USA v. Robert J. Lunn
Filed opinion of the court by Judge Bauer. AFFIRMED. William J. Bauer, Circuit Judge; Frank H. Easterbrook, Circuit Judge and David F. Hamilton, Circuit Judge. [6849063-1]  [16-1791]
United States Court of Appeals
For the Seventh Circuit
UNITED STATES OF AMERICA,
ROBERT J. LUNN,
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 12 CR 00402 — Charles R. Norgle, Judge.
ARGUED FEBRUARY 15, 2017 — DECIDED JUNE 20, 2017
Before BAUER, EASTERBROOK, and HAMILTON, Circuit Judges.
BAUER, Circuit Judge. On May 30, 2012, Defendant-appellant
Robert Lunn was charged with five counts of bank fraud, in
violation of 18 U.S.C. § 1344. A jury convicted Lunn on all five
counts on October 17, 2014. Lunn now challenges his conviction, arguing that the district court improperly interfered with
his testimony and failed to provide his requested jury instruction.
Lunn owned and operated Lunn Partners, L.L.C., an
investment advisory firm in Chicago, Illinois, that advised
mostly high-net worth clients. In 1999, Lunn invested in
Leaders Bank, a small commercial bank in Oak Brook, Illinois.
The charges in this case stem from Lunn’s conduct surrounding three extensions of credit by Leaders Bank: a line of credit
he obtained for himself; a loan that Lunn arranged for former
Chicago Bulls player Scottie Pippen; and a loan that Lunn
arranged for Robert Geras, a Lunn Partners client.
A. Personal Line of Credit
In May 2001, Lunn contacted James Lynch, CEO of Leaders
Bank, seeking to obtain a $480,000 line of credit. Lunn provided the bank with a December 31, 2000, personal financial
statement attesting that he owned shares of Morgan Stanley
common stock with a market value of $11.5 million. The
statement further attested that he owned shares of Lehman
Brothers common stock with a market value of $5.5 million.
Based on Lunn’s purported ownership of a combined $15
million worth of common stocks, the bank provided Lunn the
line of credit. However, the fact was that Lunn no longer
owned the stocks; he had sold them in the 1990s to fund the
launch of Lunn Partners. His brokerage account statements
did not include the stocks, nor did his tax returns report any
dividends earned from the stocks.
In January 2004, Lunn sought to increase his line of credit
by $720,000, bringing the total line of credit to $1.2 million.
Lunn submitted a personal financial statement dated December 31, 2003, in support of his request. The statement falsely
stated that Lunn still owned both the Morgan Stanley and
Lehman Brothers stock, but that the market value for the stocks
had fallen to $5.8 million and $1 million, respectively, for a
total of $6.8 million. Lunn’s purported ownership of the stock
persuaded Leaders Bank to increase Lunn’s credit line.
In April 2004, Lunn sought a $120,000 increase in his credit
line. Based upon Lunn’s purported ownership of $6.8 million
in common stock from Morgan Stanley and Lehman Brothers,
bank officials granted Lunn’s request; Lunn’s total credit line
was then $1.32 million.
B. Pippen Loan
In September 2002, Lunn contacted Leaders Bank to arrange
for a short-term loan of $1.4 million. The terms of the loan
required that principal and interest be paid back in 45 days.
Lunn told the bank that Pippen sought the loan to purchase an
interest in an airplane, but Lunn used the proceeds of the loan
to repay one of his clients, Robert Shaw.
Lunn sent Pippen the signature page from the agreement.
Pippen signed the document in the belief that it involved
transferring his assets from his previous investor to Lunn.
Lunn failed to repay the loan within 45 days, but asked the
bank to extend the loan four times. Each time, Lunn forged
Pippen’s name on the loan extension documents. The loan was
ultimately extended through January 2005. In the interim,
Pippen lost confidence in Lunn’s financial management
abilities and fired him in late 2003.
C. Geras Loan
Lunn approached Geras to invest in a real estate venture in
May and June 2004; Geras declined. Nonetheless, Lunn forged
Geras’ name on loan documents to obtain a $500,000 loan from
Leaders Bank. Lunn told bank officials that Geras needed the
loan to fund the development of a shopping center on Chicago’s south side. In July 2004, Geras received a notice from
Leaders Bank seeking interest on the loan. Geras contacted
Lunn to inquire about the loan but did not receive an answer.
