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The Attorney General filed a complaint in which Count IV alleged that Wildermuth, an attorney, and Kleanthis, a veteran of the real estate business, engaged in acts and practices that violated section 3-102 of the Illinois Human Rights Act by a pattern and practice of discrimination in the offering of loan modification services to Illinois consumers. The complaint alleged that defendants advertised that they would succeed where other loan modification providers had failed, help consumers save their homes and obtain significant reductions in their monthly payments. The circuit court of Cook County denied defendants’ motion to dismiss but certified for interlocutory appeal the question: “Whether the State may claim a violation under the Illinois Human Rights Act pursuant to a reverse redlining theory where it did not allege that the defendant acted as a mortgage lender.” The appellate court answered the question in the affirmative. The Illinois Supreme Court affirmed in part, stating that it is not necessary to allege that one is a mortgage lender to sustain a claim for a violation of the statute. The court concluded, nonetheless, that Count IV should have been dismissed, rejecting the state’s argument that the defendants engaged in a “real estate transaction” by providing “financial assistance for ... maintaining a dwelling.” Defendants’ services cannot be considered necessary; they were not “necessary conduits” through which funds flow, nor did they act as real estate brokers. View "Madigan v. Wildermuth" on Justia Law

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From 2006 through 2011, Poulson tricked homeowners facing foreclosure into selling him their homes and engaged in a multi-million-dollar Ponzi scheme that defrauded investors in those distressed properties. Poulson pleaded guilty to one count of mail fraud, 18 U.S.C. 1341. The district court calculated his total fraud to be $2,721,240.94; concluded that this fraud resulted in “substantial financial hardship” for more than 25 victims; and sentenced Poulson to 70 months’ imprisonment followed by three years of supervised release, with a condition prohibiting Poulson from working in the real estate industry for five years. The Third Circuit affirmed in part, upholding the court’s determination of the number of victims who suffered a “substantial financial hardship” under U.S.S.G 2B1.1. The court reasoned that the Guidelines give the court considerable discretion. The court vacated the imposition of a five-year occupational restriction on his three-year term of supervised release, the statutory maximum, and remanded for resentencing. View "United States v. Poulson" on Justia Law

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Defendants Larry and Dixie Masino were indicted for conspiracy to commit wire fraud, operating an illegal gambling business, conspiracy to commit money laundering, and money laundering. A federal grand jury returned a superseding indictment that added predicate offenses to Count Two, operating an illegal gambling business. The Eleventh Circuit declined to exercise pendant jurisdiction over Larry's cross-appeal of a denial of a motion to dismiss the indictment; Count Two of the indictment was legally sufficient to state an offense; because a violation of the Florida bingo statute could satisfy the essential element about state law required to prove Count Two, the court need not address Florida gambling house statutes as a basis for upholding the indictment; and thus the indictment stated the essential element about state law because the bingo statute provides at least some violations that would make a gambling business illegal. Accordingly, the court dismissed the cross-appeal for lack of jurisdiction, reversed the order dismissing part of Count Two of the indictment, and remanded for further proceedings. View "United States v. Masino" on Justia Law

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In 2009, Lopez created financial investment business entities and solicited funds from family and friends. He received approximately $450,000 total from five people, stating that he intended to invest in companies such as Coca-Cola, ExxonMobil, Wells Fargo, Visa, American Express, and Procter & Gamble. Documents the investors signed reserved Lopez’s discretion to invest where he saw fit. Lopez deposited their funds into accounts that he controlled and never invested in the companies listed in his advertising materials. Lopez used much of the money for personal expenses. Lopez unilaterally changed the terms of each investors’ promissory note; they were not aware of these changes, did not give Lopez permission to make them, and did not sign documents. After an investor complained to the Indiana Secretary of State and the IRS investigated Lopez’s businesses, Lopez was convicted of 15 counts of wire fraud, 18 U.S.C. 1343; four counts of money laundering, 18 U.S.C. 1957; and securities fraud, 15 U.S.C. 78j(b), 77ff(a). The Seventh Circuit affirmed, rejecting claims that the district court erred in allowing a government witness to testify that payments Lopez made to his investors were “lulling payments,” that the government’s references to Bernie Madoff in its closing argument denied him a fair trial, that the court erred in denying Lopez’s request to label his witness an “expert” in front of the jury, that the court improperly prevented him from introducing extrinsic evidence of a government witness's prior inconsistent statement. View "United States v. Lopez" on Justia Law

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The Eighth Circuit affirmed defendant's convictions for three counts of soliciting or receiving an illegal kickback related to a federal health-care program and one count of making a false statement to federal agents. The court held that there was sufficient evidence to convict defendant of three charges under the anti-kickback statute. In this case, the district court identified one element of the charges as proof that defendant solicited or received a payment that was paid primarily in order to induce the referral of patients insured by Medicare or Medicaid. Then the district court found that the evidence showed, beyond a reasonable doubt, that defendant solicited kickbacks, represented that he could control the referrals, and actually received money for the few referrals that were made through his efforts. Finally, defendant's challenge to his false statement conviction failed. View "United States v. Iqbal" on Justia Law

