United States of America v. Daniel Ballard

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 17‐2640
U NITED STATES OF A MERICA ,
Plaintiff‐Appellant,
v.
D ANIEL BALLARD,
Defendant‐Appellee.
____________________
Appeal from the United States District Court for the
Central District of Illinois.
No. 15‐cr‐20022 — James E. Shadid, Judge.
____________________
A RGUED FEBRUARY 15, 2018 — D ECIDED MARCH 19, 2018
____________________
Before BAUER , FLAUM, and MANION, Circuit Judges.
FLAUM, Circuit Judge. The government alleges Daniel Bal‐
lard fraudulently obtained construction loans from a bank.
After Ballard was convicted on three counts of bank fraud, his
attorney obtained a previously undisclosed audio recording
of an adverse witness in Ballard’s trial, made during the
course of a prior, unrelated criminal investigation. Ballard
moved for a new trial as a result of this newly discovered ev‐

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2 No. 17‐2640
idence. The district court found certain portions of the record‐
ing favorable and material to Ballard’s defense and granted
him a new trial. The United States appeals. We affirm.
I. Background
Ballard’s alleged fraudulent scheme was as follows: Bal‐
lard obtained a $280,000 construction loan from the State Bank
of Herscher (“SBH”) to construct a residence at 3013 Stone
Fence Drive in Kankakee, Illinois (“the Stone Fence Prop‐
erty”). After some time, he realized he was “in over his head”
and requested an additional $90,000 loan to finish the prop‐
erty. As there was insufficient equity to cover the requested
amount, SBH only lent him $20,000. To make up the balance,
Ballard sought and obtained construction loans on two other
properties in Bradley, Illinois: 411 North Center and 248
North Center (“the North Center Properties”). Joseph Grant
was the SBH loan officer for all three properties.
To obtain funds under the loans, Ballard was required to
submit Sworn Contractor’s Statements and Owner’s Payment
Authorizations to the Kankakee County Title Company
(“KCTC”). On the forms, Ballard identified the material and
labor costs supposedly associated with his work on the North
Center Properties. KCTC forwarded the forms to SBH, which
then released funds back to KCTC to disburse to Ballard.
In total, Ballard obtained approximately $188,000 for the
North Center Properties. In reality, however, no work was ac‐
tually performed; instead, Ballard used the funds to complete
construction on the Stone Fence Property. On March 21, 2012,
an SBH employee discovered Ballard’s scheme. When con‐

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No. 17‐2640 3
fronted by Charles Riker, the president of SBH, Ballard alleg‐
edly acknowledged that he had misrepresented his work on
the North Center Properties.
On June 2, 2015, Ballard was charged with three counts of
bank fraud in violation of 18 U.S.C. § 1344. At trial, Ballard
admitted that he had misdirected funds allocated for the
North Center Properties to the Stone Fence Property. How‐
ever, he maintained two separate legal defenses. The first was
a “good faith” defense—Ballard asserted that Grant and his
supervisors not only knew, but authorized Ballard’s acts and
pressured him to complete the Stone Fence Property. Second,
Ballard claimed he did not read or sign the supposedly fraud‐
ulent loan documents prior to their submission to KCTC, and
implied that someone else forged his signature.1
1 The government sought to exclude Ballard’s good faith defense, ar‐
guing that “[t]he law is pretty clear that a loan officer is not the bank. So
that if a loan officer was somehow … complicit in the bank fraud, the vic‐
tim is still the bank. It wouldnʹt be a defense for the defendant.” That may
be true. See United States v. Allender, 62 F.3d 909, 915–916 (7th Cir. 1995).
However, the district court denied the government’s motion, noting that
Ballard’s theory was not limited solely to Grant but also included his su‐
periors at SBH. The court stated:
[A]t some point the bank is its people, right? If everybody
in the bank—letʹs just go crazy here—if everybody in the
bank tells Beaumontʹs client, you go ahead, you can do
this, then you canʹt come back later and argue that the
bank is this building and not the people, right?
Thus, the district court allowed Ballard to “explore whether this goes up
past Mr. Grant under his theory.” The government continues to maintain
that the good faith defense is precluded. Since we find the recording is
favorable and material to Ballard’s defense that he did not read the loan

