Justia White Collar Crime Opinion Summaries

Charles Cui was charged with bribery and related offenses after he attempted to secure the assistance of Edward Burke, a powerful Chicago alderman, in reversing a permit denial by the Chicago Department of Buildings (CDOB) regarding a pole sign at his commercial property. Cui’s financial interests were jeopardized by the permit denial, which threatened both a lucrative lease with Binny’s Beverage Depot and tax increment financing from the City. To influence Burke, Cui offered to retain Burke’s law firm for property tax appeal work, explicitly seeking Burke’s intervention in the CDOB matter.The United States District Court for the Northern District of Illinois, Eastern Division, presided over a six-week trial in which a jury convicted Cui on all counts: bribery under 18 U.S.C. § 666(a)(2), violations of the Travel Act, and making false statements to the government. The district court admitted evidence over Cui’s objections, including a photoshopped photograph sent to the CDOB, and denied Cui’s post-trial motions for acquittal and a new trial. The court sentenced Cui to 32 months’ imprisonment and applied an obstruction-of-justice enhancement for failing to produce key emails in response to a grand jury subpoena.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed Cui’s challenges to the sufficiency of evidence, jury instructions, evidentiary rulings under Federal Rule of Evidence 404(b), and sentencing. The court held that sufficient evidence supported the convictions, that the jury instructions correctly conveyed the law’s requirements—including the quid pro quo element and the definition of “corruptly”—and that the admission of the photoshopped photograph was not an abuse of discretion. The court also found that the sentencing enhancement and the disparity between Cui’s and Burke’s sentences were justified. The Seventh Circuit affirmed the judgment of the district court. View "USA v Cui" on Justia Law

A former elected county prosecutor in Kentucky’s 21st Judicial Circuit was charged with Honest Services Wire Fraud, violations of the Travel Act, and Federal Program Bribery. The charges stemmed from an arrangement with a young woman, M.H., who repeatedly faced legal troubles. Evidence showed that the prosecutor agreed to help her with matters such as getting warrants withdrawn, charges reduced, and release from jail, in exchange for sexual acts and explicit images. The FBI discovered the scheme, leading to federal prosecution. At trial, the government presented incriminating text messages, testimony from M.H., and law enforcement, while the defendant claimed he did not solicit images and that M.H. was assisting in investigations—a claim disproved by evidence.The United States District Court for the Eastern District of Kentucky oversaw the jury trial, which resulted in convictions on all counts. The court sentenced the defendant to 41 months in prison and imposed supervised release conditions, including refraining from excessive alcohol use. On appeal to the United States Court of Appeals for the Sixth Circuit, the defendant challenged the exclusion of certain testimony about Kentucky law, sufficiency of the evidence on several elements, the federal funding nexus for the bribery charge, the supervised release condition, and the sentencing court’s refusal to consider “collateral consequences.”The Sixth Circuit held that the district court did not abuse its discretion or violate constitutional rights in excluding expert legal opinion testimony and that the jury was properly instructed on the meaning of “official acts.” The court found overwhelming evidence supporting the verdict, including proof of a quid pro quo and an interstate nexus. The federal funding requirement was satisfied by evidence that the state received sufficient funds. The supervised release condition and sentencing decisions were not plainly erroneous. The Sixth Circuit affirmed the district court’s judgment in all respects. View "United States v. Goldy" on Justia Law

