United States of America v. Arthur Friedman

Chicago, IL - Criminal defense lawyer represented defendant with seven counts of bank fraud charges.

Arthur Friedman and Leon Bilis co‐owned Prestige Leas‐

ing, a luxury used car dealership. The dealership purchased,

leased, sold, and exported luxury vehicles. When their deal‐

ership began to suffer financially in 2008, Friedman devised a

plan and schemed with Bilis to get cash fortheir business. The

dealership exported cars overseas yet kept the title certificates

for many of them as "a lot of countries did not require original

titles, just the copies.” Friedman and Bilis secured loans

against the exported cars, using the title certificates as proof

of collateral. So Friedman and Bilis obtained loans backed by

assets they no longer possessed.

At first the two used their own names on loan applications.

Later they used the names of family, friends, former employ‐

ees, and customers, most often without that person's

knowledge. For each loan, Friedman and Bilis falsely said that

the car was present in the United States and being sold to the

listed borrower. The loan applications also included false em‐

ployment or income information, falsified corporate docu‐

ments and title information, and forged signatures, on which

the banks relied.

To conceal the fraud, Friedman and Bilis took cash from

customers for cars that the dealership never had or delivered.

In particular, customers gave down payments or full deposits

under the ruse that advance payments were needed to lock

up cars with a limited inventory. Rather than use the cus‐

tomer funds as promised, Friedman and Bilis used the money

to pay down the bogus car loans. They similarly bilked floor‐

plan investors. Those investors financed cars to be marketed

and sold on the Prestige dealership lot in exchange for a cut

of the mark‐up price; instead, their funding was tied to cars

No. 19‐2004 3

that the dealership neither stocked nor intended to sell. The

investors' funds, too, were used to pay down fraudulent

loans.

Unsurprisingly, this scheme was unsustainable and in late

2011 banks came calling for unpaid loans. Local police, too,

began investigating suspicious loan activity. Given the police

investigation, Friedman and Bilis retained attorney Jeffrey

Steinback to jointly represent them. This joint counsel ar‐

rangement was short‐lived; around January 2012, Friedman

ended his relationship with Steinback and retained separate

counsel. Almost four years later the federal government got

involved, and Friedman and Bilis were indicted.

The indictment charged seven counts of bank fraud—each

count pointing to a specific loan—in violation of 18 U.S.C.

§ 1344. It alleged that from November 2008 until November

2011, Friedman and Bilis schemed to defraud banks by sub‐

mitting loan applications for fake car purchases. It also

alleged that Friedman and Bilis concealed the bank fraud by

deceiving customers and floor‐plan investors into fronting

money for other fake car purchases, then used that money to

make loan payments. Bilis—still represented by Steinback—

pleaded guilty and entered a cooperation agreement with the

government. Due to Bilis's plea, the government filed a re‐

dacted indictment, removing two counts charging Bilis alone

and renumbering the rest. Friedman proceeded to trial on the

remaining five counts. In relevant part, count five of the re‐

dacted indictment charged that Friedman and Bilis executed

the fraud scheme by "knowingly caus[ing] American Eagle

Bank to fund a vehicle loan for $62,589.57 in the name of

Michael Blekhman for the purchase of a 2011 Porsche

Panamera.”

4 No. 19‐2004

Less than a month before trial, Friedman moved to dismiss

the indictment or, in the alternative, to exclude Bilis's testi‐

mony. Friedman claimed he shared "confidential

information” with Steinback during the brief period of joint

representation. And because Steinback represented Bilis

through his eventual plea deal, "[i]t is impossible to discern

... what confidential information Steinback provided to Bilis

... that has now tainted Bilis as a witness.”

The district court held an evidentiary hearing on Fried‐

man's motion, at which Steinback and Friedman testified.

Steinback testified he represented Prestige Leasing, Bilis, and

Friedman "in connection with their business.” Though no fed‐

eral investigation loomed when hired, Steinback believed his

representation "very well could be” for a criminal defense

matter "but, at that juncture, it could also remain civil.” In any

event, Steinback advised Friedman and Bilis that they may

later need independent counsel. Steinback testified Friedman

never shared substantive information about the car loans or

made any admission of wrongdoing during their discussions.

For his part Steinback did not pass on information provided

by Friedman to Bilis or the government. Steinback also pro‐

duced his client file forthe district court's ex parte review, and

the court closed a portion of the hearing to allow Steinback to

testify ex parte about potentially privileged matters.

Friedman gave a different account of the joint representa‐

tion arrangement. He said he and Bilis met with Steinback at

least three times. During those meetings, Friedman initially

claimed that he kept discussing the joint matter with Stein‐

back during Bilis's bathroom breaks because "[i]t's too expen‐

sive to talk about other stuff.” That story evolved during the

evidentiary hearing. Friedman later claimed he waited for

No. 19‐2004 5

Bilis's bathroom breaks to tell Steinback "certain things” he

did not want Bilis to hear, adding that Bilis took bathroom

breaks lasting around ten to fifteen minutes. When asked

whether those conversations had anything to do with the al‐

leged fraud, Friedman responded, "in a way,” and that

"[m]ost of” those conversations involved "privileged commu‐

nications” Still, Friedman never told Steinback to keep those

communications from Bilis. Nor did Friedman ever attempt

to privately relay these confidences to Steinback via telephone

or a separate one‐on‐one meeting. Friedman testified he

shared purportedly privileged information only when Bilis

took bathroom breaks.

