Justia White Collar Crime Opinion Summaries

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The First Circuit denied the petition for a writ of mandamus filed by Akebia Therapeutics, Inc. pursuant to the Crime Victim's Rights Act, 18 U.S.C. 3771(d)(3), requesting vacatur of the district court's restitution order, holding that the district court properly determined the award of restitution to Akebia, a corporate victim of a securities fraud conspiracy.A jury convicted Akebia's former director of biostatistics of securities fraud and conspiracy to commit securities fraud. During the sentencing phase, the government, on behalf of Akebia, sought reimbursement of $312,899 pursuant to the Mandatory Victims Restitution Act, 18 U.S.C. 3663A. The requested reimbursement was for fees Akebia paid to attorneys it hired for assistance while Akebia responded to requests for information during the government's investigation into suspected insider trading activities. The district court awarded Akebia approximately half of the attorneys' fees it requested. The First Circuit affirmed the restitution award, holding that the district court did not improperly exercise its discretion in applying the relevant law and did not abuse its discretion in its award of restitution to Akebia. View "In re Akebia Therapeutics, Inc." on Justia Law

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The First Circuit affirmed Defendants' convictions for securities fraud and conspiracy to commit securities fraud, holding that Defendants' claims of trial and sentencing error were unavailing.Defendants were two biostaticians employed by two publicly traded biopharmaceutical companies. The jury found Defendants guilty of conspiracy of commit securities fraud and all counts of securities fraud with which they were charged. The First Circuit affirmed, holding that the district court (1) did not err in denying Defendants' motions for judgments of acquittal as to the conspiracy and securities fraud convictions; (2) did not abuse its discretion in denying Defendants' motion to compel production of a letter from the Financial Industry Regulatory Authority; (3) imposed sentences that were without error; and (4) did not err in awarding restitution. View "United States v. Chan" on Justia Law

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Elmer owned and operated multiple healthcare-related companies including Pharmakon, a compounding pharmacy that mixes and distributes drugs—including potent opioids like morphine and fentanyl—to hospitals across the U.S.. Pharmakon conducted its own internal potency testing and contracted with a third party to perform additional testing to evaluate whether its compounded drugs had too little of the active ingredient (under-potent) or too much (over-potent). In 2014-2016, testing showed 134 instances of under- or over-potent drugs being distributed to customers. Elmer knew the drugs were dangerous. Rather than halting manufacturing or recalling past shipments, sales continued and led to the near-death of an infant. Elmer and Pharmakon lied to the FDA.Elmer was charged with conspiracy to defraud the FDA (18 U.S.C. 371); introducing adulterated drugs into interstate commerce (21 U.S.C. 331(a), 333(a)(1) & 351); and adulterating drugs being held for sale in interstate commerce (21 U.S.C. 331(k), 331(a)(1) & 351). Pharmakon employees, FDA inspectors, and Community Health Network medical staff testified that Elmer was aware of and directed the efforts to conceal out-of-specification test results from the FDA. The district court sentenced Elmer to 33 months’ imprisonment. The Seventh Circuit affirmed, rejecting challenges to rulings related to the evidence admitted at trial and Elmer’s sentence. The evidence before the jury overwhelmingly proved Elmer’s guilt. The sentence was more than reasonable given the gravity of Elmer’s crimes. View "United States v. Elmer" on Justia Law

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The Second Circuit affirmed defendant's conviction and sentence for charges related to his operation of an illegal payday-loan scheme. The jury found that defendant violated the Racketeer Influenced and Corrupt Organizations Act (RICO), the Truth in Lending Act (TILA), and federal wire fraud and identity theft statutes from 2004 through 2014.As to the RICO counts, the court rejected defendant's contention that the district court erred as a matter of law by instructing the jury that, as to his business's loans to New York borrowers, New York usury laws governed the transaction rather than the laws of the jurisdictions specified in the loan agreements, which set no interest rate caps. Rather, the court ruled that New York law applies and that the district court was correct when it so instructed the jury. As to the TILA conviction, the court rejected defendant's contention that his loan agreements disclosed the "total of payments" borrowers would make, as TILA requires, and that the evidence was insufficient to show that these disclosures were inaccurate. The court held that the evidence supported the jury's guilty verdict under TILA. The court rejected defendant's remaining contentions, finding them unpersuasive. View "United States v. Moseley" on Justia Law

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The First Circuit affirmed Defendant's conviction of violating federal laws by conspiring to receive, and of receiving, kickbacks from the pharmaceutical company Insys in exchange for prescribing its synthetic opioid, Subsys, holding that there was no merit to Defendant's arguments on appeal.Specifically, the First Circuit held (1) the government introduced sufficient evidence to prove that Defendant participated in a conspiracy to receive kickbacks or to prove that he accepted those kickbacks in exchange for prescribing Subsys; (2) Defendant's conduct fell outside the Anti-Kickback Statute's safe harbor provision; and (3) the district court did not err in failing to instruct the jury about that same safe harbor provision. View "United States v. Clough" on Justia Law

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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