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4 No. 17‐2640
In response, Grant testified that he never told Ballard to
use the North Center loan proceeds at the Stone Fence Prop‐
erty or knew that Ballard was doing so. At the conclusion of
the trial, a jury convicted Ballard of all three counts.
On February 8, 2017, Ballard filed a motion for a new trial.
Ballard’s motion centered on a surreptitious audio recording
of Grant made during a prior, unrelated federal investigation
centering on Scott Fitts (“the Fitts investigation”). Notably,
Lawrence Beaumont—Ballard’s attorney here—represented
Fitts during those criminal proceedings. In 2007, Fitts ob‐
tained a personal loan from SBH, with Grant serving as his
loan officer. Fitts later pleaded guilty to at least one criminal
violation related to the loan. Fitts signed a cooperation agree‐
ment as part of his plea, and was later directed to audio record
a conversation with Grant. In that approximately one‐hour re‐
cording, Fitts and Grant discussed various matters relating to
Fitts’s alleged misconduct and Grant and SBH’s involvement.
Ballard alleged that the day after the jury verdict was an‐
nounced, Fitts called Beaumont and told him about the Grant
recording. Based on the contents of the recording, Ballard
moved for a new trial, arguing that the government had im‐
properly suppressed evidence capable of impeaching Grant’s
credibility. The district court agreed, vacated Ballard’s convic‐
tion, and ordered a new trial. According to the district court,
Ballard’s defense that he did not read the loan documents
“may have been a much more plausible defense had the Gov‐
ernment turned over the Grant recording prior to trial.” This
appeal followed.
statements, we need not address whether the good faith defense is plausi‐
ble here.

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No. 17‐2640 5
II. Discussion
Under Brady v. Maryland, a defendant can obtain a new
trial if he shows that evidence suppressed by the government
was favorable and material to either his guilt or punishment.
See 373 U.S. 83, 88–89 (1963); see also United States v. Veras, 51
F.3d 1365, 1374 (7th Cir. 1995). 2 Whether evidence is favorable
and material “is legally simple but factually complex.” Turner
v. United States, 137 S. Ct. 1885, 1893 (2017). Indeed, “[w]e
must examine the trial record, ‘evaluat[e]’ the withheld evi‐
dence ‘in the context of the entire record,’ and determine in
light of that examination whether ‘there is a reasonable prob‐
ability that, had the evidence been disclosed, the result of the
proceeding would have been different.’” Id. (second alteration
in original) (first quoting United States v. Agurs, 427 U.S. 97,
112 (1976); then quoting Cone v. Bell, 556 U.S. 449, 470 (2009)).
Generally, we review a grant or denial of a motion for a
new trial under an abuse of discretion standard. United States
v. Lawson, 810 F.3d 1032, 1042 (7th Cir. 2016). Brady violations
often implicate both issues of fact and law; we review the dis‐
trict court’s factual findings for clear error, and legal conclu‐
sions de novo. United States v. Griffin, 652 F.3d 793, 797 (7th
Cir. 2011); see also United States v. Freeman, 650 F.3d 673, 678–
79 (7th Cir. 2011) (“The district court abuses its discretion
when it makes an error of law or when it makes a clearly er‐
roneous finding of fact.”); United States v. Wolf, 860 F.3d 175,
189 (4th Cir. 2017) (“With regard to the district court’s Brady
ruling, we apply de novo review to its legal determinations
and clear error review to its factual findings.”).
2 On appeal, the government does not contest that the Grant recording
was suppressed; thus, we need not further analyze that factor.

