Justia White Collar Crime Opinion Summaries

The case involves Gail Dee Lew-Williams, as the surviving spouse and successor in interest of Wilbur Williams, Jr., M.D., and Wilbur Williams, M.D., Inc. (collectively, the Williams plaintiffs) and Sevana Petrosian and her associates Salina Ranjbar, Vana Mehrabian, and Staforde Palmer (collectively, the Petrosian defendants). The Williams plaintiffs accused the Petrosian defendants of embezzling approximately $11.5 million from the Corporation’s bank accounts. The trial court compelled the case to arbitration, but the Williams plaintiffs failed to initiate arbitration proceedings. As a result, the trial court dismissed the Williams plaintiffs’ claims against the Petrosian defendants.The Williams plaintiffs appealed, arguing that they did not have the funds to initiate the arbitration and that the trial court erred in compelling arbitration. The Petrosian defendants argued that the claims were properly dismissed because the Williams plaintiffs had the funds to arbitrate and should not be allowed on appeal to challenge the trial court’s order compelling arbitration before first arbitrating their claims.The Court of Appeal of the State of California, Second Appellate District, Division Seven, concluded that once a trial court has compelled claims to contractual arbitration, the court has “very limited authority with respect to [the] pending arbitration.” If a party fails to diligently prosecute an arbitration, the appropriate remedy is for the opposing party to seek relief in the arbitration proceeding. Therefore, the Court of Appeal held that the trial court exceeded its jurisdiction when it dismissed the Williams plaintiffs’ claims against the Petrosian defendants for failure to prosecute. The court reversed the trial court's dismissal of the case. View "Lew-Williams v. Petrosian" on Justia Law

In this case, defendant Charles Yeager-Reiman, a veteran, pleaded guilty to misdemeanor grand theft in connection with fraudulent activities related to veterans' benefits from the United States Department of Veterans Affairs (VA). Yeager-Reiman appealed his conviction, arguing that his prosecution was preempted by federal law, as his offenses concerned the theft of benefits from the VA.The Court of Appeal of the State of California Second Appellate District Division Five disagreed with Yeager-Reiman's contention, and affirmed the lower court's judgement. The court ruled that federal preemption did not apply in this case. While federal law establishes the guidelines and regulations for VA benefits, it does not prohibit state-level criminal prosecutions for fraudulent activities related to these benefits.In terms of field preemption, the court determined that the provisions of the federal law did not indicate an intent by Congress to occupy the field of criminal prosecution of veterans in connection with the theft of VA benefits. As for obstacle preemption, the court found that allowing state-level prosecutions for theft of VA benefits actually promotes Congress's purpose of aiding veterans by preserving funds for veterans' benefits through deterrence.Therefore, the court concluded that neither field preemption nor obstacle preemption deprived the trial court of jurisdiction to hear Yeager-Reiman's case. View "People v. Yeager-Reiman" on Justia Law

Defendant-appellant Matthew Mazur appealed his third sentencing for multiple criminal offenses arising out of a fraudulent investment scheme. The sole issue raised on appeal of his reduced 23-year prison sentence was that the trial court erred by refusing to dismiss a five-year white-collar enhancement for loss greater than $500,000. Mazur argued the trial court was required to dismiss this enhancement because its imposition “result[ed] in a sentence of greater than 20 years.” Finding no reversible error, the Court of Appeal affirmed. View "California v. Mazur" on Justia Law

In 2008-2010, Shah engaged in fraudulent transactions involving three luxury condominiums owned by Hwang, ultimately using the property to obtain over $2 million in loans. Shah was convicted of multiple crimes. Enhancement allegations, including taking a property valued over $3.2 million and special findings, including a pattern of white-collar crime. were found true. A 2015 restitution order remains unpaid. Hwang filed a civil action against Shah and, in 2018, secured a civil judgment—over $3.8 million.In 2021, the trial court levied property under Penal Code 186.11, the “Freeze and Seize” law, which is intended to prevent a defendant from disposing of assets pending trial, and then use the assets to pay restitution after conviction. Shah argued that a trial court must seize any properties under section 186.11 no later than the sentencing hearing.The court of appeal affirmed. Shah sought to import time limitations into the statute and ignored the legislative purpose of section 186.11 and California’s over-arching statutory framework for restitution in criminal cases. California recognizes restitution for crime victims as a constitutional right. The court’s authority does not change even after the Courts of Appeal decide a criminal case. The lack of a disposition formally remanding Shah’s original appeal for further proceedings was no bar to the trial court’s levying order. View "People v. Shah" on Justia Law

The Penal Code authorizes but does not require, county sheriffs to issue licenses to carry concealed weapons. The Santa Clara County Sheriff’s Office rarely issued CCW licenses; the office would not even process a CCW application absent a special instruction Sung, who apparently ran Sheriff Smith’s 2018 re-election campaign and subsequently became the undersheriff, could issue such instructions and could place applications on hold even after licenses were signed by the sheriff. Sung abused that authority to extract favors.Apple executives, concerned about serious threats, met with Sung, who asked whether they would support Sheriff Smith’s re-election. Apple would not give anything of value in exchange for CCW licenses but two executives personally donated $1,000, the maximum allowable amount, to Smith’s campaign. After the election, the applicants were fingerprinted and completed their firearm range qualification tests. Sheriff Smith signed the CCW licenses but they were not handed over. Although Apple had no program for donating products to law enforcement agencies, after a meeting with Sung, an Apple executive (Moyer) emailed an inquiry about donating iPads or computers to the sheriff’s office's “new training facility,” not mentioning Apple’s pending CCW applications. The Office was not setting up a new training center but asked for 200 iPads, worth $50,0000-$80,000. Apple’s team then received their CCW licenses, Apple terminated the promised donation.The court of appeal reversed the dismissal of a bribery charge against Moyer. A public official may be bribed with a promise to donate to the official’s office. View "People v. Moyer" on Justia Law

