Justia White Collar Crime Opinion Summaries

Ayers, an experienced Kentucky criminal-defense attorney, was indicted in 2008 on five counts of failing to file state tax returns. Ayers represented himself throughout the 21 months between his indictment and trial, but never formally elected to do so. He never waived his right to counsel on the record, filed a notice of appearance, or moved to be allowed to proceed pro se. The court allegedly failed to inform him at his arraignment that he had a right to counsel and never subsequently sought to determine whether Ayers’s self-representation was a voluntary, intelligent, and knowing waiver of his right to counsel. When Ayers asked for a continuance a day before trial was scheduled to begin so that he could hire an attorney with whom he attested he was already in negotiations, the court denied his request and forced him to proceed pro se. Ayers was convicted. The Sixth Circuit reversed the district court’s denial of habeas relief. The Kentucky Supreme Court acted contrary to clearly established Supreme Court precedent when it held that trial courts need not “obtain a waiver of counsel” before allowing “experienced criminal trial attorneys” to represent themselves. Applying de novo review, the court concluded that Ayers did not validly waive his right to counsel. View "Ayers v. Hall" on Justia Law

Petitioner William Avignone, at the time of this appeal, was in custody awaiting trial on charges of multiple counts of grand theft of personal property and fraud in connection with the offer, purchase, or sale of security. As part of a plea deal, Avignone pled guilty to three counts of fraud and two counts of grand theft while the prosecution dismissed the remaining counts. The trial court sentenced him to five years four months to be served in the custody of the sheriff. Before December 2017, he had been out on bail for four years. During that time, he made all court appearances and did not engage in criminal activity. Avignone appealed his sentence, arguing, among other things, the court abused its discretion in denying probation. The Court of Appeal rejected that contention, but allowed Avignone to withdraw his guilty plea. He did, and the superior court held a bail review hearing. After multiple hearings, the court increased Avignone's bail to $300,000. Avignone appealed, arguing the court abused its discretion in increasing his bail and setting it at an amount that violated In re Humphrey, 19 Cal.App.5th 1006 (2018), the Eighth Amendment of the United States Constitution, and article 1, section 12 of the California Constitution. To this point the Court of Appeal agreed that the sentencing court abused its discretion. As such, the court vacated the superior court's bail determination, and directed reconsideration of the amount of bail. View "In re Avignone" on Justia Law

Petitioner Peyman Heidary (Heidary) allegedly owned and oversaw a network of medical clinics to generate fraudulent billings to workers’ compensation and insurance carriers. A non-attorney, he also allegedly controlled the day-to-day operations of various law firms, including California Injury Lawyers (collectively, the law firm.). He allegedly controlled or directed hiring and firing, legal decision making, and income flow to and from the law firm. Codefendants (and petitioners in a related writ case discussed below) Abramowitz, a lawyer, and Solis allegedly assisted Heidary in these operations. Under the alleged fraud scheme, injured workers appeared at the law firm, which would fill out boilerplate paperwork and, on Heidary’s order, direct the workers to one of his clinics to begin treatment. Each provider would fill out a “ ‘super bill,’ ” describing services rendered, which would then go to support staff to review compliance with Heidary’s orders. They would forward the superbill to a medical billing company. Those companies would generate a form to start the claim process. The billing companies contracted with each provider to bill for services, on Heidary’s order, including sometimes by forgery. Payment came from two sources: workers’ compensation insurers and third-party accounts-receivable buyers. The defendants were indicted by grand jury on conspiracy, making false or fraudulent claims for payment of health care benefits, knowingly making false and fraudulent material representations for payment of workers' compensation, money laundering, forgery, and unlicensed practice of medicine. In Petitioner challenged challenges the trial court’s denial of his motion to set aside the indictment pursuant to Penal Code section 995(a)(1)(B). Finding no reason to disturb the indictment, the Court of Appeal denied the petition. View "Heidary v. Superior Court" on Justia Law