The district court denied Friedman's motion, explaining

that it "carefully evaluated the demeanor and credibility of

each witness, including his body language, tone of voice, fa‐

cial expressions, mannerisms, and other indicative factors.”

Based on these factors, the court found that Friedman did not

make any admissions of criminal wrongdoing to Steinback,

crediting Steinback's "emphatic[]” testimony on this point

and the lack of evidence in his client file suggesting that Fried‐

man made such admissions. The court also found Friedman's

testimony farfetched:

[T]hat a criminal defendant—apparently con‐

cerned with his individual criminal exposure

and desirous of keeping that concern from his

business partner—would enter into joint repre‐

sentation with that business partner, and then

await inherently unpredictable bathroom

breaks to provide his lawyer with critical infor‐

mation (rather than calling him or meeting with

him one‐on‐one) breaks the Court's credulity.

6 No. 19‐2004

The district court continued: "Friedman testified that he read

the government's reports on Bilis's proffers—yet in his briefs,

on redirect, or ex parte, Friedman did not identify any similar‐

ities between what was contained in those reports and what

he supposedly shared with Steinback in confidence.” Because

Friedman lacked evidence of prejudice from the use of privi‐

leged information, the district court ruled that a dismissal of

charges or exclusion of Bilis's testimony was unwarranted. As

a precaution, the district court provided a cautionary instruc‐

tion that "Bilis was promised a benefit in return for his coop‐

eration with the government” and to "consider [his]

testimony with caution and great care.”

When trial commenced, Bilis testified Friedman first pro‐

posed the scheme to secure loans on exported cars, and that

the pair sought cash from other sources, including defrauding

customers and floor‐plan investors, to pay down those loans.

According to Bilis, Friedman ramped up the fraud to build a

house and to furnish it with imported décor. Friedman also

prepared Prestige's financial documents, including outstand‐

ing loans and cash flow reports. Bilis identified Friedman's

signature on loan documents, and he confirmed that no actual

car transaction occurred on any loan, and that the cars in‐

volved were exported overseas before they submitted loan

applications. Bilis further explained that Prestige made the

car loan payments, not the named borrowers, and that deal‐

erships do not pay down customer loans, especially when the

car buyer is personally responsible for the debt.

Purported "borrowers” also testified, explaining they

never purchased the cars in question, authorized the loan ap‐

plications bearing their names, or received loan funds from

the banks. Similarly, several Prestige customers and floor‐

No. 19‐2004 7

plan investors testified about giving large sums of cash for car

purchases and investments, only to learn that their money

was squandered. In particular, Prestige made a cash cow out

of the Porsche Panamera vehicle noted in count five. Evidence

showed that Prestige "sold” the same Porsche to multiple

buyers, including Blekhman, but never delivered the car to

any of them because it had already been exported overseas.

Evidence also showed that Prestige took money from a floor‐

plan investor for the same Porsche. On top of that, Prestige

forged a loan in Blekhman's name from American Eagle Bank

for over $60,000. Altogether Prestige took in around $300,000

for the Porsche scam. When confronted with the scheme, sev‐

eral witnesses testified that Friedman confessed to the fraud.

Before the close of evidence, the district court noted that

at the pretrial conference Friedman had not objected to the

government's proposed jury instructions. Even so, the court

asked the parties to reexamine the instructions for objections,

giving them a three‐day weekend for this review. Friedman

requested changes to several instructions, but as relevant to

this appeal, none involved Seventh Circuit Criminal pattern

instruction 5.06(a)–(b) concerning aiding and abetting/acting

through another. With jury instructions resolved, the parties

proceeded to closing arguments.

Friedman's closing argument pinned the loan scheme en‐

tirely on Bilis, accusing him of fabricating Friedman's role to

obtain a favorable government deal. In rebuttal, the govern‐

ment urged the jury to "use your common sense, check your

gut,” and rely on "your own life experience” to assess the case

and the credibility of witnesses. As to the argument that Bilis

operated as a lone actor and hid the fraud from Friedman, the

government again asked the jury to "trust your gut” and use

8 No. 19‐2004

"your own common sense ... your own life experience” that

Friedman, as president of Prestige, was not ignorant of the

fraud, let alone Prestige's assumption of loan payment obli‐

gations for customers. Friedman objected to the government's

"gut” references, arguing that "[t]heir gut is not what [the

jury] is supposed to listen to.” The government responded:

"It's common sense ... that the president of a two‐man com‐

pany knew exactly what was going on when a company's

failing but he's still taking money out.” The district court

overruled Friedman's objection and instructed the jury "to

use their common sense,” explaining "that is what [the gov‐

ernment] is arguing” and "[i]t is proper argument.” The gov‐

ernment then concluded: "If you do those two things, if you

look at both the evidence ... but also go with your gut, you

are going to find [Friedman] guilty.”

