Justia White Collar Crime Opinion Summaries

The appellant in this case was the sole owner and operator of a clean energy startup. In order to attract investment, he provided prospective investors with forged business agreements, altered financial statements, and other documents that misrepresented the company’s assets, operational history, and business relationships. He also fabricated the signatures of various business partners and used personal information of others without authorization. Investors provided nearly $1 million based on these representations. The appellant then diverted a substantial portion of the funds for personal use, including the purchase of a residence, and obscured these transactions through rapid transfers among several accounts. He continued to mislead investors about the use of their funds and the status of the business. When questioned by federal agents, he made a series of false statements regarding his activities.A grand jury in the U.S. District Court for the Middle District of Pennsylvania indicted the appellant on multiple counts, including wire fraud, mail fraud, aggravated identity theft, money laundering, unlawful monetary transactions, obstruction of justice, and making false statements. After a nine-day jury trial, the jury found him guilty on all counts. The District Court sentenced him to 72 months’ imprisonment and ordered restitution of approximately $1.2 million, including attorneys’ fees incurred by victims.The United States Court of Appeals for the Third Circuit reviewed the case. On appeal, the appellant challenged the sufficiency of the evidence, the jury instructions, the constitutionality of the aggravated identity theft statute, denial of a good faith instruction, and the restitution order. The Court held that a general Rule 29 motion does not preserve all sufficiency arguments for appeal and found no plain error in the conviction. It also found the jury instructions and statute to be proper and the denial of the good faith instruction not to be an abuse of discretion. However, the Court held that the Mandatory Victims Restitution Act does not authorize restitution for attorneys’ fees, vacated that portion of the restitution order, and remanded for entry of an amended judgment. All other aspects of the conviction and sentence were affirmed. View "United States v. Abrams" on Justia Law

The defendant, a former employee of a tattoo studio, embezzled approximately $120,000 from her employer over a nine-month period. After being charged with first-degree theft, she pleaded guilty under a plea agreement in which both she and the State recommended a deferred judgment, with restitution payments as a condition of probation. Prior to sentencing, a presentence investigation report (PSI) was submitted, but it did not include any victim-impact statements. At the sentencing hearing, the business owner delivered an oral victim-impact statement detailing the emotional and financial harm caused by the theft. The district court declined to follow the parties’ joint recommendation and instead imposed the statutory maximum prison sentence of up to ten years.The defendant appealed to the Iowa Court of Appeals, arguing that the district court abused its discretion by sentencing her to prison and by allegedly relying on improper factors contained in the victim-impact statement, which she claimed included unproven allegations. The Court of Appeals affirmed the district court’s judgment, holding that the defendant had not preserved error regarding the victim-impact statement because she failed to object at the sentencing hearing. The appellate court also found no indication that the district court had relied on improper factors.Upon further review, the Supreme Court of Iowa vacated the Court of Appeals’ decision. The Supreme Court clarified that, with respect to previously unseen oral victim-impact statements delivered at sentencing, defendants are not required to object contemporaneously in order to raise claims on direct appeal about improper sentencing considerations. However, the Supreme Court concluded that the victim-impact statement in this case was largely appropriate and that the record did not indicate the district court relied on any improper factors. The Supreme Court affirmed the district court’s judgment and sentence. View "State of Iowa v. Hallock" on Justia Law

The case concerns a defendant who, after losing his law license, became involved in schemes such as romance scams and business email compromises, which defrauded victims of millions of dollars. He opened bank accounts for shell companies, received funds from victims deceived by his co-conspirators, and transferred or withdrew the money for personal or further illicit purposes. Even after being confronted by bank investigators, he continued these activities.Previously, the United States District Court for the District of Massachusetts convicted him on charges including wire fraud and money-laundering conspiracy, but the United States Court of Appeals for the First Circuit affirmed only some of those convictions, vacated others, and remanded for resentencing. On remand, the district court imposed a new sentence of 87 months’ imprisonment—below the advisory guidelines range of 108 to 135 months—and reimposed more than $2 million in restitution. The defendant appealed again, challenging both the procedural and substantive reasonableness of his sentence and the amount and scope of restitution ordered.The United States Court of Appeals for the First Circuit reviewed and rejected all of the defendant’s claims. The court held that the district judge correctly applied the sentencing guidelines, including the base offense level, loss amount calculation, and enhancements for money laundering and sophisticated means. The court also found that the district judge properly denied a reduction for zero-point offenders, reasonably found the sentence substantively appropriate given the facts, and correctly ordered restitution, including for losses suffered by a foreign victim through a domestic bank account. The First Circuit affirmed the new sentence and restitution order in full. View "United States v. Abbas" on Justia Law