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6 No. 17‐2640
A. Favorability
Evidence is favorable “either because it is exculpatory, or
because it is impeaching.” Turner, 137 S. Ct. at 1893 (quoting
Strickler v. Greene, 527 U.S. 263, 281–282 (1999)). Evidence need
only have “some weight” or “tendency” to be favorable to the
defendant. Kyles v. Whitley, 514 U.S. 419, 451 (1995).
The district court found the Grant recording supported
four reasonable inferences: (1) Grant disclosed to Fitts that a
Suspicious Activity Report (“SAR”) had been created for one
of his transactions 3 ; (2) SBH filled out the SAR related to
Fitts’s loan with false information; (3) Grant accepted signed,
blank loan applications from Fitts; and (4) Grant believed he
was under criminal investigation. The government contends
that these factual findings are not supported by the record.
We disagree. “Under [the clear error] standard, we will not
reverse unless, after reviewing all the evidence, we are left
with ‘the definite and firm conviction that a mistake has been
committed.’” Buechel v. United States, 746 F.3d 753, 756 (7th
Cir. 2014) (quoting Anderson v. City of Bessemer City, N.C., 470
U.S. 564, 573 (1985)). Upon a thorough review of the record,
including the Grant recording, we have no such conviction
here. The district court’s four conclusions “are ‘plausible in
3 A SAR is a report made by a financial institution about suspicious,
or potentially suspicious activity, to prevent fraud, money laundering, and
other nefarious activities. In the United States, financial institutions and
their employees can face civil and criminal penalties for failing to properly
file a SAR or for failing to file them within 30 calendar days of detection
of behavior that might constitute the basis for their filing. See generally 31
U.S.C. §§ 5311–32. Disclosure of the existence of a SAR is prohibited. 31
U.S.C. § 5318(g)(2).

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No. 17‐2640 7
light of the record viewed in its entirety.’” Id. (quoting Fyrnet‐
ics (Hong Kong) Ltd. v. Quantum Grp., Inc., 293 F.3d 1023, 1028
(7th Cir. 2002)). Thus, we will not disturb them.
Based upon these factual findings, the district court made
a legal determination that the Grant recording provided “am‐
ple fodder for impeaching Grant’s credibility.” Once again, we
cannot say that such a finding was in error. For one, some of
the acts arguably admitted by Grant in the recording—such
as falsifying a SAR and accepting signed, blank loan applica‐
tions—are probative to attacking his character for truthful‐
ness. See Fed. R. Evid. 608(b)(1). Additionally, the recording
supports an inference that Grant not only admitted to illegal
activity, but also thought he was being criminally investi‐
gated for his misconduct. Because Grant was never prose‐
cuted, it can be further inferred that Grant received some ben‐
efit from the government. Thus, Grant was arguably biased in
favor of the prosecution, especially given that many of the
main characters in the Fitts investigation took part in the Bal‐
lard investigation—most notably the prosecutor, investigat‐
ing agent, and Grant. If believed, such a motive would dam‐
age Grant’s credibility as a witness against Ballard. That’s be‐
cause, at trial, Grant’s testimony directly contradicted Bal‐
lard’s statement as to whether Grant and SBH sanctioned Bal‐
lard’s conduct. If a jury did not believe Grant’s testimony, it
might have found Ballard generally more credible. This may
have made Ballard’s defense that he did not read the loan
statements more believable.
B. Materiality
We must next address whether the favorable evidence is
material. A statement is material if “there is a reasonable prob‐
ability that, had the evidence been disclosed, the result of the