Geras received another notice the next month, and this time he
contacted the bank directly, which informed him that Lunn
had obtained a loan on his behalf. Lunn and Geras met in
September 2004; Lunn attempted to account for the loan
with far-fetched explanations, and eventually told Geras that
the bank had made a mistake. Lunn promised Geras that he
would correct the bank’s mistake. He sent Geras an email that
geras … I have my tit in the ringer on this bank
stuff. … [W]hen u are comforted that the matter
is clear by hearing that the loan is paid, you can
say that lunn told me I was in, then he told me I
was not in, so how could I have a loan? sorry to
put you in this position … . Please talk to me
before anyone else.
At trial, Lunn testified that with respect to his personal line
of credit, he did not intend to deceive bank officials about his
net worth. He stated that in May 2001 he had assets worth
nearly $20 million and liabilities around $1 million. He
admitted to preparing the December 2000 financial statement
and claimed that it accurately conveyed his net worth. Lunn
testified that he did not prepare the December 2003 financial
statement and had no knowledge of how the bank received it.
As to the Pippen loan, Lunn testified that he told Lynch the
purpose of the loan was to finance the development of the
shopping center, not an airplane. Lunn stated that Pippen’s
investment would serve as a substitute for half of the initial
investment made by Shaw. Lunn also testified that he believed
he was authorized by Pippen to sign the loan extension
documents for him; Pippen contradicted this statement. Lunn
stated that he notified bank officials that he signed Pippen’s
name to the loan extension documents at the time of their
submission. As to the Geras loan, Lunn testified that Geras
agreed to make an investment in the real estate development
and authorized Lunn to sign his name to the loan documents;
Geras testified that Lunn took out the loan without his knowledge or consent.
The jury convicted Lunn on all counts; Lunn filed a motion
for judgment of acquittal or a new trial. The court denied the
motion, and sentenced him to 36 months’ imprisonment. Lunn
Lunn mounts two attacks on his conviction. He argues first
that the district court improperly “interfered” with his testimony, preventing him from presenting his theory of defense.
Next, he argues that the court erred by refusing to give the jury
the good-faith instruction that he tendered to the court. We
address each argument in turn.
A. Testimonial Interference
We review a district court’s evidentiary rulings for abuse of
discretion. United States v. Brown, 822 F.3d 966, 971 (7th Cir.
2016) (citation omitted).
Lunn contends that the court’s multiple intrusions into his
testimony were so serious that he did not receive a fair trial;
we review this de novo. Id. Lunn contends that the court
interfered with his testimony about the Pippen loan. Specifically, he argues that the court interfered with his testimony
about the purpose of the loan. He contends that the court erred
by precluding him from presenting to the jury or testifying
about a separate loan and agreement from April 2002 that
Pippen purportedly entered into in order to purchase an
airplane. Part of Lunn’s theory of defense was that the purpose
of the September 2002 Pippen loan was not to finance the
purchase of an airplane, but rather to buy Shaw out of half of
his interest in a bridge loan to purchase a shopping center.
Trial evidence demonstrated that Lunn wire transferred the
proceeds of the loan to Shaw. Lunn’s testimony about the
Shaw investment was subject to a series of objections on
grounds of hearsay and lack of foundation; the testimony
referred to several out-of-court statements offered for the truth
of the matter. Ultimately, after a sidebar, Lunn was able to
offer testimony regarding the purpose of the loan. He was also
able to deny Lynch’s claim that he told the bank the purpose
of the loan was to finance the purchase of an airplane. It is
unclear what testimony Lunn claims the court prevented him
from providing to the jury.
An additional element of Lunn’s defense was that bank
officials mistakenly conflated the purpose of the September
2002 loan with that of the April 2002 loan. Lunn’s testimony
about the April 2002 agreement was subject to an objection
based on hearsay and lack of foundation. The court properly
sustained both objections, as Lunn sought to testify about the
existence of a contract not in evidence without establishing any
personal knowledge of the contract. Lunn was unable to cure
the deficiencies in his testimony, so the testimony was properly
excluded. We note that the testimony about the April 2002 loan
would have been largely irrelevant, as it did not address the
salient issues—the reason Lunn provided for the purpose of
the September 2002 loan and whether Pippen granted Lunn
authority to sign the loan extension documents.
Lunn also argues that the court prevented his testimony
about the shopping center development that prompted all of
the loans. Lunn contends that this precluded the jury from
having “important context.” It is unclear what “context” Lunn
believes the jury did not hear. The jury heard Lunn’s testimony
that the purpose of Pippen’s September 2002 loan was to
finance the shopping center. It also heard about Lunn’s
discussions with Pippen regarding the development and
Lunn’s transfer of Pippen’s loan proceeds to Shaw. Lunn did
not seek to provide further “context” about the development
in his cross-examination of Shaw, who originally financed the
Next, Lunn contends that the court interfered with his
testimony about “his own understanding of his net worth.”
