The Seventh Circuit Court of Appeals issued a mixed ruling in a corruption case involving two Housing Authority of South Bend officials who exploited their positions to run a kickback scheme targeting federal housing funds. In *United States v. Tonya Robinson* (7th Cir. 2025), the court affirmed wire fraud convictions against Tonya Robinson and Albert Smith while reversing their bank fraud convictions.
Robinson and Smith held leadership roles at the Housing Authority of South Bend, an institution responsible for providing affordable housing to the local community. The Housing Authority served as landlord for more than 800 homes rented to South Bend residents and received funding from the U.S. Department of Housing and Urban Development to support its operations.
According to the court's opinion written by Circuit Judge Scudder, instead of fulfilling their duty to help tenants, Robinson and Smith "used their positions to enrich themselves through a kickback scheme." The defendants hired contractors to perform what the court described as "fictional maintenance work" on Housing Authority properties, then took cuts of the payments made for these non-existent projects.
The Housing Authority's standard practice was to use its own employees for small maintenance tasks while contracting with outside vendors for larger projects such as property renovations between tenants. The authority often used HUD money to fund these larger projects, filing draw requests rather than receiving funds in lump sums.
The defendants exploited this system by creating fraudulent contracts and maintenance orders. They would arrange for contractors to submit invoices for work that was never performed, then take portions of the payments as kickbacks. This scheme diverted federal housing funds intended to maintain affordable housing for low-income residents.
A federal jury convicted both Robinson and Smith on multiple federal charges, including wire fraud and bank fraud. The convictions followed an investigation that revealed the scope of their fraudulent activities and the impact on the Housing Authority's mission to serve the community.
On appeal, the defendants challenged their convictions on various grounds. The Seventh Circuit panel, consisting of Circuit Judges Easterbrook, Rovner, and Scudder, reviewed the case after oral arguments held on Oct. 27, 2025.
The court affirmed the wire fraud convictions under 18 U.S.C. § 1343, finding sufficient evidence that the defendants used interstate wire communications to further their fraudulent scheme. Wire fraud requires proof that defendants devised a scheme to defraud and used wire communications in furtherance of that scheme.
However, the court reversed the bank fraud convictions, finding a critical flaw in the government's case. Under 18 U.S.C. § 1344(2), bank fraud requires proof that defendants made false statements to a financial institution. 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 distinction highlights the different elements required for wire fraud versus bank fraud prosecutions. While wire fraud focuses on the use of interstate communications to further a fraudulent scheme, bank fraud specifically requires false statements directed at financial institutions.
The case was initially decided on Dec. 15, 2025, but was amended following a petition for rehearing on Jan. 28, 2026. This suggests the defendants or government sought clarification or reconsideration of certain aspects of the ruling.
The mixed outcome reflects the court's careful analysis of each charge's specific legal requirements. While affirming that the defendants engaged in wire fraud through their kickback scheme, the court found insufficient evidence to sustain the bank fraud charges under the applicable statute.
The case originated in the U.S. District Court for the Northern District of Indiana, South Bend Division, where Judge Jon E. DeGuilio presided over the trial that resulted in the defendants' convictions.
This prosecution represents part of ongoing federal efforts to combat corruption in public housing programs. Housing authorities across the country manage billions in federal funds, and cases like this demonstrate the Justice Department's commitment to protecting these resources from fraud and abuse.
The ruling provides important guidance on the distinct elements required for wire fraud and bank fraud prosecutions in public corruption cases. While the wire fraud convictions stand, the reversal of bank fraud charges may influence how prosecutors structure similar cases involving housing authority corruption.
For the South Bend community, the case underscores the importance of accountability in public housing administration. The Housing Authority serves hundreds of low-income families, and the defendants' scheme directly undermined the institution's mission to provide safe, affordable housing.
The case demonstrates how federal oversight and prosecution can address corruption that diverts resources from vulnerable populations. While Robinson and Smith's wire fraud convictions remain intact, the legal distinctions highlighted in this appeal may shape future prosecutions of similar schemes.