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8 No. 17‐2640
proceeding would have been different.” Cone, 556 U.S. at 470.
In order to have “[a] ‘reasonable probability’ of a different re‐
sult,” the suppressed evidence must “undermine[] confidence
in the outcome of the trial.” Turner, 137 S. Ct. at 1893 (quoting
Kyles, 514 U.S. at 434).
As the district court reasoned, “[t]he Defense was entitled
to cross‐examine Grant about his credibility, and had the jury
found Grant incredible, it is not a stretch to see the verdict
could have been different.” The dissent correctly notes that
twelve other witnesses testified at trial. And it is true that it is
“the rare case in which impeaching evidence warrants a new
trial, because ordinarily such evidence will cast doubt at most
on the testimony of only one of the witnesses.” United States
v. Taglia, 922 F.2d 413, 415 (7th Cir. 1991). However, as we con‐
tinued in Taglia, “[that] practice should not be taken to imply
… the district judge is helpless to grant a new trial. District
judges do not in fact consider themselves helpless in such cir‐
cumstances, and they are right not to.” Id. 415–16. Indeed, a
trial judge is best equipped to “develop[] a feel for the impact
of the witnesses on the jury—and how that impact might have
been different had the government played by the rules” and
disclosed the suppressed evidence. United States v. Boyd, 55
F.3d 239, 242 (7th Cir. 1995). We, “confined to reading the tran‐
script, cannot duplicate” such a nuanced sense on appeal. Id.
Thus, “unless we are convinced that [the trial judge in fact]
was mistaken”—and we are not convinced here—“we have
no warrant to reverse.” Id.
III. Conclusion
For the foregoing reasons, we A FFIRM the judgment of the
district court.

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No. 17‐2640 9
MANION, Circuit Judge, dissenting. Daniel Ballard needed
money to complete an over‐budget construction project, so he
obtained a loan ostensibly to improve two other properties.
When it was discovered that he never did any work on the
other properties, he was investigated for bank fraud. He was
eventually charged with making false representations to a ti‐
tle company in order to obtain a disbursement of funds from
the fraudulent loan. His main defense at trial seems to have
been that he did not bother to read the admittedly false Sworn
Contractor’s Statements submitted to the title company to ob‐
tain the disbursement. Implausible as that may be on its face,
the government refuted the defense by calling multiple wit‐
nesses—including an FDIC special agent and the former bank
president—who told the jury that Ballard had admitted he
knew the representations he made in Sworn Contractor’s
Statements were false. The jury convicted him.
But after the trial, a recording surfaced of a 2009 conversa‐
tion between Ballard’s loan officer (and government witness)
Joe Grant and convicted fraudster Scott Fitts. In the recording,
the two men discussed a loan Fitts had obtained from Grant
that eventually led to Fitts’ conviction. Ballard moved for a
new trial. The district court held that (1) the recording was
relevant as potential impeachment of Grant; and (2) the po‐
tential impeachment was material because it may have made
Ballard’s “I didn’t read the Statements” defense “much more
plausible.” As a result, it ordered a new trial. The court today
affirms that decision. I cannot agree. Because I conclude that
disclosure of the recording before trial would have had no ef‐
fect on the outcome, I would reverse the decision below and
remand with instructions to reinstate the jury verdict.

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10 No. 17‐2640
As the court recognizes, material evidence for the pur‐
poses of Brady v. Maryland, 373 U.S. 83 (1963), is “evidence that
(if disclosed in a timely way) would have created a reasonable
probability of a different result.” United States v. Wilson, 237
F.3d 827, 832 (7th Cir. 2001). The question before us is whether
the impeachment evidence contained in the recording is sig‐
nificant enough “to undermine confidence in the verdict.”
Kyles v. Whitley, 514 U.S. 419, 435 (1995). For several reasons, I
believe it is not.
First, despite Ballard’s representations to the contrary, the
recording is not “exculpatory evidence.” “Exculpatory” refers
only to evidence “tending to establish a criminal defendant’s
innocence.” Black’s Law Dictionary 577 (7th ed. 1999). The re‐
cording has nothing to do with this case, and thus does not
tend to prove that Ballard is innocent. Its only potential value
is as impeachment of Grant. But “[t]he practice has been to
deny new trials where the only newly discovered evidence
was impeaching.” United States v. Taglia, 922 F.2d 413, 415 (7th
Cir. 1991). “[I]t will be the rare case in which impeaching evi‐
dence warrants a new trial, because ordinarily such evidence
will cast doubt at most on the testimony of only one of the
witnesses.” Id. That is certainly the case here.1 And while Bal‐
lard attempts to cast Grant as the government’s “key witness,”
in reality he was just one of thirteen witnesses. Several other
1 The court is correct that district courts are not helpless to grant new
trials because of suppressed impeachment evidence. Yet the lesson of Ta‐
glia is that withheld impeachment evidence impugning the credibility of
only one witness will rarely be enough to undermine confidence in the
verdict. That’s especially true when, as in this case, the credibility of the
impeached witness is irrelevant to the defense asserted.

