Justia White Collar Crime Opinion Summaries

Appellant Mark Dunham, was a door-to-door salesman for Capital Connect. On or about June 15, 2016, Appellant rang the doorbell of Eloise Moody, an 81- year-old lady recently widowed and diagnosed with cancer. When Moody answered, Appellant pointed at the “Central Security Group” alarm sign in Moody’s front yard and said: “I’m here to update your security.” Appellant also said, referring to the Central Security Group sign, “I’ll put a light on it, make it visible from the street” which he explained would be helpful to “update the neighborhood.” Appellant was not wearing a uniform or name tag and did not say what company he worked for. Moody, therefore, understood Appellant to be employed by her alarm company (Central) and that he was intending to place a light on the sign in her front yard. Appellant managed to gain access to Moody's home and convinced her to cancel her existing security contract and enter a five-year agreement with Capital Security at a higher cost. Appellant was charged with deceptive business practices to which he pled not guilty. A jury found him guilty, and he was sentenced to one year in jail. The Texas Court of Criminal Appeals granted review to determine whether the evidence was sufficient to support Appellant’s conviction and whether the jury charge erroneously authorized a non-unanimous verdict. Based on its construction of Texas Penal Code § 32.42(b), and its review of the record, viewing the evidence in the light most favorable to the verdict, the Court agreed with the court of appeals on both points: (1) there was sufficient evidence to support the conviction; and (2) jury unanimity was not required on the specific manner and means of the offense because it was not an “essential element” of the offense. View "Dunham v. Texas" on Justia Law

Defendant challenges his convictions of healthcare fraud, illegal kickbacks, and money laundering and the related restitution award and forfeiture judgment. After Defendant filed this appeal, President Trump commuted his sentence of imprisonment and rendered any challenge to it moot. In his remaining challenges, Defendant argued that his indictment should have been dismissed because of prosecutorial misconduct, that the district court erroneously admitted expert opinion testimony against him, that the admissible evidence against him was insufficient to sustain his convictions, and that the restitution award and forfeiture judgment should be vacated.   The Eleventh Circuit affirmed. The court explained that that the presidential commutation renders Defendant’s appeal of his prison sentence moot but does not otherwise affect his appeal. Second, the court explained that the district court did not abuse its discretion when it declined to dismiss the indictment or to disqualify the prosecutors due to misconduct. Third, the court affirmed the admission of the expert-opinion testimony. Fourth, the court affirmed the restitution amount as not clearly erroneous. And fifth, the court held that there was sufficient evidence for the jury to convict Defendant of money laundering and that the forfeiture judgment based on money laundering was lawfully calculated. View "USA v. Philip Esformes" on Justia Law

Mongol Nation is an unincorporated association whose members include the official, or “full-patch,” members of the Mongols Gang. A jury convicted the association of substantive RICO and RICO conspiracy violations; it also found various forms of Mongol Nation property forfeitable. That property included the collective membership marks—a type of intellectual property used to designate membership in an association or other organization. The district court denied forfeiture of those marks, holding that the forfeiture would violate the First and Eighth Amendments.   The Ninth Circuit affirmed the district court’s judgment. The court explained that in Mongol Nation’s appeal, it argued for the first time that it is not an indictable “person” under RICO because the indictment alleges that the association was organized for unlawful purposes only. The panel concluded that this unpreserved argument is non-jurisdictional. The panel did not resolve the Government’s contention that Mongol waived it. The panel wrote that regardless of the merits of Mongol Nation’s argument, it mischaracterizes the allegations in the indictment.    On the Government’s cross-appeal of the order denying its second preliminary order of forfeiture, the panel did not need to decide whether forfeiture of the membership marks would violate the First and Eighth Amendments. Nor did the panel reach the question of whether the marks may be forfeitable without the transfer of any goodwill associated with the marks. The panel held that the forfeiture was improper for a different reason—the Government effectively sought an order seizing and extinguishing the Mongols’ right to exclusive use of its marks without the Government itself ever seizing title to the marks. View "USA V. MONGOL NATION" on Justia Law