After deliberations the jury found Friedman guilty on

three of the five counts. He moved for judgment of acquittal

or a new trial under Federal Rules of Criminal Procedure 29

and 33, arguing, among other things, that: (1) the government

presented insufficient evidence to convict on count five, the

Blekhman loan charge; (2) Friedman's prosecution was

"taint[ed]” by Steinback's continued representation of Bilis;

and (3) the government's urging jurors to "go with [their]

gut” minimized its burden of proof beyond a reasonable

doubt. The district court denied those motions in a compre‐

hensive written order.

Friedman then filed a second motion for a new trial, claim‐

ing to have "newly discovered” a 2015 forbearance agreement

between Bilis and American Eagle Bank regarding Bilis's out‐

standing debt, and a 2016 loan from the bank to a business

owned by Bilis's wife. The 2015 agreement and 2016 loan,

No. 19‐2004 9

according to Friedman, "exposed a considerable bias and mo‐

tive to testify falsely against Friedman.” The district court de‐

nied that motion, too.

With Friedman's post‐verdict challenges exhausted, the

district court calculated his adjusted offense level as 35,result‐

ing in an advisory Guidelines range of 168 to 210 months' im‐

prisonment. Even so, the court imposed a below‐guidelines

sentence of 108 months' imprisonment on each count, run‐

ning concurrently on each of the three counts, and ordered

restitution of $4,722,347.

II. Discussion

Friedman appeals a glut of pre‐trial, trial, and post‐verdict

rulings. His arguments cover: (1) the alleged conflict of inter‐

est of Bilis's counsel; (2) jury instructions; (3) the jury's verdict

on count five, the Blekhman loan charge; (4) the denial of a

new trial based on the government's "gut” references during

its closing argument; (5) the denial of a new trial based on

"newly discovered evidence”; (6) a sentencing enhancement

for obstruction of justice; (7) a sentencing enhancement forthe

use of sophisticated means to conceal the fraud; (8) the district

court's calculation of loss attributable to the fraud; and (9) the

district court's restitution order. We discuss these challenges

in that order. For sake of clarity as to the appropriate standard

of review, the issues are organized according to whether they

were raised via motion or objection.

Before turning to the merits, a word must be said on the

lack of effectiveness of making so many claims of error.

"[O]ne of the most important parts of appellate advocacy is

the selection of the proper claims to urge on appeal.” Howard

v. Gramley, 225 F.3d 784, 791 (7th Cir. 2000) (admonishing a

10 No. 19‐2004

"'kitchen sink' approach” to advancing issues on appeal).1

The claims chosen should be few and carefully measured for

maximum effect. A circumspect approach boosts credibility,

while raising every conceivable challenge on appeal can di‐

lute the persuasiveness of plausible arguments. For these rea‐

sons we have cautioned: "[A] brief that treats more than three

or four matters runs a serious risk of becoming too diffused

and giving the overall impression that no one claimed error

can be very serious.” Practitioner's Handbook for Appeals to the

United States Court of Appeals for the Seventh Circuit 139 (2019);

Hussein v. Oshkosh Motor Truck Co., 816 F.2d 348, 359 (7th Cir.

1987) (quoting same). Tempting as it may be to call foul on

every perceived trial error, that strategy generally produces

diminishing returns. "Legal contentions, like the currency,

depreciate through over‐issue.” Robert H. Jackson, Advocacy

Before the Supreme Court, 37 CORNELL L.Q. 1, 5 (1951). With that

said, we proceed to Friedman's nine claims.

A. Motion to Dismiss the Indictment

Recall that as Friedman and Bilis's scheme began to un‐

ravel, they jointly retained Steinback "in connection with their

business.” The joint‐counsel engagement was brief, as Fried‐

man obtained his own lawyer around two months later.

Nearly four years afterthat, Friedman was indicted. Steinback

1 This is a time‐honored tenet of advocacy. See generally ANTONIN

SCALIA & BRYAN A. GARNER, MAKING YOUR CASE: THE ART OF PERSUADING

JUDGES 22–23 (2008) ("The most important—the very most important—

step you will take ... before a trial court or an appellate court, is selecting

the arguments that you'll advance.”); MARCUS TULLIUS CICERO, DE

INVENTIONE 345 (H.M. Hubbell trans., Harvard Univ. Press 1949) (describ‐

ing the selection of arguments as "the first and most important part of

rhetoric”).

No. 19‐2004 11

continued to represent Bilis, who went on to plead guilty and

cooperate with the government. Friedman moved to dismiss

the indictment, claiming he shared privileged communica‐

tions with Steinback during the short joint representation. On

appeal Friedman insists that Steinback's continued represen‐

tation of Bilis infected the prosecution and deprived his due

process right to a fair trial. We review de novo the denial of a

motion to dismiss an indictment, United States v. Hernandez‐

Perdomo, 948 F.3d 807, 810 (7th Cir. 2020), and the court's fac‐

tual findings for clear error, United States v. Boyce, 742 F.3d

792, 794 (7th Cir. 2014).

Because "[t]he attorney‐client privilege is a testimonial

privilege,” "so long as no evidence stemming from the breach

of the privilege is introduced at trial, no prejudice results.”