In February 2016, Defendant Ricky Williams pled guilty to tax fraud relating to his preparation of federal income-tax returns for third-party clients for the 2010 and 2011 tax years. In his plea agreement, he agreed to pay restitution. After pleading guilty, he was initially released on bond pending sentencing. However, his release was revoked after the court discovered that he had been violating the terms of his release by again engaging in tax preparation activities for someone other than himself or his spouse. The probation officer who prepared his Presentence Investigation Report “determined that the defendant lied about his income, assets, and liabilities” to the probation officer. Among other things, the probation officer discovered several undisclosed financial transactions that Defendant had conducted with someone else’s social security number, and an attempt to unfreeze a bank account that contained approximately $37,000. The bank contacted the IRS. This lead to a sentence of thirty months in prison and an increased restitution amount to the IRS. A few months after Defendant’s sentencing, the government filed an application for post-judgment writ of garnishment against the frozen bank account. The bank objected on the grounds that the account was subject to “a prior internal USAA Federal Savings Bank hold from its Fraud Department." A magistrate judge concluded the government could not seek garnishment. The district court declined to accept the magistrate judge's recommendation pursuant to the terms of defendant's earlier restitution agreement. The Tenth Circuit found no error in the district court’s conclusion that the government was entitled to garnish Defendant’s bank account to obtain partial payment of the amount then-currently due in restitution. View "United States v. Williams" on Justia Law

Austin Ray was convicted by jury convictions for one count of conspiracy to defraud the United States, five counts of aiding in the preparation of a false tax return, and two counts of submitting a false tax return. Ray argued on appeal: (1) the government violated the Interstate Agreement on Detainers Act (IAD) of 1970; (2) the government engaged in vindictive prosecution; (3) the district court violated his rights under the Speedy Trial Act (STA) of 1974; (4) the government violated his due-process rights by destroying certain evidence; and (5) the district court constructively amended the indictment. The Tenth Circuit affirmed in all respects, finding: (1) the government never lodged a detainer against Ray, meaning the IAD didn’t apply; (2) Ray established neither actual nor presumptive vindictiveness; (3) Ray’s STA argument was waived for failing to raise it below; (4) the evidence at issue lacked any exculpatory value, and even if the evidence were potentially useful to Ray’s defense, the government didn’t destroy it in bad faith; and (5) the district court narrowed, rather than broadened, the charges against Ray. View "United States v. Ray" on Justia Law

On the facts of the case, the constitutional speedy trial clock began to run from the date of the original indictment rather than from the date of an additional charge first brought in a superseding indictment.A federal grand jury indicted Defendant on twelve counts of wire fraud. Approximately six years later, the government filed a superseding indictment containing the same twelve wire-fraud counts as the original indictment and adding a new count for bank fraud. The district court granted Defendant’s motion to dismiss the original indictment and the added bank-fraud count on Sixth Amendment speedy trial grounds. The government appealed, arguing that, with respect to the bank-fraud charge, the district court should have measured the period of delay from the filing of the superseding indictment, not from the filing of the initial indictment. The First Circuit disagreed, holding that the bringing of an additional charge does not reset the Sixth Amendment speedy trial clock to the date of the superseding indictment where the additional charge and the charge for which the defendant was previously accused are based on the same act or transaction, or common scheme or plan, and where the government could have, with diligence, brought the additional charge at the time of the prior accusation. View "United States v. Handa" on Justia Law

Schock resigned from Congress in 2015, after disclosures about trips he took at public expense, the expense of his elaborate office furnishings, and how he had applied campaign funds. Schock was charged with mail and wire fraud, theft of government funds, making false statements to Congress and the Federal Elections Commission, and filing false tax returns. Schock moved to dismiss the indictment, arguing that the charges are inconsistent with the Constitution’s Speech or Debate Clause and with the House of Representatives’ constitutional authority to determine the rules of its proceedings. The Seventh Circuit affirmed the denial of the motion. The indictment arises out of applications for reimbursements, which are not speeches, debates, or any other part of the legislative process. Submitting a claim under established rules differs from the formulation of those rules. The foundation for Schock’s rule-making” argument—the proposition that if Body A has sole power to make a rule, then Body A has sole power to interpret that rule—does not represent established doctrine. “ Judges regularly interpret, apply, and occasionally nullify rules promulgated by the President or another part of the Executive Branch, as well as statutes enacted by the Legislative Branch; why would reimbursement rules be different?” View "United States v. Schock" on Justia Law

