                           ILLINOIS OFFICIAL REPORTS
                                         Appellate Court




                           People v. Radojcic, 2012 IL App (1st) 102698




Appellate Court            THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellant, v.
Caption                    BUDIMIR RADOJCIC and MARK HELFAND, Defendants-Appellees
                           (Suzana Radojcic, Mirjana Omickus, Christa Patterson, Defendants).



District & No.             First District, Third Division
                           Docket No. 1-10-2698


Filed                      May 2, 2012


Held                       In a prosecution for financial institution fraud, the trial court erred in
(Note: This syllabus       striking defendant’s attorney from the list of witnesses, since the State
constitutes no part of     presented sufficient testimony to give a reasonable person cause to
the opinion of the court   suspect that defendant used his communications with his attorney to
but has been prepared      advance his attempts to commit fraud, and under those circumstances, the
by the Reporter of         attorney-client privilege did not preclude the attorney’s testimony.
Decisions for the
convenience of the
reader.)


Decision Under             Appeal from the Circuit Court of Cook County, No. 07-CR-25197; the
Review                     Hon. Thomas J. Hennelly, Judge, presiding.



Judgment                   Reversed and remanded.
Counsel on                  Lisa Madigan, Attorney General, of Chicago (Michael A. Scodro,
Appeal                      Michael M. Glick, and David Simpson, Assistant Attorneys General, of
                            counsel), for the People.

                            Len Goodman Law Office LLC (Leonard C. Goodman and Melissa A.
                            Matuzak, of counsel), and Michael J. Pelletier, Alan D. Goldberg, and
                            Michael G. Soukup, all of State Appellate Defender’s Office, both of
                            Chicago, for appellees.


Panel                       JUSTICE NEVILLE delivered the judgment of the court, with opinion.
                            Presiding Justice Steele and Justice Salone concurred in the judgment and
                            opinion.



                                               OPINION

¶1          In this prosecution for financial institution fraud and other crimes, the trial court held that
        attorney-client privilege barred the State from calling defendant-appellee Budimir Radojcic’s
        former attorney as a witness. We address two questions in the appeal: (1) Did the trial court
        follow proper procedures for deciding whether to bar the proposed witness?; and (2) Did the
        evidence show that the attorney-client privilege applied to the communications between the
        defendant and his former attorney?
¶2          We hold that before the trial court excludes testimony from an attorney because of
        attorney-client privilege, the court must consider whether the party seeking to use the
        testimony has made a sufficient showing to give the court reason to question witnesses in
        camera to determine whether the attorney-client privilege applied to the communications
        between the attorney and the client. We find that the State presented testimony that would
        give a reasonable person cause to suspect that the client here used his communications with
        his attorney to advance his attempts to commit crimes or fraud. Accordingly, we hold that
        attorney-client privilege does not preclude testimony from the attorney here, and we reverse
        and remand for a trial at which the State may call the attorney as a witness.

¶3                                         BACKGROUND
¶4          From 2002 through 2008, Mark Helfand represented Budimir Radojcic in connection
        with several real estate transactions. Federal investigators who studied some of the
        transactions believed they saw evidence of crimes. In August 2007, the Illinois Attorney
        General sought to persuade a grand jury to return indictments against Radojcic, Helfand and
        several other persons involved in the real estate transactions.
¶5          Christa Patterson testified before the grand jury that Radojcic hired her to work for Jewel