United States v. White, 970 F.2d 328, 336 (7th Cir. 1992). Fried‐

man concedes he "could not identify any communications

from Steinback to Bilis, or in turn from Bilis to the govern‐

ment” suggesting a breach. Without that evidence, Friedman

maintains the district court "should have presumed that con‐

fidences were shared.” Even if true, Friedman acknowledges

this presumption is rebuttable. We conclude it was thor‐

oughly rebutted during the district court's evidentiary hear‐

ing on the issue.

To address Friedman's concerns, the district court held a

closed evidentiary hearing at which Friedman and Steinback

testified. On direct examination, Friedman's counsel never

elicited, and Friedman never testified, that he shared any con‐

fidences with Steinback about the alleged fraud. When Fried‐

man was asked whether he shared communications about the

fraud with Steinback, Friedman responded, "in a way.” But

Friedman never explained what privileged communications

12 No. 19‐2004

were exchanged, despite the district court's offer of ex parte

and in camera opportunities to do so.

The exclusive setting in which the purportedly privileged

communications were conveyed—during infrequent and un‐

predictable Bilis bathroom breaks—is not credible. Fried‐

man's explanation also changed during the hearing; first, he

testified Steinback was too expensive for idle chat, then he

said those chats were saved for things he did not want Bilis to

hear. That Friedman did not ask Steinback to keep those per‐

sonal confidences from Bilis—with whom he entered a joint

representation arrangement—further supported the unlikeli‐

hood that Friedman shared such confidences. Friedman rec‐

ognized the line between personal and mutual confidences, as

shown by Friedman's prompt decision to retain independent

counsel without Steinback telling him to do so. All this oc‐

curred almost four years before the government issued Fried‐

man's indictment. The record supports the district court's

finding that "Friedman did not provide Steinback with any

personal, privileged confidences,” rebutting Friedman's pre‐

sumption otherwise.

Friedman challenges the district court's credibility find‐

ings, arguing the court should have disregarded Steinback's

testimony. But "[d]etermining witness credibility is especially

within the province of the district court and can virtually

never be clear error.” United States v. Austin, 806 F.3d 425, 431

(7th Cir. 2015) (internal quotation marks and citations omit‐

ted). And Friedman's criticisms of Steinback's testimony are

unconvincing. First, he complains Steinback did not initially

inform the government that Bilis and Friedman paid a $30,000

retainer, and that Steinback applied $25,000 of it during the

joint representation arrangement. Friedman calls this a

No. 19‐2004 13

"glaring omission.” Yet he offers no explanation how or why

the failure to tell the government that Bilis and Friedman paid

a retainer has any bearing on Steinback's credibility. Regard‐

less, Steinback testified about the retainer during the eviden‐

tiary hearing and Friedman cross‐examined him on the

subject. Friedman also criticizes Steinback's mistake in re‐

calling the location of his initial meeting with Bilis and Fried‐

man (Rockford versus Chicago). As the district court noted,

however, Steinback also testified it was "possible” they had

first met elsewhere. In the end, the district court was "best

situated to make credibility determinations in light of the to‐

tality of the evidence, including the witness's statements and

behavior, other witness statements, and further corroborating

or contrary evidence.” Id. Friedman cannot point to a clear er‐

ror by the district court in crediting Steinback's testimony

over his own.

Because Friedman has not shown that any privileged com‐

munications were ever shared—let alone that any breach of

privilege affected his trial—he has not shown error in the dis‐

trict court's denial of his motion to dismiss the indictment.

B. Objections to Jury Instructions

Friedman challenges two jury instructions: (1) an "aiding

and abetting” instruction, which tracked Seventh Circuit pat‐

tern instruction 5.06(a); and (2) an "acting through another”

instruction, which tracked Seventh Circuit pattern instruction

5.06(b). In Friedman's view, these instructions "understated

the mens rea element” required for the underlying bank fraud

charges and "misstated the law.” Friedman concedes "the de‐

fense did not object to the[se] instructional errors” at trial.

14 No. 19‐2004

Because the alleged errors were not raised in the district

court, we must decide whether Friedman has affirmatively

waived or merely forfeited this challenge. "Waiver occurs

when a party intentionally relinquishes a known right and

forfeiture arises when a party inadvertently fails to raise an

argument in the district court.” United States v. Flores, 929 F.3d

443, 447 (7th Cir. 2019).2 "We review forfeited arguments for

plain error, whereas waiver extinguishes error and precludes

appellate review.” Id. "Although passive silence with regard

to a jury instruction permits plain error review ... a defend‐

ant's affirmative approval of a proposed instruction results in

waiver.” United States v. LeBeau, 949 F.3d 334, 341–42 (7th Cir.

2020) (quoting United States v. Natale, 719 F.3d 719, 729 (7th

Cir. 2013)). This rule is "strictly applied” to affirmative ex‐

pressions of approval, including "affirmative statements as

simple as 'no objection' or 'no problem' when asked about the

acceptability of a proposed instruction.” Id. at 342 (quoting

Natale, 719 F.3d at 730).

