial,
Philpot introduced this conclusion to show his good faith in
continuing to take bonuses from the IV‐D fund. The jury
disagreed, though, and it convicted him on all five counts.
Following his conviction, Philpot filed a number of post‐
trial motions. The district court granted his motion for ac‐
quittal on Counts 1 and 4, which dealt with the bonuses he
took prior to consulting with Saks, because it found there
was no evidence that Philpot knew of § 31‐25‐4‐23 before
2 Saks’s letter read:
The question was posed as to the requirements necessary to
comply with I.C. 31‐25‐4‐23. This statute deals with incentive
payments for enforcing and collecting assigned child support
rights; the amount and terms thereof.
Pursuant to this section of the Indiana Code, incentive payments
are to be made by the Title IV‐D Agency directly to the county
and deposited in the county treasury for distribution in a speci‐
fied manner. The Clerk of the Circuit Court, pursuant to the
formula, is to receive $4,000.00 for the year 2007. Distribution
from the county treasury is not made pursuant to I.C. 36‐2‐5‐2
(fixing of tax rates and appropriations). Rather, simple approval
of the county fiscal body to supplement the salary of the elected
official is necessary.
At the onset of the year in question, a fund under the auspices of
the clerk known as “Clerk’s Child Support IV‐D #428 Fund” was
in existence. This fund had a specific line item enumerated as
line item #41390 styled as “supplemental pay.” This was brought
before the fiscal body and was approved and thus there was
complete compliance with I.C. 31‐25‐4‐23.
The funds that are the subject of the above‐mentioned procedure
are still in the account and are available for distribution. Appar‐
ently, the funds have to be transferred out of a general line item
to the relevant line item for payment.
6 No. 13‐1465
2008. However, it sustained the convictions on the post‐2008
counts (Counts 2, 3, and 5). The district court also denied
Philpot’s motion for a new trial, which was based on the
court’s supposedly erroneous jury instructions, its refusal to
reopen the evidence to permit Philpot to call an additional
witness, and the government’s closing argument.
The district court sentenced Philpot to 18 months in pris‐
on followed by two years of supervised release and a $10,000
fine. Philpot objected that the court had miscalculated his
loss amount, since he returned the bonus money to the
County before the loss was detected, but the objection was
overruled.
II. Discussion
Philpot has appealed numerous issues, which we will
address in turn, describing additional facts as necessary. We
begin with his pretrial motions, proceed to issues relating to
the trial, and conclude with his sentencing argument.
A. The pretrial motions
1. Motion to transfer venue
Philpot moved to transfer venue to the Northern District
of Illinois pursuant to Federal Rule of Criminal Procedure
21, arguing that local media coverage was so inflammatory
and pervasive that he could not receive a fair trial in north‐
west Indiana. The magistrate judge reviewed the motion and
concluded that the press coverage in the case had not been
so pervasive as to compromise Philpot’s fair trial rights. He
noted that many of the articles Philpot complained of were
factual in nature, and many preceded the trial by over a year.
The magistrate judge also did not believe that the pretrial
publicity was any more severe than it had been for other
No. 13‐1465 7
public corruption cases that had been tried in the Northern
District of Indiana.
We review a denial of a request for change of venue for
abuse of discretion, which means that the facts must “com‐
pel—and not merely support—a finding that a change in
venue is necessary.” United States v. Nettles, 476 F.3d 508, 513
(7th Cir. 2007). Defendants can adduce evidence of Rule 21
prejudice by showing that individual jurors were actually
exposed to material that prevented them from judging the
case impartially. See id. Alternatively, defendants can show
presumed prejudice, which occurs when “pervasive and in‐
flammatory pretrial publicity makes juror bias inevitable.”
Id. (internal quotation marks omitted).
Philpot does not seriously argue actual prejudice, nor do
we see any indication that it existed. Instead, Philpot argues
that the pretrial media coverage of his case created a circus
atmosphere that made juror bias substantially likely. In sup‐
port, he offers a list of numerous newspaper articles and edi‐
torials discussing the controversy surrounding the bonuses.
