Justia White Collar Crime Opinion Summaries

Defendant appealed his conviction for attempting to obstruct an official proceeding by attempting to dispose of and hide assets involved in a forfeiture proceeding. At issue was whether the district court erred in denying defendant's motion for judgment of acquittal. The court held that, because the government offered no evidence that defendant knew that his actions were likely to affect a forfeiture proceeding, the court concluded that a jury could not find beyond a reasonable doubt that he had the requisite intent to obstruct. Therefore, the district court erred in denying defendant's motion where the evidence was insufficient to support defendant's conviction.

A jury found David Safavian, Chief of Staff of the General Services Administration ("GSA"), guilty on four counts of a five-count indictment where his convictions were related to a golf trip he took with Jack Abramoff, a lobbyist, who had asked Safavian for information about two properties the GSA owned. At issue was whether Counts Three and Five should be vacated on the grounds of prosecutorial vindictiveness; whether Counts Two and Five should be vacated on the grounds that the government failed to prove Safavian's false statements to the ethics officer and to the Federal Bureau of Investigation ("FBI") were materially within the meaning of 18 U.S.C. 1001(a)(1); and whether a new trial should be granted on Count One and Count Three where the district court improperly admitted evidence regarding the cost of the private plane. The court held that so long as Safavian's false statements were capable of influencing the course of the FBI's investigation, those statements were material within the meaning of section 1001(a)(1). The court also held that the district court did not clearly err in presuming vindictiveness on the part of the prosecution or in holding that the government overcame that presumption when it offered two reasons why the addition of Count Five was not vindictive. The court further held that its reasons for rejecting Safavian's arguments pertaining to Counts One, Two, and Three were the same as those of the district court and did not need to repeat them.

Defendant appealed from a judgment in which the district court found him guilty of four counts of aiding in the preparation of false tax returns in violation of 26 U.S.C. 7206(2). At issue was whether the district court unlawfully based its verdict on the guilty pleas of co-defendants, which were not evidence in the case, thereby depriving defendant of his due process right to a fair trial; whether the district court improperly credited testimony by the government's key witness that defendant contended was false; and whether the evidence was insufficient to prove that defendant knew that the tax returns he prepared were fraudulent and that he willfully violated section 7206(2). The court held that the district court's erroneous references to the unadmitted guilty pleas of his co-defendants constituted harmless error where the evidence overwhelmingly supported the conclusion that defendant deliberately avoided learning of materially false representations on the tax returns at issue. The court also held that the district court did not err in its consideration of a key witness' testimony where the the testimony was the product of reliable principles and methods. The court further held that the evidence was sufficient to support defendant's conviction where a reasonable trier of fact could conclude the defendant purposefully "closed his eyes" to large accounting discrepancies, which strongly indicated that the tax forms he prepared during the years in question contained materially false financial information.

Defendants, Don Eugene Siegelman, the former Governor of Alabama and Richard Scrushy, the founder and former Chief Executive Officer of Health South Corporation ("HealthSouth"), were convicted of federal funds bribery and five counts of honest services mail fraud and conspiracy. Siegelman was also convicted of obstruction of justice. The Supreme Court of the United States remanded to the court for reconsideration in light of Skilling v. United States. Defendants raised numerous issues of error related to their convictions and sentences. The court affirmed Count 3 and 4 for Federal Funds Bribery and held that there was no reversible error in the bribery instructions given by the district court and that the evidence of a corrupt agreement between defendants was sufficient to permit a reasonable juror to find quid pro quo. The court affirmed Count 5, 6, and 7 for Honest Services Mail Fraud and Conspiracy and held that any error in the honest services instructions was harmless. The court reversed Count 8 and 9 for Self Dealing where there was lack of evidence from which the jury could infer that Siegelman knowingly agreed to or participated in a broader scheme that included Scrushy's alleged subsequent dealing and where, in light of Skilling, the evidence was insufficient to show self-dealing. The court affirmed Count 17 for Obstruction of Justice and held that the district court did not abuse its discretion in admitting evidence that a certain statement at issue met the United States v. Caraza standard. The court also held that the district court did not abuse its discretion in holding that there was no reasonable possibility of prejudice to defendants that arose out of the exposure of the jury to certain extrinsic evidence and denied the motion for new trial. The court held that exposure of the jurors to media reports about the trial was harmless in view of the limited and incidental nature of the exposure and the substantial evidence of defendants' guilt. The court also agreed with the district court that defendants were not entitled to a new trial where there was no possibility that defendants suffered prejudice from any premature deliberations, discussion of penalty, or deliberation with fewer than all the members of the jury present. The court further held that Scrushy's recusal motion was untimely and without merit; that defendants' claims regarding the Middle District of Alabama's jury selection procedures were without merit and did not entitle them to any relief; and that Siegelman's upward departure in sentencing was not an abuse of discretion.

The government filed a complaint for forfeiture of the money claimant consolidated into a single bank account at Bank of America pursuant to 31 U.S.C. 5317(2), 5324, after claimant made eight separate currency transactions at two banks and deposited a total of $79,650 in cash. At issue was whether the government was required to prove that claimant had actual knowledge of the banks' obligation to report currency transactions in excess of $10,000 to the government and whether the magistrate judge erred when it issued an order reducing the forfeiture amount on Eight Amendment grounds from $79,650 to $50,000. The court held that the totality of the circumstances, and in particular the compelling evidence of prior structuring activities, was more than sufficient to justify the court's findings in support of the section 5324 offenses. Therefore, the court rejected claimant's cross-appeal and affirmed the judgment that he committed the offense of currency structuring. The court vacated the order reducing the forfeiture judgment and remanded, holding that the magistrate judge's proportionality analysis was erroneously conducted where it predicated the proportionality analysis on an incorrect understanding that the authorized penalty was the advisory fine of $60,000 when the correct authorized penalty was the statutory maximum fine of $500,000.

The defendant was convicted of wire fraud in connection with a fraudulent investment and mortgage brokerage business and sentenced to 144 months. The Seventh Circuit affirmed. Evidence turned over by the defendant's wife, who was the former corporate secretary and one of the business organizers, was properly admitted; she was not an agent for the government, which was unaware that she was collecting evidence, but acted for private reasons. It does not matter whether she had a right to take the documents, but the defendant did, in fact, share custody of the records with his wife and she had the right to consent to a search. There was sufficient evidence that the defendant intended to defraud his victims and the above-guidelines sentence was reasonable in light of evidence of criminal history and that the defendant was planning new fraudulent schemes.