Here, Friedman twice approved the instructions he now

challenges on appeal. First, he confirmed during the final pre‐

trial conference that he had no objections to the government's

proposed instructions.3 Then, before the close of evidence, the

2 Before this court decided Flores, the panel invoked Circuit Rule 40(e)

and circulated the opinion to all judges in active service, and no judge

voted to hear the case en banc. See 929 F.3d at 450 n.1.

3 At the final pretrial conference, the court and Friedman's counsel

had the following colloquy:

THE COURT: Jury instructions. There were no objections ‐‐‐

COUNSEL: There weren't.

THE COURT: ‐‐‐ or counters. So, I will adopt the government's in‐

structions without objection. ... And I realize there may be issues that

No. 19‐2004 15

district court asked the parties to reexamine the instructions

for objections. After previously adopting the government's in‐

structions wholesale, Friedman's counsel responded to this

second opportunity with requests to change several instruc‐

tions, including as to the elements of bank fraud. None of

those requests involved the aiding and abetting or acting

through another instructions, much less an objection to the

validity of any pattern instruction. See United States v. Freed,

921 F.3d 716, 721 (7th Cir. 2019) ("Pattern instructions are pre‐

sumed to accurately state the law.”) Therefore, we are not

simply relying on Friedman's "passive silence,” LeBeau, 949

F.3d at 341–42, or "inadvertent[] fail[ure] to raise an argument

in the district court,” Flores, 929 F.3d at 447. By choosing to

pursue changes to certain instructions and forgoing multiple

chances to change others, Friedman waived other possible

jury instruction challenges.

C. Motion for Acquittal

Federal Rule of Criminal Procedure 29 permits a defend‐

ant to move for a judgment of acquittal before the case is sub‐

mitted to the jury, or even after a guilty verdict is entered, if

he does not believe the evidence is sufficient to sustain a con‐

viction. FED. R. CRIM. P. 29(a), (c)(1). Friedman first moved for

judgment of acquittal under Rule 29 at the close of the gov‐

ernment's case, which the district court took under advise‐

ment. He then renewed his Rule 29 motion after the jury

come up during the course that we need to add an instruction on here or

there or modify a couple of them at the end. We will go through the full

set again, just to make sure all of them are appropriate, before it goes to

the jury.

(Final Pretrial Conf., March 16, 2018, ECF 203 at 12.)

16 No. 19‐2004

verdict, arguing the trial evidence was insufficient to support

his conviction. The district court denied this motion. On ap‐

peal, Friedman challenges only his conviction on count five,

which charged that he knowingly caused American Eagle

Bank to fund the Blekhman loan for the fake purchase of a

2011 Porsche Panamera.

We review de novo the denial of a defendant's motion for

judgment of acquittal. United States v. Hernandez, 952 F.3d 856,

859 (7th Cir. 2020). When faced with a challenge to the suffi‐

ciency of the evidence, "we view the evidence in the light

most favorable to the government and will overturn the jury's

verdict only when the record contains no evidence, regardless

of how it is weighed, from which the jury could find guilt be‐

yond a reasonable doubt.” United States v. Wade, 962 F.3d 1004,

1012 (7th Cir. 2020) (citation and internal quotation marks

omitted).

To convict Friedman on count five, the government had to

prove beyond a reasonable doubt: (1) there was a scheme to

defraud a bank; (2) Friedman knowingly executed or at‐

tempted to execute the scheme; (3) Friedman acted with the

intent to defraud; (4) the scheme involved a materially false

or fraudulent pretense, representation, or promise; and (5) at

the time of the charged offense the bank's deposits were in‐

sured by the Federal Deposit Insurance Corporation. Freed,

921 F.3d at 722. Friedman concedes the jury was properly in‐

structed on these elements and that American Eagle was an

FDIC‐insured bank.

An appellant's challenge to the sufficiency of the evidence

is "a nearly insurmountable hurdle,” United States v. Torres‐

Chavez, 744 F.3d 988, 993 (7th Cir. 2014), which Friedman does

not clear. The government produced ample evidence of

No. 19‐2004 17

Friedman's participation in the overall fraud scheme, includ‐

ing the Blekhman loan:

ï‚· Bilis testified about the scheme and corroborated

Friedman's role in it;

ï‚· Purported borrowers testified they did not apply for

the fraudulent loans, receive purportedly purchased

cars from Prestige, or make payments on those loans

as typical with legitimate loans;

 Fraudulent loan documents contained Friedman's sig‐

nature, and, as Prestige's president, Friedman pre‐

pared Prestige's loan and cash flow reports;

ï‚· Several witnesses testified that Friedman confessed to

the fraud;

 The Porsche Panamera was exported before the sub‐

mission of Blekhman's fake loan application;

ï‚· The Porsche Panamera's loan payments were made by

Prestige, not Blekhman;

ï‚· Prestige accepted payments from another customer

and a floor‐plan investor for the same Porsche

Panamera; and

ï‚· Prestige never delivered the Porsche Panamera to

Blekhman or anyone else.