Between 2019 and 2022, a bookkeeper for a family-owned machine and fabrication business misappropriated approximately $500,000 from her employer. She forged the co-owner’s signature on checks made out to herself and later confessed to the theft in a video-recorded interview with law enforcement. The bookkeeper admitted to taking funds for personal use and acknowledged the significant amount taken. She was charged with theft by unauthorized taking or transfer and forgery, pleaded not guilty, and proceeded to a jury trial.Prior to trial, the defendant sought access to the company’s QuickBooks password through a motion to compel discovery, which she later withdrew. She subsequently moved to suppress her confession as involuntary, but the Unified Criminal Docket (Piscataquis County, Roberts, J.) denied the motion after a hearing. Additional pretrial motions included a request for the trial judge’s recusal, based on his prior professional association with the prosecutor, and a motion to exclude financial evidence due to the State’s failure to produce the QuickBooks password. Both motions were denied. At trial, the prosecution presented testimonial, documentary, and video evidence, including the defendant’s confession. The jury found her guilty on both counts, and she was sentenced to concurrent prison terms, with part of the sentence suspended and probation imposed.On appeal, the Maine Supreme Judicial Court reviewed claims of prosecutorial error, denial of recusal, and alleged discovery violations. The Court held that although some prosecutorial statements constituted error, these were harmless in light of overwhelming evidence of guilt, including the defendant’s own confession. The Court also found no abuse of discretion in denying recusal or in rulings regarding discovery, concluding the State was not obligated to produce information it did not possess. The conviction was affirmed. View "State of Maine v. Moulton" on Justia Law

A group of affiliated pest-control companies discovered that employees of a competing firm, Aptive Environmental, LLC, had bribed members of their organization to obtain confidential sales data stored in a password-protected system. The misappropriated data was allegedly used by Aptive to recruit sales representatives for the competitive summer sales season, an activity crucial to both businesses’ revenue. Upon learning of these actions, the companies sued Aptive and several individual employees, asserting claims under the Computer Fraud and Abuse Act (CFAA), the Racketeer Influenced and Corrupt Organizations Act (RICO), the Defend Trade Secrets Act (DTSA), and Utah’s Uniform Trade Secrets Act (UTSA).The United States District Court for the District of Utah initially dismissed the CFAA claim, concluding that the plaintiffs had not sufficiently pleaded the statutory loss requirement, specifically a loss from technological harm. The court denied motions to compel broad discovery into damages, limiting disclosures but allowing the possibility of further tailored discovery. On summary judgment, the district court found that the plaintiffs failed to provide sufficient evidence of causation linking Aptive’s alleged misappropriation to unjust enrichment, granting judgment for Aptive on the RICO, DTSA, and UTSA claims.The United States Court of Appeals for the Tenth Circuit reviewed these decisions. It held that the district court erred in dismissing the CFAA claim, clarifying that the statute does not require loss from technological harm and that investigative costs can qualify as statutory losses. The appellate court affirmed the district court’s denial of broad discovery, finding no abuse of discretion. Regarding summary judgment, the Tenth Circuit affirmed the outcome for the RICO claim due to lack of causation evidence but reversed in part for the DTSA and UTSA claims, holding that reasonable royalties and injunctive relief do not require the same proof of causation as unjust enrichment. The CFAA, DTSA, and UTSA claims were remanded for further proceedings. View "Moxie Pest Control (Utah) v. Nielsen" on Justia Law