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The government sought forfeiture (21 U.S.C. 881(a)(4),(6), (7); 18 U.S.C. 981) of bank accounts, real properties, vehicles, and $91,500 in U.S. currency, related to its investigation into Salouha and Sbeih. Salouha allegedly illegally sold prescription drugs through his Ohio pharmacies; Salouha and Sbeih allegedly laundered the receipts. Salouha and his wife claimed several assets. Salouha was indicted but failed to appear. The court issued an arrest warrant. Permission for Salouha to attend a status conference regarding the forfeiture via telephone was denied. Salouha, his pregnant wife and four children, had moved to Gaza after the asset seizure; travel restrictions made their return difficult. Salouha did not attend. The government moved to strike his claims under the fugitive disentitlement statute, 28 U.S.C. 2466. The court waited to see whether Salouha could return with the help of the State Department. Salouha did not to respond. The court struck the claims but did not order forfeiture. Seven months later, the court approved a Stipulated Settlement Agreement and Decree of Forfeiture, under which Salouha’s wife withdrew her claims to all but a house and car. The remaining properties, claimed by the Sbeihs, were ordered forfeited the following month. Weeks later the Salouhas unsuccessfully moved to vacate the judgment. The Sixth Circuit affirmed. The district court properly credited the government's uncontested statements, and relied on the knowledge of Mrs. Salouha’s return, to conclude that Salouha was deliberately staying outside U.S. jurisdiction to avoid prosecution. View "United States v. $525,695.24" on Justia Law

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The government sought forfeiture (21 U.S.C. 881(a)(4),(6), (7); 18 U.S.C. 981) of bank accounts, real properties, vehicles, and $91,500 in U.S. currency, related to its investigation into Salouha and Sbeih. Salouha allegedly illegally sold prescription drugs through his Ohio pharmacies, 21 U.S.C. 841. Salouha and Sbeih allegedly laundered the receipts through their accounts, 18 U.S.C. 1956. Sbeih and his wife filed verified claims to seven of the personal bank accounts. Sbeih was indicted but failed to appear. The court issued an arrest warrant, lifted the stay on the civil forfeiture case and scheduled a status conference. Sbeih’s counsel sought permission for Sbeih not to attend, as he was in Israel. Sbeih alleged that he was in danger of losing his Jerusalem permanent residency permit if he left Israel. The court granted the motion. The government moved to strike Sbeih’s claim under the fugitive disentitlement statute, 28 U.S.C. 2466. The court waited to see whether the Salouhas, Sbeih’s codefendants, were able to reenter the country, but ultimately granted the government’s motion to strike Sbeih’s claim and ordered forfeiture. While section 2466 requires the government to prove that the claimants had a specific intent of avoiding criminal prosecution in deciding to remain outside the U.S., it does not require that that intent be the sole or principal intent. In this case, however, government did not meet its burden of proving that Sbeih was not returning to the U.S. to avoid prosecution View "United States v. $525,695.24" on Justia Law

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Defendant was convicted of one count of conspiracy to commit securities fraud and two counts of securities fraud in connection with an insider trading scheme. After defendant's conviction, the Second Circuit issued a decision in United States v. Newman, 773 F.3d 438 (2d Cir. 2014), which elaborated on the Supreme Court's ruling in Dirks v. S.E.C., 463 U.S. 646 (1983), concerning liability for a "tippee" who trades on confidential information obtained from an insider, or a "tipper." While defendant's appeal was pending, the Supreme Court issued a decision in Salman v. United States, 137 S. Ct. 420 (2016), which rejected certain aspects of Newman's holding. The court held that the logic of Salman abrogated Newman's "meaningfully close personal relationship" requirement and that the district court's jury instruction was not obviously erroneous. The court also held that any instructional error would not have affected defendant's substantial rights because the government presented overwhelming evidence that at least one tipper received a financial benefit from providing confidential information to defendant. Accordingly, the court affirmed the judgment. View "United States v. Martoma" on Justia Law

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Plaintiffs appealed the district court's dismissal of their amended securities fraud class action complaint, alleging that Atossa and its Chairman and CEO, Steven Quay, made a series of public statements about Atossa's breast cancer screening products that were materially false or misleading. The district court dismissed the complaint. The Ninth Circuit held that plaintiffs have properly alleged falsity and materiality as to some, but not all, of these statements. In this case, plaintiffs have sufficiently alleged that the following were materially false or misleading: (1) Quay's statement quoted in Atossa's December 20, 2012 Form 8–K filing describing the ForeCYTE Test as "FDA-cleared"; (2) Quay's statement during his interview with NewsMedical.Net that the ForeCYTE test had "gone through all of the FDA clearance process"; (3) Atossa's Form 8–K filing on February 25, 2013, giving notice of the FDA's warning letter; and (4) Quay's statement during his interview with the Wall Street Transcript that "FDA clearance risk has been achieved." Accordingly, the court affirmed in part, reversed in part, vacated in part, and remanded. View "Levi v. Atossa Genetics, Inc." on Justia Law

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Plaintiffs appealed the district court's dismissal of their amended securities fraud class action complaint, alleging that Atossa and its Chairman and CEO, Steven Quay, made a series of public statements about Atossa's breast cancer screening products that were materially false or misleading. The district court dismissed the complaint. The Ninth Circuit held that plaintiffs have properly alleged falsity and materiality as to some, but not all, of these statements. In this case, plaintiffs have sufficiently alleged that the following were materially false or misleading: (1) Quay's statement quoted in Atossa's December 20, 2012 Form 8–K filing describing the ForeCYTE Test as "FDA-cleared"; (2) Quay's statement during his interview with NewsMedical.Net that the ForeCYTE test had "gone through all of the FDA clearance process"; (3) Atossa's Form 8–K filing on February 25, 2013, giving notice of the FDA's warning letter; and (4) Quay's statement during his interview with the Wall Street Transcript that "FDA clearance risk has been achieved." Accordingly, the court affirmed in part, reversed in part, vacated in part, and remanded. View "Levi v. Atossa Genetics, Inc." on Justia Law