Although Lunn admitted that the financial statements he
provided to the bank in support of his personal line of credit
were inaccurate, he sought to prove a lack of intent by testifying that the statements accurately reflected his net worth. The
government objected because Lunn’s counsel failed to establish
the basis of Lunn’s claim of knowledge of his assets and
liabilities. After a protracted exchange with the court, Lunn
described his assets as of May 2001, identifying the name of the
asset, the type of ownership, and the value. He did the same
for his liabilities. Nevertheless, the fact of his net worth is not
relevant; it does not negate the government’s contention that
Lunn obtained the line of credit by submitting fraudulent
financial statements. See 18 U.S.C. § 1344.
Relatedly, Lunn argues that the court impeded his testimony regarding his assets as disclosed in his 2005 bankruptcy.
Lunn contends that this testimony would have demonstrated
that he lacked the intent to defraud the bank by revealing that
all of his creditors had been repaid. When Lunn’s counsel
questioned him regarding the repayment of his creditors, the
government objected on relevance grounds; the court sustained the objection. This was the proper course of action. Bank
officials testified that Lunn’s purported ownership of the
Morgan Stanley and Lehman Brothers stock at the time of the
credit line extension was important to their decision, and Lunn
admitted that he did not own the stocks during the relevant
time period. Neither his high net worth nor ability to repay his
creditors is relevant to this issue. There was no undue interference by the court.
We briefly turn to Lunn’s argument that he was denied a
Lunn’s reliance on United States v. Busic, 592 F.2d 13 (2d Cir.
1978) and United States v. Kellington, 217 F.3d 1084 (9th Cir.
2000) is misplaced. In Busic, the district court and the government interrupted closing argument for the defense numerous
times, and the court provided personal commentary on the
evidence. 592 F.2d at 27–29. Nevertheless, the Second Circuit
upheld the defendants’ convictions. Id at 35. Conversely, the
district court did not interfere during Lunn’s trial, rather it
appropriately ruled on the government’s objections and
prevented the admission of inadmissible evidence and testimony. In Kellington, the district court improperly minimized
the significance of the defense’s expert witness in its jury
instruction, which the Ninth Circuit found hampered the
defendant’s ability to present his theory of the defense in
closing argument. 217 F.3d at 1100. However, as discussed
above, Lunn largely succeeded in presenting the testimony he
wished the jury to consider. Nor was he denied the right to
present his theory of defense at any phase of the trial.
B. Good-Faith Instruction
We review the denial of a requested jury instruction
de novo. United States v. Cruse, 805 F.3d 795, 814 (7th Cir. 2015)
(citation omitted). “Defendants are not automatically entitled
to any particular theory-of-defense jury instruction.” Id.
A defendant is only entitled to a jury instruction
that encompasses a theory of the defense if
(1) the instruction represents an accurate statement of the law; (2) the instruction reflects a
theory that is supported by the evidence; (3) the
instruction reflects a theory which is not already
part of the charge; and (4) the failure to include
the instruction would deny the defendant a fair
Id. (citation and alteration omitted).
Lunn’s proposed jury instruction stated that “[i]f the
defendant acted in good faith, then he lacked the intent to
defraud required to prove the offense of bank fraud[.]” It
further stated that “[t]he defendant acted in good faith if, at
the time, he honestly believed the accuracy of the personal
financial statements and the validity of the signatures that the
government has charged as being fraudulent.” Lunn argues
that the instruction was appropriate because his theory of
defense is that he did not knowingly submit false personal
financial statements to the bank, and he did not intend to
deceive the bank by signing the Geras and Pippen loan
The court instructed the jury that the government was
required to prove, beyond a reasonable doubt, that Lunn
“knowingly executed” a scheme to defraud “with the intent to
defraud.” The court further instructed that “[a] person acts
with intent to defraud if he acts knowingly with the intent to
deceive or cheat the victim … .” We have held that “an action
taken in good faith is on the other side of an action taken
knowingly[,]” and therefore, “it is impossible to intend to
deceive while simultaneously acting in good faith.” United
States v. Mutuc, 349 F.3d 930, 936 (7th Cir. 2003) (citation
omitted). As a result, Lunn’s good-faith instruction would
have been at best redundant. The court properly denied the
We AFFIRM Lunn’s conviction.
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