A businessman from Kazakhstan alleged that he was wrongfully detained and psychologically coerced by the country’s National Security Committee into signing unfavorable business agreements, including waivers of legal claims and a forced transfer of valuable company shares. The business at issue, CAPEC, operated in Kazakhstan’s energy sector and held significant assets, some of which were allegedly misappropriated by fellow shareholders and transferred through U.S. financial institutions. The plaintiff claimed these actions harmed him economically, including the loss of potential U.S.-based legal claims.Following unsuccessful litigation in Kazakhstan, the plaintiff initiated suit in the United States District Court for the Eastern District of New York, seeking to invalidate the coerced agreements and recover damages under the Racketeer Influenced and Corrupt Organizations Act (RICO), the Alien Tort Statute, and other state and federal laws. The district court dismissed the complaint for lack of subject-matter jurisdiction, finding that the plaintiff, as a permanent resident alien, could not establish diversity jurisdiction against foreign defendants, that the alleged torts occurred outside the U.S., and that the plaintiff failed to allege a domestic injury required for civil RICO claims. The court denied leave to amend, determining that any amendment would be futile.The United States Court of Appeals for the Second Circuit reviewed the matter de novo, affirming the district court’s judgment. The Second Circuit held that claims against the National Security Committee were barred by the Foreign Sovereign Immunities Act, as its conduct was sovereign rather than commercial. For the individual defendants, the court found that the plaintiff failed to allege a domestic injury under RICO, as the harm and racketeering activity occurred primarily in Kazakhstan. The court further concluded that amendment of the complaint would have been futile. The judgment was affirmed. View "Yerkyn v. Yakovlevich" on Justia Law

Sean Grusd fraudulently persuaded multiple victims over two years that he was a successful investor, convincing them to entrust him with significant sums of money, including life savings and funds intended for their children’s education. He substantiated his misrepresentations with forged documents and ultimately used the money for personal luxury purchases. Grusd pleaded guilty to one count of wire fraud and acknowledged in his plea agreement that he had defrauded his victims of approximately $23,155,000. He agreed that restitution would be ordered in that amount, minus any funds repaid prior to sentencing.The United States District Court for the Northern District of Illinois, Eastern Division, oversaw Grusd’s sentencing. The Presentencing Investigative Report, consistent with the plea agreement, recommended restitution of $23,155,000. During sentencing, the prosecutor noted that approximately $1.6 million had already been recovered from third parties, a representation to which Grusd’s counsel acquiesced and clarified as voluntary returns connected with civil matters. The prosecutor then confirmed that the updated restitution figure was $21,557,739, which the district judge ordered, with credit for any further payments. Grusd did not object to this calculation or the restitution amount.On appeal to the United States Court of Appeals for the Seventh Circuit, Grusd challenged the subtraction of the $1.6 million credit from the agreed-upon total, arguing that the district judge erred by not substantiating the amount. The Seventh Circuit held that Grusd had waived his right to challenge the restitution credit by acquiescing during sentencing and failing to object. The court further held that, even if the claim was merely forfeited, Grusd could not meet the requirements for plain-error review. The judgment of the district court was affirmed. View "United States v. Grusd" on Justia Law

Several entities affiliated with Allstate sued a group of individuals and entities that own, manage, and operate Memorial Heights Emergency Center in Houston, Texas. The plaintiffs alleged that, starting in 2018, defendants entered into agreements with personal injury attorneys to refer clients to the Center under letters of protection, guaranteeing future payment from insurance settlements. Defendants billed these patients—primarily car accident victims—using emergency billing codes at rates far above standard charges, often conducting expensive diagnostic tests without documented medical necessity and discharging patients without additional treatment. The bills were then sent to attorneys, who submitted them to Allstate for inclusion in settlement demands. Between August 2018 and November 2022, Allstate settled with 635 claimants and subsequently alleged it discovered a fraudulent scheme, seeking to recover $4.7 million plus treble damages and attorney fees.The United States District Court for the Southern District of Texas dismissed all claims with prejudice. The district court held that Allstate failed to sufficiently allege reliance on the fraudulent bills, undermining its RICO, common-law fraud, conspiracy, unjust enrichment, and money-had-and-received claims. The court also found Allstate had not adequately pleaded direct or proximate causation, concluded that Allstate was “complicit” in the alleged fraud due to its continued settlements after learning of the scheme, and determined that the complexity of the case made it unmanageable as a single lawsuit.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed the dismissal de novo. The Fifth Circuit held that the district court applied the wrong legal standards to Allstate’s RICO claims by requiring reliance, which is not necessary for a RICO claim predicated on mail fraud. The appellate court further found that Allstate adequately pleaded proximate cause, damages, and the elements of its common-law and equitable claims. The judgment of the district court was reversed and the case remanded for further proceedings. View "Allstate Indemnity Co v. Bhagat" on Justia Law

