Justia White Collar Crime Opinion Summaries

Defendant-Appellant Justin Foust appealed his conviction on six counts of wire fraud, and one count each of aggravated identity theft and money laundering. He was sentenced to 121 months’ imprisonment and three years’ supervised release. Foust’s company, Platinum Express, LLC, submitted false and fraudulent invoices to its customer, Chesapeake Energy Corporation (“Chesapeake”). Chesapeake identified more than $4.5 million that it had paid out on these invoices. Foust did not deny that the invoices were improper and that Platinum Express had not performed the work. But he denied that he had forged the signatures and employee identification numbers of Chesapeake employees. A handwriting expert testified otherwise regarding invoices associated with Chesapeake employee Bobby Gene Putman. The jury convicted Foust on the wire-fraud and aggravated-identity-theft counts associated with these invoices. On appeal, Foust argued the district court abused its discretion by allowing the handwriting expert to testify at trial. He contended: (1) the government did not adequately show that the expert’s methodology was reliable; and (2) the handwriting expert used unreliable data in reaching his opinion. Finding no abuse of discretion, the Tenth Circuit affirmed the district court judgment. View "United States v. Foust" on Justia Law

Prior to her arrest in May 2017, Defendant-Appellant Gladys Nkome participated in an international “advance-fee” conspiracy managed by individuals located in the Republic of Cameroon. The Cameroon-based organizers created websites that purportedly sold legal and illegal goods. They convinced prospective online buyers to wire purchase money to fictitious U.S.-based sellers. A U.S.-based individual posing as a seller (a so-called “money mule”) would retrieve the wired money, take a percentage, and send the remainder overseas to the conspiracy’s organizers. The buyers would never receive the items that they sought to purchase. For approximately thirteen months, Ms. Nkome used at least thirty-five (35) fraudulent identities to collect $357,078.74 in wire transfers connected to the conspiracy. Nkome challenged the district court’s denial of a mitigating-role adjustment under United States Sentencing Guideline section 3B1.2. After careful consideration of Ms. Nkome’s arguments, the Tenth Circuit concluded that the district court did not err. View "United States v. Nkome" on Justia Law

Defendant Riordan Maynard, the former chief executive officer of two related companies, was convicted by a jury of twenty-six criminal counts arising out of his gross mismanagement of those companies. The district court sentenced Maynard to 78 months’ imprisonment. The district court also ordered Maynard to pay restitution to the Internal Revenue Service and to the employee-victims. On appeal, Maynard argued: argues that: (1) the district court misapplied the Sentencing Guidelines in calculating his offense level for Counts 1 and 2 (failure to pay corporate payroll taxes); (2) his convictions on Counts 14 through 26 were not supported by sufficient evidence (theft or embezzlement of employee health care contributions); (3) the district court erred in calculating the restitution award for Counts 4 through 13 (theft or embezzlement of employee benefit plan contributions); and (4) the district court plainly erred in calculating the restitution award for Counts 14 through 26. Rejecting these arguments, the Tenth Circuit affirmed Maynard's convictions and sentence. View "United States v. Maynard" on Justia Law

A felony complaint alleged that on seven different dates in 2014, Martinez committed a felony under Insurance Code section 1814 by entering into an agreement and having an understanding with a person incarcerated in jail, to inform and notify Martinez, a bail licensee, of the fact of an arrest in violation of California Code of Regulations, title 10, section 2076. Martinez was associated with Luna Bail Bonds.The court of appeal reversed her subsequent conviction, finding the regulation facially invalid. Section 2076 prohibits bail licensees from entering, indirectly or directly, any arrangement or understanding with specified types of people— including a “person incarcerated in a jail”—“or with any other persons” to inform or notify any bail licensee, directly or indirectly, of information pertaining to (1) an existing criminal complaint, (2) a prior, impending, or contemplated arrest, or (3) the persons involved therein, which impliedly includes arrestees and named criminals. The section is not unconstitutionally vague but is a content-based regulation, which unduly suppresses protected speech and fails to survive even intermediate judicial scrutiny. While section 2076 might indirectly deter unlawful solicitation of arrestees, an indirect effect is not enough to survive intermediate scrutiny. View "People v. Martinez" on Justia Law

James Stanley Koenig was convicted by jury on 33 counts of securities fraud, mostly involving Corporations Code section 25401, in addition to two counts of residential burglary. He was sentenced to an aggregate term of 42 years eight months. On appeal, defendant raised 15 contentions. The Court of Appeal concluded the trial court erred by not instructing on mistake of law as to some counts and it erred in failing to define the term “indirect” for the jury as to one count. However, the Court concluded these errors were harmless and found no merit to the other contentions. Accordingly, Koenig's convictions were affirmed. View "California v. Koenig" on Justia Law

