Justia White Collar Crime Opinion Summaries

Waters, a former Michigan state legislator, became involved in a corruption probe involving her then-live-in companion, political consultant Riddle. With a negotiated plea agreement, Waters pleaded guilty to filing a fraudulent tax return (26 U.S.C. 7207). The district court sentenced her to a year’s probation on the misdemeanor charge. Eight days later, Waters moved pro se to withdraw her guilty plea. The district court denied that motion. The Sixth Circuit affirmed and later affirmed Waters’s conviction and sentence. More than three years later, Waters petitioned for a writ of error coram nobis, claiming that her attorney was constitutionally ineffective in promising that her misdemeanor conviction could “easily” be expunged and in failing to represent her vigorously at sentencing because he had a conflict of interest arising from his simultaneous representation of Riddle. The district court denied the petition. The Sixth Circuit affirmed. Waters did not establish an ongoing civil disability. At most she has alleged an injury to reputation, but this is not enough to warrant coram nobis. Although Waters claimed that her ability to travel outside the United States has been impaired, she did not show how this is the case. View "United States v. Waters" on Justia Law

Defendant, an attorney, was charged with multiple counts of, inter alia, forgery of a document and uttering a forged instrument. The charges stemmed from allegations that Defendant, through his use of computers, orchestrated a sophisticated scheme to divert to himself funds that were intended to be used to pay off large home mortgage loans. Prior to trial, the Commonwealth filed a motion to compel Defendant to enter his password into encryption software he placed on various digital media storage devices that were in the custody of the Commonwealth. Following a hearing, a judge denied the Commonwealth’s motion to compel decryption but reported a question of law to the Supreme Judicial Court. The Court reversed the denial of the Commonwealth’s motion, concluding that Defendant could be compelled to provide his key to seized encrypted digital evidence provided that the compelled decryption would not communicate facts of a testimonial nature to the Commonwealth beyond what Defendant had already admitted to investigators. Remanded. View "Commonwealth v. Gelfgatt" on Justia Law

After a jury trial, Defendant was convicted of theft by misapplication of property and securities fraud. Defendant appealed, contending that the court's jury instructions impermissibly shifted the burden of proof onto him to prove his innocence. The Supreme Court affirmed, holding that the burden of proof was not improperly shifted onto Defendant to prove his innocence where (1) there was no obvious error in the instructions the trial court gave because, as a whole, the instructions correctly stated the law; and (2) the court correctly stated the State's burden of proof and Defendant's presumption of innocence several times during the jury selection, at the beginning of the trial, in its final instructions, and in its written instructions sent to the jury room. View "State v. Philbrook" on Justia Law

Plaintiffs here were Bryan Behrens, Bryan Behrens Co., Inc., National Investments, Inc., and Thomas Stalnaker. Defendants were Christian Blunk, Berkshire and Blunk, and Abrahams Kaslow & Cassman LLP. In 2008, the SEC filed a civil enforcement action against all plaintiffs except Stalnaker. In 2009, the federal government indicted Behrens on charges of securities fraud, mail fraud, wire fraud, and money laundering. Prior to the filing of the indictment, Plaintiffs filed their complaint alleging that Blunk had committed legal malpractice. Plaintiffs also sued Blunk's former partnership and the firm that later employed Blunk. Both civil and criminal cases were proceeding at roughly the same time. In 2010, Behrens pled guilty to securities fraud. Later that year, Plaintiffs filed an amended complaint against Defendants for legal malpractice. The district court found the action was barred by the applicable statute of limitations and by the doctrine of in pari delicto. The Supreme Court affirmed, holding that Plaintiffs' suit was barred by the two-year statute of limitations set forth in Neb. Rev. Stat. 25-222.View "Behrens v. Blunk" on Justia Law

After a grand jury indicted the Kaleys for reselling stolen medical devices and laundering the proceeds, the government obtained a restraining order against their assets under 21 U.S.C. 853(e)(1), to “preserve the availability of [forfeitable] property” while criminal proceedings are pending. An order is available if probable cause exists to think that a defendant has committed an offense permitting forfeiture and the disputed assets are traceable or sufficiently related to the crime. The Kaleys moved to vacate the order, to use disputed assets for their legal fees. The district court allowed them to challenge traceability to the crimes but not the facts supporting the underlying indictment. The Eleventh Circuit and Supreme Court affirmed. In challenging a section 853(e)(1) pre-trial seizure, an indicted defendant is not entitled to contest the grand jury determination of probable cause to believe the defendant committed the crimes. A probable cause finding sufficient to initiate prosecution for a serious crime is conclusive and, generally, a challenge to the reliability or competence of evidence supporting that finding will not be heard. A grand jury’s probable cause finding may effect a pre-trial restraint on a person’s liberty or property. Because the government’s interest in freezing potentially forfeitable assets without an adversarial hearing about the probable cause underlying criminal charges and the Kaleys’ interest in retaining counsel of their own choosing are both substantial, the issue boils down to the “probable value, if any,” of a judicial hearing in uncovering mistaken grand jury probable cause findings. The legal standard is merely probable cause, however, and the grand jury has already made that finding; a full-dress hearing will provide little benefit. View "Kaley v. United States" on Justia Law