He also points to assorted reader comments posted to the
stories’ online pages, which he claims “reveal a widespread
hostility to Philpot as well as a certainty that he is guilty.”
In Skilling v. United States, 130 S. Ct. 2896, 2915–16 (2010),
the Supreme Court set forth a number of factors to assess
presumed prejudice: the size and characteristics of the com‐
munity where the crime occurred, the nature of the news
stories, and the time that elapsed between the news coverage
and the trial. None of these factors lead us to believe that
Philpot was unable to receive a fair trial in the Northern Dis‐
trict of Indiana. Northwest Indiana may not be as populous
as, say, Chicago, but neither is it a small town. Roughly
8 No. 13‐1465
600,000 people live in Porter and Lake Counties, from which
the jury pool was drawn. Cf. Gentile v. State Bar of Nev., 501
U.S. 1030, 1044 (1991) (plurality opinion) (reduced likelihood
of prejudice where the venire had a population in excess of
600,000 people). Most of the news stories to which Philpot
objects were factual in nature. Moreover, few readers would
take the comments section of an online news story to be any‐
thing but mostly‐anonymous opinions. Finally, most of the
media coverage occurred over a year before trial, and long
periods went by with few or no articles on the subject. This
is hardly the kind of circus atmosphere required for pre‐
sumed prejudice.
The Supreme Court has instructed that “juror impartiali‐
ty … does not require ignorance” and that “[a] presumption
of prejudice … attends only the extreme case.” Skilling, 130 S.
Ct. at 2915 (emphasis omitted). Especially in light of the
magistrate’s observation that the pretrial publicity was no
more inflammatory than other local political corruption cas‐
es that had been successfully tried in the district, we see no
grounds for concluding that the judge abused his discretion
in denying the motion.
2. Motion to dismiss the indictment
Philpot also moved to dismiss his indictment, alleging
that the government presented false and misleading evi‐
dence to the grand jury. The district court denied the motion,
a decision we also review for abuse of discretion. United
States v. Useni, 516 F.3d 634, 656 (7th Cir. 2008).
As an initial matter, the government argues that any mis‐
conduct before the grand jury cannot have prejudiced Phil‐
pot because a petit jury later convicted him of the charges for
No. 13‐1465 9
which he was indicted, and a “petit jury’s guilty verdicts
render harmless any possible error in the grand jury pro‐
ceedings.” United States v. Morgan, 384 F.3d 439, 443 (7th Cir.
2004); see also United States v. Vincent, 416 F.3d 593, 601–02
(7th Cir. 2005). If so, then even if the government did know‐
ingly present false evidence to the grand jury and even if
that evidence did prejudice Philpot (both points it contests),
his argument still fails.
There is some daylight between Morgan and Philpot’s
case: here, although the jury initially found Philpot guilty of
all counts, the district court granted acquittal on two of
them. However, we think that this is a distinction without a
difference. All Philpot asks for on appeal is for us to reverse
his three remaining counts of conviction. And insofar as these
counts are concerned, Morgan’s rationale remains sound. As
we have put it, a rule designed “to protect the innocent from
being indicted … should not be enforced by reversing a con‐
viction obtained after trial—because we know, as surely as
courts ‘know’ anything, that the convicted defendant is not a
member of the class of beneficiaries of the rule.” United
States v. Fountain, 840 F.2d 509, 515 (7th Cir. 1988).
Of course, Philpot does offer several reasons to think that
the jury’s convictions on the three remaining courts are inva‐
lid. Were we to accept any of these contentions, we would
not necessarily “know” that Philpot is not a member of the
class of innocent persons, and we would therefore need to
make a deeper inquiry into his grand jury arguments. But
we do not accept these contentions (as we shall explain be‐
low), and so we conclude that the district court did not
abuse its discretion when it denied the motion to dismiss the
indictment.
