Justia White Collar Crime Opinion Summaries

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For about three years, Nulf, an Illinois licensed loan originator, and two co-defendants participated in a mortgage-fraud scheme, causing approximately $2.2 million in losses. Nulf was charged with bank fraud, 18 U.S.C. 1344, and making a false statement to a financial institution, 18 U.S.C. 1014. Each crime carries a 30-year maximum prison term. The government filed a superseding information charging Nulf with a single count of making a false statement to HUD, a misdemeanor punishable by up to one year in prison. 18 U.S.C. 1012. Nulf pleaded guilty to the misdemeanor; the government agreed to dismiss the felony charges. The one-year statutory maximum was the recommended sentence. The plea agreement included an appeal waiver. Sentenced to 12 months' imprisonment, Nulf claims that the judge interfered with her allocution, wrongly denied credit for acceptance of responsibility, and committed other sentencing mistakes, amounting to a miscarriage of justice, making the appeal waiver unenforceable.The Seventh Circuit dismissed the appeal, stating that it has not announced a general “miscarriage of justice” exception to the enforcement of appeal waivers. A narrow set of extraordinary circumstances can justify displacing an otherwise valid appeal waiver. Nulf’s case is far from extraordinary, so the appeal waiver is enforceable unless the underlying guilty plea was invalid. Nulf does not claim that her plea was unknowing or involuntary. View "United States v. Nulf" on Justia Law

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While working for Vanguard, Capps fraudulently caused funds from dormant accounts to be mailed to co-conspirators, one of whom then wrote checks conveying back to him some of the proceeds. Capps received at least two checks, one for $555,200 and another for $29,750, and did not report the income on his federal tax returns. Capps pled guilty to conspiracy to commit mail fraud, 18 U.S.C. 1349, money laundering, sections 1956(a)(1)(B)(i) and 2, and filing a false tax return, 26 U.S.C. 7206(1). At sentencing, he did not raise any objections to the PSR and the court adopted its calculation of the applicable guidelines range (63-78 months), including two separate 2-level adjustments based on abuse of trust and gross receipts. The court sentenced Capps to 48 months’ imprisonment and ordered Capps to pay $2,137,580.81 in restitution.The Third Circuit vacated, finding that the district court plainly erred in applying the abuse of trust adjustment. As to the application of the gross receipts adjustment, the court reasoned that, while the district court did not plainly err in deciding the adjustment could be applicable, it is not clear on this record whether Capps met the threshold for the adjustment to actually apply. View "United States v. Capps" on Justia Law

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The Second Circuit reversed the district court's grant of defendant's motion for a new trial under Federal Rule of Criminal Procedure 33, following defendant's conviction for conspiracy to commit securities fraud and securities fraud. The court clarified that the preponderates heavily standard requires that the district court determine whether all the evidence at trial, taken as a whole, preponderated heavily against the verdict. It does not, however, permit the district court to elect its own theory of the case and view the evidence through that lens. The court held that the weight of the evidence at trial did not preponderate heavily against the jury's verdict, and thus the district court abused its discretion in vacating the judgment and granting a new trial. The court reinstated the conviction and remanded to the district court for sentencing. View "United States v. Archer" on Justia Law

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The Idaho Department of Finance ("Department") filed a civil enforcement action against appellant appellant, Sean Zarinegar, Performance Realty Management LLC ("PRM") and other nominal defendants, alleging Zarinegar and PRM committed securities fraud. The Department moved for summary judgment; Zarinegar and PRM responded with their own motion for partial summary judgment and a motion to strike several documents submitted by the Department in support of its motion for summary judgment. A few days before the district court was set to hear arguments on the motions, counsel for Zarinegar and PRM moved the district court for leave to withdraw as counsel of record. At the hearing, the district court preliminary denied the motion to withdraw, entertained the parties’ arguments, and took all matters under advisement. The district court later issued a memorandum decision and order denying, in part, Zarinegar’s, and PRM’s motions to strike. The district court also denied Zarinegar’s and PRM’s motion for partial summary judgment. The district court granted summary judgment for the Department after finding Zarinegar and PRM had misrepresented and omitted material facts in violation of Idaho Code section 30-14-501(2) and fraudulently diverted investor funds for personal use in violation of section 30-14-501(4). The district court then granted the motion to withdraw. The district court entered its final judgment against Zarinegar and PRM September 30, 2019. Zarinegar, representing himself pro se, appealed the judgment, arguing: (1) the district court lacked jurisdiction to enter judgment against him; (2) the district court violated his constitutional right to a jury trial and right to proceed pro se; (3) the district court’s denial of Zarinegar’s motions to strike as to certain documents was an abuse of discretion; and (4) the district court erroneously granted summary judgment for the Department. Finding no reversible error, the Idaho Supreme Court affirmed the district court's judgment. View "Idaho v. Zarinegar" on Justia Law

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The Eighth Circuit affirmed defendant's 58 month sentence imposed after he was convicted of conspiracy to commit theft of public funds, theft of public funds, aggravated identity theft, money laundering, and mail fraud. Defendant's conviction stemmed from improper billing practices related to a federal program called the Child Care and Development Fund.The court held that the record supports the district court's conclusion that defendant was responsible for a loss amount between $250,000 and $550,000, and thus the offense level (and resulting guidelines range) was correct. In this case, defendant presented no evidence that he provided legitimate services or submitted legitimate bills. Furthermore, he provided no evidence differentiating legitimate from illegal billing. The court also held that the district court did not clearly err in concluding that the $536,833.75 paid to defendant's daycares by Missouri is the loss amount under the Mandatory Victims Restitution Act. View "United States v. Karie" on Justia Law