The district court considered each of these facts to con‐

clude that a rational trier of fact could have found Friedman

guilty on count five. Friedman, on the other hand, describes

the above facts as a "total lack of evidence regarding [his] role

in the Blekhman loan.” That dearth is intensified, he believes,

because Blekhman did not testify at trial. Friedman's argu‐

ments overlook that "there is nothing wrong with

18 No. 19‐2004

circumstantial evidence of guilt” to support a fraud convic‐

tion. United States v. Memar, 906 F.3d 652, 656 (7th Cir. 2018).

Indeed, Friedman made the same arguments to the jury and

the jury rejected them, as it was entitled to do. Friedman's trial

did not "lack” evidence of his fraudulent acts. From the evi‐

dence described above, the jury reasonably inferred Fried‐

man's knowledge of and involvement in the Blekhman loan

fraud.

D. Two Motions for a New Trial

Friedman appeals the district court's denial of his two mo‐

tions for a new trial. Our review of a district court's ruling on

such a motion is for an abuse of discretion. United States v.

O'Brien, 953 F.3d 449, 456 (7th Cir. 2020). A new trial "should

be granted only if the evidence preponderates heavily against

the verdict, such that it would be a miscarriage of justice to let

the verdict stand.” Id. (internal quotation marks and citation

omitted). "The ultimate inquiry is whether the defendant was

deprived of a fair trial,” and we must affirm "unless we have

a strong conviction that the district court erred, and the error

committed was not harmless.” United States v. Lawrence, 788

F.3d 234, 243 (7th Cir. 2015) (citations and internal quotation

marks omitted).

1. First New Trial Motion

We start with Friedman's conflict of interest claim, which

repackages the arguments raised in his motion to dismiss the

indictment. Those arguments fail for reasons we already ex‐

plained: Friedman never showed that Steinback breached an

attorney‐client privilege, so the district court appropriately

denied a new trial on these grounds.

No. 19‐2004 19

Next, Friedman challenges the government's various

"gut” references during its rebuttal closing argument. He

contends those references told the jury, in effect, to ignore ev‐

idence and to decide the case based on feelings. We have ex‐

plained, however, that "improper statements during closing

argument rarely constitute reversible error.” United States v.

Wolfe, 701 F.3d 1206, 1211 (7th Cir. 2012). A review of such

comments involves two steps. First, we consider whether the

challenged remark was improper, and second, whether the

remark deprived Friedman of a fair trial. Id. On this second

step we consider five factors: "(1) the nature and seriousness

of the misconduct; (2) the extent to which the comments were

invited by the defense; (3) the extent to which any prejudice

was ameliorated by the court's instruction to the jury; (4) the

defense's opportunity to counter any prejudice; and (5) the

weight of the evidence supporting the conviction.” Id. at 1212

(internal quotation marks omitted).

Juries are permitted to draw upon their own life experi‐

ences and common sense in reaching their verdicts. See, e.g.,

United States v. Brasher, 962 F.3d 254, 270 (7th Cir. 2020); United

States v. Durham, 211 F.3d 437, 441–42 (7th Cir. 2000). Fried‐

man cedes this point, arguing instead that "[g]oing with one's

'gut' is the opposite of 'common sense.'” The district court

found that the government used the "gut” phrase synony‐

mously with "common sense.” Our review of the record com‐

pels the same conclusion.

The government prefaced each of its "gut” references by

directly invoking common sense or plainly alluding to it. For

example, the government urged the jury to "look at the evi‐

dence and your gut, your common sense.” It later told the ju‐

rors to "use your common sense, check your gut, ask

20 No. 19‐2004

yourself” why a particular witness would have testified as

they did. Indeed, after Friedman's trial counsel objected to use

of the term, the jury was told twice, once by government

counsel and then again by the court, that by "gut,” the gov‐

ernment meant "common sense.” After that, during jury in‐

structions, the district court once more instructed the jury to

use its common sense and everyday experience in weighing

and considering the evidence, and to draw reasonable infer‐

ences based on the evidence alone. True, prosecutors would

be wise to avoid any expression that invites confusion of the

government's proof burden, including "gut” comments. But

in this case the jury was repeatedly informed that Friedman

must be presumed innocent and that the government bore the

burden of proving him guilty beyond a reasonable doubt.

Thus, even if we assume the gut remarks were improper, the

district court's instructions, coupled with overwhelming evi‐

dence of Friedman's role in the fraud scheme, satisfy us that

such remarks did not deprive Friedman of a fair trial. We see

no abuse of discretion here.

2. Second New Trial Motion

After Friedman lost his first motion for a new trial, he

moved again for a new trial based on newly discovered evi‐

dence: (1) a forbearance agreement between Bilis and Ameri‐

can Eagle Bank related to Bilis's outstanding debt, and (2) a

loan agreement between the bank and Bilis's wife. Documents

related to the forbearance agreement showed that the bank

agreed to not pursue the remedies it had against Bilis in ex‐

change for monthly payments to pay down the fraudulent

loans and Bilis's assistance if the bank needed information for

its bankruptcy case against Friedman. As for the loan involv‐

ing Bilis's wife, the bank's file contained a memorandum that

No. 19‐2004 21

acknowledged Bilis's fraud, his restitution, and his help in ob‐

taining a judgment against Friedman.