10 No. 13‐1465
B. The alleged trial misconduct
Philpot takes issue with three aspects of his trial. First, he
argues that there is insufficient evidence to support the jury’s
guilty verdict on Counts 2, 3, and 5 (i.e., the counts on which
he was not acquitted following the jury verdict). Second, he
argues that is entitled to a new trial because the prosecutor
made improper statements in his closing argument. Finally,
he argues for a new trial because the trial court erred by
providing an advice‐of‐counsel instruction to the jury or, in
the alternative, refusing to let Philpot reopen the case to call
a witness. In our view, none of these claims has merit.
1. The sufficiency of the evidence
We review the denial of a motion for judgment of acquit‐
tal de novo, and ask whether, viewing the evidence in the
light most favorable to the government, any rational trier of
fact could have found the essential elements of the offense
beyond a reasonable doubt. United States v. Pree, 408 F.3d
855, 865 (7th Cir. 2005). Here, we must decide whether the
jury had sufficient evidence to conclude that Philpot acted
knowingly and with intent to defraud, rather than just neg‐
ligently, when he took the bonus payments. In the context of
the mail fraud statute, “[i]ntent to defraud requires … a will‐
ful act by the defendant with the specific intent to deceive or
cheat, usually for the purpose of getting financial gain for
one’s self or causing loss to another.” Corley v. Rosewood Care
Center, Inc. of Peoria, 388 F.3d 990, 1005 (7th Cir. 2004). Simi‐
larly, theft from a federally funded program requires a spe‐
cific intent to convert money or property from that program.
United States v. Weaver, 220 F. App’x 88, 91 (3d Cir. 2007).
No. 13‐1465 11
We begin with a piece of evidence that both parties agree
is insufficient to prove the mens rea elements of the charged
offenses. The government offered four “cooperative agree‐
ments” that Philpot signed between 2004 and 2009. These
agreements, which Indiana requires from entities receiving
IV‐D funds, state that the Clerk will comply with “applicable
state law, CSB [Child Support Bureau] policy and State
Board of Accounts’ rules and instructions.” They do not spe‐
cifically reference Ind. Code § 31‐25‐4‐23, however. Because
there was no evidence other than the cooperative agree‐
ments to show that Philpot knew of § 31‐25‐4‐23 during the
time covered by Counts 1 and 4 of the indictment, the dis‐
trict court granted Philpot’s motion of acquittal on those
counts following the trial. The government does not chal‐
lenge that ruling here.
Counts 2, 3, and 5, which pertain to the two bonuses
Philpot accepted in 2009, are a different matter. Both parties
apparently agree that Philpot knew of the statute by No‐
vember 2008. Recall that in that month, Philpot handed Da‐
vid Saks a piece of paper with a citation to § 31‐25‐4‐23, and
asked him to investigate a situation that had “fallen through
the cracks” a year earlier. The question we face is whether
Philpot intentionally took the bonus money in 2009, know‐
ing that he did not have the Lake County Council’s approval.
The government offered three pieces of circumstantial
evidence that it says permitted a rational jury to conclude
that Philpot acted knowingly and with intent to defraud in
2009. First, it notes that the statutory requirement that Phil‐
pot get approval before taking a bonus is straightforward.
See Ind. Code § 31‐25‐4‐23(c) (“[I]ncentive payments may
not, without the approval of the county fiscal body, be used
12 No. 13‐1465
to increase or supplement the salary of an elected official.”).
Once Philpot—a licensed attorney and elected official with
many years of experience—was aware of the statute, he did
not need the advice of counsel to know that he lacked the
approval of the “county fiscal body” to supplement his sala‐
ry.
Second, on the same day that Philpot received Saks’s re‐
sponse, Sandra Radoja, Philpot’s deputy, directed the Clerk’s
financial manager to place an item on the Council agenda.