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The Fifth Circuit affirmed defendant's 120 month sentence imposed after she was convicted of conspiracy to commit health care fraud and conspiracy to commit money laundering.The court held that defendant failed to show that the district court imposed an unconstitutional trial penalty on her at sentencing and rejected her claim that she was treated more harshly than her co-conspirators because she chose to go to trial rather than to plead guilty. In this case, her only direct co-conspirator was charged with different crimes that carried different statutory maximum sentences. The court also held that defendant's sentence was not procedurally unreasonable where the district court did not abuse its discretion by improperly presuming the Guidelines range to be reasonable; the district court considered the need to avoid unwarranted sentencing disparities; and defendant failed to show a reasonable probability that an explanation by the district court for running the sentences consecutively would have changed her total punishment. Finally, the court held that defendant's sentence was not substantively unreasonable and upheld the district court's restitution order, rejecting procedural and constitutional challenges. View "United States v. Gozes-Wagner" on Justia Law

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After the Bernie Madoff Ponzi scheme collapsed, Picard was appointed under the Securities Investor Protection Act, 15 U.S.C. 78aaa (SIPA), as the liquidation trustee for Bernard L. Madoff Investment Securities LLC (BLMIS). The Act established a priority system to make customers of failed brokerages whole before other general creditors. Where customer property is insufficient to satisfy customers' claims, the trustee may recover property transferred by the debtor that would have been customer property but for the transfer if and to the extent that the transfer is void or voidable under the Bankruptcy Code. 15 U.S.C. 78fff–2(c)(3). The provisions of the Bankruptcy Code apply only to the extent that they are consistent with SIPA.Picard attempted to recover transfers of money that the defendants had received from BLMIS in excess of their principal investments. The defendants are BLMIS customers who were unaware of the fraud but profited from it by receiving what they thought were legitimate profits; the funds were actually other customers' money. The Second Circuit affirmed summary judgment in favor of Picard. The Bankruptcy Code affirmative defense that permits a transferee who takes an interest of the debtor in property "for value and in good faith" to retain the transfer to the extent of the value given does not apply in this SIPA liquidation. The transfers were not "for value" and recovery would not violate the two-year limitation. View "In re: Bernard L. Madoff Investment Securities LLC" on Justia Law

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The Second Circuit affirmed defendant's conviction of two counts of insider trading in violation of Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b–5. The court held that defendant had a duty to refrain from trading on nonpublic inside information and that the evidence was sufficient to convict him. In this case, defendant served as a principal investigator for a clinical trial of a cardiac drug developed by Regado Biosciences, a publicly traded biopharmaceutical company, that was designed to prevent blood clotting. After defendant learned that patients suffered adverse effects during the trial, he traded on that nonpublic inside information to avoid a loss and earn a profit in the shares of the company. The court concluded that, taken together, the evidence of defendant's deceptive activity was sufficient for the jury to find that he was a sophisticated investor that knew his actions were unlawful under the charge given by the district court. Finally, there was no abuse of discretion in the district court's evidentiary rulings. View "United States v. Kosinski" on Justia Law

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Defendant Keith Fitzgerald appealed a superior court order denying his motion for a new trial based on ineffective assistance of counsel. In December 2015, defendant was indicted on five counts of theft by unauthorized taking. Defense counsel, whose assistance is alleged to have been ineffective, was retained by defendant in March 2016, after defendant’s prior counsel withdrew. Defense counsel, defendant, and the prosecutor engaged in several plea discussions leading up to trial. Plea negotiations ultimately failed and the case went to trial. The jury heard testimony from the defendant that his father authorized the transactions. On cross-examination however, the State elicited a number of admissions from defendant, which defense counsel did not anticipate, that severely damaged defendant’s credibility and undercut his defense. The jury returned verdicts of guilty on all five counts of theft by unauthorized taking. Ultimately, the court sentenced defendant to a term of not less than nine and one-half years and not more than 25 years in the New Hampshire State Prison. After an evidentiary hearing on defendant's new trial motion, the court ruled that defendant failed to sustain his burden of showing that the outcome of his case would have been different but for his counsel’s performance. On appeal, defendant argued the trial court erred by concluding that, even if defense counsel rendered ineffective assistance, defendant was not prejudiced by: (1) defense counsel’s failure to adequately advise defendant regarding the merits of the State’s plea offer; or (2) counsel’s failure either to object to the trial court’s jury instructions on a sentence enhancement provision on the basis that it had not been presented to the grand jury for indictment, or to move for dismissal of the indictment on that same basis. The New Hampshire Supreme Court determined defense counsel did not adequately advise defendant about a sentence enhancement and the merits of the State's plea offer relative to defendant's likelihood of success at trial, and but for counsel's deficient performance, there was a reasonable probability that defendant would have accepted the State's plea offer. The Court therefore affirmed in part, reversed in part and remanded for further proceedings. View "New Hampshire v. Fitzgerald" on Justia Law

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In a split decision, the Supreme Court reversed Defendant's negligent homicide convictions but upheld his convictions on nine counts of criminal endangerment and eleven counts of criminal distribution of dangerous drugs, holding that there was insufficient evidence to establish that Defendant's actions in prescribing narcotics was the cause in fact of the deaths of two of his patients.After a jury trial, Defendant, a licensed medical doctor, was convicted of several crimes related to the repeated prescribing of copious amounts of opiates and other narcotics to eleven individuals. Two of Defendant's patients died from drug overdoses. The Supreme Court reversed in part and affirmed in part the convictions, holding (1) the State did not present sufficient evidence to establish that Defendant's actions were the direct cause of the two drug overdose deaths; and (2) Defendant was operating outside the bounds of a professional medical practice, and therefore, the exemption for medical practitioners acting within the course of a professional practice did not apply to the facts of this case. View "State v. Christensen" on Justia Law