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United States v. Walters

United States Court of Appeals for the Seventh Circuit

June 11, 1993, Argued ; June 30, 1993, Decided

No. 92-3420


 [*1221]  EASTERBROOK, Circuit Judge. Norby Walters, who represents entertainers, tried to move into the sports business. He signed 58 college football players to contracts while they were  [**2]  still playing. Walters offered cars and money to those who would agree to use him as their representative in dealing with professional teams. Sports agents receive a percentage of the players' income, so Walters would profit only to the extent he could negotiate contracts for his clients. The athletes' pro prospects depended on successful completion of their collegiate careers. To the NCAA, however, a student who signs a contract with an agent is a professional, ineligible to play on collegiate teams. To avoid jeopardizing his clients' careers, Walters dated the contracts after the end of their eligibility and locked them in a safe. He promised to lie to the universities in response to any inquiries. Walters inquired of sports lawyers at Shea & Gould whether this plan of operation would be lawful. The firm rendered an opinion that it would violate the NCAA's rules but not any statute.

Having recruited players willing to fool their universities and the NCAA, Walters discovered that they were equally willing to play false with him. Only 2 of the 58 players fulfilled their end of the bargain; the other 56 kept the cars and money, then signed with other agents. They relied on the fact  [**3]  that the contracts were locked away and dated in the future, and that Walters' business depended on continued secrecy, so he could not very well sue to enforce their promises. When the 56 would neither accept him as their representative nor return the payments, Walters resorted to threats. One player, Maurice Douglass, was told that his legs would be broken before the pro draft unless he repaid Walters' firm. A 75-page indictment charged Walters and his partner Lloyd Bloom with conspiracy, RICO violations (the predicate felony was extortion), and mail fraud. The fraud: causing the universities to pay scholarship funds to athletes who had become ineligible as a result of the agency contracts. The mail: each university required its athletes to verify their eligibility to play, then sent copies by mail to conferences such as the Big Ten.

After a month-long trial and a week of deliberations, the jury convicted Walters and Bloom. We reversed, holding that the district judge had erred in declining to instruct the jury that reliance on Shea & Gould's advice could prevent the formation of intent to defraud the universities. 913 F.2d 388, 391-92 (1990). Any dispute [**4]  about the adequacy of Walters' disclosure to his lawyers and the bona fides of his reliance was for the jury, we concluded. Because Bloom declined to waive his own attorney-client privilege, we held that the defendants must be retried separately.  Id. at 392-93. On remand, Walters asked the district court to dismiss the indictment, arguing that the evidence presented at trial is insufficient to support the convictions. After the judge denied this motion, 775 F. Supp. 1173 (N.D. Ill. 1991), Walters agreed to enter a conditional Alford plea: he would plead guilty to mail fraud, conceding that the record of the first trial supplies a factual basis for a conviction while reserving his right to contest the sufficiency of that evidence. In return, the prosecutor agreed to dismiss the RICO and conspiracy charges  [*1222]  and to return to Walters all property that had been forfeited as a result of his RICO conviction. Thus a case that began with a focus on extortion has become a straight mail fraud prosecution and may undergo yet another transformation. The prosecutor believes that Walters hampered the investigation preceding his indictment.  [**5]  See In re Feldberg, 862 F.2d 622 (7th Cir. 1988) (describing some of the investigation). The plea agreement reserves the prosecutor's right to charge Walters with perjury and obstruction of justice if we should reverse the conviction for mail fraud.

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997 F.2d 1219 *; 1993 U.S. App. LEXIS 16075 **

UNITED STATES OF AMERICA, Plaintiff-Appellee, v. NORBY WALTERS, Defendant-Appellant.

Prior History:  [**1]  Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 88 CR 709. Harry D. Leinenweber, Judge.

Disposition: REVERSED


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Criminal Law & Procedure, Fraud Against the Government, Mail Fraud, Elements, General Overview, Reviewability, Preservation for Review, Entry of Pleas, Guilty Pleas, Fraud, Wire Fraud