Radoja testified that she did so at Philpot’s direction; or, at
least, that she did so using Philpot’s signature, which she did
not use without consulting with him beforehand. The item
requested that the Council move $22,177 in the “Clerk’s
Child Support IV‐D #428 Fund” from an “other equipment”
line item to a “supplemental pay” line item. This piqued the
interest of the Council President, Christine Cid, who asked
the Council’s attorney to look into the matter. Cid later spoke
to Philpot’s personnel manager, Gus Trakas, and informed
him that he could take a bonus from the IV‐D fund, but that
Philpot could not unless he first received Council approval.
Shortly thereafter, Philpot’s deputy requested that the items
be removed from the agenda, and the Council never voted
on them.
The government argues that this maneuvering over the
Council agenda supports an inference that Philpot was at‐
tempting to trick the Council into approving bonus pay‐
ments, only to withdraw the request when he realized Cid
was becoming suspicious. Philpot argues that the requests
the Clerk’s Office placed on, and then removed from, the
Council agenda are irrelevant. Among other things, he says
that there is no direct evidence that Philpot was involved,
No. 13‐1465 13
the transfers did not specifically reference Philpot’s bonus,
and the request was visible on the Council’s public agenda
even after it was withdrawn. These counterarguments are
certainly plausible—so that a jury could very well credit
them instead of the government’s version—but we cannot
say that they are so convincing that no rational juror could
reject them, which is the standard we must apply on appeal.
Finally, the government offered testimony from Gus
Trakas. Trakas testified that he told Philpot about his discus‐
sion with Christine Cid, including her instruction that Phil‐
pot needed to get Council approval in order to take a bonus
for himself. Trakas could not recall exactly when he and
Philpot had this conversation; he estimated it occurred
somewhere between November 2008 and January 2009.
All this adds up to a welter of inferences about Philpot’s
actual state of mind when he took the IV‐D bonuses in 2009.
But we are not tasked with resolving that confusion. The
question we must answer is a simpler one: is it true that
“viewing the evidence in the light most favorable to the
Government, no rational trier of fact could have found the
essential elements of the offense beyond a reasonable
doubt”? Pree, 408 F.3d at 865.
Philpot knew of § 31‐25‐4‐23 by November 2008 at the
latest. As the government notes, this was not a complicated
provision. It said that Philpot, an elected official, could not
take supplemental pay from the IV‐D program without
Council approval. Furthermore, based on his conversation
with Trakas, he knew that the Council President did not be‐
lieve that he had approval. Trakas estimated that this con‐
versation occurred between November 2008 and January
2009—so a jury could certainly find that the conversation oc‐
14 No. 13‐1465
curred before Philpot took the first of his two IV‐D bonuses
in January 2009. From this evidence alone, we think that a
jury could conclude that Philpot knowingly violated Indiana
law.3
Philpot argues, however, that even though he knew of
the approval requirement, he thought that he had complied
with it. That is because of the letter from David Saks stating
that Philpot was in “complete compliance” with Indiana law:
At the onset of the year in question, a fund under the
auspices of the clerk known as “Clerk’s Child Support
IV‐D #428 Fund” was in existence. This fund had a
specific line item enumerated as line item #41390
styled as “supplemental pay.” This was brought be‐
fore the fiscal body and was approved and thus there
was complete compliance with I.C. 31‐25‐4‐23.
Because he honestly believed this advice, Philpot claims, he
could not have acted with the requisite scienter, even if Saks’s
conclusion later turned out to be wrong.
The parties strongly dispute what to make of this letter.
According to the government, Philpot procured it in bad
faith: he knew Saks was not an expert in this area of the law,
yet pressured him to quickly produce an opinion; he told
Saks that the IV‐D bonuses “fell through the cracks” in 2007,
when in fact he had been slated to receive a bonus only to
have his name struck after the state raised concerns; and he
did not mention to Saks that he had never received Council
3 We note that this conclusion was permissible even if the jury con‐
cluded the government’s theory about the attempt to trick the Council by
manipulating the agenda was a red herring.
No. 13‐1465 15
approval for any of his previous bonuses.4 The government
even suggests that Philpot may have purposely sought out
Saks, with whom he had a longstanding professional rela‐
tionship, in order to more easily obtain a favorable opinion.
