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The district court’s decision to grant the jury’s oral request, made during deliberations, for a dictionary was improper, but under the circumstances of this case, the judge did not abuse his discretion in denying Appellant’s motion for a new trial. Appellant was found guilty of conspiracy to commit mail fraud and substantive mail fraud, based upon his certification of false injury claims submitted to the American Family Life Insurance Company. On appeal, Appellant argued that the judge erred in denying his motion for a new trial where the jury was exposed to material not properly offered during trial. The First Circuit affirmed the decision of the district court, holding (1) the judge’s decision to grant the jury’s request, over Defendant’s objection and with no discussion on the record, to use the dictionary was error; but (2) the trial judge took thorough, effective action to investigate the impact of the error and properly concluded that Appellant suffered no prejudice. View "United States v. Pagan-Romero" on Justia Law

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Williams, a CPA, was manager or co-owner of Sexton’s Kentucky companies. Flynn was the office manager. From 2006-2010, they secured loans by misrepresenting the businesses’ assets and the identity of the true borrowers. The total amount disbursed from the banks was $8,160,400. Sexton and Williams submitted applications for higher loan amounts ($13,600,000 and $13,800,000) toward the end of the time period involved, but those funds were never disbursed. In 2016, the three and a bank loan officer were charged with conspiracy to commit bank fraud, 18 U.S.C. 1349 and 18 U.S.C. 1344(1) (Count 1) and bank fraud, 18 U.S.C. 1344(1) and 18 U.S.C. 2. The indictment also alleged forfeiture to the U.S. under 18 U.S.C. 981(a)(1)(C), 982(a)(2)(A), and 28 U.S.C. 2461(c). Sexton pleaded guilty to Count 1. The government moved to dismiss Counts 2–24. Sexton’s PSR gave Sexton a four-level increase for being an organizer or leader under USSG 3B1.1(a); one criminal history point under USSG 4A1.1(c), 4A1.2(m), and 4A1.2(f) for a 2005 California sentence for willful infliction of corporal injury to which Sexton pleaded nolo contendere; and two criminal history points under USSG 4A1.1(d) for committing the instant offense while on probation for the California sentence. Sexton’s guideline imprisonment range was 97–121 months. The court sentenced Sexton to 109 months’ imprisonment. The Sixth Circuit affirmed that sentence and orders that he pay $2,637,058.32 in restitution and forfeit property to the government, including a money judgment of $2,534,912. View "United States v. Sexton" on Justia Law

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The Fifth Circuit reversed the district court's order dismissing an indictment with prejudice. The indictment charged defendant, the owner and operator of an adoption agency, for fraud. The court held that there was no Brady violation where the evidence clearly was not suppressed; discovery violations did not warrant imposed sanctions where the district court failed to impose the least sever sanction and the government's violations of the discovery deadlines did not warrant dismissing the indictment with prejudice; and defendant failed to demonstrate prejudice sufficient to support the district court's severe sanction and thus the district court abused its discretion when it dismissed defendant's indictment with prejudice. The court remanded for reassignment of the case to a different district judge. View "United States v. Swenson" on Justia Law

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Defendant appealed his conviction for misappropriating over $5000 in federal grant funds that were distributed to the organization that he managed to subsidize an after-school program for children, in violation of 18 U.S.C. 666(a)(1)(A). The Eighth Circuit held that section 666(a)(1)(A) is not a continuing offense and a defendant may not be charged for a section 666(a)(1)(A) offense committed outside the five-year statute of limitations. However, like the defendant in this case, when a defendant has committed the offense both within and outside the limitations period, he may be charged with violations committed within the limitations period. The court held that any error in admitting evidence related to expenditures outside the limitations period did not seriously affect the fairness, integrity or public reputation of the judicial proceedings. Furthermore, there was no error in admitting a purported grant application into evidence; any error regarding the admission of hearsay at a pre-trial release proceeding was moot; and the evidence was sufficient to support the conviction. View "United States v. Askia" on Justia Law

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The Eighth Circuit affirmed the district court's calculation of the loss amount in defendant's sentence after he was convicted of five counts of wire fraud. The court held that the district court properly determined that defendant's employer was a victim of the fraud scheme and that the company suffered actual and intended pecuniary losses, and the district court did not commit clear error in finding that certain uncharged conduct was part of defendant's common scheme or plan and including that conduct in the calculation of loss. The court vacated, however, the restitution award. The court held that the Mandatory Victim Restitution Act applied to the wire fraud conviction and the court reversed and remanded in light of Lagos v. United States, 138 S.Ct. 1684 (May 29, 2018). View "United States v. Cornelsen" on Justia Law