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No. 17‐2640 11
witnesses established the facts necessary for Ballard’s convic‐
tion: that Ballard knowingly made false representations to the
title company in order to obtain the money.
Second, and perhaps most importantly, Grant’s credibility
is irrelevant to the dispositive issue: whether Ballard read the
Sworn Contractor’s Statements and knew they were false. Bal‐
lard’s counsel indicated at trial that he did not intend to argue
that Grant knew the representations made in the Statements
were false. That is the missing link in the district court’s anal‐
ysis. After all, if Grant didn’t know whether the Statements
were false, it follows that impeaching Grant’s credibility
wouldn’t affect the government’s ability to prove that Ballard
knew they were false. In other words, the district court’s as‐
sertion that further impeachment of Grant would have helped
Ballard’s “I didn’t read the Statements” defense was simply
wrong. I would not defer to that finding because it lacks rec‐
ord support. See United States v. Savage, 505 F.3d 754, 760 (7th
Cir. 2007) (the abuse of discretion standard means “we will
not reverse unless the record contains no evidence upon
which the trial judge rationally could have based his deci‐
sion.”).
Third, the recording’s weight is further compromised be‐
cause it would be inadmissible at a new trial. Federal Rule of
Evidence 608(b) provides that “[e]xcept for a criminal convic‐
tion under Rule 609, extrinsic evidence is not admissible to
prove specific instances of a witness’s conduct in order to at‐
tack or support the witness’s character for truthfulness.” So
although Ballard’s counsel might make use of the recording to
cross‐examine Grant at a new trial, counsel would be stuck
with Grant’s answers. See United States v. Veras, 51 F.3d 1365,
1375 (7th Cir. 1995). The jury will never hear the recording.

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12 No. 17‐2640
That makes the recording much less valuable than Ballard
would like to admit.
Finally, I must address Ballard’s continuing assertions that
his true defenses have been that the State Bank of Herscher is
a “crooked bank” and that Grant knew exactly what was go‐
ing on with the Ballard loan. If these were valid defenses to
bank fraud, then perhaps Grant’s credibility—and specifically
the subject matter of the recording—would be relevant to the
outcome of the trial. But it is settled law that “the loan officer
was in on it” is not a defense to bank fraud. See United States
v. Allender, 62 F.3d 909, 915–16 (7th Cir. 1995) (finding no error
with a jury instruction to that effect). And Ballard provides no
authority to support his theory that the supposed corruption
all the way to the top of the bank, even if proven, would ab‐
solve him of responsibility for the misrepresentations. 2 With
these “defenses” out of the picture, further impeachment of
Grant would not help Ballard in the least.
I conclude that the existence of the Grant‐Fitts recording
does not undermine confidence in the verdict against Ballard.
Therefore, I would reverse the decision to grant a new trial
and remand with instructions to reinstate the guilty verdict. I
respectfully dissent.
2 Failure to cite authority (whether it be from the record or case law)
for his assertions is a common problem in Ballard’s brief. Worst of all, Bal‐
lard fails to identify anything Grant said at trial that, had the jury disbe‐
lieved it, would have changed the result. “We will not scour a record to
locate evidence supporting a party’s legal argument.” Estate of Moreland v.
Dieter, 395 F.3d 747, 759 (7th Cir. 2005). In my view, Ballard failed to de‐
velop several points and waived any response he might have had to many
of the government’s well‐reasoned arguments.

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