In reply, Philpot argues that no reasonable jury could
conclude that he misled Saks. Saks told the jury that Philpot
was looking for his “honest opinion,” and that Saks had full
access to personnel in the Clerk’s Office and any budget ma‐
terials he needed to complete his task. Philpot suggests that
to the extent Saks implicated him in his mistake, he was
primarily concerned with shifting blame and his testimony
should be disregarded as self‐serving.
As the district court noted, Saks’s testimony was “full of
internal conflicts and can be interpreted in many different
ways.” But again, that is not the question before us on ap‐
peal. We must instead decide whether a jury could have ra‐
tionally concluded that Philpot knew his bonuses violated
state law. We conclude that it could, even assuming that
Philpot procured Saks’s letter in good faith.
For reliance on a lawyer’s opinion to negate a mental
state, that reliance must be reasonable and in good faith. “If
a person is told by his attorney that a contemplated course of
action is legal but subsequently discovers the advice is
wrong or discovers reason to doubt the advice, he cannot
hide behind counsel’s advice to escape the consequences of
his violation.” United States v. Benson, 941 F.2d 598, 614 (7th
Cir. 1991), amended, 957 F.2d 301 (7th Cir. 1992); see also Unit‐
ed States v. Urfer, 287 F.3d 663, 664 (7th Cir. 2002) (“[T]he rea‐
4 At trial, Saks stated that if he had known that Philpot never re‐
ceived approval, he would have given a different legal opinion.
16 No. 13‐1465
sonableness of a lawyer’s advice is indeed relevant to a de‐
termination of willfulness.”). It does not seem reasonable for
Philpot to rely on Saks’s bare‐boned conclusion that there
was “complete compliance” with the Indiana statute when
Philpot himself knew that the County Council never ap‐
proved his bonus payment, and when he knew that Council
President Cid had told Trakas that Philpot lacked approv‐
al—or so a jury could find.5
It is certainly possible that a rational jury could have sid‐
ed with Philpot and concluded that he acted in good faith
when he accepted the bonuses in January and October 2009.
This jury did not, however. It concluded that Philpot acted
knowingly and with intent to defraud when he accepted IV‐
D money without Council approval. We believe that, looking
at the totality of the evidence in the light most favorable to
the government, this conclusion was a permissible one.
2. The prosecutor’s closing argument
Philpot next argues that, even if we do not reverse the
district court’s partial denial of the motion for acquittal, we
ought to grant him a new trial because of prejudicial errors
the prosecutor made in his closing argument to the jury.
Philpot identifies the following improper arguments:
5 Trakas testified that after he told Philpot about Cid’s comments,
Philpot replied that he did not need Council approval because Saks’s
letter indicated that he had satisfied the Indiana statutory requirement.
That could support an inference that Philpot genuinely thought he did
not need—or already had—Council approval. But it also could support
an inference that Philpot unreasonably relied on Saks’s letter, or even
that he knew he was taking bonus payments without approval and
hoped to avoid drawing attention to himself. In the end, it was the jury’s
job to decide which version of this story to believe.
No. 13‐1465 17
The suggestion at several points that the coopera‐
tive agreements Philpot signed as Clerk directed
him to the relevant Indiana statutes;
The statement that Philpot consulted with Saks af‐
ter Cid raised questions about his needing Council
approval to take a bonus;
The misrepresentation of Saks’s answer to the
question whether Philpot ever mentioned that he
did not have Council approval—“Well, no, that’s
the whole ball game”—to suggest Philpot inten‐
tionally withheld critical information; and
The repeated statement that Philpot was using his
position to “writ[e] himself checks.”
The district court found that some of these statements were
unsupported by the evidence. However, the court did not
think any were so inflammatory or prejudicial that they war‐
ranted a new trial.
Philpot objected to these remarks at trial, and we review
the decision to overrule the objections for abuse of discre‐
tion. United States v. Clark, 535 F.3d 571, 580 (7th Cir. 2008).
