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United States v. Austin

54 F.3d 394 (1995)

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United States v. Austin

United States Court of Appeals for the Seventh Circuit

54 F.3d 394 (1995)

Facts

Donald Austin (defendant) ran several art galleries in which he sold what purported to be original prints by famous modern artists. In reality, almost everything Austin sold was a forgery. Following complaints, the Federal Trade Commission (FTC) brought a civil action against Austin. Austin entered a settlement agreement with the FTC under whose terms Austin was prohibited from making further misrepresentations in the sale of artworks. Austin also agreed to pay $625,000 into a consumer-redress fund, which would increase to $1.5 million if he defaulted. However, the total loss that Austin caused to customers was estimated at more than $3.8 million. After entering the agreement, Austin neither stopped selling forgeries nor paid the full $625,000 on time. The United States (plaintiff) then initiated criminal proceedings against Austin for violation of the mail- and wire-fraud statutes. The jury found Austin guilty on all counts. Austin was sentenced and ordered to pay the remaining part of the $625,000 to the FTC compensation fund. Austin appealed, arguing that the initial FTC suit had already placed him in jeopardy for any fraud allegations made against him, and that the earlier increase from $625,000 to $1.5 million had been punitive. Austin also contended that the trial court erred in admitting evidence pertaining to the FTC settlement. The United States Court of Appeals for the Seventh Circuit granted certiorari.

Rule of Law

Issue

Holding and Reasoning (Flaum, J.)

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