The Seventh Circuit Court of Appeals issued a mixed ruling in *United States v. Robinson*, affirming wire fraud convictions while reversing bank fraud convictions for two Housing Authority of South Bend officials who exploited their positions to enrich themselves through a kickback scheme.
Tonya Robinson and Albert Smith held leadership roles at the Housing Authority of South Bend, an institution dedicated to providing affordable housing in the local community. Instead of serving their mission to help tenants, the pair orchestrated a scheme to defraud the organization and federal housing programs.
According to the court's opinion issued Dec. 15, 2025, and amended Jan. 28, 2026, Robinson and Smith hired contractors to perform fictional maintenance work on Housing Authority properties and then took a cut of the payments for those projects. The scheme targeted funds from the U.S. Department of Housing and Urban Development, which provides financial support to local housing authorities that offer affordable housing in communities.
The Housing Authority of South Bend served as a landlord for over 800 homes rented to residents in the Indiana community. While the organization used its own employees to handle small maintenance projects, it relied on outside contractors for larger renovations, particularly when preparing properties between tenants. These larger projects were often funded with HUD money, which the Housing Authority accessed through a draw system rather than receiving funds in one lump sum.
A federal jury convicted both defendants of wire fraud and bank fraud, among other federal crimes, following a trial in the U.S. District Court for the Northern District of Indiana. The case was heard before Judge Jon E. DeGuilio in the South Bend Division.
On appeal, a three-judge panel consisting of Circuit Judges Frank Easterbrook, Ilana Rovner, and David Scudder reviewed the convictions. Circuit Judge Scudder authored the court's opinion addressing the defendants' challenges to their convictions.
The appellate court affirmed the wire fraud convictions, finding sufficient evidence to support the jury's determination that Robinson and Smith used wire communications in furtherance of their fraudulent scheme. Wire fraud under federal law requires proof that defendants devised a scheme to defraud and used interstate wire communications to execute that scheme.
However, the Seventh Circuit reversed the bank fraud convictions on technical grounds. The court held that the government failed to identify a false statement that went to a bank, as required by 18 U.S.C. § 1344(2). This federal statute criminalizes making false statements to financial institutions, but prosecutors must demonstrate that defendants made specific false representations directly to banks.
The bank fraud reversal represents a narrow technical victory for the defendants on statutory interpretation grounds, rather than a finding that no fraudulent conduct occurred. The wire fraud convictions remain intact, ensuring that Robinson and Smith face significant federal criminal penalties for their scheme.
The case highlights ongoing challenges in prosecuting public corruption cases involving housing authorities and federal funding programs. Housing authorities across the country manage billions in federal dollars intended to provide affordable housing for low-income residents. When officials exploit their positions for personal gain, they not only violate federal criminal laws but also undermine programs designed to serve vulnerable populations.
The scheme alleged in this case involved creating fictional maintenance contracts, a method that allowed the defendants to generate fraudulent invoices and payments while appearing to conduct legitimate business operations. By taking kickbacks from these fake projects, Robinson and Smith diverted money that should have been used to maintain and improve affordable housing stock in South Bend.
The mixed appellate ruling demonstrates the complexity of federal fraud prosecutions, where different criminal statutes have distinct elements that prosecutors must prove beyond a reasonable doubt. While the wire fraud statute focuses on the use of interstate communications in fraudulent schemes, bank fraud requires specific false statements made to financial institutions.
The case was argued before the Seventh Circuit on Oct. 27, 2025, with the initial decision issued Dec. 15, 2025. The court issued an amended opinion on Jan. 28, 2026, following a petition for rehearing, though the court did not indicate what changes were made in the amendment.
This prosecution reflects the federal government's continued focus on combating corruption in housing programs and protecting federal funds designated for affordable housing initiatives. The Department of Justice regularly pursues cases involving misuse of HUD funds and other federal housing programs.
The wire fraud convictions ensure that Robinson and Smith will face federal sentencing for their roles in the kickback scheme, though the reversed bank fraud convictions may reduce their potential prison time. Federal wire fraud carries penalties of up to 20 years in prison and substantial fines.
The case serves as a reminder that federal prosecutors closely monitor the use of HUD funds and other federal housing program money, and that officials who exploit their positions of trust face serious criminal consequences under federal fraud statutes.