Defendant was convicted of numerous wire fraud and money-laundering charges arising from a fraudulent scheme to cause the Department of Veterans Affairs to pay over $71 million in GI-Bill funding to his trade school. Defendant raised several challenges to his convictions and his sentence.   The Fifth Circuit affirmed in nearly all respects, except that it vacated the forfeiture order and remanded it for further proceedings. The court held that Defendant fails to show the evidence was insufficient to allow a rational jury to convict him on the money-laundering counts. Further, the court concluded that conclude that the indictment was not faulty and the district court did not err in declining to order a bill of particulars.   Moreover, the court explained that illegally provided services that could have “hypothetically” been provided in a “legal manner”—like Defendant’s operation of the school—implicate the second definition of proceeds under Section 981(a)(2)(B), under which a defendant may deduct “the direct costs incurred in providing the goods or services.” The focus of any Section 981(a)(2) analysis is the underlying criminal conduct, not the crime itself.   That subsection further provides that Defendant “shall have the burden of proof with respect to the issue of direct costs” and also that those costs “shall not include any part of the overhead expenses of the entity providing the goods and services, or any part of the income taxes paid by the entity.” Therefore the court remanded for determining whether Defendant can prove any offset under the terms of Section 981(a)(2)(B). View "USA v. Davis" on Justia Law

Defendant Troy Gregory, a former senior vice president of University National Bank (UNB) in Lawrence, Kansas, was charged with one count of conspiracy to commit bank fraud, four counts of bank fraud, and two counts of making false bank entries. These charges arose from Defendant’s arrangement of a $15.2 million loan by 26 banks to fund an apartment development by established clients of UNB. After a ten-day trial, including two days of deliberations, a jury found Defendant guilty on all counts except the conspiracy count, on which the jury could not reach a unanimous verdict. The court sentenced Defendant to 60 months in prison and three years of supervised release. Defendant appealed the district court’s denial of: (1) his motion for a judgment of acquittal; and (2) his motion for a new trial on the ground that the government’s extended hypothetical in closing argument was not based on facts in evidence and constituted prosecutorial misconduct. After review, the Tenth Circuit affirmed the district court, finding defendant’s conviction was supported by sufficient evidence and the government’s closing argument was rooted in evidence presented at trial or reasonable inferences drawn from that evidence. View "United States v. Gregory" on Justia Law

Defendant was convicted after a jury trial of conspiracy to commit mail, wire, and bank fraud. On appeal, Defendant argued that her pretrial counsel was constitutionally ineffective for failing to transmit a plea offer from the government to Defendant before it expired, thereby depriving her of the chance to plead guilty under the terms of the offer.   The Second Circuit affirmed the district court’s judgment of conviction. The court concluded that Defendant has waived any claim that the alleged error violated her Sixth Amendment rights. Unlike the defendant in Frye, Defendant learned of her expired plea offer and received new court-appointed counsel two months before trial. She nonetheless chose to go to trial rather than to plead guilty or to petition the court for reinstatement of the offer. This knowing and the voluntary choice was inconsistent with seeking the benefit of the expired plea offer and thus constitutes waiver.
The court further found that the district court did not abuse its discretion by admitting evidence of Defendant’s other fraudulent activity that was similar and/or related to the charged conduct; the court did not err by allowing the government to introduce certain “red flag” emails from an outside attorney for the limited purpose of proving her knowledge, and the court’s decision to instruct the jury on conscious avoidance was proper. View "United States v. Graham" on Justia Law

The Haistens sold discounted animal pesticides and drugs online from their South Carolina home. They operated in violation of multiple FDA and EPA regulations. They sold counterfeit DVDs of movies and television shows that they obtained from China. The Haistens ignored cease-and-desist letters from state regulators and animal pesticides companies. Department of Homeland Security agents began making undercover purchases from the Haistens. Customs and Border Protection (CBP) seized shipments of counterfeit DVDs. Agents then searched the Haistens’ home, which revealed unapproved animal pesticides and drugs, counterfeit DVDs, and business records. In the ensuing prosecution, Count 14 charged the Haistens with trafficking counterfeit DVDs that were seized by CBP officers in Cincinnati. Count 15 charged them with trafficking counterfeit DVDs, that were seized at their home. Defense counsel did not request a jury instruction on improper venue or move for acquittal on Counts 14 or 15 for lack of proper venue in the Eastern District of Pennsylvania. The Haistens appealed, challenging an evidentiary ruling and a statement the government made during its summation. The Third Circuit affirmed.The Haistens then sought relief under 28 U.S.C. 2255, arguing that their trial counsel was ineffective for failing to challenge venue on Counts 14 and 15. The Third Circuit remanded the denial of that motion for the district court to conduct an evidentiary hearing on whether their counsel had a strategic reason for not raising a defense based on improper venue. View "United States v. Haisten" on Justia Law

