By Margo Kirchner
A federal judge’s refusal to delay trial for two years so that “Coupon King” Thomas (Chris) Balsiger could be represented by a particular lawyer did not violate Balsiger’s right to counsel, a federal appeals court ruled last week.
The ruling means that the 10-year federal criminal case against Balsiger will not be retried. The U.S. Court of Appeals for the Seventh Circuit affirmed the bulk of Balsiger’s conviction and sentence with the exception of a recalculated forfeiture amount.
Balsiger ran International Outsourcing Services, one of the nation’s largest product-coupon processors, in El Paso, Texas, and Bloomington, Indiana.
He and 10 others were indicted in 2007 on 25 counts of wire fraud, conspiracy to commit wire fraud, and conspiracy to obstruct justice. The fraud allegations involved coupon payments made by Wisconsin manufacturers Sargento Foods, Good Humor/Breyers Ice Cream, Kimberly-Clark, LeSaffre Yeast, and S.C. Johnson & Sons. The indictment alleged that the wire-fraud scheme caused $250 million in losses to manufacturers.
Pretrial proceedings dragged on for years. During that time, in July 2014, Balsiger’s lawyer, Joseph Sib Abraham, passed away.
U.S. District Judge Charles N. Clevert, Jr. was notified in August 2014, and a lawyer who worked with Abraham said Balsiger expected to hire new counsel within 30 days. Yet by early December 2014 no new attorney had appeared in the case and Balsiger claimed he could not then hire a new attorney due to financial difficulties.
Clevert set trial for October 2015.
At a status conference in early January 2015 Balsiger told Clevert he planned to hire El Paso attorney Richard Esper, and asked for a deadline of April 1, 2015, to hire Esper. Balsiger said he did not have sufficient funds and could not sell his home because of a filing the government made against the property.
Clevert soon learned that Esper could not be ready for trial until 2017 at the earliest. The judge also found that Balsiger could afford to hire a lawyer and ordered him to hire someone by Feb. 17, 2015.
The court found that Balsiger was not working diligently to hire counsel and warned that failure to hire an attorney would be considered a waiver of the right to counsel.
At the next status hearing, the court stressed that Balsiger should hire counsel, but Balsiger repeated his wish to hire Esper and asked for a continuance until 2017. Clevert said no.
The judge also said he was not denying Balsiger the right to counsel of his choice generally but only the choice of Esper.
No retained attorney appeared for Balsiger by the February deadline.
At the next status conference, Clevert found that Balsiger’s search showed a lack of effort and intent to delay trial. The judge warned that if no attorney appeared within one week, the case would proceed with Balsiger representing himself.
Balsiger told the court that he would not have an attorney within one week and claimed the court was coercing him.
Clevert later found Balsiger waived his right to counsel by refusing to hire an attorney despite having the financial means to do so. The judge appointed standby counsel to assist at trial, however.
In May 2015, when Clevert again suggested that Balsiger hire an attorney, Balsiger said that hiring counsel did not make financial sense and he would rather “play the odds.”
Balsiger represented himself in a five-week court trial in October and November 2016. (Balsiger’s health problems delayed proceedings.)
In December 2016, Clevert found Balsiger guilty on 12 of 27 counts. He sentenced Balsiger to 10 years in prison, with restitution of $65 million and a forfeiture of $21.2 million.
On appeal, Balsiger argued that Clevert violated his Sixth Amendment right to retain counsel of his choice and improperly forced Balsiger to proceed pro se, that the record included insufficient evidence for the verdict, and that venue in Wisconsin was improper. He also argued that the court incorrectly determined the restitution and forfeiture amounts.
Seventh Circuit Judge Michael Y. Scudder, Jr. wrote the opinion rejecting the bulk of Balsiger’s appeal, joined by Circuit Judges Frank H. Easterbrook and David F. Hamilton.
The Seventh Circuit approved Clevert’s denial of a lengthy continuance so Balsiger could hire Esper. Further, the appellate court found no violation of Balsiger’s right to counsel.
The Seventh Circuit deferred to Clevert’s credibility finding that Balsiger was not diligent in hiring an attorney and was trying to delay the case. Further, said the appellate court, the record showed that Balsiger sufficiently understood the risk of representing himself and made a calculated decision to represent himself and “play the odds.”
The appellate court also rejected Balsiger’s argument that his conviction on 10 wire fraud counts could not be reconciled with acquittal on 15 others. Scudder pointed out that the counts of conviction related to two particular manufacturers and that Clevert had “ample evidence” to support the verdict on those counts.
Balsiger’s argument that the case was improperly tried in Milwaukee merited little discussion. That Balsiger and his codefendants schemed to defraud manufacturers located in the Eastern District of Wisconsin and caused wire transfers in and out of the district sufficed, said the court.
While the appellate court rejected the challenge to a loss calculation of $65 million, which determined the amount of restitution, it agreed with Balsiger that the forfeiture amount should have been based on net rather than gross profits received from the illegal conduct.
The case will return to district court for the limited purpose of calculating that amount.
Gretchen Schuldt is executive director of the Wisconsin Justice Initiative.
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