Christopher Texidor was charged alongside several codefendants for participating in a large-scale drug trafficking organization that conspired to ship nearly 3,000 kilograms of marijuana from California to Pennsylvania using the United States Postal Service. Texidor used his business, Fastlane Auto Sales, LLC, and his residence to facilitate these activities. He recruited various individuals, including family members, to receive shipments and organized GPS tracking for parcels after noticing thefts. When the group determined a postal employee was responsible for stealing their parcels, Texidor and others organized violent acts to intimidate him, including drive-by shootings and theft of the employee’s vehicle containing drugs and a firearm. During searches, law enforcement discovered drugs, tracking devices, firearms, and cash at Texidor’s properties. Texidor was also separately indicted for wire fraud involving false Paycheck Protection Program loan applications, which he committed while on pretrial release.Following a six-day trial in the U.S. District Court for the Middle District of Pennsylvania, a jury convicted Texidor on most drug and firearm counts, but acquitted him of the cocaine charge and a related firearm count. Texidor later pleaded guilty to one count of wire fraud, with other fraud charges dismissed. The District Court considered both cases at sentencing, calculated a Guidelines range of 292–365 months, and imposed concurrent sentences: 292 months for the drug/firearm offenses and 240 months for wire fraud. The District Court struck one reference to cocaine from the Presentence Investigation Report but overruled objections to other references and applied a four-level leadership enhancement.The U.S. Court of Appeals for the Third Circuit affirmed the District Court’s rulings. It held that recent changes to the Sentencing Guidelines do not prevent consideration of acquitted conduct when determining an appropriate sentence outside of Guidelines calculations. The Court found no clear error in applying the leadership enhancement and concluded that the aggregate sentence was substantively reasonable. Further, under the concurrent sentence doctrine, the Court declined to review the substantive reasonableness of the wire fraud sentence. View "USA v. Texidor" on Justia Law

A group of individuals, including the appellant, participated in a scheme involving the use of stolen credit cards and fraudulent memberships at a warehouse store to purchase large quantities of cigarettes. The appellant served as the primary account holder for two business membership accounts and was a secondary member on two others. The scheme resulted in over $2 million in cigarette purchases. Following an 85-count indictment, the appellant was charged with conspiracy to commit credit card fraud, several counts of credit card fraud, and aggravated identity theft. After his codefendants pleaded guilty, the appellant proceeded to trial. During the trial, the government presented testimony from victims whose credit cards were used without authorization. The district court granted the appellant’s motion for acquittal on certain counts due to insufficient evidence, and the jury acquitted him on others, but found him guilty of the remaining charges.The United States District Court for the Northern District of Georgia sentenced the appellant, holding him accountable for the total loss amount charged by all members of the conspiracy using the shared credit cards. This figure was calculated in the presentence report and included losses attributable to the codefendants, except for those counts where the appellant was acquitted. The appellant objected, arguing that he should only be held responsible for transactions he personally conducted, but the district court overruled his objection and imposed restitution matching the total loss amount.On appeal, the United States Court of Appeals for the Eleventh Circuit concluded that the district court committed legal error by failing to make individualized findings regarding the scope of criminal activity undertaken by the appellant, as required under the Sentencing Guidelines. The appellate court vacated the appellant’s sentence and restitution order, remanding for resentencing with instructions to determine the loss amount based on the appellant’s own conduct and correct a clerical error in the judgment. View "USA v. Barry" on Justia Law

Elizabeth Holmes and Ramesh “Sunny” Balwani founded Theranos, a company that claimed its technology could run fast, accurate, and affordable blood tests using just a drop of blood. Holmes served as CEO, and Balwani as President and COO. They raised significant investments by making representations about the capabilities of Theranos’s proprietary devices, financial health, and business relationships. However, investigations revealed that the technology was unreliable, Theranos often relied on third-party devices, and its partnerships and finances were misrepresented to investors. Both Holmes and Balwani were indicted for conspiracy and wire fraud relating to investors and patients; they were tried separately, and each was convicted of multiple counts of fraud.Proceedings were held before the United States District Court for the Northern District of California. Holmes was convicted on four investor-related counts, while Balwani was convicted on all counts, including those related to patients and investors. At sentencing, both were found responsible for losses to multiple victims and given lengthy prison terms. The district court also ordered them to pay $452 million in restitution to fourteen victims, finding that the money invested constituted the lost property.On appeal, the United States Court of Appeals for the Ninth Circuit reviewed and affirmed the convictions, sentences, and restitution order. The panel held that while some testimony by former Theranos employees should have been treated as expert opinion under Rule 702, any error was harmless. The court found no abuse of discretion in admitting a regulatory report, limiting cross-examination, or excluding certain hearsay statements. It rejected arguments of constructive amendment and Napue violations. The panel clarified restitution calculations under the MVRA, holding that the victims’ actual losses equaled their total investments, affirming the district court’s order. View "United States v. Holmes" on Justia Law

