Justia White Collar Crime Opinion Summaries

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

Susan and William Avignone defrauded five investors out of more than $700,000 in a real estate scheme. In exchange for dismissal of some of the charges, the Avignones pleaded guilty to three counts of fraud in connection with the offer, sale, and purchase of a security and two counts of grand theft of personal property with a value of more than $950. Susan admitted a Penal Code section 186.11 (a)(2) allegation attached to count 10, and a section 12022.6 (a)(1) allegation attached to count 5. William admitted a section 186.11 (a)(2) allegation attached to count 2, a section 12022.6 (a)(2) allegation attached to count 3, and a section 12022.6 (a)(1) allegation attached to count 5. At sentencing, the trial court struck the section 186.11 enhancements and denied probation. It sentenced the Avignones to an aggregate term of five years four months to be served in the custody of the sheriff. The court imposed a split sentence, ordering that one year four months of the imposed sentence would be served in the community under mandatory supervision. The Avignones separately appealed, contending the trial court abused its discretion in denying probation. William also contended: (1) an electronic search condition was unreasonable and unconstitutionally overbroad; and (2) the trial court improperly calculated a restitution order as to one of the victims. The State conceded the trial court improperly calculated the restitution for one of the victims, but asserted the Avignones' sentences were unauthorized because the trial court did not have discretion to sentence them to county jail, rather than prison. The Court of Appeal rejected the Avignones' argument that the trial court abused its discretion in denying probation, and agreed the trial court imposed an unauthorized sentence. This conclusion rendered William's argument regarding the electronic search condition moot. The Court reversed and remanded with directions to allow the Avignones an opportunity to withdraw their guilty pleas. View "California v. Avignone" on Justia Law

Defendant Kenneth Hardin was the senior manager of the Civil Rights Division for the Regional Transportation District in Colorado (RTD). Lucilious Ward was the owner–operator of a busing company that had been certified as a Disadvantaged Business Enterprise and Small Business Enterprise. Ward was also a manufacturing representative for a Chinese manufacturer of automobiles and rechargeable batteries. In 2008, Ward’s busing company contracted with RTD as a service provider for a program that provided local bus transportation in Denver for people with disabilities. From that point on, Ward paid Defendant monthly bribes in exchange for his help. When the "Access-a-Ride" contract expired in 2014 and Ward received his final check, Defendant called Ward to request an additional, final payment of $1,100. Unbeknownst to Defendant, Ward had pled guilty to tax evasion. Hoping to receive a reduced sentence in his tax case, Ward relayed Defendant’s request to the Federal Bureau of Investigation, which began using him as a confidential informant to investigate Defendant for bribery. Defendant was indicted on four counts relating to committing bribery involving a program that receives federal funds. The four counts correlated to four meetings he had with Ward about RTD’s request for proposal for a shuttle-bus contract. Count 1 charged Defendant with accepting a bribe of $1,100; he was acquitted on this count. However, the jury found Defendant guilty as to Counts 2–4, which were based on Ward’s bribes relating to the proposed shuttle-bus contract. After return of the guilty verdicts, Defendant moved for a judgment of acquittal, arguing that, because of his acquittal on Count 1, the government had not shown that the bribes he solicited met the $5,000 threshold set by statute. The district court denied Defendant’s motion, holding that the jury could reasonably have concluded that the bribes were intended to influence the selection of bids for the shuttle-bus contract and that the value of this contract exceeded $5,000. Defendant timely appealed. View "United States v. Hardin" on Justia Law

