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Wilson was the Director, Chairman of the Board, President, and CEO of Imperial, which acquired e-Bio, which ran a fraud scheme, "Alchemy." It involved purchasing biodiesel from a third party and reselling it as though it had been produced by e-Bio, to take advantage of government incentives for renewable-energy production without expending production costs. Wilson was convicted of 21 counts: fraud in connection with the purchase or sale of securities, 15 U.S.C. 78j(b) and 78ff; fraud in the offer or sale of securities, 15 U.S.C. 77q(a) and 77x, and 18 U.S.C. 2; material false statements in required SEC filings, 15 U.S.C. 78ff and 18 U.S.C. 2; wrongful certification of annual and quarterly reports by a corporate officer, 18 U.S.C. 1350(c)(1); material false statements by a corporate officer to an accountant, 15 U.S.C. 78m(b)(5) and 78ff, and 18 U.S.C. 2; and false statements to government investigators, of 18 U.S.C. 1001. The dcourt sentenced Wilson to 120 months’ imprisonment and to pay $16,468,769.73 in restitution. The Seventh Circuit affirmed. None of Wilson’s contentions reach the high threshold of showing that a reasonable jury could not have found him guilty. Viewed in the light most favorable to the prosecution, the evidence adequately supports the jury’s finding that Wilson knowingly and willfully made false statements to investors, regulators, an outside accountant, and government agents, and the reasonable inference that Wilson participated in “Alchemy.” View "United States v. Wilson" on Justia Law

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Defendant was convicted of conspiring to misappropriate and sell property of AOL and was ordered to pay AOL restitution. On appeal, defendant challenged the district court's denial of his motion for a reduction of his remaining restitution obligation by amounts recovered by AOL in civil litigation against other persons. The district court concluded that defendant failed to show that those amounts recovered by AOL were compensation for the same loss caused by defendant or that AOL has been fully compensated for the loss caused by him. The Second Circuit considered defendant's contentions and found that they were without merit. The court affirmed the judgment and held that the district court did not abuse its discretion in determining that justice required that defendant have the burden of proving that recoveries by AOL in civil litigation were for the same loss that he caused and that AOL has been compensated in full for the loss defendant caused. View "United States v. Smathers" on Justia Law

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The Eighth Circuit affirmed defendant's sentence and conviction of wire fraud and unlawful monetary transaction. The court held that the district court did not abuse its discretion in admitting ATM-location evidence where the location of defendant's withdrawals -- an adult club -- was proof he might not have used investor funds for legitimate business expenses. The court held that the district court did not clearly err in applying a two-level vulnerable-victim enhancement where vulnerability no longer needed to contribute to success of the scheme; although the district court did not make explicit factual findings, the victims testified at sentencing; the district court heard arguments regarding whether that testimony warranted the enhancement; and defendant ignored the combination of factors he knew about the victims, including disability and alcoholism. Finally, the court lacked jurisdiction to review the district court's denial of a downward departure. View "United States v. Beyer" on Justia Law

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Individuals reprogrammed ATMs to dispense $20 bills for each $1 they were supposed to dispense. Requesting $40 at a compromised ATM would deliver 40 $20 bills instead of two. More than $600,000 was taken from ATMs owned by SafeCash Systems. SafeCash investigated and found evidence that a former employee who serviced the machines, Folad, and his friend, Fattah, engineered the scheme. They turned the information over to the government, resulting in several criminal convictions, one-year sentences for Folad and Fattah, and a restitution order. After the scheme ended and after SafeCash determined what had happened, SafeCash replaced 17 of the relevant 18 ATMs in response to a federal regulation requiring that they be accessible to individuals with sight impairments. The Sixth Circuit affirmed the convictions and sentences, rejecting an argument that destruction of the ATMs amounted to the destruction of potentially exculpatory evidence and violated the defendants’ due process rights. SafeCash, not the government, made the decision to replace the machines. Even if the government had been involved in the destruction of the machines, there was no indication that they contained potentially exculpatory evidence. View "United States v. Folad" on Justia Law

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Susan and William Avignone defrauded five investors out of more than $700,000 in a real estate scheme. In exchange for dismissal of some of the charges, the Avignones pleaded guilty to three counts of fraud in connection with the offer, sale, and purchase of a security and two counts of grand theft of personal property with a value of more than $950. Susan admitted a Penal Code section 186.11 (a)(2) allegation attached to count 10, and a section 12022.6 (a)(1) allegation attached to count 5. William admitted a section 186.11 (a)(2) allegation attached to count 2, a section 12022.6 (a)(2) allegation attached to count 3, and a section 12022.6 (a)(1) allegation attached to count 5. At sentencing, the trial court struck the section 186.11 enhancements and denied probation. It sentenced the Avignones to an aggregate term of five years four months to be served in the custody of the sheriff. The court imposed a split sentence, ordering that one year four months of the imposed sentence would be served in the community under mandatory supervision. The Avignones separately appealed, contending the trial court abused its discretion in denying probation. William also contended: (1) an electronic search condition was unreasonable and unconstitutionally overbroad; and (2) the trial court improperly calculated a restitution order as to one of the victims. The State conceded the trial court improperly calculated the restitution for one of the victims, but asserted the Avignones' sentences were unauthorized because the trial court did not have discretion to sentence them to county jail, rather than prison. The Court of Appeal rejected the Avignones' argument that the trial court abused its discretion in denying probation, and agreed the trial court imposed an unauthorized sentence. This conclusion rendered William's argument regarding the electronic search condition moot. The Court reversed and remanded with directions to allow the Avignones an opportunity to withdraw their guilty pleas. View "California v. Avignone" on Justia Law