Two Massachusetts State Police officers, Lieutenant Daniel Griffin and Sergeant William Robertson, were implicated in a years-long scheme involving fraudulent overtime billing between 2015 and 2017. Both routinely claimed pay for hours they did not work, either by arriving late, leaving early, or “double-dipping” by billing overtime for tasks performed during regular hours. They also encouraged subordinates to engage in the same practices. The overtime funds in question were supplied through federal grants meant to support highway safety initiatives. In addition to the overtime fraud, Griffin separately engaged in wire fraud relating to private school financial aid and tax fraud connected to a private security business.The United States District Court for the District of Massachusetts presided over a jury trial, which resulted in convictions for both defendants on all counts related to wire fraud, theft of federal funds, and conspiracy. Griffin pled guilty to additional charges of wire fraud and tax falsification before trial. Sentences were imposed: Griffin received 60 months’ imprisonment, three years’ supervised release, substantial restitution, and forfeiture; Robertson received 36 months’ imprisonment, three years’ supervised release, joint and several liability for restitution, and forfeiture.Upon appeal to the United States Court of Appeals for the First Circuit, the court reviewed a broad array of challenges. The First Circuit largely affirmed the convictions, sentences, and restitution orders. It found no reversible error in the district court’s handling of the constitutional challenge, sufficiency of the evidence, guidelines calculations, sentencing disparities, and restitution. However, the Circuit Court vacated and remanded the forfeiture order against Griffin, holding that the government failed to prove by a preponderance of the evidence that the full amount of financial aid received was “traceable to” fraud, as required by statute. All other aspects of the district court’s judgment were affirmed. View "United States v. Robertson" on Justia Law

De’Andre Owens was the subject of a controlled drug buy operation in Centralia, Illinois, on March 15, 2022. Law enforcement provided a confidential informant, Charlie Anderson, with money and recording equipment to purchase methamphetamine from Owens. The exchange occurred under police surveillance, but the recording device did not capture the transaction clearly. After the sale, Anderson was followed by Owens, prompting coordinated surveillance by detectives until Anderson safely rejoined them and turned over methamphetamine. While awaiting trial in jail for this offense, Owens attempted to bribe Anderson not to testify, orchestrating a series of calls offering Anderson $10,000 for his silence.In July 2023, Owens was indicted in the United States District Court for the Southern District of Illinois on counts of distributing methamphetamine and witness tampering. At trial, several law enforcement officers and experts testified regarding the procedures used in the controlled buy and the subsequent investigation. The jury found Owens guilty on both counts. The district court sentenced him to 360 months’ imprisonment, classifying him as a career offender based in part on a prior state drug conviction. Owens had initially objected to the career offender enhancement but withdrew that objection at sentencing.Owens appealed to the United States Court of Appeals for the Seventh Circuit, arguing errors related to expert testimony, jury instructions, handling of dual-role witnesses, and the career offender enhancement. The Seventh Circuit held that Owens forfeited or waived each argument. The court found no plain error in the admission of expert testimony, the inclusion of a witness in a jury instruction, or the handling of dual-role testimony, and concluded Owens had waived his objection to the career offender enhancement. The Seventh Circuit affirmed the judgment of the district court. View "USA v Owens" on Justia Law