We must first consider whether the challenged statements,
standing alone, are in fact improper. If they are, we consider
whether the statements, in the context of the record as a
whole, denied the defendant his right to a fair trial. Id. That
said, “improper statements made during closing argument
are rarely reversible error.” Id. at 581.
We begin with the prosecutor’s references to the coopera‐
tive agreements—references that were indeed improper. As
the district court observed, the agreements do not specifical‐
ly reference Ind. Code § 31‐25‐4‐23, so the suggestion that
18 No. 13‐1465
they “told [Philpot] exactly where to look” was incorrect. We
also find the prosecutor’s description of the timeline sur‐
rounding Saks’s letter to be improper. In his closing and re‐
buttal arguments, the prosecutor told the jury that Philpot
went to Saks because “all heck was breaking loose with Cid
finding out about this and he needed some cover, and Mr.
Saks was the closest ally.” Yet that is not what the evidence
showed: Cid made her inquiries upon noticing the supple‐
mental payment item on the Council agenda, which Radoja
had placed there after a week after Philpot spoke to Saks.
However, we find nothing improper in the prosecutor’s
accurate quotation of Saks’s testimony about “the whole ball
game,” particularly because (as the district court noted)
Philpot did not object to this statement when Saks was on
the stand. Nor do we think that the prosecutor’s suggestions
that Philpot was “writing himself checks” were unfair or
misleading. After Philpot objected to this phrasing, the pros‐
ecutor explained that he was speaking figuratively about the
process that Philpot used to take bonuses without drawing
the Council’s attention.
We next consider whether the two improper state‐
ments—the references to the cooperative agreements and the
chronological mix‐up about Cid’s conversation with
Trakas—prejudiced Philpot’s right to a fair trial. Six factors
guide this inquiry: (1) whether the prosecutor misstated the
evidence; (2) whether the remark implicated a specific right;
(3) whether the defendant invited the remark; (4) whether
the district court provided an effective curative instruction;
(5) whether the defendant had an opportunity to rebut the
remark; and (6) the weight of the evidence against the de‐
fendant. Clark, 535 F.3d at 580–81. At bottom, we ask wheth‐
No. 13‐1465 19
er “the prosecutors’ comments so infected the trial with un‐
fairness as to make the resulting conviction a denial of due
process.” Id. at 851 (internal quotation omitted) (quoting
Darden v. Wainwright, 477 U.S. 168, 181 (1986)).
We agree with the district court that the cooperative
agreements did not unfairly prejudice Philpot with respect
to the counts on which he was convicted. The agreements
were most relevant to the pre‐2008 counts, because there was
no other evidence showing Philpot knew of the Indiana re‐
quirement at that time. Philpot has been acquitted on these
counts, however, so any error is harmless. All of the counts
of conviction, by contrast, involve funds taken in January
and October 2009, and Philpot concedes that he knew about
the statute then. Philpot argues that the misstatement about
the cooperative agreements may have led the jury to believe
that he did not consult with Saks in good faith, but we do
not see how that follows, especially as the government never
intimated this inference in its closing argument.
Jumbling up the timeline, as the government did in its
closing, gives us more pause. As the district court noted, the
Clark factors cut both ways on this point. Philpot did not in‐
vite the remark, and he could not rebut it the second time it
was made in the government’s rebuttal. On the other hand,
the statement did not implicate any specific rights, the dis‐
trict court frequently reminded the jury that statements
made during the closing argument are not evidence, and the
weight of the evidence against Philpot was strong (though
not overwhelming). At the end of the day, we must be mind‐
ful that “the district court is in a superior position to judge
the seriousness of the incident in question, particularly as it
relates to what has transpired in the course of the trial.”
20 No. 13‐1465
United States v. Johnson, 655 F.3d 594, 602 (7th Cir. 2011) (in‐
ternal quotation marks omitted). In light of the closeness of
the question, we cannot conclude that the district court
abused its discretion when it denied the motion for a retrial.
