Waiver of Rule 29(b) Arguments Raised at Oral Argument and Reinstatement of Jury Verdict Under the “Wholly Irrational” Sufficiency Standard

Introduction

United States v. John Sand (7th Cir. Mar. 18, 2025) arises from the sale of “limited indemnity” health plans—products that can supplement but do not replace major medical insurance—through a telemarketing operation, Simple Health. A jury convicted John A. Sand (Simple Health’s Vice President of Sales) of conspiracy to commit wire and mail fraud (18 U.S.C. § 1349), wire fraud (18 U.S.C. § 1343), and mail fraud (18 U.S.C. § 1341). After trial, the district court granted Sand’s Rule 29 motion for judgment of acquittal, finding insufficient evidence that Sand knowingly joined and participated in the fraud.

The government appealed. The Seventh Circuit reversed, reinstating the jury’s verdict and remanding for sentencing. The decision is designated nonprecedential, but it is instructive on (1) how the Seventh Circuit applies its highly deferential sufficiency review when a district court overturns a jury’s verdict, and (2) waiver of arguments first raised at oral argument, including attempted reliance on Rule 29(b)’s timing/evidentiary limitations.

Summary of the Opinion

The Seventh Circuit held that the district court erred in setting aside the jury’s guilty verdict. Viewing the evidence in the light most favorable to the government and deferring to the jury’s credibility determinations, the court concluded a rational jury could find beyond a reasonable doubt that Sand had the requisite knowledge and intent.

The court also rejected Sand’s attempt—raised for the first time at oral argument—to confine appellate review to the government’s case-in-chief based on Rule 29(b). That contention was deemed waived, and in any event the court concluded the government’s case alone was sufficient.

Analysis

Precedents Cited

1) Review of Rule 29 acquittals and sufficiency: extreme deference to the jury

  • United States v. Torres-Chavez, 744 F.3d 988, 993 (7th Cir. 2014): Provided the core framework—de novo review of the Rule 29 ruling, but sufficiency assessed by viewing evidence in the light most favorable to the government and deferring to the jury on credibility. The court also quoted Torres-Chavez’s stringent formulation: reversal is proper only when the record contains no evidence from which a jury could find guilt beyond a reasonable doubt.
  • United States v. Johnson, 874 F.3d 990, 998 (7th Cir. 2017): Reinforced that overturning a jury verdict for insufficiency is a “nearly insurmountable hurdle,” situating the district court’s acquittal as an exceptional step requiring truly thin proof.
  • United States v. Tinsley, 62 F.4th 376, 386 (7th Cir. 2023) (quoting United States v. Faulkner, 885 F.3d 488, 492 (7th Cir. 2018)): Supplied the “wholly irrational” gloss—Sand could prevail only if the jury’s view of the evidence was wholly irrational. This framed the appellate task as determining whether any rational inference chain supported knowledge/intent.
  • United States v. Blassingame, 197 F.3d 271, 284 (7th Cir. 1999): Appeared via quotation in Torres-Chavez; it underscores that the appellate court does not reweigh evidence but asks whether the evidentiary record includes a legally sufficient basis for guilt.

2) Elements of conspiracy and fraud

  • United States v. Pacilio, 85 F.4th 450, 462 (7th Cir. 2023): Used for the proposition that conspiracy requires proof the defendant knowingly joined an agreement to commit fraud. This mattered because the district court’s acquittal rested on a purported lack of proof that Sand knowingly became part of the illicit agreement.
  • United States v. Weimert, 819 F.3d 351, 355 (7th Cir. 2016): Anchored the wire/mail fraud elements—knowing participation in a scheme to defraud and intent to defraud—and supported the opinion’s key point that fraud can be proven through material omissions used to induce transactions, not merely overt falsehoods.

3) Waiver of arguments first raised at oral argument

  • Quality Oil, Inc. v. Kelley Partners, Inc., 657 F.3d 609, 614-15 (7th Cir. 2011): Controlled the court’s threshold ruling that Sand waived his Rule 29(b) limitation argument by presenting it for the first time at oral argument. This prevented Sand from reshaping the evidentiary universe late in the appeal.

Legal Reasoning

1) The appellate lens: not “what the district judge believed,” but what a rational juror could find

The Seventh Circuit’s reasoning is driven by the institutional division of labor in criminal cases: the jury decides what to believe, and Rule 29 relief is reserved for cases where guilt cannot be found by any rational juror on the evidence admitted. The panel applied that framework to conclude the district court’s rationale conflicted with record evidence and with the inference-friendly sufficiency standard.