Two individuals who held leadership positions at a local public housing authority in South Bend, Indiana, orchestrated a scheme in which they collaborated with several contractors to submit false invoices for maintenance work that was never performed. The contractors cashed checks issued by the housing authority for these fictitious services and shared the proceeds with the two employees. This fraudulent activity came to light after a casino employee observed the pair gambling large amounts of cash and reported the suspicious behavior to law enforcement. Following an investigation, both individuals were indicted on multiple counts, including conspiracy to commit wire and bank fraud, several counts of bank fraud, wire fraud, and federal program theft.The United States District Court for the Northern District of Indiana presided over their trial. After the government presented its case, both defendants moved for judgments of acquittal on the wire fraud charges; the court reserved ruling, and the jury ultimately convicted both individuals on the majority of counts, although one was acquitted on a wire fraud count. The district court denied the motions for acquittal, imposed prison sentences, and ordered substantial restitution. The defendants appealed their convictions and sentences.The United States Court of Appeals for the Seventh Circuit reviewed the appeals. It held that the evidence was insufficient to sustain the bank fraud convictions because the government failed to prove that any false statement was made to a bank, as required by 18 U.S.C. § 1344(2), and therefore reversed those convictions. However, the Seventh Circuit affirmed the wire fraud convictions, finding that a rational jury could conclude the fraudulent scheme furthered the transmission of funds via interstate wire. The court also affirmed one defendant’s sentence enhancement for abuse of a position of trust, finding no clear error or harmless error. The case was remanded solely to correct a clerical error in the restitution order. View "United States v. Smith" on Justia Law

Two brothers sought multimillion-dollar loans from a bank to fund oil and gas investments. Because the bank required collateral, one brother arranged for a third party to create fraudulent documents making it appear that a securities account was worth millions. The brothers paid the third party for these fake statements, and, over several years, borrowed millions from the bank. They used some of the loan proceeds for improper purposes, including personal expenses and paying for the fake account statements. The bank eventually discovered the fraud after questioning the third party, who confessed and cooperated with the government, leading to indictments for conspiracy to commit bank fraud and money laundering.Prior to trial, the case was assigned to a district judge who had previously represented the victim bank in unrelated civil matters. One brother pled guilty to conspiracy to commit bank fraud before trial, while the other, Phillip, went to trial. The district court denied motions to dismiss the indictment, sever the defendants, and for the judge’s recusal. It also admitted certain evidence and denied several of Phillip’s proposed jury instructions. After a jury found Phillip guilty on all counts, he was sentenced to concurrent prison terms and supervised release. He appealed, raising issues related to the judge’s recusal, evidentiary rulings, prosecutorial delay, instructions, and sufficiency of the evidence.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court held that the district judge was not required to recuse himself due to his prior, unrelated representation of the bank. The court found no reversible error in the handling of co-conspirators’ pleas or other evidentiary rulings, found no grounds for dismissal due to prosecutorial delay, and held that the jury instructions were adequate. The court also found the evidence sufficient to support the convictions and rejected the cumulative error argument. The convictions were affirmed. View "USA v. Page" on Justia Law

A special agent with Homeland Security Investigations was discovered to have stolen money from criminal targets, embezzled agency funds, and entered into a cash-for-protection arrangement with a confidential source. The agent’s conduct came to light after the confidential source was arrested by the DEA, and text messages between the two were uncovered. Investigators found that the agent deleted incriminating messages, misappropriated cash from drug dealers and agency sources, manipulated controlled buys for personal gain, and protected his source from law enforcement scrutiny. The agent was also shown to have structured cash deposits to evade bank reporting requirements and failed to report significant taxable income.The United States District Court for the Northern District of Illinois, Eastern Division, conducted a thirteen-day jury trial in 2023. The jury found the agent guilty on all counts, including filing false tax returns, structuring cash transactions, and concealing material facts from the government. The district court denied the agent’s post-trial motions for acquittal and a new trial, then imposed sentence. The agent appealed, contesting the sufficiency of the evidence supporting his conviction.The United States Court of Appeals for the Seventh Circuit reviewed the case. Applying the appropriate standards of review, the court held that there was sufficient evidence for a rational jury to convict on all counts. The evidence included direct and indirect proof of unreported income, clear indications of structuring to evade reporting requirements, and material omissions on government forms. The court found no grounds to disturb the jury’s credibility determinations or the district court’s denial of post-trial motions. Accordingly, the Seventh Circuit affirmed the judgment of the district court. View "USA v Sabaini" on Justia Law