Cohen, as the president and chairman of companies that sold insurance to those in the entertainment industry, was obliged to submit regular financial statements to insurance regulators. Beginning in 2008, Cohen engaged in a scheme to defraud policyholders and the public. Cohen created fraudulent financial documents and sent fraudulent representations to auditing firms and others, securing favorable opinions on the financial standing of his companies, which received more than $100,000,000 in premiums. Prosecutors secured a 31-count indictment, alleging that Cohen’s arrest upended his intentions to harm public officials. Cohen had purchased a long-range tactical rifle, plus ammunition and a night vision device and had researched homemade bombs, purchased ammonium nitrate and made recordings about plans to attack public officials. As his scheme unraveled, Cohen threatened witnesses. Cohen, who represented himself during most proceedings, eventually pleaded guilty to wire fraud, aggravated identity theft, making false statements to insurance regulators, and obstruction of justice. Cohen was sentenced to 444 months in prison. The Fourth Circuit upheld Cohen’s appeal waiver and dismissed certain claims. The court rejected, on the merits, claims that the district court erred in failing to conduct a Farmer hearing on his asset seizure allegations and that Cohen’s Sixth Amendment right to counsel was contravened by the magistrate’s denial of his request to revoke his pro se status and have a lawyer appointed for his final sentencing hearing. View "United States v. Cohen" on Justia Law

Porter, the mayor of Paintsville, Kentucky, steered business and contracts to companies owned by his co-defendant, Crace, and ensured payment of a fraudulent invoice to Crace’s company, in return for payments disguised as loans. Porter was charged with theft concerning programs receiving federal funds, 18 U.S.C. 666(a)(1)(A), and bribery concerning such programs, section 666(a)(1)(B) and was sentenced to 48 months of imprisonment. The Sixth Circuit affirmed, rejecting arguments that the conviction under section 666(a)(1)(B) was unsupported by sufficient evidence and that the admission of a witness’s prior statements to investigators and the admission of another witness’s deposition testimony violated his confrontation rights. A conviction under section 666(a)(1)(B) does not require evidence of a quid pro quo “in connection with” any “official act.” It is enough if a defendant corruptly solicits anything of value with the intent to be influenced or rewarded in connection with some transaction involving property or services worth $5000 or more. Testimony concerning prior statements to investigators did not violate Porter’s confrontation rights because they were not offered to prove the truth of the matter asserted. The government sufficiently demonstrated the unavailability of the deposition witness to testify at trial, so no Confrontation Clause violation occurred. View "United States v. Porter" on Justia Law

Defendants-Appellants Matthew and Brandi Channon s used fictitious names and addresses to open rewards accounts at OfficeMax, known as “MaxPerks” accounts. They used these accounts to fraudulently obtain more than $100,000 in OfficeMax products. The scheme came to light when Steven Gardner, an OfficeMax fraud investigator, noticed an unusually high number of online-adjustments across several different accounts. Gardner observed that most of the accounts were registered to one of three email addresses, differing only with interspersed periods between the characters of each address. OfficeMax recognized the variations as unique email addresses, but gmail did not. Defendants then used these fraudulent email addresses to claim purchases by other customers, thus generating rewards to which they were not entitled. They also used various accounts to sell more than 27,000 used ink cartridges, receiving $3 in rewards from OfficeMax for each after paying an average of $.32 per cartridge on eBay. In total, over the 21 months of their scheme, Defendants redeemed $105,191 in OfficeMax rewards. Defendants were ultimately were convicted by a jury of wire fraud and conspiracy to commit wire fraud relating to a scheme to defraud OfficeMax. They appealed, challenging the district court’s decision to: (1) admit exhibits derived from computer records and (2) enter a money judgment forfeiture. The Tenth Circuit Court of Appeal upheld the district court’s admission of the exhibits but remanded so the district court may conduct further proceedings on the money judgment of forfeiture. View "United States v. Channon (Matthew)" on Justia Law