Charles Cui was charged with bribery and related offenses after he attempted to secure the assistance of Edward Burke, a powerful Chicago alderman, in reversing a permit denial by the Chicago Department of Buildings (CDOB) regarding a pole sign at his commercial property. Cui’s financial interests were jeopardized by the permit denial, which threatened both a lucrative lease with Binny’s Beverage Depot and tax increment financing from the City. To influence Burke, Cui offered to retain Burke’s law firm for property tax appeal work, explicitly seeking Burke’s intervention in the CDOB matter.The United States District Court for the Northern District of Illinois, Eastern Division, presided over a six-week trial in which a jury convicted Cui on all counts: bribery under 18 U.S.C. § 666(a)(2), violations of the Travel Act, and making false statements to the government. The district court admitted evidence over Cui’s objections, including a photoshopped photograph sent to the CDOB, and denied Cui’s post-trial motions for acquittal and a new trial. The court sentenced Cui to 32 months’ imprisonment and applied an obstruction-of-justice enhancement for failing to produce key emails in response to a grand jury subpoena.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed Cui’s challenges to the sufficiency of evidence, jury instructions, evidentiary rulings under Federal Rule of Evidence 404(b), and sentencing. The court held that sufficient evidence supported the convictions, that the jury instructions correctly conveyed the law’s requirements—including the quid pro quo element and the definition of “corruptly”—and that the admission of the photoshopped photograph was not an abuse of discretion. The court also found that the sentencing enhancement and the disparity between Cui’s and Burke’s sentences were justified. The Seventh Circuit affirmed the judgment of the district court. View "USA v Cui" on Justia Law

A former elected county prosecutor in Kentucky’s 21st Judicial Circuit was charged with Honest Services Wire Fraud, violations of the Travel Act, and Federal Program Bribery. The charges stemmed from an arrangement with a young woman, M.H., who repeatedly faced legal troubles. Evidence showed that the prosecutor agreed to help her with matters such as getting warrants withdrawn, charges reduced, and release from jail, in exchange for sexual acts and explicit images. The FBI discovered the scheme, leading to federal prosecution. At trial, the government presented incriminating text messages, testimony from M.H., and law enforcement, while the defendant claimed he did not solicit images and that M.H. was assisting in investigations—a claim disproved by evidence.The United States District Court for the Eastern District of Kentucky oversaw the jury trial, which resulted in convictions on all counts. The court sentenced the defendant to 41 months in prison and imposed supervised release conditions, including refraining from excessive alcohol use. On appeal to the United States Court of Appeals for the Sixth Circuit, the defendant challenged the exclusion of certain testimony about Kentucky law, sufficiency of the evidence on several elements, the federal funding nexus for the bribery charge, the supervised release condition, and the sentencing court’s refusal to consider “collateral consequences.”The Sixth Circuit held that the district court did not abuse its discretion or violate constitutional rights in excluding expert legal opinion testimony and that the jury was properly instructed on the meaning of “official acts.” The court found overwhelming evidence supporting the verdict, including proof of a quid pro quo and an interstate nexus. The federal funding requirement was satisfied by evidence that the state received sufficient funds. The supervised release condition and sentencing decisions were not plainly erroneous. The Sixth Circuit affirmed the district court’s judgment in all respects. View "United States v. Goldy" on Justia Law