Supreme Court Summaries

Opinions filed December 1, 2011

People v. Gutman, 2011 IL 110338

Appellate citation: 401 Ill. App. 3d 199.

JUSTICE THOMAS delivered the judgment of the court, with opinion.

Chief Justice Kilbride and Justices Freeman, Garman, Karmeier, Burke, and Theis concurred in the judgment and opinion.

Cook County defendant Irit Gutman was co-owner of Egra Medical Transportation, a company she formed in 1995 with Iyla Lubenskiy. It was located at an address on Lincoln Avenue in Lincolnwood, just outside Chicago. After overbilling the Illinois Medical Assistance Program for transporting low-income patients to their medical appointments, these two signed an agreement with the federal government on December 1, 1999, to be permanently barred from participating in the Medicare Program, all other federal health-care programs, and the Illinois Medical Assistance Program. They then formed a new company, Universal Transportation Company (UPT).

UPT began doing business on January 16, 2001. A new third person was brought in who appeared to be the sole owner, Mike Tishel. He was an authorized signatory on the UPT account, into which State of Illinois checks were deposited. He then transferred funds to defendant Gutman's personal account. The business continued as before at the same location, with the same employees. Defendant and Lubenskiy ran the company, with defendant dealing with the public aid office and Lubenskiy doing the bookkeeping. Overbilling continued.

On January 20, 2004, charges of vendor fraud, theft, and money laundering were filed against Gutman, Lubenskiy, Tishel and UPT. Lubenskiy pled guilty and agreed to testify. Gutman was tried separately in a Cook County bench trial and was convicted on the charges, sentenced to 66 months in prison, and ordered to pay restitution of $1.2 million. The only conviction which the appellate court reversed was that for money laundering, which is at issue here. The appellate court was of the view that "proceeds," as used in the Illinois money laundering statute, referred to "profits," and the State had failed to prove that the defendant had made a profit.

In this decision, the Illinois Supreme Court reversed the appellate court and upheld the money laundering conviction. Although the statute is ambiguous, the court declined to construe the term "proceeds" as "profits," noting the difficulty of proving profit in the case of criminal enterprises, which seldom operate by standard accounting rules. The court said that construing the term only to mean profit cannot be what the legislature intended.