Friedman argues this "new” evidence shows the bank in‐

centivized Bilis to fabricate testimony, and that Bilis and the

bank failed to disclose the nature and extent of their ongoing

relationship. The district court denied Friedman's motion,

finding that Friedman could have discovered these docu‐

ments sooner through due diligence, and that the agreements

were "immaterial because they were merely impeaching and

cumulative of the evidence presented to the jury.”

A post‐judgment motion resting on newly discovered ev‐

idence must show the additional evidence: "(1) was discov‐

ered after trial, (2) could not have been discovered sooner

through the exercise of due diligence, (3) is material and not

merely impeaching or cumulative, and (4) probably would

have led to acquittal.” United States v. O'Malley, 833 F.3d 810,

813 (7th Cir. 2016). Taking Friedman at his word that the evi‐

dence was discovered after trial, he knew enough underlying

facts to dig deeper into Bilis's relationship with American

Eagle Bank. Friedman concedes he knew before trial that "Bi‐

lis was making modest restitution payments to the bank

through a settlement.” Friedman also knew that Bilis and two

bank witnesses were set to testify against him at trial. No one

disputes that the bank kept records of its "settlement” and

other arrangements with Bilis in its ordinary course of busi‐

ness. Nor does anyone disagree that the bank would have

turned over those records in response to a simple subpoena

request. The key question is whether Friedman could have

discovered the additional evidence had he taken reasonable

steps to do so. Because the answeris "yes,” Friedman's second

new trial motion fails for that reason alone.

22 No. 19‐2004

Even if we assume otherwise, the "new” evidence was cu‐

mulative of other trial evidence. On cross‐examination, Bilis

explained that he was making two types of payments to

American Eagle Bank: one for the fraudulent loans, and the

other "for my home equity loan” involving Bilis's wife. Fried‐

man's counsel did not follow up on the specifics of Bilis's

agreements with the bank. Likewise, Friedman's counsel

passed on the opportunity to discuss these arrangements

when questioning the bank's witnesses. And had counsel

sought those specifics, it still would not have led to an acquit‐

tal. At best, that information could have been used to impeach

the credibility of Bilis and the bank witnesses, which offers

little help to Friedman. "[T]ypically, newly discovered im‐

peachment evidence does not warrant relief under Rule 33.”

United States v. Reyes, 542 F.3d 588, 596 (7th Cir. 2008). Though

an exception to thatrule exists where a defendant's conviction

depends entirely on the uncorroborated testimony of a single

unreliable witness,see, e.g., United States v. Taglia, 922 F.2d 413,

415 (7th Cir. 1991), those are not the circumstances here.

Friedman faced a mountain of evidence apart from whatever

Bilis and bank executives had to offer. That evidence included

testimony from victims and Prestige employees, bogus loan

applications, export documents, checks, loan files, and bank

records. Friedman also eagerly impeached Bilis on cross‐ex‐

amination, pointing out that Bilis had every reason to pin the

blame on Friedman to secure a deal with the government. The

district court, too, instructed the jury that "Bilis was promised

a benefit in return for his cooperation with the government”

and to "consider [his] testimony with caution and great care.”

The jury still credited Bilis's testimony on three of the five

counts. For these reasons, we conclude there was no abuse of

No. 19‐2004 23

discretion or other error in the district court's denial of Fried‐

man's second new trial motion.

E. Objections to Sentencing Enhancements

Friedman also challenges the enhancements to his sen‐

tence. We review the district court's application of the sen‐

tencing guidelines de novo and its findings of fact for clear

error. United States v. Sheneman, 682 F.3d 623, 630 (7th Cir.

2012). We will reverse a finding for clear error only when "we

are left with the definite and firm conviction that a mistake

has been committed.” Id. (citation and internal quotation

marks omitted). A below‐guidelines sentence, like the one

here, is "presumptively reasonable against an attack by a de‐

fendant claiming that the sentence is too high.” United States

v. Dewitt, 943 F.3d 1092, 1098 (7th Cir. 2019) (citation and in‐

ternal quotation marks omitted).

Friedman first argues the district court erred in applying

an enhancement under U.S.S.G. § 3C1.1, which provides a

two‐level offense level increase if a defendant "willfully ob‐

structed or impeded, or attempted to obstruct or impede, the

administration of justice with respect to the investigation,

prosecution, or sentencing of the instant offense.” Perjury is

an example of conduct warranting the enhancement for ob‐

struction, United States v. Dinga, 609 F.3d 904, 909 (7th Cir.

2010), and the district court found there was "no question”

that Friedman falsely testified at the evidentiary hearing

about sharing of privileged information with Steinback. On

appeal, Friedman insists he shared privileged information

with Steinback during Bilis's scattered bathroom breaks, and

he again disputes the district court's credibility findings. For

reasons already discussed, Friedman's bathroom break story

is implausible, if not far‐fetched. See id. ("To believe

24 No. 19‐2004

[defendant's] story would require a significant stretch of the

imagination.”). So this enhancement was correctly applied.