The Idaho Department of Finance ("Department") filed a civil enforcement action against appellant appellant, Sean Zarinegar, Performance Realty Management LLC ("PRM") and other nominal defendants, alleging Zarinegar and PRM committed securities fraud. The Department moved for summary judgment; Zarinegar and PRM responded with their own motion for partial summary judgment and a motion to strike several documents submitted by the Department in support of its motion for summary judgment. A few days before the district court was set to hear arguments on the motions, counsel for Zarinegar and PRM moved the district court for leave to withdraw as counsel of record. At the hearing, the district court preliminary denied the motion to withdraw, entertained the parties’ arguments, and took all matters under advisement. The district court later issued a memorandum decision and order denying, in part, Zarinegar’s, and PRM’s motions to strike. The district court also denied Zarinegar’s and PRM’s motion for partial summary judgment. The district court granted summary judgment for the Department after finding Zarinegar and PRM had misrepresented and omitted material facts in violation of Idaho Code section 30-14-501(2) and fraudulently diverted investor funds for personal use in violation of section 30-14-501(4). The district court then granted the motion to withdraw. The district court entered its final judgment against Zarinegar and PRM September 30, 2019. Zarinegar, representing himself pro se, appealed the judgment, arguing: (1) the district court lacked jurisdiction to enter judgment against him; (2) the district court violated his constitutional right to a jury trial and right to proceed pro se; (3) the district court’s denial of Zarinegar’s motions to strike as to certain documents was an abuse of discretion; and (4) the district court erroneously granted summary judgment for the Department. Finding no reversible error, the Idaho Supreme Court affirmed the district court's judgment. View "Idaho v. Zarinegar" on Justia Law

Defendant Keith Fitzgerald appealed a superior court order denying his motion for a new trial based on ineffective assistance of counsel. In December 2015, defendant was indicted on five counts of theft by unauthorized taking. Defense counsel, whose assistance is alleged to have been ineffective, was retained by defendant in March 2016, after defendant’s prior counsel withdrew. Defense counsel, defendant, and the prosecutor engaged in several plea discussions leading up to trial. Plea negotiations ultimately failed and the case went to trial. The jury heard testimony from the defendant that his father authorized the transactions. On cross-examination however, the State elicited a number of admissions from defendant, which defense counsel did not anticipate, that severely damaged defendant’s credibility and undercut his defense. The jury returned verdicts of guilty on all five counts of theft by unauthorized taking. Ultimately, the court sentenced defendant to a term of not less than nine and one-half years and not more than 25 years in the New Hampshire State Prison. After an evidentiary hearing on defendant's new trial motion, the court ruled that defendant failed to sustain his burden of showing that the outcome of his case would have been different but for his counsel’s performance. On appeal, defendant argued the trial court erred by concluding that, even if defense counsel rendered ineffective assistance, defendant was not prejudiced by: (1) defense counsel’s failure to adequately advise defendant regarding the merits of the State’s plea offer; or (2) counsel’s failure either to object to the trial court’s jury instructions on a sentence enhancement provision on the basis that it had not been presented to the grand jury for indictment, or to move for dismissal of the indictment on that same basis. The New Hampshire Supreme Court determined defense counsel did not adequately advise defendant about a sentence enhancement and the merits of the State's plea offer relative to defendant's likelihood of success at trial, and but for counsel's deficient performance, there was a reasonable probability that defendant would have accepted the State's plea offer. The Court therefore affirmed in part, reversed in part and remanded for further proceedings. View "New Hampshire v. Fitzgerald" on Justia Law

Steven Thompson was a real estate developer and sole member and manager of SGD Timber Canyon, LLC (“Timber Canyon”), a real estate company that held an interest in a number of undeveloped lots in Castle Rock, Colorado. To buy those properties, Timber Canyon initially obtained a $11.9 million loan from Flagstar Bank. The properties went into foreclosure in October 2009. In February 2010, Timber Canyon filed for bankruptcy; Flagstar Bank sought relief from the automatic stay to allow it to proceed with the foreclosure. In the spring of 2010, Thompson met John Witt (“John”), who had worked in the construction industry in Denver but wanted to become a real estate developer. John eventually began working with Thompson and signed a letter of intent indicating that John would eventually obtain an ownership interest in Thompson’s company. Shortly thereafter, and without disclosing the fact that the Timber Ridge properties were in foreclosure and subject to a forbearance agreement, Thompson obtained an “investment” from John’s parents, Thomas and Debra Witt (“the Witts”). Ultimately, the Witts agreed to increase their initial $400,000 investment to $2.4 million. At no point did Thompson disclose to the Witts that Timber Canyon's properties were already highly leveraged; the company was in bankruptcy, the properties were in foreclosure, and the properties had been valued at only $6.75 million (an amount significantly less than the $31 million value that Thompson had represented to the Witts during negotiations). When the Witts’ note ultimately came due in the winter of 2011, Thompson defaulted. The Witts filed a civil lawsuit against him and contacted law enforcement. Thereafter, the State charged Thompson with two counts of securities fraud and one count of theft. A jury convicted Thompson on all counts, and the court sentenced him to the Department of Corrections for twelve years on each of the securities fraud counts, to be served concurrently, and eighteen years on the theft count, to be served consecutively to the securities fraud counts. As pertinent here, Thompson argued on appeal: (1) because the note at issue was not a security, insufficient evidence supported his securities fraud convictions; (2) the trial court erred by tendering an incorrect jury instruction regarding the meaning of “security”; and (3) his theft conviction had to run concurrently with his securities fraud convictions. The issue this case presented for the Colorado Supreme Court's review was whether: (1) the promissory note at issue was a security under the "family resemblance" test; (2) any error in the jury instruction defining “security” was not plain; and (3) consecutive sentences were permissible because different evidence supported defendant Steven Thompson’s securities fraud and theft convictions. Finding the note at issue was indeed a security under Colorado law, and no other reversible error, the Supreme Court affirmed Thompson's convictions. View "Thompson v. Colorado" on Justia Law

