Justia White Collar Crime Opinion Summaries

Defendant Michael Calhoun (and two co-conspirators) prematurely sought to appeal a district court order denying his motion to quash the indictment against them. The 60-count indictment arose out of Defendant’s grand jury testimony. In it, Defendant was charged with 50 counts of mail and wire fraud and conspiracy to commit the same. Absent a “final decision,” the Tenth Circuit Court of Appeals dismissed the appeal for want of subject matter jurisdiction. On remand, Defendant entered into a plea agreement with the Government, whereby Defendant pled guilty to one count of conspiracy to commit wire or mail fraud and reserved his right to appeal the denial of his motion to quash. The district court sentenced Defendant to five years probation. The court did not impose a fine or order restitution. Defendant again appealed, arguing that a “division of loyalties,” i.e., conflict of interest, on the part of his retained counsel prompted his incriminating grand jury testimony, thus tainting the indictment. Specifically, Defendant asserted that his criminal counsel, Tom Mills (hired and paid by Texas Capital Bank on the recommendation of his civil counsel Larry Friedman) encouraged Defendant to incriminate himself before the grand jury for the purpose of assisting the Bank in its efforts to overturn a $65 million civil judgment related to the scheme. Defendant says the conflict rendered his criminal counsel ineffective in violation of his Sixth Amendment right to counsel, thereby requiring suppression of his grand jury testimony and quashing of the indictment. The Tenth Circuit affirmed the district court's judgment. "Precedent, both our own and that of the Supreme Court, provides us no alternative but to recognize that Defendant’s Sixth Amendment right to counsel did not attach until August 15, 2012, the date he was formally charged by way of indictment. Unfortunately for Defendant, his right to counsel claim centers on his counsel’s conduct prior to that date. Defendant has no remedy without a right. [. . .] Sure, Defendant did not want to be indicted . . . But the Government made no such promise." Defendant acknowledged at the hearing on his motion to quash that "'after I had given substantial help, then I would be granted probation.' Defendant understood this to mean 'a deal had been made and I would get probation at worst.' Then, after the prosecutor advised him that he would receive a downward departure for his assistance, Defendant testified before the grand jury. Defendant may not have received the deal he had hoped for, but he undoubtedly received the deal he expected." View "United States v. Calhoun" on Justia Law

King pled guilty in Arkansas state court to 1,577 counts of forgery and theft of property for embezzling more than $700,000 from the school district where she worked. The court sentenced King to 80 years imprisonment, within the guidelines range. King had no criminal history and claims she accepted the plea because of threats that her husband and son would also be charged. Five months later, the court reduced King’s sentence to 20 years imprisonment, under Arkansas Code 16-90-111, which allows a trial court to “correct an illegal sentence at any time” or to “correct a sentence imposed in an illegal manner within . . . ninety (90) days after the sentence is imposed.” The state appealed to the Arkansas Supreme Court, which reinstated King’s 80-year sentence, finding the trial court lacked jurisdiction to enter the reduction because the 90-day period for doing so had expired. King sought federal habeas relief. Although the district court was clearly sympathetic, it found no grounds for habeas relief. The Eighth Circuit affirmed, holding that King is not entitled to habeas relief based on her disagreement with the Arkansas Supreme Court’s interpretation of Arkansas law. View "King v. Kelley" on Justia Law

King pled guilty in Arkansas state court to 1,577 counts of forgery and theft of property for embezzling more than $700,000 from the school district where she worked. The court sentenced King to 80 years imprisonment, within the guidelines range. King had no criminal history and claims she accepted the plea because of threats that her husband and son would also be charged. Five months later, the court reduced King’s sentence to 20 years imprisonment, under Arkansas Code 16-90-111, which allows a trial court to “correct an illegal sentence at any time” or to “correct a sentence imposed in an illegal manner within . . . ninety (90) days after the sentence is imposed.” The state appealed to the Arkansas Supreme Court, which reinstated King’s 80-year sentence, finding the trial court lacked jurisdiction to enter the reduction because the 90-day period for doing so had expired. King sought federal habeas relief. Although the district court was clearly sympathetic, it found no grounds for habeas relief. The Eighth Circuit affirmed, holding that King is not entitled to habeas relief based on her disagreement with the Arkansas Supreme Court’s interpretation of Arkansas law. View "King v. Kelley" on Justia Law

Defendant-appellant Leslie Camick was convicted of mail fraud, wire fraud, making a material false statement to the U.S. Patent Office, three counts of aggravated identity theft, and obstruction of justice, all stemming from his unlawful use of his deceased brother’s name and identity. Following his conviction and sentencing, defendant was ordered to pay restitution. On appeal, he argued the evidence was insufficient to convict him on each count. He also challenged the district court’s restitution determination. Upon review, the Tenth Circuit reversed defendant's convictions for mail fraud, wire fraud, material false statement, and aggravated identity theft, as well as portions of the restitution award, finding that the evidence presented at trial was indeed insufficient to support those charges. But the Court affirmed the conviction for obstruction of justice. View "United States v. Camick" on Justia Law

Defendant-appellant Leslie Camick was convicted of mail fraud, wire fraud, making a material false statement to the U.S. Patent Office, three counts of aggravated identity theft, and obstruction of justice, all stemming from his unlawful use of his deceased brother’s name and identity. Following his conviction and sentencing, defendant was ordered to pay restitution. On appeal, he argued the evidence was insufficient to convict him on each count. He also challenged the district court’s restitution determination. Upon review, the Tenth Circuit reversed defendant's convictions for mail fraud, wire fraud, material false statement, and aggravated identity theft, as well as portions of the restitution award, finding that the evidence presented at trial was indeed insufficient to support those charges. But the Court affirmed the conviction for obstruction of justice. View "United States v. Camick" on Justia Law