2) Evidence supporting knowledge and intent

The court emphasized multiple evidentiary channels allowing a rational jury to infer Sand’s knowledge and fraudulent intent:

  • Non-approved and “two-script” practices: Testimony placed Sand in management meetings where HII’s preferred script was derided, described Sand switching scripts during audits, and tied him to a system where agents used one script unless HII was present—supporting an inference of consciousness of impropriety.
  • Participation in script creation and review: Sand was “typically consulted on script changes,” emails referenced his review, and annotated scripts were found in his desk—supporting an inference that misrepresentations and omissions were not accidental or merely downstream employee conduct.
  • Material omission about out-of-pocket caps: Expert testimony explained why out-of-pocket caps are a central consumer-protection feature of major medical plans; the scripts omitted that limited indemnity plans lacked that cap. Under Weimert, omission of critical information designed to induce purchases can constitute a scheme to defraud.
  • Persistence of the “70%” claims after prohibition: Evidence showed HII prohibited even “up to 70%” language; Sand was copied on communications; leadership notes reflected ongoing consumer complaints; and testimony indicated Sand at times tolerated continued use due to sales pressure—supporting intent and knowing participation rather than mere negligence.
  • Knowledge of off-script lying and failure to discipline (plus rewards): Reports and emails to Sand described deceptive practices; compliance personnel told him lies occurred multiple times weekly; yet he did not discipline and sometimes promoted/rehired offenders—supporting an inference of agreement and participation.

3) Disposition of the Rule 29(b) limitation argument

Sand attempted to narrow the record considered on appeal by invoking Rule 29(b) (where a judge reserves decision on a motion made at the close of the government’s case). The court held the argument waived under Quality Oil, Inc. v. Kelley Partners, Inc. because it was first raised at oral argument. Importantly, the court also held that even considering only the government’s case-in-chief, the evidence sufficed—making the waiver ruling independently non-dispositive but doctrinally clarifying.

4) Correction of the district court’s factual premise

The district court stated that “HII approved the scripts that Sand told the employees to use” and found no evidence Sand agreed to allow off-script misrepresentations. The Seventh Circuit effectively treated these propositions as inconsistent with evidence that (a) Simple Health used non-approved scripts and toggled scripts for audits, and (b) Sand repeatedly received notice of misleading practices yet tolerated or incentivized them. Under the sufficiency standard, these were classic jury questions, not grounds for acquittal.

Impact

  • Managerial liability in fraud schemes: The opinion illustrates how knowledge and intent may be inferred for supervisors who shape sales scripts, monitor calls, receive compliance warnings, and fail to discipline deceptive conduct—especially where the business model depends on customer misunderstanding.
  • Fraud by omission in consumer financial/insurance products: By leaning on United States v. Weimert, the decision underscores that a scheme to defraud can rest on withholding a product limitation that is central to consumer decision-making, not only on explicit lies.
  • Appellate discipline on Rule 29 acquittals: The court’s reinstatement of the jury verdict reinforces that post-verdict acquittals are vulnerable on appeal where the record supports reasonable inferences of guilt.
  • Appellate practice—issue preservation: The waiver ruling signals that defendants cannot rely on last-minute reframing at oral argument to restrict the record or alter the standard of review.

Because the disposition is nonprecedential, its direct binding effect is limited; nonetheless, it reflects the Seventh Circuit’s continued adherence to the “wholly irrational” sufficiency lens and its willingness to reinstate jury verdicts where district courts appear to have reweighed evidence.

Complex Concepts Simplified

  • Limited indemnity plan: A plan that pays set amounts for certain services; it may not cap what the customer must pay out-of-pocket and may exclude key benefits. It is not the same as “major medical” insurance.
  • Out-of-pocket cap: A maximum limit on what an insured person must pay in a year for covered services. Once reached, the insurer pays the rest for covered care. Its absence can expose consumers to very large bills.
  • Scheme to defraud (wire/mail fraud): A plan to obtain money or property by materially deceptive means. Deception can include half-truths and material omissions—leaving out facts a reasonable buyer would consider important.
  • Material omission: Withholding a fact that would matter to a reasonable person deciding whether to buy—here, the lack of an out-of-pocket cap and the true limits of promised “discounts.”
  • Rule 29 motion for judgment of acquittal: A request for the judge to overturn a conviction because the evidence was legally insufficient. On appeal, courts do not ask whether the judges agree with the jury, but whether any rational jury could have convicted on the record.
  • “Wholly irrational” standard: A shorthand for extreme deference to the jury’s inferences; reversal for insufficiency is reserved for cases where a guilty verdict has no rational evidentiary support.
  • Waiver on appeal: If a party fails to timely raise an argument in briefing and presents it for the first time at oral argument, the appellate court may refuse to consider it.

Conclusion

United States v. John Sand reinstates a jury’s fraud and conspiracy convictions by applying the Seventh Circuit’s stringent sufficiency-of-the-evidence framework: appellate courts view the evidence in the government’s favor and overturn jury verdicts only when guilt would be “wholly irrational.” The opinion is especially significant for how it treats supervisory involvement—script design, audit-driven script switching, awareness of compliance warnings, tolerance of deceptive talk tracks, and failure to discipline—as evidence from which a jury may infer knowing participation and intent to defraud. It also reinforces an appellate practice point: arguments (including Rule 29(b) record-limitation theories) raised for the first time at oral argument are waived.