After a grand jury indicted the Kaleys for reselling stolen medical devices and laundering the proceeds, the government obtained a restraining order against their assets under 21 U.S.C. 853(e)(1), to “preserve the availability of [forfeitable] property” while criminal proceedings are pending. An order is available if probable cause exists to think that a defendant has committed an offense permitting forfeiture and the disputed assets are traceable or sufficiently related to the crime. The Kaleys moved to vacate the order, to use disputed assets for their legal fees. The district court allowed them to challenge traceability to the crimes but not the facts supporting the underlying indictment. The Eleventh Circuit and Supreme Court affirmed. In challenging a section 853(e)(1) pre-trial seizure, an indicted defendant is not entitled to contest the grand jury determination of probable cause to believe the defendant committed the crimes. A probable cause finding sufficient to initiate prosecution for a serious crime is conclusive and, generally, a challenge to the reliability or competence of evidence supporting that finding will not be heard. A grand jury’s probable cause finding may effect a pre-trial restraint on a person’s liberty or property. Because the government’s interest in freezing potentially forfeitable assets without an adversarial hearing about the probable cause underlying criminal charges and the Kaleys’ interest in retaining counsel of their own choosing are both substantial, the issue boils down to the “probable value, if any,” of a judicial hearing in uncovering mistaken grand jury probable cause findings. The legal standard is merely probable cause, however, and the grand jury has already made that finding; a full-dress hearing will provide little benefit. View "Kaley v. United States" on Justia Law

After a jury trial, Defendants, Catherine Floyd and William Dion, were convicted of conspiracy to defraud the United States of payroll and income taxes and endeavoring to obstruct and impede the Internal Revenue Service (IRS). The First Circuit Court of Appeals affirmed, holding (1) there was sufficient evidence to support the convictions; (2) the district court did not err in failing to suppress certain evidence; (3) the district court did not err in denying Defendants’ motions for severance and in trying Defendants jointly with their coconspirator; (4) Defendants’ claim that the IRS’s failure to comply with the Federal Register Act engendered dismissal of some of the charges was without merit; and (5) the district court did not err in sentencing Dion. View "United States v. Dion" on Justia Law

After losing his job as a stockbroker and financial advisor and his accompanying health insurance, Appellant applied for and received subsidized health insurance for several years. Russell represented on each application that he had no income to report and was unemployed, but Appellant was working under the table during those years. After a government investigation and an ensuing jury trial, Appellant was convicted of making false statements in connection with the payment of health care benefits. The First Circuit Court of Appeals affirmed, holding (1) the jury instruction on the definition of willfulness was not error; (2) the government presented sufficient evidence that Appellant's false statements were material to support the conviction; (3) the district court did not err in excluding certain testimony as state-of-mind hearsay; and (4) neither the prosecutor's statements during closing arguments nor his questions in eliciting testimony from a witness necessitated reversal. View "United States v. Russell" on Justia Law

After a jury trial, Defendants Salvatore DiMasi, the former Speaker of the Massachusetts House of Representatives, and Richard McDonough, a lobbyist, were convicted of several crimes, including honest-services fraud and conspiracy to commit honest-services fraud, resulting from a scheme to funnel money to DiMasi in exchange for political favors. The district court sentenced DiMasi to ninety-six months' imprisonment and McDonough to eight-four months' imprisonment. The First Circuit Court of Appeals affirmed the convictions and sentences, holding (1) the evidence was sufficient to support Defendants' convictions; (2) the trial court did not prejudicially err in instructing the jury; (3) the trial court did not err in its challenged evidentiary rulings; and (4) the trial court did not err in sentencing Defendants. View "United States v. McDonough" on Justia Law

Defendants in this case were a Puerto Rico legislator and a Commonwealth businessman who were charged with unlawfully exchanging favorable action on legislation for a trip to Las Vegas to attend a prize fight. After a jury trial, Defendants were convicted of, inter alia, federal program bribery in violation of 18 U.S.C. 666. Defendants appealed, contending, among other issues, that the district court erred in instructing the jury to find guilt on the section 666 counts based on a gratuity theory rather than a bribery theory. The First Circuit Court of appeals (1) vacated Defendants' section 666 convictions, holding that because section 666 does not criminalize gratuities in addition to bribes, the district court erred in its instructions; and (2) directed the district court to enter a judgment of acquittal on Defendants' conspiracy charges, holding that the Double Jeopardy Clause entitled both men to acquittal on their respective conspiracy charges. View "United States v. Bravo-Fernandez" on Justia Law