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Moose solicited investors with a stock tip; instead of investing all the $680,000 he received from 16 investors, Moose invested only $200,000. The remaining $480,000 he took for himself. Without a plea agreement, Moose pleaded guilty to defrauding investors in violation of the federal wire fraud statute, 18 U.S.C. 1343. The district court gave him a below-guideline sentence of two years in prison plus two years of supervised release. The Seventh Circuit affirmed the prison sentence and the length of the supervised release term, but remanded for the limited purpose of considering several conditions of supervised release that had not been adequately explained. The court rejected Moose’s challenges to the loss amount the district court used in calculating his guideline sentencing range and the fraud guideline’s treatment of loss amounts more generally. Though Moose admitted that he pocketed the $480,000, he argued for a loss figure of just $70,000, claiming to qualify for the discount based on returning stolen property before the crime was detected. View "United States v. Moose" on Justia Law

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This appeal arose out of Michael and Sue Clarke’s attempted recovery of earlier financial losses sustained due to the fraudulent investment practices of Zach Latimer. After obtaining a judgment against Latimer, the Clarkes filed a separate action against his wife, Holly Latimer, alleging that the Latimers engaged in transfers of funds that violated the Uniform Fraudulent Transfer Act. The district court found in favor of the Clarkes’ claim after a bench trial but ruled that there was no prevailing party and denied the Clarkes’ request for attorney’s fees and costs. The court also ordered the Clarkes to file a partial satisfaction of judgment in their separate action against Zach and denied their post-trial motion for prejudgment interest. The Clarkes challenged each of these determinations, and sought additional fees and costs for their appeal. After review, the Idaho Supreme Court determined the Clarkes should have been found to be the prevailing party, and the district court erred by ordering the Clarkes to file a partial satisfaction of their judgment in their case against Zach Latimer. The district court did not, however, abuse its discretion by denying the Clarkes' prejudgment interest or attorney's fees, however, they were entitled to costs. View "Clarke v. Latimer" on Justia Law

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The Fifth Circuit affirmed defendant's convictions and sentences for charges related to his efforts in convincing about a hundred people to lend his companies millions of dollars. The court held that there was sufficient evidence to support the mail and wire fraud counts; there was sufficient evidence to support defendant's conviction for giving false testimony during a bankruptcy court proceeding; the district court's decision denying defendant's motion to suppress some prior statements under the Fifth Amendment was unreviewable because defendant neither testified nor proffered what he would have said; challenges to the admission of several summary charts denied; challenges to jury instructions as infirm were rejected; and there was no procedural error in defendant's sentence. View "United States v. Spalding" on Justia Law

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Dr. Paulus, a cardiologist at Ashland, Kentucky’s KDMC, was first in the nation in billing Medicare for angiograms. His annual salary was around $2.5 million, under KDMC’s per-procedure compensation package. In 2008, HHS received an anonymous complaint that Paulus was defrauding Medicare and Medicaid by performing medically unnecessary procedures, 42 U.S.C. 1320c-5(a)(1), 1395y(a)(1), placing stents into arteries that were not blocked, with the encouragement of KDMC. An anti-fraud contractor selected 19 angiograms for an audit and concluded that in seven cases, the blockage was insufficient to warrant a stent. Medicare denied reimbursement for those procedures and continued investigating. A private insurer did its own review and concluded that at least half the stents ordered by Paulus were not medically necessary. The Kentucky Board of Medical Licensure subpoenaed records and concluded that Paulus had diagnosed patients with severe stenosis where none was apparent from the angiograms. Paulus had retired; he voluntarily surrendered his medical license. A jury convicted Paulus on 10 false-statement counts and on the healthcare fraud count. It acquitted him on five false-statement counts. The court set aside the guilty verdicts and granted Paulus a new trial. The Sixth Circuit reversed. The degree of stenosis is a fact capable of proof. A doctor who deliberately inflates the blockage he sees on an angiogram has told a lie; if he does so to bill a more expensive procedure, then he has also committed fraud. View "United States v. Paulus" on Justia Law

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Brookdale employed Prather to review Medicare claims before their submission for payment. Many of these claims were missing required certifications from physicians attesting to the need for the medical services provided. Certifications must “be obtained at the time the plan of care is established or as soon thereafter as possible.” 42 C.F.R. 424.22(a)(2).Prather filed a complaint under the False Claims Act, 31 U.S.C. 3729, alleging an implied false certification theory. The district court dismissed her complaint. The Sixth Circuit reversed in part, holding that Prather had pleaded two claims with the required particularity and that the claims submitted were false. On remand, the district court dismissed Prather's Third Amended Complaint in light of the Supreme Court’s 2016 clarification of the materiality element of an FCA claim. The Sixth Circuit reversed. Prather sufficiently alleged the required materiality element; the timing requirement in section 424.22(a)(2) is an express condition of payment and Prather alleges that the government paid the claims submitted by the defendants without knowledge of the non-compliance, making those payments irrelevant to the question of materiality. Section 424.22(a)(2) is a mechanism of fraud prevention, which the government has consistently emphasized in guidance regarding physician certifications and Prather adequately alleged “reckless disregard” of compliance and whether this requirement was material. View "Prather v. Brookdale Senior Living Community" on Justia Law