3. The advice‐of‐counsel instruction
Finally, Philpot takes issue with the advice‐of‐counsel in‐
struction the district court gave the jury over his objection.
He contends that the instruction should not have been given
at all because he did not offer an advice‐of‐counsel defense.
Rather, his defense was that he took the bonuses in good
faith. He further contends that, by drawing the jury’s atten‐
tion to Saks’s opinion and away from Philpot’s actual argu‐
ment—which relied on additional indicia of good faith—the
instruction unfairly prejudiced his case.
We review claims of instructional error de novo, but will
reverse the district court’s denial of a new trial motion only if
the instructions as a whole misled the jury as to the law.
United States v. Joshua, 648 F.3d 547, 554 (7th Cir. 2011). In
Joshua, we concluded that an advice‐of‐counsel instruction
was appropriate even though the defendant characterized
his argument as good faith because, labels aside, the defens‐
es operate to the same end. See id. (noting that advice of
counsel “is not a stand‐alone defense; rather, information
about advice of counsel sheds light on the question whether
the defendants had the required intent to defraud”). That is
equally true here. The district court’s pattern instruction ex‐
plained that “[i]f the defendant relied in good faith on the
advice of an attorney that his conduct was lawful, then he
lacked the intent to defraud required to prove the offenses
charged in Counts Two, Three, and Five of the Indictment.”
No. 13‐1465 21
Philpot attempts to distinguish Joshua by pointing out
that although the attorney in that case was called to the
stand by the defendant, here Saks testified for the govern‐
ment. However, Philpot is the one responsible for introduc‐
ing Saks’s letter: he moved to admit it during his cross‐
examination of Gus Trakas. More importantly, it is still the
case that “information about advice of counsel sheds light on
the question whether the defendants had the required intent
to defraud,” Joshua, 548 F.3d at 554, and the district court did
not err in explaining as much to the jury.
In the alternative, Philpot argues that, even if the instruc‐
tion was appropriate, the district court abused its discretion
by not permitting him to reopen his case in order to intro‐
duce testimony from attorney John Dull. Philpot consulted
with Dull, the attorney for the Lake County Commissioners,
in early 2010 about a newspaper article criticizing him for
taking IV‐D bonuses without Council approval. After re‐
searching the law and reviewing county records, Dull con‐
cluded that Saks’s 2008 letter was based on a mistake of fact
and advised Philpot to return the bonuses to the County.
Philpot complied the next day.
Philpot filed his motion to reopen the day after the par‐
ties rested. The district court denied it, reasoning that Dull’s
testimony was not relevant because he did not meet with
Philpot until long after the conduct alleged in the indictment
had concluded. We review this decision for abuse of discre‐
tion. United States v. Medina, 430 F.3d 869, 879 (7th Cir. 2005).
Philpot argued that Dull’s testimony was relevant to
whether Philpot misled Saks in 2008. His theory was that,
because Dull came to the correct conclusion based on the in‐
formation in the newspaper article, Philpot acted reasonably
22 No. 13‐1465
in relying on Saks’s earlier conclusion based on similar in‐
formation. But Dull and Saks were not acting on the same
information. The 2010 news story reported that Philpot had
taken several IV‐D bonuses and suggested that he might not
have received the required Council approval. That conveyed
a very different picture than Philpot’s statement to Saks that
a matter “slipped through the cracks.” More generally, Phil‐
pot’s actions after his bonuses were reported in the press
shed little or no light on his state of mind two years earlier.
The district court did not abuse its discretion by denying the
motion to reopen.
C. The sentencing determination
Philpot’s final argument is that the district court improp‐
erly calculated the loss amount when determining the guide‐
lines range for sentencing. He claims that, because he volun‐
tarily repaid his bonuses to Lake County, the court ought to
have given him a “credit against loss” for sentencing pur‐
poses. We review the district court’s application of the guide‐
lines de novo and its findings of fact for clear error. United
States v. Natour, 700 F.3d 962, 975 (7th Cir. 2012).
