United States v. Ford

737 F.3d 1121 (7the Cir. 2013)

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Nature of the Case

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Facts

White (D) owned and operated Eyes Have Not Seen (EHNS), a company that offered a 'mortgage bailout' program to insolvent homeowners in the Chicago area. People could stave off foreclosure by transferring their homes to EHNS 'investors' for a one-year period. EHNS investors would pay the property's mortgage; the owners could then continue to live in their home, take the year to improve their financial health, and reassume their mortgage obligation at the program's conclusion. EHNS investors would take title to the home outright. EHNS's appraisers would assess the properties at amounts higher than their actual value. EHNS would strip both the available and manufactured equity from the property in the form of transaction fees. The clients almost always were unable to buy back their homes at the conclusion of the one-year program. Eventually, lenders foreclosed on many of the properties. Ford (D) took the stand at trial. She sought to testify that she had cooperated in an FBI investigation of an identity-theft scheme during the relevant period. Ford (D) wanted to use this episode to show that she did not ignore fraudulent activity when she learned of it. The court sustained the government's objection. It ruled that evidence of Ford's (D) cooperation in the investigation of an entirely different fraud-a fraud in which she was not personally involved, and was unrelated and could confuse the jury. Ford (D) was convicted and appealed.