## Facts

- Robert R. Krilich, a real estate developer, pursued municipal approvals and tax-exempt Industrial Revenue Bond financing for large development projects.
- The government alleged Krilich bribed local officials and misused bond-related transactions, combining public-corruption conduct with financial fraud.
- In one episode, a golf tournament offered a hole-in-one prize (a 1931 Cadillac or $40,000) insured by a hole-in-one association.
- The “winner” was the son of the mayor of Oakbrook Terrace, Illinois, whose support Krilich needed for a bond offering tied to a planned apartment complex.
- The government’s proof (and Krilich’s later admissions) described an agreement to use the contest as a payoff: Krilich staged a fake hole-in-one by producing a ball from the cup and presenting it as the winning shot.
- Because the prize was reimbursed by insurance, the scheme both delivered a bribe and shifted the cost to the insurer.
- Krilich entered a written proffer agreement with federal prosecutors and made incriminating statements describing the bribery and related conduct.
- The proffer agreement contained a conditional waiver allowing the government to use proffer statements if Krilich later presented a position inconsistent with the proffer through his testimony or evidence elicited through others.
- At trial, defense counsel used cross-examination to suggest Krilich was not present at the hole when the shot occurred and to elicit testimony implying no bribes were connected to company projects.
- The government argued these trial positions were inconsistent with the proffer and introduced portions of the proffer statements to rebut the defense.

## Issues

1. Whether the proffer agreement’s conditional waiver permitted the government to use Krilich’s proffer statements when the asserted “inconsistent position” was developed through cross-examination of government witnesses.
2. Whether the evidence and legal theory supported Krilich’s convictions for making false statements to a federally insured bank under 18 U.S.C. § 1014.
3. Whether the district court’s Sentencing Guidelines calculations were erroneous and unduly favorable to Krilich.

## Decision

- The Seventh Circuit affirmed Krilich’s convictions for RICO conspiracy (18 U.S.C. § 1962(d)) and for making false statements to a federally insured bank (18 U.S.C. § 1014).
- The court held the proffer agreement was enforceable and that the waiver condition was satisfied by positions advanced through cross-examination.
- The court rejected Krilich’s challenges to the § 1014 counts, concluding the convictions were supported under applicable law despite acknowledging disagreement among circuits about the statute’s scope.
- The court vacated the sentence and remanded for resentencing because the district court’s Guidelines application was too favorable to Krilich.
- Certiorari was denied.

## Legal Principles

- A defendant may knowingly and voluntarily enter a proffer agreement that conditionally waives protections that otherwise limit the use of plea-discussion statements, permitting use of the proffer if the defendant later advances an inconsistent trial position.
- Where a proffer agreement permits use of statements if the defendant presents an inconsistent position through “evidence presented through others,” that condition may be triggered by evidence or inferences elicited through cross-examination, not only by defense witnesses on direct examination.
- When the defense advances a theory inconsistent with the defendant’s proffer admissions, the government may introduce proffer statements within the agreement’s terms to rebut that theory.
- Convictions under 18 U.S.C. § 1014 may be sustained where the evidence shows material false statements made to influence a federally insured financial institution, as construed by controlling circuit precedent.
- An appellate court may vacate and remand for resentencing when the district court misapplies the Sentencing Guidelines in a manner that improperly reduces the sentencing range.

## Conclusion

The Seventh Circuit upheld Krilich’s RICO-conspiracy and § 1014 false-statement convictions, holding that his proffer agreement’s conditional waiver allowed admission of incriminating proffer statements once the defense advanced inconsistent positions through cross-examination, but it vacated the sentence and remanded for recalculation under the Sentencing Guidelines.


United States v. Krilich, 159 F.3d 1020 (7th Cir. 1998), cert. denied, 528 U.S. 810 (1999)