After defendants Frayba and William Tipton pled guilty to committing insurance fraud, they were ordered to pay victim restitution to Nationwide Insurance Company of America (Nationwide). Later, Nationwide petitioned the trial court to convert the criminal restitution orders to civil judgments against both defendants. Defendants opposed. Relying on Penal Code1 section 1214, the trial court granted Nationwide’s petition and entered civil judgments against the defendants. On appeal, defendants argued the trial court erred because (1) Nationwide “failed to provide citation to any . . . authority supporting” conversion of the victim restitution orders to civil judgment; and (2) Nationwide’s petition lacked supporting evidence. The Court of Appeal found no reversible error and affirmed the trial court's judgment. View "Nationwide Ins. Co. of Am. v. Tipton" on Justia Law

Ung stole cryptocurrencies from multiple victims in 2018, exploiting a common website security feature: A user can prompt a website hosting an account to send a text message to the user’s phone with a security code that temporarily allows access to the account. Ung employed “SIM swapping” in which the thief tricks the victim’s phone carrier into switching the victim’s phone number to a SIM card in the thief’s phone. The thief then prompts the website hosting the victim’s financial account to send a temporary security code to the hijacked phone; the thief accesses the account and transfers the assets.In 2021, Ung pleaded no contest to identity theft, attempted grand theft, and 10 counts of felony grand theft. He admitted a white-collar crime enhancement; he committed three offenses after his bail was revoked. The court imposed a 10-year prison term, entered a general restitution order, and later ordered Ung to make restitution by transferring cryptocurrencies to the victims in the same kinds and amounts he had stolen. Ung argued the order violated his due process rights to notice. He estimates the value of the cryptocurrencies was about $1.56 million when he stole them; the value was about $15.9 million by the time of the restitution hearing.The court of appeal affirmed. Under the statute, the value of stolen property is the replacement cost of like property. By stealing the victims’ cryptocurrency, Ung deprived them of the ability to sell it for a profit after its value increased; whatever profits they lost were a direct consequence of Ung’s conduct. View "People v. Ung" on Justia Law

This case arose out of a qui tam action against Prime Healthcare Services—Encino Hospital, LLC (Encino Hospital) and others to impose civil penalties for violation of the Insurance Fraud Prevention Act (IFPA), Insurance Code section 1871 et seq. The State of California and relator (Plaintiffs) appealed from a judgment entered after a bench trial in which the court found insufficient evidence to support their allegations that Defendants engaged in insurance fraud by billing insurers for services performed in a detox center for which they had no appropriate license, and by employing a referral agency to steer patients to the center.   The Second Appellate District affirmed the judgment. The court explained that, CDI alleged that Encino Hospital misrepresented to insurers that it was properly licensed to provide detox services when it was not. The trial court found no evidence suggesting that Defendants presented a false claim to any insurer. The court agreed, reasoning that no authority of which it is aware or to which it has been directed obligates Encino Hospital to hold any license other than its license as a general acute care hospital. Because Encino Hospital needed no separate license or approval, and no evidence showed it concealed any provider, the CDI’s cause of action for false claims failed for lack of a predicate. View "State of Cal. v. Encino Hospital Medical Center" on Justia Law

Defendant Laura Shelly pled no contest to one count of embezzlement by an employee. Pursuant to the negotiated plea, the trial court imposed a five-year term of felony probation. The court also ordered defendant to pay $72,972.47 in restitution. Shelly argued on appeal the length of her probation had to be reduced in light of Assembly Bill No. 1950 (2019-2020 Reg. Sess.) which reduced the maximum length of felony probation to two or three years. She also argued the amount of restitution had to be reduced by $5,816.25. The Court of Appeal agreed, and the State conceded, that Assembly Bill 1950 applied retroactively and entitled defendant to have the length of her probation reduced. The question remaining was whether the State was then entitled to withdraw from the plea agreement. To this, the Court held it was not. The Court also reduced the restitution order by $1,000. View "California v. Shelly" on Justia Law

Sara, an elderly woman, owned the property and resided there with her husband, who has dementia. San Mateo County informed Sara that she owed taxes and faced foreclosure. Miller, a real estate salesperson, contacted Sara and offered to secure a reverse mortgage to pay Sara’s tax obligation. Miller provided Sara with a document to sign. Sara believed the document was to secure a $500,000 reverse mortgage and that after she signed, Miller would pay the taxes. Sara did not read the document but signed it. The document was actually a purchase agreement. A deed transferring the property to Rex was recorded the same day. The District Attorney’s Office notified Sara of the sale. Lion had purchased the property from Rex. Miller pled no contest to unlawfully and knowingly procuring and offering a false or forged instrument to be filed in a state public office and grand theft of the property. Lion filed a quiet title action.The state moved to void the deed to Rex. The court determined the deed was forged and that the matter was appropriately addressed in the criminal proceeding. The court of appeal affirmed the adjudication of the deed as void from its inception, rejecting arguments that Miller’s no contest plea “was not an adjudication of the alleged falsity or forgery” of the deed, that the finding was not supported by the record, and the court should have deferred to the pending quiet title action. View "People v. Miller" on Justia Law