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     Windows, a corporation he operated. Patterson explained that Radojcic, through several
     corporations including Jewel Windows, purchased apartment buildings in Chicago and
     converted the units into condominiums. He then found straw buyers who would first
     purchase the units at the prices Radojcic set, and then sell the units to other corporations
     Radojcic operated. The straw buyers sent false information to mortgage brokers to obtain
     loans for the straw purchases.
¶6         Patterson described the process to the grand jury with the specific example of Daniella
     Kuljanin, who purchased all three condominium units in a building Radojcic converted to
     condominiums. Kuljanin obtained separate loans from three different lenders for the three
     transactions, with all three loan applications made at the same time, with closings scheduled
     a day or two apart, so that the three lenders would not find out about the multiple purchases.
     To persuade the lenders that Kuljanin could repay the loans, Radojcic put money into
     Kuljanin’s account for a short time while the lenders went through the process for approval
     of the mortgage loans. For some other straw purchasers, Radojcic’s corporations provided
     false verifications of employment to the mortgage lenders. After the banks approved the
     loans for Kuljanin, Kuljanin returned to Radojcic the money he had given her to inflate her
     bank account. Kuljanin received the three loans and gave the cash to Patterson, who kept it
     in a safe in Jewel Windows’ offices. Radojcic used this elaborate process to obtain the loans
     because he needed to keep his name off of all documents related to the transactions.
     Patterson said Radojcic owed the United States Internal Revenue Service unpaid taxes of
     about $2 million.
¶7         Patterson testified that Helfand prepared documents needed to convert the apartments to
     condominiums, and then he prepared the deeds conveying the properties to the straw
     purchasers and from the straw purchasers to corporations Radojcic controlled.
¶8         Biljana Aranyos, who acted as a straw purchaser for eight condominiums, testified that
     her loan applications included false statements about her income and assets. She did not
     write the false statements. Someone working for Radojcic prepared the applications Aranyos
     signed. In May 2006, Patterson gave Aranyos $65,000 to deposit into Aranyos’s account for
     a few days, and then Aranyos gave the money to a corporation Radojcic controlled. Although
     Aranyos went to seven of the eight closings, she knew nothing about the purchases. She did
     not find out the amounts of the mortgages until the closings.
¶9         The grand jury indicted Radojcic, Helfand, Patterson, and some others on a long list of
     charges, including theft, forgery, and financial institution fraud. The prosecutors included
     Helfand on the list of witnesses they intended to call to testify against Radojcic. Both
     Radojcic and Helfand objected on the basis of attorney-client privilege. In response to the
     objection, the prosecutor presented transcripts of the grand jury testimony and argued that
     the testimony of Patterson and Aranyos showed that the attorney-client privilege did not
     apply. The trial court found that the State had not met its burden of presenting a prima facie
     case for finding that Radojcic committed a crime and his communications with Helfand
     furthered the criminal enterprise. On that basis, the court sustained the objections of Helfand
     and Radojcic and struck Helfand’s name from the list of witnesses. The State filed a
     certificate stating that the ruling substantially impaired its ability to prosecute Radojcic, and
     it filed a notice of appeal. Supreme Court Rule 604(a)(1) gives this court jurisdiction to hear

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       this appeal. Ill. S. Ct. R. 604(a)(1) (eff. July 1, 2006).

¶ 10                                        ANALYSIS
¶ 11                                     Standard of Review
¶ 12        The parties disagree about the standard of review applicable to the trial court’s ruling.
       Radojcic contends that we should review the evidentiary ruling for abuse of discretion, while
       the State maintains that we should review the ruling de novo because it involved the
       applicability of a privilege. Although federal courts have used the abuse of discretion
       standard in similar cases (e.g., United States v. BDO Seidman, LLP, 492 F.3d 806, 814 (7th
       Cir. 2007)), Illinois courts have reviewed de novo decisions concerning the admissibility of
       evidence when a party claims attorney-client privilege. People v. McRae, 2011 IL App (2d)
       090798, ¶ 25; Cangelosi v. Capasso, 366 Ill. App. 3d 225, 227 (2006). We will follow
       Illinois authority. Accordingly, we review de novo the legal issue of whether the trial court
       followed proper procedures when it considered the objection to the inclusion of Helfand’s
       name on the list of witnesses. See Woods v. Cole, 181 Ill. 2d 512, 516 (1998).