Defendants, a married couple, opened numerous rewards accounts at OfficeMax using fictitious names and addresses. They fraudulently claimed other customers’ purchases as their own to generate undeserved rewards through OfficeMax’s customer loyalty program. As part of the scheme, Defendants also violated the terms of the reward program by using various accounts to sell more than 27,000 used ink cartridges to OfficeMax in exchange for OfficeMax rewards. In 21 months' time, they redeemed $105,191 in OfficeMax rewards. A jury convicted Defendants of wire fraud and conspiracy to commit wire fraud relating to their scheme to defraud OfficeMax. At sentencing, the district court ordered Defendants to pay $96,278 in restitution to OfficeMax and entered a separate forfeiture money judgment jointly and severally against Defendants in the amount of $105,191. In Defendants' first appeal, they argued the district court erred when it entered a forfeiture money judgment without proving the $105,191 constituted, or was derived from, proceeds traceable to the wire fraud. The government contended it proved Defendants fraudulently acquired OfficeMax rewards with a face value of $105,191, and that Defendants exchanged that credit for $105,191 in actual merchandise. At first glance, the Tenth Circuit surmised a district court’s order of forfeiture and its order of restitution appeared to be a double punishment, particularly when the district court ordered defendants to pay forfeiture and restitution in the same amount. Restitution exists to make victims whole; forfeiture punishes those who commit crimes. In some cases, a defendant either does not resell fraudulently obtained merchandise or does so at a discount and thus has no profit above the value of the merchandise. To address that scenario, the Tenth Circuit held here that a district court could base a judgment’s forfeiture amount on the value of the fraudulently obtained merchandise at the time a defendant acquired it. Furthermore, a district court may not reduce or eliminate criminal forfeiture because of restitution. Finally, the Court reaffirmed its holding that in personam money judgments representing the amount of unlawful proceeds are appropriate under the criminal forfeiture statutes. View "United States v. Channon (Brandi)" on Justia Law

In 1998-2010, Dimora served as one of three Cuyahoga County Commissioners. An FBI investigation revealed that Dimora had received over $250,000 in gifts from individuals with business before the County, including home renovations, trips to Las Vegas, and encounters with prostitutes. Dimora had used his position to help with the awarding of County contracts, hiring, the results of at least one County election, and civil litigation outcomes. Dimora’s “influence” ranged from casting formal votes as Commissioner to pressuring other officials.Dimora was charged with Hobbs Act offenses, bribery concerning programs receiving federal funds, making false statements on tax returns, conspiracy to commit mail fraud and honest services mail fraud, conspiracy to commit bribery concerning programs receiving federal funds, conspiracy to commit wire fraud and honest services wire fraud, RICO conspiracy, mail fraud, conspiracy to obstruct justice and obstructing a federal investigation. A jury convicted Dimora on 33 counts. The Sixth Circuit upheld the jury instructions defining “official acts” as having “fairly trace[d] the line between permissible gifts and impermissible bribes.” A ruling that state ethics reports were inadmissible hearsay was harmless in light of “overwhelming evidence.”In its 2016 “McDonnell” decision, the Supreme Court gave a narrow construction to a key element included within several of Dimora’s offenses. The term “official acts” does not include “setting up a meeting, calling another public official, or hosting an event.” Official acts are limited to “formal exercise[s] of governmental power.” Dimora petitioned to vacate his convictions under 28 U.S.C. 2255. The Sixth Circuit vacated a denial of relief. The court declined to decide whether the instructional error was harmless with respect to most of the counts or whether the “cumulative effect” of instructional and evidentiary errors entitles Dimora to relief. View "Dimora v. United States" on Justia Law