Next, Friedman challenges the district court's imposition

of a two‐level sophisticated‐means enhancement. This en‐

hancement is appropriate when "the defendant intentionally

engaged in or caused the conduct constituting sophisticated

means.” United States v. Muresanu, 951 F.3d 833, 840 (7th Cir.

2020) (quoting U.S.S.G. § 2B1.1(b)(10)(C)). When determining

whether a defendant employed sophisticated means, courts

consider "the level of planning or concealment in relation to

typical fraud of its kind.” United States v. Harris, 791 F.3d 772,

781 (7th Cir. 2015); United States v. Anobah, 734 F.3d 733, 739

(7th Cir. 2013) (considering same and affirming application of

sophisticated means enhancement where scheme spread over

two states, used false documents, false loan applications, and

false documents to support the misinformation contained in

the loan applications).

The district court found that Friedman's fraud exceeded

the garden‐variety scheme to commit bank fraud. It included:

selling single cars to multiple purchasers; orchestrating fic‐

tional car buyers to obtain loans; assuming loan payments for

bogus debtors; manipulating floor‐plan investors; misappro‐

priating personally identifiable information belonging to fam‐

ily, friends, and former customers; and covering all that up

over a span of three years, as opposed to one or two fake loan

applications. Friedman insists that loan applications con‐

tained "the most basic lies.” But the facts are to the contrary.

His fraud went far beyond simple falsities. Those lies in‐

cluded the creation of phony corporate resolution documents,

the misuse of driver's licenses from priorlegitimate loans, and

the use of already‐exported cars as collateral to secure cash to

No. 19‐2004 25

conceal the fraud. Friedman also argues that "international

shipping had long been a part of Prestige's business model,”

suggesting the fraud was not as complex as it seems. But that

only reinforces a finding of sophistication. "[A] district court

need only find by a preponderance of the evidence facts suf‐

ficient to support the enhancement.” United States v. Sewell,

780 F.3d 839, 848 (7th Cir. 2015). Friedman exploited his pro‐

ficiency with international shipping practices to secure loans

without collateral, distinguishing his fraud from typical bank

fraud. So, the district court did not err in applying this en‐

hancement.

F. Objections to Loss Calculation and Restitution

Finally, Friedman challenges the district court's loss calcu‐

lation of $4,722,347 and its order of restitution in that amount.

We review findings of loss amounts for clear error. United

States v. White, 883 F.3d 983, 986 (7th Cir. 2018), and will re‐

verse only if we are left with the definite and firm conviction

that a mistake has been committed, United States v. Orillo, 733

F.3d 241, 244 (7th Cir. 2013).

In calculating the loss amount, the district court included

losses suffered by floor‐plan investors, which totaled around

$2.5 million. Friedman argues the floor‐plan investors' losses

should be excluded from the loss amount and restitution

award. The way he sees it, defrauding the floor‐plan investors

was separate from bilking the banks. The district court disa‐

greed, explaining the entire reason Prestige could "keep[] the

business afloat” was by concealing the bank fraud, and that a

key part of that scheme was "seeking more funding” from

floor‐plan investors. Nor would those investors continue their

investments had they known they were pumping cash into a

fake inventory from a dealership that survived on fraudulent

26 No. 19‐2004

loans. The court analogized the scheme to "musical chairs,”

in which money comes in from defrauded investors to pay off

defrauded banks.

On appeal Friedman contends the district court based its

loss findings on speculation and made no specific findings

that the investors' loss amount was attributable to Friedman.

We disagree, and conclude the record firmly supports the dis‐

trict court's finding that the solicitation, acceptance, and use

of floor‐plan investor funds kept Prestige afloat and the fraud

concealed for over three years. Friedman asks too much of the

district court. When calculating loss for sentencing, the court

"must conclude that it is more likely than not that the amount

in question is correct,” and "a reasonable estimate suffices.”

United States v. Bogdanov, 863 F.3d 630, 634 (7th Cir. 2017).

Friedman does not dispute the loss amount suffered by inves‐

tors. He merely challenges the incorporation of those losses

into his loss calculation. Because the record amply supports

that Friedman used the investors' proceeds to pay down the

fraudulent loans, we find no error in the district court's loss

calculation.

Friedman's brief attack on the restitution order fails for the

same reasons. That order is reviewed for abuse of discretion,

United States v. Corrigan, 912 F.3d 422, 430 (7th Cir. 2019),

viewing the evidence in the light most favorable to the gov‐

ernment, United States v. Yihao Pu, 814 F.3d 818, 829 (7th Cir.

2016). Friedman acknowledges that the Mandatory Victims

Restitution Act requires restitution to a victim "directly

harmed by the defendant's criminal conduct in the course of

the scheme, conspiracy, or pattern,” including bank fraud. See

18 U.S.C. § 3663A(a)(1)–(2), (c)(1)(A)(ii). He merely reiterates

his argument that the evidence at sentencing was insufficient

No. 19‐2004 27

to show the floor‐plan investors' losses were caused by the

bank fraud scheme. Viewing the evidence in the light most

favorable to the government, we disagree. The same record

evidence and findings that supported the district court's loss

calculation also support the restitution award

Finding no merit in any of Friedman’s claims, his convic‐

tion and sentence for bank fraud are AFFIRMED