¶ 13              Procedures for Determining Whether Privilege Bars Testimony
¶ 14       In In re Marriage of Decker, 153 Ill. 2d 298 (1992), our supreme court set out the law
       pertaining to attorney-client privilege. Generally, clients have the right to prevent the
       disclosure in judicial proceedings of the communications between the attorney and the client.
       Decker, 153 Ill. 2d at 312. However, the client loses the privilege if he “seeks or obtains the
       services of an attorney in furtherance of criminal or fraudulent activity.” Decker, 153 Ill. 2d
       at 313. The party seeking disclosure of the communications bears the burden of proving the
       client has lost the privilege. Decker, 153 Ill. 2d at 321. To defeat the privilege, the party
       seeking disclosure must show “that a prudent person ha[s] a reasonable basis to suspect the
       perpetration or attempted perpetration of a crime or fraud, and that the communications were
       in furtherance thereof.” In re Grand Jury Subpoena Duces Tecum Dated Sept. 15, 1983, 731
       F.2d 1032, 1039 (2d Cir. 1984), quoted in Decker, 153 Ill. 2d at 322. Often, only the
       communication itself can show that the privilege does not apply. Decker, 153 Ill. 2d at 322.
       In some such cases, when other evidence fails to show that the client has lost the privilege,
       the trial court may hear evidence in camera to determine whether the privilege applies.
       Before hearing evidence in camera, the judge should require the party seeking disclosure to
       show facts that would support a reasonable belief “that in camera review of the materials
       may reveal evidence to establish the claim that the crime-fraud exception applies.” United
       States v. Zolin, 491 U.S. 554, 572 (1989), quoted in Decker, 153 Ill. 2d at 324.
¶ 15       We recognize that the appellate court, in Mueller Industries, Inc. v. Berkman, 399 Ill.
       App. 3d 456, 470 (2010), apparently interpreted Decker to require a showing of probable
       cause to believe that the client committed a crime and his communications with his attorney
       furthered that crime before the court could hear evidence in camera about the
       communications between the attorney and the client. We find that the procedure delineated
       in Mueller does not comport with the language of Decker, especially where the court in
       Decker adopts the standard set in Zolin. Therefore, we follow Decker, and not Mueller, on

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       this procedural issue. As long as the party seeking to defeat the privilege has shown facts that
       support a reasonable belief that disclosure of the communications may prove the privilege
       does not apply, the court has discretion to hear evidence of those communications in camera.
       Decker, 153 Ill. 2d at 324.
¶ 16       Here, the trial judge found that the evidence apart from the communications with the
       attorney did not show that a prudent person would have a reasonable basis to suspect that
       those communications furthered the attempt to perpetrate crimes or fraud. The court simply
       omitted the next step, in which it should have determined whether the prosecution presented
       sufficient evidence to support a reasonable belief that the communications themselves could
       show that Radojcic lost the privilege by using the communications with Helfand to further
       his attempts to perpetrate crimes or fraud. We hold that the trial court erred when it struck
       Helfand’s name from the list of witnesses, and excluded from evidence all communications
       between Radojcic and Helfand, without considering whether the evidence supported a
       reasonable belief that those communications might reveal that Radojcic lost the privilege.

¶ 17            Sufficiency of the Evidence to Show the Privilege Does Not Apply
¶ 18       Radojcic asks us to remand for the trial court to determine whether the court should hear
       testimony in camera and then decide whether that testimony suffices to meet the State’s
       burden of showing that Radojcic lost the privilege. The State contends that the testimony of
       Patterson and Aranyos shows that a prudent person would have reason to suspect both that
       Radojcic attempted to commit crimes or fraud and that his communications with Helfand
       furthered that project. Thus, according to the State, we should reinstate Helfand as a witness
       and remand for trial.
¶ 19       To prove Radojcic guilty of loan fraud, the prosecutors need prove only that Radojcic
       knowingly participated in making false statements in loan applications with intent to defraud
       the financial institution. See People v. Aguilar, 366 Ill. App. 3d 341, 343-44 (2006); 720
       ILCS 5/5-2(c), 16H-25, 16H-30 (West 2006). Both Patterson and Aranyos testified to
       Radojcic’s extensive role in the use of false statements on loan applications so straw
       purchasers, including Aranyos, could obtain loans from various financial institutions. Both
       witnesses said Radojcic retained the loan proceeds. Radojcic and Helfand do not contest the
       sufficiency of the evidence to show reason to suspect Radojcic committed crimes and fraud.
¶ 20       Instead, Radojcic and Helfand argue that the State has not shown any reason to suspect
       that the communications between Radojcic and Helfand furthered the attempts to commit
       crimes or fraud. First, Radojcic points out that, according to Patterson, Patterson gave
       Helfand many of the instructions that he carried out. Patterson also testified that Radojcic
       told her what to tell Helfand, what to do to obtain loans, and what to do with the money once
       the lender gave it to the straw purchaser. Radojcic contends that the fact that Patterson spoke
       directly to Helfand shows that his own communications with Helfand did not further the
       crimes or fraud. We adopt the State’s persuasive response to this argument.
¶ 21       Either Radojcic communicated with Helfand through Patterson or Patterson acted on her
       own when she told Helfand what to do. If Patterson spoke to Helfand on her own behalf, only
       she has the attorney-client privilege, and Radojcic cannot assert her privilege as grounds to