Defendant Kathleen Stegman was convicted by a jury of two counts of evading her personal taxes for the tax years 2007 and 2008. Stegman was sentenced to a term of imprisonment of 51 months, to be followed by a three-year term of supervised release. The district court also ordered Stegman to pay a $100,000 fine, plus restitution in the amount of $68,733. Stegman established several limited liability corporations pertaining to a “medical aesthetics” business she owned, using these corporations to effectively launder client payments. As part of this process, Stegman would use the corporations to purchase money orders, typically in denominations of $500 or less, that she in turn used to purchase items for personal use. In 2007, Stegman purchased 162 money orders totaling $77,181.92. In 2008, she purchased 252 money orders totaling $121,869.99. And in 2009, she purchased 157 money orders totaling $73,697.31. Notably, Stegman reported zero cash income on her federal income tax returns during each of these years. At the conclusion of the evidence, the jury convicted Stegman of evading her personal taxes for the tax years 2007 and 2008 (Counts 4 and 5), as well as evading corporate taxes for the tax years 2008 and 2009 (Counts 1 and 2). The jury acquitted Stegman of evading corporate taxes for the tax year 2010 (Count 3). The jury also acquitted Stegman and Smith of the conspiracy charge (Count 6). Stegman moved for judgment of acquittal or, in the alternative, a new trial. The district court granted the motion as to the two counts that related to the evasion of corporate taxes (Counts 1 and 2), but denied the remainder of the motion. In doing so, the district court chose to acquit Stegman of the corporate tax evasion counts not due to a lack of “proof beyond a reasonable doubt that this corporation evaded taxes,” but rather because “the indictment itself was flawed in attributing the loss as due and owing by Ms. Stegman, when actually it was due and owing by the corporation.” Stegman raised five issues on appeal, four of which pertain to her convictions and one of which pertained to her sentence. Although several of these issues require extensive discussion due to their fact-intensive nature, the Tenth Circuit concluded that all of these issues lacked merit. View "United States v. Stegman" on Justia Law

This appeal stemmed from an embezzlement case concerning four missing bank deposits defendant Gregory Manning was entrusted to make for his employers. Defendant argued on appeal that: (1) the State’s failure to preserve potentially exculpatory video evidence should have resulted in the trial court dismissing the charge or at least barring the State from presenting testimony concerning the video recordings in question; (2) the State’s closing argument impermissibly shifted the burden to him to preserve the video evidence and improperly impugned his defense; and (3) given his continuing claim of innocence, the sentencing court’s probation condition requiring him to complete a particular program in which he would have to accept responsibility for his crime was not individually tailored to his case and thus constituted an abuse of the court’s discretion. Finding no reversible error, the Vermont Supreme Court affirmed the conviction. View "Vermont v. Manning" on Justia Law

A jury convicted Matthew Williams of bank fraud and aggravated identity theft. He appealed, arguing the evidence against him was insufficient. Williams began a mortgage loan application at Pulaski Bank (the “bank”) using his father’s personal and financial information and his status as a Purple Heart veteran. After his father received the application packet in the mail, he called the bank to explain he had not applied for a loan. The bank referred the matter to law enforcement, but continued to work with Williams to process the loan and obtain additional documents to clarify the applicant’s identity. The bank sent Williams a notice of incompleteness because it lacked several required documents, signatures, and a photo identification. In response, Williams provided some of the required documents to the bank, including a fake earnings statement and a letter expressing his intent to proceed with the loan. The bank sent a final notice of incompleteness to Williams. Williams did not respond, and the bank closed his application file. Mr. Williams argues his misrepresentations on the incomplete application could not support a bank fraud conviction because they (1) were not material to the bank’s decision to issue him a loan; and (2) did not impose a risk of loss on the bank. Finding no reversible error in the district court's judgment, the Tenth Circuit affirmed. View "United States v. Williams" on Justia Law

A jury convicted Matthew Williams of bank fraud and aggravated identity theft. He appealed, arguing the evidence against him was insufficient. Williams began a mortgage loan application at Pulaski Bank (the “bank”) using his father’s personal and financial information and his status as a Purple Heart veteran. After his father received the application packet in the mail, he called the bank to explain he had not applied for a loan. The bank referred the matter to law enforcement, but continued to work with Williams to process the loan and obtain additional documents to clarify the applicant’s identity. The bank sent Williams a notice of incompleteness because it lacked several required documents, signatures, and a photo identification. In response, Williams provided some of the required documents to the bank, including a fake earnings statement and a letter expressing his intent to proceed with the loan. The bank sent a final notice of incompleteness to Williams. Williams did not respond, and the bank closed his application file. Mr. Williams argues his misrepresentations on the incomplete application could not support a bank fraud conviction because they (1) were not material to the bank’s decision to issue him a loan; and (2) did not impose a risk of loss on the bank. Finding no reversible error in the district court's judgment, the Tenth Circuit affirmed. View "United States v. Williams" on Justia Law