Application Note 3(E) to Section 2B1.1 of the Sentencing
Guidelines provides that any loss created by the offense
shall be reduced by “[t]he money returned … by the defend‐
ant … to the victim before the offense was detected.”
U.S.S.G. § 2B1.1 n.3(E)(i). It further states that “[t]he time of
detection of the offense is the earlier of (I) the time the of‐
fense was discovered by a victim or government agency; or
(II) the time the defendant knew or reasonably should have
known that the offense was detected or about to be detected
by a victim or government agency.” Id.
No. 13‐1465 23
The district court rejected Philpot’s credit‐against‐loss ar‐
gument at the sentencing hearing. As it explained in a sub‐
sequent opinion denying Philpot’s motion for bond pending
appeal, “Philpot paid the money back after consulting John
Dull, who opined that the bonus payments Philpot took
were improper and should be paid back. Dull at the time
was the attorney for the Lake County Commissioners, mean‐
ing that Lake County, a victim, knew of the loss before Phil‐
pot paid it back.” Philpot now contends that although Lake
County knew of its loss prior to his repayment, it is not clear
that it knew that Philpot had committed a crime. Indeed, at
the sentencing hearing, Dull testified that he did not think
Philpot could face criminal charges for his conduct.
In United States v. Peugh, 675 F.3d 736 (7th Cir. 2012), rev’d
on other grounds, 133 S. Ct. 2072 (2013), we considered a simi‐
lar argument. There, the defendants managed to repay a
$471,000 overdraft fee resulting from their check‐kiting
scheme. Because the defendants were not charged with a
crime until seven years later, they contended that they were
entitled to a loss reduction for returning the overdraft mon‐
ey to the bank before the offense was detected by the victim.
Id. at 742. We thought otherwise, since “[a] victim can detect
an offense without understanding its full scope, and ‘the
time to determine the loss in a check‐kiting scheme is the
moment the loss is detected.’” Id. (alterations omitted) (quot‐
ing United States v. Mau, 45 F.3d 212, 216 (7th Cir. 1995)).
As with check kiting, so too with theft. In fact, Mau’s rule
was in part premised on an equivalency between the two of‐
fenses. See 45 F.3d at 215 (“[C]heck kiting is not more equiva‐
lent to a fraudulent loan transaction than to simple theft.”
(internal quotation marks omitted)); id. at 216 (“[A]s in theft
24 No. 13‐1465
cases, loss is the value of the money … unlawfully taken.”
(citing U.S.S.G. § 2F1.1 n.7)).6 Here, Lake County knew that
Philpot had improperly taken the bonus money at the time
he returned it. Although the County authorities were not
necessarily aware of the full scope of Philpot’s misconduct,
that is not necessary for a victim to detect an offense. The
fact that Philpot “repa[id]” the bonus “after the loss ha[d]
been discovered does not change the fact of the loss; such
fact merely indicates some acceptance of responsibility.” Id.
Even if the County had not yet detected the offense,
moreover, a defendant does not get credit for returning
money if he knows or should know that the offense is about
to be uncovered. U.S.S.G. § 2B1.1 n.3(E)(i)(II). Philpot re‐
turned his bonuses on February 5, 2010. At this point, the
media had already reported that he had wrongfully taken
the IV‐D money, and Philpot should have known that gov‐
ernment investigators might soon become aware of his con‐
duct. We therefore conclude that the district court correctly
calculated Philpot’s loss amount at sentencing.
III. Conclusion
For the foregoing reasons, we AFFIRM the district court in
all respects.
6 Today, this inference is even stronger because § 2F1.1 has been re‐
pealed and consolidated with § 2B1.1 to provide a unified treatment of
theft, property destruction, and fraud. As the amendment to the guide‐
lines notes, “inasmuch as theft and fraud offenses are conceptually simi‐
lar, there is no strong reason to sentence them differently.” U.S.S.G. App.
C Vol. II 172 (2012) (Amendment 617).