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       bar Helfand as a witness. See People v. Adam, 51 Ill. 2d 46, 48 (1972). Patterson waived her
       privilege by testifying to the grand jury about her discussions with Helfand. See People v.
       Simms, 192 Ill. 2d 348, 382 (2000). Thus, insofar as Patterson acted on her own, and not as
       a conduit for Radojcic’s instructions, the trial court should permit the State to call Helfand
       as a witness to testify about his discussions with Patterson.
¶ 22        If Patterson merely acted as a conduit for Radojcic’s instructions to Helfand, she either
       acted as Radojcic’s agent or she acted as a third party, not an agent for Radojcic. If Patterson
       did not act as Radojcic’s agent when she conveyed Radojcic’s instructions to Helfand, then
       the privilege does not apply to the communications. “A defendant’s voluntary disclosure of
       information, or other matters subject to being testified to, in the presence of *** any other
       third person who is not the agent of the defendant or his attorney is not privileged.” Simms,
       192 Ill. 2d at 382. Again, if Patterson did not act as Radojcic’s agent, the trial court should
       permit the State to call Helfand as a witness to testify about the nonprivileged
       communications he received through Patterson, insofar as those communications have any
       bearing on the charges against any of the defendants.
¶ 23        If Patterson acted as Radojcic’s agent, then the communications with Helfand count, for
       purposes of the attorney-client privilege, exactly as though Radojcic spoke the words
       himself. See Lama v. Preskill, 353 Ill. App. 3d 300, 306 (2004). Thus, the court must look
       to those communications to determine whether Radojcic has lost the attorney-client privilege
       by using his communications with Helfand to further the crimes or fraud.
¶ 24        Patterson testified that, at Radojcic’s behest, Helfand prepared the legal documents for
       converting the apartment buildings to condominiums, for the sales to straw purchasers, and
       for the resales from the straw purchasers to the corporations Radojcic controlled. Without
       the condominium conversions, the straw purchasers could not have purchased the units, and
       therefore they could not have obtained the mortgage loans. Without the sales documents and
       the closings of the sales, the banks would not have loaned the straw purchasers the money.
       Thus, Helfand’s work helped complete the crime of obtaining the loans from the financial
       institutions by means of falsified loan applications. The communications with Helfand, and
       Helfand’s work in accord with the instructions, helped with the commission of the crimes
       even if Helfand did not know about the falsified loan applications and even if Helfand did
       not himself commit any crime or fraud. See Radiac Abrasives, Inc. v. Diamond
       Technologies, Inc., 177 Ill. App. 3d 628, 635 (1988). We find that Patterson’s testimony
       provides a reasonable person with a reasonable basis to suspect that the communications with
       Helfand delineating instructions for the preparation of documents needed to receive the loans
       furthered the crimes and fraud. Therefore, applying the test set out in Decker, we find that
       the State has presented sufficient evidence to show that the attorney-client privilege does not
       prevent Helfand from testifying about his communications with Radojcic and the acts he took
       in following Radojcic’s instructions. Accordingly, we reverse the trial court’s decision and
       remand for a trial at which the prosecution may call Helfand as a witness.

¶ 25                                   CONCLUSION
¶ 26      Before striking Helfand from the witness list, the trial court should have addressed the


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       issue of whether the State presented sufficient evidence to support a reasonable belief that
       the communications between Radojcic and Helfand might show that Radojcic used the
       communications to advance his attempts to perpetrate crimes or engage in fraudulent activity.
       On de novo review of the court’s decision, we find that the evidence shows that Radojcic
       used his instructions to Helfand to further his attempts to commit crimes or engage in
       fraudulent activity. Therefore, the trial court erred when it struck Helfand’s name from the
       list of witnesses. Accordingly, we reverse the trial court’s decision and remand for trial.

¶ 27      Reversed and remanded.




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