Sixth Circuit upholds allowing jury questions in online extortion case.Using the pseudonym “Dr. Evil,” an extortionist demanded $1 million in Bitcoin in exchange for an encryption key to Mitt Romney’s unreleased tax returns, which he claimed to have stolen from an accounting firm. He posted an image of Mike Myers’s Dr. Evil, from an Austin Powers movie, in the accounting firm’s Franklin, Tennessee office lobby. Agents traced the scheme to Brown, who had not actually stolen Romney’s returns. With 12 convictions for wire fraud and extortion, Brown was given a four-year prison sentence, and ordered to pay restitution. The Sixth Circuit affirmed his conviction, rejecting arguments that the search warrant lacked probable cause and that Brown was prejudiced by the judge allowing questions from the jury. The affidavit offered “a fair probability” that Brown’s home would contain evidence of the crime. Understanding the evidence required the jury to grasp the Secret Service’s forensic analysis of thumb drives, online posts, and Brown’s computers, Bitcoin, fingerprint matching, and digital photo manipulation-- enough complexity for a court to believe that permitting questions might aid jurors. The court vacated the sentence. Brown’s statements to prosecutors did not significantly impede the investigation, to justify the obstruction of justice enhancement. View "United States v. Brown" on Justia Law

In this appeal, the parties asked the Court of Appeal to determine the value of a blank check for the purpose of distinguishing between misdemeanor and felony receiving stolen property after passage of the Safe Neighborhoods and Schools Act (Proposition 47). Respondent Angela Vandiver pled guilty in 2012 to a single felony count of receiving stolen property based on her possession of blank checks she knew had been stolen. She later petitioned to have the conviction redesignated a misdemeanor under the new provisions of Proposition 47 on the ground the checks were worth $950 or less. The State opposed, arguing the balance of the victim’s checking account was greater than $950. The trial court found the value of the blank checks to be de minimis and granted the petition. The State argued on appeal the court erred by: (1) reaching the merits because Vandiver did not attach evidence of value to her petition; and (2) determining the checks’ value was de minimis. The State contended the court should have dismissed the petition as unsupported or found the checks were worth the full amount in the linked checking account and denied the petition on the merits. Finding no reversible error, the Court of Appeal affirmed. View "California v. Vandiver" on Justia Law

Petitioner Austin Veith pleaded guilty to theft and securities fraud. He asked the trial court to sentence him to probation instead of a term of incarceration. The trial court rejected his request for probation with no incarceration and sentenced Veith to ten years of incarceration on the theft count, and twenty-five years of probation on the securities fraud count. Veith did not object when the judge announced his sentence.  But, he did not sign the probation order acknowledging and accepting the terms and conditions of his sentence of probation. Instead, he filed a motion to correct his sentence pursuant to Crim. P. 35(a), arguing that the probationary portion of his sentence must be vacated because he did not consent to it. The trial court denied the motion, and Veith appealed.  The court of appeals affirmed in part and reversed in part, concluding that Veith had consented to the terms and conditions of the sentence of probation by requesting probation prior to the hearing, but that his consent did not include certain terms of probation added by the court. As a result, the court of appeals remanded the case to the trial court to remove the terms of probation from his sentence that Veith had not requested before sentencing.I t did not order any modification of the prison sentence. The Colorado Supreme Court granted certiorari to determine the legality of Veith’s sentence of probation, and reversed the appellate court's judgment. The Supreme Court held that a trial court cannot impose a sentence of probation without the defendant’s consent. In this case, Veith consented to probation in lieu of incarceration; therefore, the trial court exceeded the scope of Veith’s consent when it imposed a ten-year sentence of incarceration in addition to probation. The trial court lacked authority to impose the sentence of probation.  Accordingly, the Court vacated Veith’s sentence in its entirety, reversed the judgment of the court of appeals, and remanded the case to that court to return the case to the trial court for resentencing consistent with Veith’s plea agreement. View "Veith v. Colorado" on Justia Law