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The Indianapolis Land Bank was created to return tax-delinquent and other troubled properties into productive use. But, in 2011, Walton, the Land Bank’s manager, and Johnson began orchestrating the sale and resale of the city’s properties through a nonprofit loophole and pocketing the profits. The total loss to the city was $282,782.38. Johnson and Walton were convicted of honest services wire fraud, wire fraud, and conspiracy to engage in money laundering. Walton was also convicted of receiving bribes. The Seventh Circuit affirmed. The government provided substantial evidence that the two had specific intent, including evidence of kickbacks and making false statements, and provided to substantial evidence to support the money laundering convictions. Rejecting Walton’s argument that the court’s instruction on 10 U.S.C. 666 permitted the jury to convict him of accepting a gratuity and not a bribe, the court stated that the instruction and evidence made clear that Walton was convicted of accepting bribes, not gratuities. The convictions required proof of their bad intent (specific intent to commit fraud), so a good faith jury instruction was unnecessary. Both were properly subject to sentencing enhancements because their offenses involved a public official in a high-level decision-making position and they victimized vulnerable families. View "United States v. Johnson" on Justia Law

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Fadden earned over $100,000 per year but did not submit tax returns. After an audit, the IRS garnished his wages. Fadden filed for bankruptcy, triggering an automatic stay. Fadden claimed that he had no interest in any real property nor in any decedent’s life insurance policy or estate. Fadden actually knew that he would receive proceeds from the sale of his mother’s home (listed by the executor of her estate for $525,000) and would receive thousands of dollars as a beneficiary on his mother’s life insurance policies. A week later, Fadden mentioned his inheritance to a paralegal in the trustee’s office and asked to postpone his bankruptcy. When Fadden finally met with his bankruptcy trustee and an attorney, he confirmed that his schedules were accurate and denied receiving an inheritance. The Seventh Circuit affirmed his convictions under 18 U.S.C. 152(1) for concealing assets in bankruptcy; 18 U.S.C. 152(3) for making false declarations on his bankruptcy documents; and 18 U.S.C. 1001(a)(2) for making false statements during the investigation of his bankruptcy. Counts 1 and 2 required proof of intent to deceive. Fadden proposed a theory-of-defense instruction based on his assertion that his conduct was “sloppiness.” The Seventh Circuit upheld the use of pattern instructions, including that “knowingly means that the defendant realized what he was doing and was aware of the nature of his conduct and did not act through ignorance, mistake or accident.” View "United States v. Fadden" on Justia Law

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In 2014, following investigations by the Indiana Attorney General and FBI, a grand jury indicted Shorter and her company, Empowerment, which provided transportation to Medicaid patients, for health care fraud, 18 U.S.C. 1347, and three counts of misusing a means of identification, 18 U.S.C. 1028A. The government submitted evidence of Shorter’s personal involvement in Empowerment’s billing practices; the results of an Indiana Attorney General Investigation into Empowerment’s billing practices; an FBI search of Empowerment’s records; and the experiences of Empowerment employees and of clients who used its services. The Seventh Circuit affirmed her convictions rejecting arguments challenging the indictment, the admission of certain evidence at trial and the sufficiency of the evidence as a whole. The court noted “powerful” circumstantial evidence that permitted the jury to convict her, especially because the jury could reasonably infer from the evidence that she “caused” the fraudulent billings. View "United States v. Shorter" on Justia Law

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The Fourth Circuit affirmed defendants' conviction of health care fraud and conspiracy to engage in health care fraud. Assuming that the district court did err in failing to consider materiality expressly when assessing guilt, the court held that such error was harmless because the record conclusively established that insurers would not have paid for the second, more sophisticated tests had they known those tests were not medically necessary and no rational fact finder could conclude otherwise. Furthermore, Universal Health Services, Inc. v. United States ex rel. Escobar, — U.S. —, 136 S. Ct. 1989 (2016), did not compel a different conclusion. The court rejected defendants' remaining arguments, concluding that each lacked merit. View "United States v. Palin" on Justia Law

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Defendant Kenneth Hardin was the senior manager of the Civil Rights Division for the Regional Transportation District in Colorado (RTD). Lucilious Ward was the owner–operator of a busing company that had been certified as a Disadvantaged Business Enterprise and Small Business Enterprise. Ward was also a manufacturing representative for a Chinese manufacturer of automobiles and rechargeable batteries. In 2008, Ward’s busing company contracted with RTD as a service provider for a program that provided local bus transportation in Denver for people with disabilities. From that point on, Ward paid Defendant monthly bribes in exchange for his help. When the "Access-a-Ride" contract expired in 2014 and Ward received his final check, Defendant called Ward to request an additional, final payment of $1,100. Unbeknownst to Defendant, Ward had pled guilty to tax evasion. Hoping to receive a reduced sentence in his tax case, Ward relayed Defendant’s request to the Federal Bureau of Investigation, which began using him as a confidential informant to investigate Defendant for bribery. Defendant was indicted on four counts relating to committing bribery involving a program that receives federal funds. The four counts correlated to four meetings he had with Ward about RTD’s request for proposal for a shuttle-bus contract. Count 1 charged Defendant with accepting a bribe of $1,100; he was acquitted on this count. However, the jury found Defendant guilty as to Counts 2–4, which were based on Ward’s bribes relating to the proposed shuttle-bus contract. After return of the guilty verdicts, Defendant moved for a judgment of acquittal, arguing that, because of his acquittal on Count 1, the government had not shown that the bribes he solicited met the $5,000 threshold set by statute. The district court denied Defendant’s motion, holding that the jury could reasonably have concluded that the bribes were intended to influence the selection of bids for the shuttle-bus contract and that the value of this contract exceeded $5,000. Defendant timely appealed. View "United States v. Hardin" on Justia Law