Defendants appealed their convictions and the ensuing sentences on multiple counts arising out of their conspiracy to commit access device fraud. On appeal they argued that: (1) law enforcement agents violated their Fourth Amendment rights by illegally entering their house after arresting them; (2) the district court impermissibly lowered the government’s burden of proof during voir dire; (3) the district court erred in applying two-level enhancements to their base offense levels for possessing device-making equipment; (4) the district court erred in applying two-level aggravating-role enhancements; (5) their total sentences were procedurally unreasonable; and, finally, (6) their sentences, overall, were substantively unreasonable.   The Eleventh Circuit affirmed. The court the record demonstrates Defendants’ deep involvement in the planning and organization of the fraudulent scheme and their vital role in the commission of the offenses, as well as their involvement in decision-making and recruitment, all of which was far more extensive than the role played by the co-conspirator. To the extent Defendants argue that they could not both receive aggravating-role enhancements since they were equally involved, a defendant eligible for an aggravating-role enhancement “does not have to be the sole leader of the conspiracy for the enhancement to apply.” The district court did not clearly err in applying the aggravating-role enhancements to the brothers’ offense levels. Further, the court wrote that the district court imposed an otherwise substantively reasonable total sentence for each defendant. View "USA v. Igor Grushko, et al." on Justia Law

Defendant was convicted on all five counts of a 2011 indictment charging himself and two co-conspirators with a variety of offenses arising from a well-orchestrated scheme to circumvent American export controls designed to prevent dual-use commodities—goods with both civilian and military applications—from falling into the hands of adversaries like Iran. On appeal, Defendant seeks reversal and remand on three independent grounds.   The Fifth Circuit affirmed. The court held that because of the Government’s diligence and Defendant’s evasiveness, the first two factors in the Barker balancing test weigh decidedly against Defendant’s speedy trial claim. The court wrote this is a case where a defendant who took steps to avoid being caught now faults the Government for not catching him sooner. Further, Defendant’s efforts to avoid apprehension cut against his speedy trial assertion in another way, as well—they betray a lack of diligence in asserting the right. Thus, because the Barker balancing test weighs overwhelmingly against Defendant, the district court was correct to deny his motion to dismiss for lack of speedy trial.   Finally, because the Sixth Amendment does not require a district court to render a particularized dissertation to justify a partial courtroom closure that is reasonable, neutral, and largely trivial (i.e., requiring spectators to watch and listen on live stream rather than in-person), the district court’s partial closure of Defendant’s jury trial was not unconstitutional. View "USA v. Ansari" on Justia Law

Defendants were convicted by a jury of conspiracy to defraud the Internal Revenue Service (“IRS”) by interfering with its lawful functions and evasion of payment of taxes. On appeal, Defendants both challenge the sufficiency of the evidence supporting their convictions and raise challenges to a number of jury instructions.   The Fifth Circuit affirmed. The court held that the district court’s denial of Defendant’s last-minute continuance request was not an abuse of discretion, and Defendant was not denied the counsel of his choice. Further, because Defendant failed to meaningfully address all four prongs of plain error review either in his opening brief or in reply, his constructive amendment challenge fails.   Further, the court wrote, that viewed in the light most favorable to the verdict, the evidence showed that Defendant failed to report a substantial amount of income; influenced MyMail to amend its tax return to underreport how much income it distributed to Defendant; converted at least $1 million of income into gold coins; purchased a house with gold coins and transferred it to a trust controlled by a relative; and hid his income in Co-Defendant’s trust accounts and used the concealed funds to pay his living expenses for at least a decade, including during the years that the IRS Agent was contacting Defendants, as Defendant’s IRS power-of-attorney, in an attempt to collect Defendant’s unpaid tax liabilities. Based on the foregoing evidence, a reasonable jury could find beyond a reasonable doubt both willfulness and an affirmative act of evasion. View "USA v. Selgas" on Justia Law