Katherine Fleming was indicted on two counts of identity fraud and two counts of financial transaction fraud. She entered a negotiated guilty plea, which allowed for deferred sentencing and participation in a drug court program. Her plea agreement specified that she would be sentenced to eight years of probation if she completed the drug court program, but she would be sentenced to ten years, with the first four to be served in prison and the remaining six to be served on probation, including residential substance abuse treatment, if she failed to complete the program. The agreement also provided that she would make restitution payments under either scenario. After more than two years in the program, Fleming was terminated from the drug court program for failure to comply with its rules. Consistent with the plea agreement, the trial court then imposed a ten-year sentence, the first four to be served in prison and the remaining six to be served on probation, including residential substance abuse treatment. The Supreme Court granted certiorari to determine under what circumstances a defendant may receive sentence credit for participation in a drug court program established under OCGA 15-1-15. After that review, the Court held that no sentence credit for participation in a drug court program was warranted in this particular case. View "Fleming v. Georgia" on Justia Law

In 1973, Doe organized his medical practice as a “professional association,” a type of corporation doctors are permitted to form under New Jersey law. Since its creation, Doe has operated his practice through that entity. As of 2011, the entity employed six people. The government alleges that Doe entered into an illicit agreement with OTE, a blood laboratory, whereby it paid him monetary bribes for referring patients to it for blood testing. A grand jury subpoena was served on the entity’s custodian of records, directing it to turn over documents, including records of patients referred to OTE, lease and consulting agreements, checks received by it for reasons other than patient treatment, correspondence regarding its use of OTE, correspondence with specified individuals and entities, and basic corporate records. The district court denied Doe’s motion to quash. Doe persistently refused to let the entity comply; the court found it in civil contempt. Meanwhile, the entity fired its employees and hired independent contractors, tasked with “[m]aint[aining] accurate and complete medical records, kept in accordance with HIPAA and Patient Privacy standards,” and assisting with billing practices. The Third Circuit affirmed, agreeing that Supreme Court precedent indicated that corporations may not assert a Fifth Amendment privilege, and that the subpoena was not overbroad in violation of the Fourth Amendment. View "In Re: The Matter Of The Grand Jury" on Justia Law

Eagan, Minnesota, assisted in apprehending Procknow, who had absconded while serving supervised release imposed by a Wisconsin state court for forgery. Authorities had received information that Procknow and his girlfriend were staying at an Eagan hotel. The girlfriend was registered at the hotel. Officers spotted Procknow’s car, chased Procknow through the lobby, and arrested him. Through the windows of Procknow’s car, they saw a scanner or copier. Learning of the arrests, the hotel manager stated that the their stay was being terminated and asked the officers to collect a dog, believed to be in their room and ensure that there were no other occupants. Officers knocked, and announced. No one answered, so they used a hotel key and found a dog. Entering to ensure that there were no other occupants, officers saw, in plain view, an electric typewriter, a credit card issued in the name of “Smith,” and financial forms bearing various names and social security numbers. Officer photographed the room, sealed it, and obtained search warrants for the room and car. They seized blank W‐2 forms, partially completed tax forms, lists of business employer identification numbers, and prepaid debit cards (tax refunds) in the names of different people. Further investigation revealed that Procknow had obtained the personal identifying information of at least 40 individuals, which he used to file fraudulent tax returns and claim refunds. Procknow pleaded guilty to theft of government money and aggravated identify theft. The Seventh Circuit affirmed denial of a motion to suppress evidence obtained by the warrantless entry into the hotel room and evidence obtained by grand jury subpoena following the withdrawal of IRS administrative summonses requesting the same information. View "United States v. Procknow" on Justia Law

Defendant was convicted and sentenced for conspiracy to obstruct justice, accessory after the fact to mail fraud and securities law violations, altering documents to influence a federal investigation, and aiding and abetting false testimony at an SEC deposition. A panel of the Ninth Circuit affirmed, holding (1) the district court did not err at sentencing by applying both the “Broker-Dealer” enhancement and the “Special Skill” enhancement under the Sentencing Guidelines; (2) the district court did not err in calculating loss and victim amounts, as required under the Sentencing Guidelines; (3) Defendant was competent to waive his right to a jury trial, and his waiver was knowing and intelligent; and (4) the district court did not plainly err in (a) excluding a non-lawyer’s testimony reciting facts and the legal conclusion that Defendant did not break the law; (b) determining that the district court was capable of understanding an expert’s opinion regarding Defendant’s professional and ethical duties as an attorney; and (c) admitting coconspirator nonhearsay testimony. View "United States v. Tamman" on Justia Law

A jury convicted defendants James Sweeney II and Patrick Ryan of 65 counts of white-collar crime (all relating to the sale of securities) and found true three special allegations. The court sentenced Sweeney to 33 years and Ryan to 31 years. The court also imposed restitution. On appeal, both defendants challenged the sufficiency of the evidence on count 68 and the convictions on counts 67, 68, 69, 70, and 71, primarily involving multi-level marketing programs. Ryan also claimed various sentencing errors, including those related to fines and restitution.3 Sweeney makes similar arguments. The Court of Appeal found sufficient evidence for count 68. The Court also upheld convictions on counts 67 through 71. View "California v. Sweeney" on Justia Law